EquitySet Aims to Democratize Institutional Research Tools for Retail Investors

With the popularity of trading stocks, especially among Millennial and Gen Z investors, new platforms dedicated to helping one trade have also proliferated in recent years. However, many investors still struggle to find a platform that centralizes all of the features they need in one place and provides high-level research. It is only made worse by online forums and chats that tend to be more opaque sources of accurate information on investing.

The solution? Bringing institutional-quality research tools to retail investors. And that is precisely what EquitySet is aiming to achieve through a blend of fundamental and technical research tools. It even offers a suite of unique features, including the platform’s proprietary Alignment Score, and a sleek interface that’s easy to navigate.

The platform’s co-founder, Tony Zipparro, helped walk us through the genesis of EquitySet and the importance of democratizing research tools for retail investors in the current market environment.

Grit Daily: Tell me about the inspiration behind EquitySet.

Tony Zipparro: Early on in my investing career, I struggled to find tools that fully fit the analysis I was doing on individual companies. The options available, while valuable, seemed more biased and limited and less accessible to investors than what I felt should exist. There were all these models, ideas and insights that I had cobbled together between Excel, VB Basic, and cron jobs that I knew could be programmed into a platform. 

I waited for years for something just like I had envisioned to pop up in another system, but most of them never did. That’s when I realized that while the FinTech boom was in full swing, so much money was chasing the hot new thing for investors like gamifying trading, zero commissions, options, etc., and not really the necessary thing. There was a huge gap in pushing towards making research more powerful and accessible. Due to my deep experience in UX / UI and software development mixed with finance, it became a no-brainer to take things into my own hands and start designing the system and tools I wanted to see. 

That’s what has and continues to inspire me to build EquitySet. To help further the understanding that investing is as much social at times as financial. And the end goal of trying to understand, analyze and account for what influences a stock price and why it does so, slides on a scale from art to science. What keeps me going is knowing that even if only 20 people find value in using EquitySet as an analysis tool or second opinion for their investing, it has a genuine impact on making their decision-making more effective.

GD: Innovation and success are often reliant on solving common pain points in an industry. What are the most common pain points investors have with the current tools?

TZ: Context and comparison for one. There is no hard and fast rule for finding an investment that always goes up (or down). What constantly challenged us and others was the ability to more quickly see the relative strength or weakness of a company to others. Something can look like a good value, but unless you understand where the competitors, industry, sector and market are in comparison, you aren’t able to truly gain that understanding.

Getting everything into a single view, let alone making it apples-to-apples, I would argue, is the single biggest struggle in investors being able to make actionable decisions. The often accepted solution is to open 30 screens or download 20 different views, printing them out and trying to piece comparison points together along disparate data. 

Another is a lack of ingenuity in reframing. Investing is complex, no matter how good of a formula you think you have for finding winners, and sometimes it doesn’t even matter. But the truth was so many financial sites focused on just presenting the numbers and letting the investors do the work. There wasn’t enough grouping of metrics together, in an attempt to better tell a company stock’s story. A stock is a derivative of a company, obviously with strong ties to one another.

But too often, investors and traders are led to believe they are the same. The real perspective worth having is what does a company do (or not do) that influences price, and to what extent? Grouping the data in an attempt to tell a story around what a company’s explicit (or implicit) beliefs about managing their organization can be key to better relating to a company an investor wants to buy or sell.

Inability to customize can also be a problem. Almost every investing tool out there is a one-size-fits-all solution. While many provide value and insight into opportunities, it requires the investor to understand the framework, report or tool and then conform to it. There is no customization to a user and what they want to see when you get down to the data and metrics on reports. Each investor is different, and their situation is, too. A majority of the financial research out there accepts this as the norm, putting the onus of customization on the researcher versus the other way around.

Analysis paralysis is also worth mentioning. There are so many stocks to choose from and not enough data to help tell you where to land. While this is as much a portfolio-specific issue, there are so many tools great at showing you lists of opportunities, but not enough that help to weed them down for you based on unique data or your preferences. 

GD: Is there anything unique that Gen Z and younger investors are looking for in an investing tool that other generations are not?

TZ: They are looking for tools that combine not only insights but education. Because of their introduction to the market (tech bubble, financial crisis, housing prices, financial engineering, COVID, meme stock mania, etc.), they have experienced a much more prolonged time of price disparency in accordance to other underlying factors. 

They have dealt with a concentrated period in time in which price often doesn’t need to follow traditional methods of valuation in order for them to make money. To them, the price of a stock has proven to be more a derivation of the supply/demand equation than anything. So, while that’s been a fun ride to be on (for some), they do have an innate sense that they are only factoring in part of the equation. And that’s where they are hungry for an understanding of what else can help value an equity. 

But they are picky. Being intimately familiar with digital and a curiosity behind everything they do, they want to know the “why” as much as the “how.” They are looking for a tool that, as powerful as it might be in data or insights, explains it to them in a way they can understand and then choose to agree or disagree with. 

GD: What are some of the unique benefits of EquitySet that people will want to take advantage of?

TZ: Customization, comparison and insight aggregation.

Allowing investors to customize their views is a big deal to us. While we take pride in boiling up and providing data in a UI that we think is effective for an investor to understand, they might be able to do it better. So, from being able to customize everything on our company reports to building new reports from over 80+ financial metrics themselves, we aim to put the power in the hands of investors to see what they think is important. 

Secondly, the art of comparison. With so many companies and so many options, we take time to develop tools and views that allow investors to see as apples-to-apples on data points as possible. From 10,000 foot view alignment scores and gauges to single data-point comparisons, we put forth solutions that we hope will drastically reduce your tab switching when trying to compare companies. 

Lastly is insight aggregation. We are data and development people. Therefore, we have a strong bias to taking large lists of data and breaking them down into something consumable for investors. Things like our Position Analysis tool allow you to take any sector, industry, ETF or list and see a complete breakout of how the stocks distribute among popular financial metrics like P/E, P/B, sales growth, etc. 

Besides the features themselves, we are unique in the aspect that our goal is to help bring tools to investors based on their feedback on what is useful. We believe that the best ideas should win out, and because we have the expertise and experience to build them, we pride ourselves on being one of the few places where user input is truly valued and responded to.

GD: How can investors utilize EquitySet’s Alignment Score to understand a stock better?

TZ: Our belief in creating an Alignment Model is that many factors within a company (and outside the company) come together at any given time to influence the price movement of a stock. And while you might never truly be able to know which ones and how heavily they weigh amongst each other, the more that are in alignment in a given direction, the more likely a stock is to go that direction. 

Our Alignment Score looks to help identify as many of those factors as we believe we can reliably measure and assign a % out of 100% to it. Two potentially useful ways to look at the Alignment Score is to:

1. Look at the high-level relative strength (or weakness) of all the dimensions in relation to that Total Alignment Score and try to understand how widespread the bullish or bearish nature of the dimensions is. Visualized as a radar chart, we try to make it easy to see if certain dimensions of a company are carrying the total score of the company or if they are more evenly distributed. So, while two companies could have the same total score, depending on the market environment, the concentration of what is contributing to that score could well matter. 
2. Analyze the Alignment Score amongst competitors and industries. When looking at multiple stocks that have upside analyst or fair value potential, leverage the Alignment Score to help flush out which company may have more things going for it within its dimensions. Pay special attention to the Valuation bucket, as a more Bullish alignment may signal that the company hasn’t run up as much in price as other companies across different sectors or industries. 

GD: What has user activity on the platform told you about how investors see the current market?

TZ: One side of the user insights reveals a potential apprehension about whether the current valuation of stocks will prove to be a good investment if bought now, especially in Technology. So much concentration of research is happening around the “big tech” software and chip companies. Users are spending a lot of time looking through the operating, valuation and financial metric prospects of some of these big winners since the beginning of the year. 

On the flip side of the coin, a surprising insight was that it appears users are searching for opportunities, specifically within Biotechnology. By and far, the Biotechnology industry was the most represented in terms of number of companies searched and total views. Many of the companies being looked at have taken a recent beating from a price and valuation perspective. On top of that, Healthcare itself was the largest directly researched sector, with nearly a third of users starting their searches at the sector level and drilling down.