M Science Rolls Out Weather Data, Visualization Tools for Portfolio Managers

Alternative data provider M Science has launched a new weather data and visualization solution, named M Data Viz. The tool takes weather-related datasets, which were previously accessible from the company’s M Analysis research reports, and allows users to drill into this information to bolster their investment theses. Added to that are customizable visualization tools.

M Data Viz uses a heat map of the United States, which measures the density of a certain retailer throughout the country. From there it breaks down the retailer’s footprint in nine areas of the US, such as New England, mid-Atlantic and/or the Mountain region. Weather trends and histories can then be observed through the various map sections. With the new setup, users can analyze weekday-versus-weekend trends, compare prior years to historical averages and narrow their scopes to include only specific timeframes.

“We thought it would be well-received because of the constant rhetoric that goes on in the retail landscape,” says John Tomlinson, head of consumer research for M Science.

For example, an M Science case study from last year showed that sales trends for home improvement retailers Home Depot and Lowe’s had decelerated significantly at the start of 2018 compared to the end of the previous year. The stores saw their lowest sales numbers in April, suggesting the decrease in performance might be weather-related. When the weather improved in May, the companies’ sales numbers rose to their highest sales for the year.

“When people start talking about really strong trends in May, you can then conceptualize it. April was really bad, May was really good, and that’s probably not sustainable,” he says. “An investor can then understand what the magnitude and the impact is, to give or not give too much credit for weather, or not be overly negative on a company when [weather is] really the main driver of why sales could be slowing.”

The offering can also be used to press a company’s management team to better explain what they mean when they talk about weather events depressing sales in a specific region.

“So [this will allow for] a more fruitful conversation when it comes to the investor relations team or management team, relative to their comments that are just made on a conference call,” he says.

Currently, M Science has deployed M Data Viz across six retail sub-sectors: hard-goods retail, discount retail, auto and motorsports, distressed credit, home furnishings, and specialty retail.

In the next couple months, Tomlinson said the company has plans to expand its model to serve the restaurant and grocery sectors, as well as department stores and soft-goods retail.