How to turn unique FT insights into smarter investment decisions

This calling card helps FT journalists build relationships with key contacts in organisations around the world, and enables them to glean valuable insights for subscribers. In this post we more closely examine several examples of organisations where those relationships are continually yielding unique stories, and how that information can be harnessed in the context of making better investment decisions.

In previous posts we’ve looked at the value of ‘scoops’ - stories that are broken first by a journalist before anyone else. Scoops, and particularly those published by the FT, have the propensity to cause significant market jumps, but they’re very rarely completely isolated occurrences without any form of build up or consequential impacts.

If we take the Wirecard accounting scandal as an example, the revelation of €1.9bn in missing cash that caused its share price to crash and the firm to ultimately collapse, was the culmination of 4 years of the FT owning that story and publishing scoop after scoop. In the subsequent fallout, journalists such as Dan McCrum and Olaf Storbeck have persevered in taking FT readers beneath the surface of the story, which continues to have repercussions for Germany’s political and financial elite, as well as more widely.

Storylines have a tendency to build and build over time, and can then erupt suddenly. Through the strength of the brand and the talent of its editorial team, the FT enables subscribers to follow those stories through and spot the micro signals or ripples that often occur before a larger market-moving event.

For financial market participants, the scope of the FT’s global network and its access to the C-suite, as well as policymakers, thought leaders, and heads of state is hugely beneficial in helping to build a complete picture around specific stocks, and understanding which are under or overvalued.

A more thorough analysis of the FT’s metadata reveals some interesting patterns in terms of the organisations and topics that FT journalists tend to scoop the most stories on. The technology space is an increasingly important pillar of the FT’s reporting, and with a growing team of experts on the ground from Silicon Valley to Shanghai, subscribers get regular insider perspectives from not just the world’s biggest and fastest-growing tech companies, but also the bodies seeking to regulate them more firmly.

A look at the FT’s top 10 most scooped organisations since 2016 includes 4 technology groups including Apple, Facebook, Uber, as well as the now insolvent Wirecard. With the scale of its investment in all manner of startups and tech firms, you could also place SoftBank alongside this group.

Let’s now take one of these organisations and dive deeper into a storyline that investors could monitor and leverage using the FT’s coverage. In 2019 a formal complaint was launched against Apple by Spotify in relation to the 30% fee for using the App Store. This FT scoop was followed by another 2 months later when the EU decided it would investigate Spotfy’s claims further. In June 2020, FT EU Correspondent Javier Espinoza and Tech Correspondent Tim Bradshaw then uncovered that the EU Commission had opened antitrust proceedings against Apple.

These earlier ‘ripples’ were indicators that an EU investigation and potentially large fines or sanctions were likely further down the line. For individuals and firms with an interest in Apple stock, following this storyline in the FT helped to anticipate what might be the ramifications of tighter regulations on Apple’s business model, and the impact on a key revenue stream.

As well as being able to identify which organisations the FT scoops stories on most, we can drill down further into the topics those scoops are about. Roughly a quarter of the scoops about Apple since 2016 have been on the topic of EU tech regulation.

The FT’s network of over 600 journalists around the world lends itself well to encouraging collaboration and knowledge-sharing across desks. Tim Bradshaw has led the FT’s reporting on the likes of Apple and Uber for over 15 years, while Javier Espinoza was part of the group of reporters who founded the FT’s market-leading Due Diligence briefing on all things corporate finance. By combining their access in Brussels, on the US west coast and even further afield, these reporters have the ability to surface the big stories on tech regulation and the EU before other media outlets.

A similar example of this at work involves another of the FT’s most scooped organisations, SoftBank. Bradshaw teamed up with Due Diligence writers Arash Massoudi and James Fontanella-Khan in July 2020 to report that SoftBank was in talks with US chipmaker Nvidia to sell UK-based chip designer, Arm. At the time they flagged that the deal was likely to raise concerns around the continuation of Arm’s open licensing model.

Several months later in February 2021, Espinoza delivered another scoop that the UK and EU would be opening competition investigations into the proposed acquisition, following complaints from rival chip manufacturers.

For investors in the tech sector, as well as organisations that work for or with technology firms, adding the FT’s tech regulation coverage, in addition to the journalists mentioned above, to their myFT watchlists is vital in order to be well-equipped to mitigate emerging risks or exploit new opportunities.

While some investors use strictly fundamental factors in their analysis of stock valuations, increasingly managers are bringing in other elements such as market sentiment, in order to provide a more robust model.

Ultimately the aim is to work out if the current price of a stock is over or undervalued, based on what the key ratios and the market suggest. Importantly, all of the information reported in the FT is doubled-sourced, and quality is never compromised for speed. This provides investors with assurances that what they read in the FT is factually accurate, and makes it a valuable tool for fundamental research.

Going back to the examples from earlier in this post, discretionary managers with a focus on the tech sector are able to look beyond just valuation metrics and use the FT’s analysis in their investment process. Where governments and regulators are under growing pressure to hold technology firms to account, the FT’s relationships with the key players offers insights that could weigh heavily on the long-term growth prospects of stocks in the sector.

Help your teams make better investment decisions with the FT’s trusted commentary and analysis. Click below to start a free FT.com trial for 30 days and share the link with colleagues.