2 Ways to Profit From ‘Big Data’ (streetreport.net)

The world of big data is a growing behemoth, one whose swift rise has helped create an entirely new business and social landscape. Institutions and companies of all types from around the globe are scrambling to provide a more accurate analysis of their operations by using complex data sets.

Since accurate analysis commonly leads to confident, informed decision-making, big data helps give credence to the saying “knowledge is power.”

While the sheer amount of data compiled and analyzed is nothing less than astronomical, the actual process is much simpler than one would expect.

In essence, Big Data is a collection of either structured or unstructured data sets

Structured data is information gained from fixed field strings: personal financial data, surveys, business transactions, point-of sale, and credit scores.

Unstructured data sets center on both captured and user-generated data from GPS, Google search terms, Facebook posts, twitter feeds, article comments, uploaded videos, etc.

Currently, unstructured sources make up over 80% of all data created, and this gap is expected to widen due to its heterogeneous and variable nature, which allows it to exist in many forms.

Using logic and computing power, this data can be analyzed and compiled to offer targeted insights or predictive statistics. Needless to say, the potential of big data is just that… BIG.

As we march forward into this brave new world, it is an imperative to understand who is leading the charge.

Here are two companies dedicated to evolving this technical revolution into a well-oiled, hyper-logical machine of productivity.

1. Verisk Analytics (Nasdaq: VRSK)

First up is our “structured” play, Verisk Analytics. Big data is a natural bedfellow to risk management, bringing a numbers-based methodology as a way to mitigate potential issues.

And Verisk a leading provider of information about these types of risk to professionals in several industries.

By offering proprietary data, predictive analytic methods, and embedded decision support, Verisk uses its data resources to benefit various markets and fields, including insurance, financial services, healthcare, retail, real estate, human resources, and environment.

In the most basic sense, Verisk Analytics helps customers protect people, property, and financial assets.

There are several indicators of strength within Verisk, including strong growth in earnings per share ($2.31 FY, up 5.7% from a year earlier), increases in net income (up 4.4% from 2013), strong cash flow from operations ($228.1 million YTD), and expanding profit margins (currently 46%).

Their most recent earnings report noted good revenue growth, driven by Verisk’s insurance units, along with an excellent financial business outlook.

Bullish indicators, like the rapidly changing landscape of healthcare in America, and top-notch financial analysis from their recently acquired Argus unit, place Verisk in an attractive position over the long-term.

2. Splunk, Inc (Nasdaq: SPLK)

SPLK is our “unstructured” pick…

Founded to pursue a disruptive new vision of making machine data accessible, usable, and valuable to everyone, Splunk is a big brother-type play that monitors and analyzes everything from customer clickstreams and transactions to network activity and call records.

With unstructured data accounting for more than 90% of the data in today’s organizations, companies like Splunk are necessary to parse the information and relay usable, actionable data.

The company has over 7,900 customers that use their services to reduce costs, mitigate security risks, enable compliance, and improve operational intelligence.

From a financial standpoint, the prospects are strong, with a 52% year-over-year increase in revenue.

Also, Price-to-Sales (31.9) and Price-to-Assets (19.43) are well above peer medians, indicating confidence in future growth opportunities.

Spending is on the rise at Splunk, so they are still finding a balance between revenue and expenses, but the young company has some aces up its sleeves.

By signing contracts with some big-time customers (like Volkswagen) and making strong acquisitions (Cloudmeter), Splunk is smartly positioning themselves to ride the massive, inertiatic expansion of Big Data.

This should offer favorable growth conditions for such a versatile company.

The big data revolution is still in its early years, and it has serious legs. As long as we continue collecting inputs to add to these massive sets of information, those leading the way in terms of providing software and analytics to parse this data, will enjoy a favorable place in an extremely healthy sector of the market.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: