Sentieo

Quarterly Report
A Linguistic Analysis of the Quarter
REPORT PERIOD
Oct. 2017 - Dec. 2017
Contents

Introduction 03

Methodology 04

Sentiment Analysis Comparisions

Quarter over Quarter 05

Year over Year 06

Sector by Sector

Consumer Discretionary 07

Consumer Staples 08

Energy 09

Financials 10

Health Care 11

Industrials 12

Information Technology 13

Materials 14

Real Estate 15

Telecommunication Services 16

Utilities 17

Keyword Trends

Trump 18

Cryptocurrency 19

Artificial Intelligence 20

Autonomous Vehicles 21
Introduction

Language is one of the last realms of financial data to be quantified. Every quarter
thousands of pages of earnings call transcripts are generated and analyzed by equity
analysts for signals about how individual companies, and the market, will perform.

With Sentieo Document Search, we’re making that data more accessible, and with this
report, we are starting down the path of quantifying linguistic data.

We plan to make this report available at the end of each earnings season for financial
journalists and equity analysts and continually improve. Please send any feedback to
hello@sentieo.com

3
Methodology

We used Sentieo’s natural language processing technology to scrape all earnings

transcripts published in the last eight quarters (the quarter shown actually represents the
update for the prior quarter). We then processed and cleaned the data to separate
keywords from filler words (like “or”, “and”, etc.) and separate the sections in which
management is speaking from those in which equity analysts are speaking.

How We Derived Sentiment Analysis

Sentieo uses the Loughran-McDonald dictionary to assign a positive or negative score
to each keyword in its database.

In this report, you will see the aggregate scores of both the management sections of
earnings call transcripts and the analyst sections of transcripts.

The sentiment percentage in the associated graphs is a result of the following formula:

Percentage of Net Positive Words = (Positive Word Score — Negative Word Score) /
Total Number of Words

How We Derived Keyword Mention Lists

We rank ordered the most frequently mentioned keywords in each sector in each quarter
and present the top 20 in rank order in the sector lists below.

How We Derived Keyword Trends

We ran open-ended search queries to match key topics of interest in the news (Trump,
AI, Autonomous Vehicles, Cryptocurrency) and find all mentions of those topics. We
used Sentieo Search Analytics to aggregate the mentions by quarter for the graphs
shown in this section.

4
Sentiment Analysis Graphs

Management quarter over quarter sentiment changes by sector

Telecommunication Services
Real Estate
Health Care
Financials
Information Technology
Energy
Utilities
Industrials
Consumer Staples
Materials
Consumer Discretionary

-10 0 -10 20

Analyst quarter over quarter sentiment changes by sector

Utilities
Real Estate
Telecommunication Services
Financials
Health Care
Information Technology
Materials
Energy
Consumer Staples
Consumer Discretionary
Industrials

0% 25% 50% 70%

Both management and analysts showed significantly positive change in sentiment between the last two
quarters in the real estate and telecoms sectors. In the utilities sector, on the other hand, management
sentiment moved negative while analyst sentiment increased significantly. Sentiment in manufacturing
oriented sectors (consumer, industrials, and materials) has decreased across both management and
analyst sections.

5
Sentiment Analysis Graphs

Management year over year sentiment changes by sector

Real Estate
Health Care
Materials
Consumer Staples
Financials
Telecommunication Services
Energy
Consumer Discretionary
Utilities
Information Technology

0 10 20

Analyst year over year sentiment changes by sector

Telecommunication Services
Real Estate
Health Care
Financials
Information Technology
Energy
Utilities
Industries
Consumer Staples
Materials
Consumer Discretionary

-30 -20 -10 0

Analyst sentiment across the board has decreased from this quarter a year ago, with major negative
swings for all but Telecoms, Real Estate, and Health Care. Management sentiment moved strongly
positive in the real estate sector, with the rest of the sectors not changing significantly in either
direction.

6
Consumer Discretionary

Consumer discretionary goods include durable goods, apparel, entertainment and leisure, and
automobiles. Large companies in this sector include: Amazon, Home Depot, Toyota Motor Corporation,
Comcast, and The Walt Disney Company.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

SG & A SG & A
RevPAR RevPAR
TV IP
Family Dollar Kate Spade
G&A Coach 2016-07 2017-01 2017-07 2018-01

DIY G&A
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Dollar Tree TV 2016 2016 2016 2016 2017 2017 2017 2017

POS Forestar Management sentiment stayed pretty flat between

2016-2017 but has become slightly more positive over the
Starbucks Automotive
last two quarters.
Starwood Craftsman
Eight Quarters of Analyst sentiment
Marriott OTT
Olympics Amazon
Asia-Pacific Starbucks
Brexit CBS
Coach LVT
Macau Prime
CBS POS
OE Netflix Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Viacom Hulu
M&A Internet Analyst sentiment for the consumer discretionary sector has
had a steep drop in sentiment, becoming more negative
over the last eight quarters.

SG&A and RevPAR (a key metric for hotel rooms), have consistently been top of mind in this
sector, as interest in different brands and entities has changed.

7
Consumer Staples

Consumer staples are essential products, such as food, beverages, tobacco and household
items. Large companies in this sector include: WalMart Stores and Coca Cola.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

SG & A iQOS
MAC SG & A
Monster Marlboro
MillerCoors DSD
P&G International 2016-07 2017-01 2017-07 2018-01

PBM SKUs
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
SKUs Walgreens 2016 2016 2016 2016 2017 2017 2017 2017

A&P PBM Management sentiment stayed pretty flat over the last eight
quarters.
Brakes Rite Aid
Jack Daniel Premium
Eight Quarters of Analyst sentiment
iQOS Sysco
Coca-Cola M&A
Marlboro Monster
Molson Coors SKU
Asia Pacific AdvancePierre
Pringles Costco
Project K HeatSticks
R&D Puerto Rico Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Recipe Hair Care
Sysco Citi Visa Analyst sentiment has steadily become more negative over
the last eight quarters.

Philip Morris’ iQOS smoking system has been a huge success, with over 3.7 million consumers.

8
Energy

Energy includes companies involved in the exploration and development of oil or gas reserves,
oil and gas drilling and refining, or integrated power utility companies - including renewable
energy and coal. Large companies in this sector include: Exxon Mobil Corp and Chevron.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

Permian Permian
Eagle Ford Eagle Ford
STACK STACK
BOE Bakken
Delaware Basin Delaware 2016-07 2017-01 2017-07 2018-01

Bakken NGL
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Wolfcamp Gulf Coast 2016 2016 2016 2016 2017 2017 2017 2017

Delaware BOE Management sentiment has increased in positivity over the

last eight quarters, with a step change increase in Q4 of
Alpine High E&P
2016.
Gulf Hurricane Harvey
Eight Quarters of Analyst sentiment
Range WTI
NGL Guyana
LNG Alpine High
Mid-Continent Middle East
MPLX Delaware Basin
Meramec SPM
North Louisiana KML
E&P Gulf Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
EOG Range
DJ Subsea Analyst sentiment has trended steadily downward since Q3
of 2016.

The top three keywords in this sector are major oil producing regions in Oklahoma and Texas:
the Permian basin, the Eagle Ford rock formation, and STACK (Sooner Trend Anadarko Basin
Canadian and Kingfisher counties).

9
Financials

The financials sector includes companies that provide financial services to commercial and
retail customers, including banks, investment funds, insurance companies and real estate.
Large companies in this sector include: Berkshire Hathaway, JP Morgan Chase & Co., Wells
Fargo, and Bank of America.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

LIBOR M&A
DOL NIM
NIM ETFs
ROE ETF
CCAR ROE 2016-07 2017-01 2017-07 2018-01
DOL
First Niagara C&
NIM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
M & A NII 2016 2016 2016 2016 2017 2017 2017 2017
ROE
CNA AUM Management sentiment has become slightly more positive
over the last eight quarters.
C& Progressive
ETF Wealth
Eight Quarters of Analyst sentiment
FDIC Affiliates
CNA
P & C ASI
C&
Brexit CCAR
ETF
AUM Robinsons
FDIC
ETFs Investment
Wealth Brighthouse
BlackRock MiFID II
AUM
Costco P&C
ETFs Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
FirstMerit AIG
Chubb Dijk Analyst sentiment has become slightly more negative over
the last eight quarters.

LIBOR (a benchmark rate that leading banks charge each other for short-term loans) was the
top keyword in 2016; ETFs came to the fore in 2017 with the rise of passive management in the
investment management industry.

10
Health Care

The healthcare sector consists of companies that provide medical services, manufacture
medical equipment or drugs, provide medical insurance, or otherwise facilitate the provision of
healthcare to patients. Large companies in this sector include: Johnson & Johnson, Pfizer, and
United Health Group.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

R&D R&D
SG & A FDA
FDA Phase III
Medicaid Medicare
Phase 3 M&A 2016-07 2017-01 2017-07 2018-01

Medicare Puerto Rico

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
ACA Medicaid 2016 2016 2016 2016 2017 2017 2017 2017

M&A NovaSeq Management sentiment became slightly more positive over

the last eight quarters.
Invisalign SG & A
Keytruda KEYTRUDA
Eight Quarters of Analyst sentiment
PD-L1 CMS
Diagnostics Invisalign
Humira MS
ORKAMBI Phase II
HCV Medicare Advantage
HIV Medical
Optum OTEZLA
Jakafi EYLEA Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
TAVR PD-1
Business HUMIRA Analyst sentiment became more negative over the last eight
quarters.

The top keywords in this sector pertain to pharmaceutical drug development (R&D, FDA, Phase
III) but an interesting trend is the rise of mentions of the Puerto Rican health care crisis.

11
Industrials

The industrial goods sector relates to the production of goods used in construction and
manufacturing. Large companies in this sector include: Boeing, General Electric, and 3M.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

SG & A SG & A
M&A OEM
F-35 Middle East
Middle East R&D
OEM UPS 2016-07 2017-01 2017-07 2018-01

Industrial GE
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
R&D Aerospace 2016 2016 2016 2016 2017 2017 2017 2017

Buy Equifax Management sentiment has slightly increased in positivity

over the last eight quarters, with a step change between
United Boeing
2016 and 2017.
GDP Buy
Eight Quarters of Analyst sentiment
Sensus Puerto Rico
UPS Industrial
RASM Flowserve
Ground M&A
Oil & Gas Watch
Automation Solutions HVAC
Watch Valves & Controls
HVAC Aerospace Systems Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Protiviti CASM
International Sensus Analyst sentiment has become more negative over the last
eight quarters, with a big drop in Q2 2017.

12
Information Technology

The information technology sector includes companies related to the research, development
and/or distribution of technologically based goods and services. Large companies in this sector
include: Apple, Alphabet, Microsoft, and Facebook.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

Atmel AI
IP Gartner
AI IoT
DRAM IP
NAND 5G 2016-07 2017-01 2017-07 2018-01

Internet CEB
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Facebook Internet 2016 2016 2016 2016 2017 2017 2017 2017

Microchip OpEx Management sentiment has mostly remained flat, with a

slight increase in positivity over the last eight quarters.
R&D Facebook
ARR Services
Eight Quarters of Analyst sentiment
IoT M&A
PC PayPal
Heartland PC
PayPal R&D
SaaS PEO
3D NAND WiFi
OpEx ASP
GPU Visa Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
M&A ANSYS
Visa Europe ASPs Analyst sentiment has become more negative over the last
eight quarters, with a big drop in Q2 2017.

Atmel (leading manufacturer of microcontrollers and touch technology semiconductors for

mobile and more) made headlines in 2016. Mentions of DRAM, NAND, and microchips, key
words in the semiconductor business were notably missing from the list in 2017, replaced by
IoT, 5G, and Gartner (IT research provider). AI (artificial intelligence) has remained a major
focus.

13
Materials

The basic materials sector accounts for companies involved with the discovery, development
and processing of raw materials. Large companies in this sector include DowDuPont and
Vulcan Materials.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

Nucor Valspar
Air Products Nucor
M&A Ag
CO2 DuPont
SG & A M&A 2016-07 2017-01 2017-07 2018-01

UAN South America

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Grasberg Chinese 2016 2016 2016 2016 2017 2017 2017 2017

Port Neal Packaging Management sentiment has slightly increased in positivity

over the last eight quarters.
South America FMC
Donaldsonville SG & A
Eight Quarters of Analyst sentiment
Lithium WestRock
WestRock Air Products
Food Care Mosaic
New Diversey Hurricane Harvey
North Carolina PT-FI
PMD Flavors
TimBar Food Care
Ag Solutions Lithium Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Ball OCC
DRI UAN Analyst sentiment has become more negative over the last
eight quarters, with a big drop in Q2 2017.

While steel producer Nucor made the top of 2016’s list, Valspar Paint beat it out in 2017.

14
Real Estate

The main segments of the real estate sector are residential real estate, commercial real estate
and industrial real estate. Large companies in this sector include: American Tower Corporation,
Simon Property Group, and Public Storage.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

San Francisco Brookdale

Brookdale Post
Recall San Francisco
JBG Amazon
New York City G&A
JV Lightower
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
DC RIDEA 2016 2016 2016 2016 2017 2017 2017 2017

RevPAR 4G Management sentiment has stayed pretty flat for the last
eight quarters.
Ardent Puerto Rico
Vornado Welltower
Eight Quarters of Analyst sentiment
G&A SHOP
NAREIT RevPAR
Telecity Ventas
Ventas 5G
EMEA Nothern California
Internet Equinix
4g NAV
REITs Sagora Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Santana Row West Coast
Post New York City Analyst sentiment has steadily decreased over the last eight
quarters.

The biggest change for 2017 was Amazon’s mentions in a sector it does not compete in
because its plans for “HQ2” will be a significant boost for a yet-to-be-announced real estate
market. San Francisco (hot real estate market) and Brookdale (senior living community
operator) also ranked at the top this year and last.

15
Telecommunication Services

The largest companies in the telecommunication sector are wireless operators, satellite
companies, cable companies and Internet service providers. Large companies in this sector
include: AT&T, Verizon Communication, and T-Mobile.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

Wireline CenturyLink
Wireless Level 3
loT 5G
5G DTV
Flos MPLS 2016-07 2017-01 2017-07 2018-01

AOL SD-WAN
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Verizon TV 2016 2016 2016 2016 2017 2017 2017 2017

Yahoo Time Warner Management sentiment has remained relatively flat over the
past eight quarters.
4G CNS
Verizon Wireless Enterprise
Eight Quarters of Analyst sentiment
FCC FirstNet
LTE IP
NFL Business Solutions
Frontier Fios
Internet Puerto Rico
Telogis Verizon
Things XO
Wholesale Yahoo Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
ARPA 4G LTE
Complex Entertainment Group Analyst sentiment has steadily become more positive over
the last eight quarters.

While the top keywords of 2016 included “wireline,” “wireless,” and “IoT” (Internet of Things),
2017’s top word was CenturyLink, likely due to the fact that on December 11, it traded on
unusually high volume. (The stock gained 8.18% to close at $15.87).

16
Utilities

The utilities sector includes firms related to utilities such as gas and power, electric, and water.
Large companies in this sector include: Nextera Energy, Duke Energy, and Dominion Energy.

Keywords Report Graphs

Eight Quarters of Management sentiment

2016.4 2017.4

American Water FERC

AEP ROI
Ohio EEI
ROE NEP
Pennsylvania SCE
EEI CPUC
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
SCE FPL 2016 2016 2016 2016 2017 2017 2017 2017

FERC PJM Management sentiment has remained relatively flat over the
past eight quarters.
Massachusetts DOE
NRG Pennsylvania
Eight Quarters of Analyst sentiment
Commission Retail
MISO PSE & G
NextEra Energy Hurricane Irma
New Jersey South Carolina
CPUC ERCOT
FPL REF
IPL Energy
Keystone Oncor Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017
Southern Power Transformation Plan
RFP New Jersey Analyst sentiment has decreased over the past two years,
but picked up somewhat this quarter.

While the top 2016 keyword was American Water (the nation's largest investor-owned water
and wastewater services company), this year’s top keyword was the Federal Energy Regulatory
Commission (FERC), the United States federal agency that regulates, monitors and investigates
electricity, natural gas, hydropower, oil matters, natural gas pipelines, LNG terminals,
hydroelectric dams, electric transmission, energy markets and pricing.

17
Keyword Trend

Trump

Mentions of trump in earnings transcripts skyrocketed around the election in Q4 2016 and even
further after the inauguration, but have steadily decreased since then. We expect mentions will
rise slightly as the Trump tax plan unfolds but certainly not to the level of Q1 2017.

To get real time email alerts of Trump mentions, check out our Trump Tracker:
https://sentieo.com/trumptracker

1250

1000

750

500

250

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017

18
Keyword Trend

Cryptocurrency

Mentions of cryptocurrency and related terms like “Bitcoin,” “ICOs,” and “Blockchain
technology” in earnings transcripts have surged this quarter, as currency prices have exploded.
We expect mentions rise even further as interest in this topic increases across a global
audience

To get real time email alerts of cryptocurrency mentions, check out our Crypto Tracker:
https://sentieo.com/cryptotracker

400

300

200

100

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017

19
Keyword Trend

Artificial Intelligence

Mentions of artificial intelligence and machine learning in earnings transcripts have been
steadily increasing over the past two years as more and more industries adopt these
technologies to create efficiencies and grow revenue.

2000

1500

1000

500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017

20
Keyword Trend

Autonomous Vehicles

Mentions of self-driving cars (or the more technical “autonomous vehicles”) have fluctuated as
various companies test the waters with announcements about new vehicles or investments in
research around autonomous cars.

125

100

75

50

25

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2016 2016 2016 2017 2017 2017 2017

21