Brady Capital Research is a leading-edge investment research firm focused on structural disruption. Our qualitative-based research enables investors to gain unique investment insights into the latest structural disruption developments to take advantage of emerging investment opportunities and avoid value traps.
- Independent: Pure unbiased research
- Differentiated: Dynamic, thought-provoking and forward-looking qualitative research
- Exclusive Access: Research is exclusively available to our select base of institutional investment clients
Research Methodology: Our Proprietary Value Pyramid Strategic Framework
The acceleration in structural disruption is creating an increasingly VUCA environment, leading to the blurring and decimation of industry boundaries and impacting the risk/growth profile of companies. Instead of analyzing companies in silos through a rear-view mirror, we piece together emerging structural disruption trends across industries, using our proprietary Value Pyramid strategic framework to identify new variables and angles, to help investors better look at and value companies. The Value Pyramid illustrates how the value equation is changing for companies. The three sides of the Value Pyramid are:
- Customer Capital (Value origination through customer value proposition): In the age of Amazon, companies can no longer compete on a FUNCTIONAL customer value proposition basis (i.e., price, convenience, variety of choice), so they need to create EMOTIONAL connections and PSYCHOLOGICAL attachments with their customers.
- Structural Capital (Value capture through capital investments): Companies that operate on only the PHYSICAL layer need to invest in moving up to the DIGITAL and AI (artificial intelligent) layers.
- Economic Capital (Value extraction through economic system): Although most companies operate in the traditional CORPORATE ECONOMY, we are seeing the rise of a new class of disruptors that operate in the PLATFORM ECONOMY, which are ideally positioned to advance in the future to the emerging CRYPTO-ECONOMY.
The Value Pyramid Strategic Framework
- Weekly Research Note: 3-6 page research note providing key investment highlights and investment insights from the latest structural disruption developments.
- Quarterly Research Report: 50-page+ research report providing actionable investment ideas on a wide range of sub-industries and companies and insights into emerging structural disruption themes
- Special Report: 10-15 page company-specific research report exploring emerging risks/opportunities
- Quarterly Meetings: 1-hour in-person meetings providing an opportunity to discuss and explore the latest disruptive themes
Research Report Highlights: “Watch Out for Gray Rhinos, Not Just Black Swans” (October 1, 2019)
Whereas a “black swan” is a highly improbable event that causes massive consequences, a “gray rhino” is a highly probable, high-impact yet neglected threat.
- The Business Roundtable is hopping on the ESG rhino with its revision of the “purpose of a corporation” to now be inclusive of all stakeholders, changing the rules of the game for: E (Energy and Packaging), S (Gig Economy), and G (WeWork).
- The Amazon rhino is charging faster into air freight and logistics. Not only did USPS blame Amazon for its 3.4% quarterly package volume decline, but FedEx finally conceded that Amazon is a serious competitor.
- The rhino keeps smashing through the bricks, decimating real estate boundaries for Industrial REITs and Retail REITs.
- The rhinos are closing in on the retailers, creating an increasingly VUCA (volatile, uncertain, complex, ambiguous) environment.
- Luxury goods companies are harnessing the strength of the rhino. Luxury goods companies remain uniquely positioned to originate value.
- The passage of AB5 in California is a gray rhino for Lyft and Uber as it has given rise to a global gig economy rights movement.
- The S-1 remains a massive gray rhino for WeWork. WeWork’s implied valuation has tumbled nearly 80%, from $47 billion to $10 billion, since I warned about its glaring red flags in my August 20 research note.
- Amazon Care is a gray rhino for healthcare. Amazon Care is evidence of Bezos’ master plan to disrupt the $3.5-trillion healthcare space as he continues to make progress on PillPack and Dr. Alexa.
Barbara Gray, CFA
Barbara ranked as an All-Star Analyst for four consecutive years, achieving top-three standing each year in the Business Trust Sector in the Brendan Wood annual institutional survey. She has over two decades of sell-side equity research experience in both Canada and the U.S. Her prior research experience has included broad sectoral coverage such as the North American consumer discretionary and consumer staples, North American auto and Canadian industrial products, energy, and forest products sectors. Barbara has a Bachelor of Commerce (Finance) from the University of British Columbia (1993) and earned her CFA (Chartered Financial Analyst) designation in 1997. She is recognized as a leading expert in structural disruption and was invited to be the keynote speaker at a number of events, including the 2018 annual conference for one of Canada’s leading investment firms and the 2017 Investment Advisory Committee meeting for a top Canadian Crown corporation. She is also the author of the books “Secrets of the Amazon III”, Secrets of the Amazon 2.0”, “Secrets of the Amazon” and “Ubernomics”.