CEO Chaith Kondragunta with Larry King

Larry King: I’m Larry King. I’m here today with AnalytixInsight and the company’s founder and CEO, Chaith Kondragunta. This company was created as a very unique product to help investors and select stocks. It took four years for them to develop the technology. The technology performs billions of computations on every listed stock in the world every night and automatically generates words and writes actual research reports on these companies to help benefit investors interested in various stocks in the market.

How did all this start?

Chaith Kondragunta: Thank you, Larry, thank you for having me.

Larry King: Thank you.

Chaith Kondragunta: Just to clarify, the company is AnalytixInsight. It’s a listed company on the Toronto Stock Exchange. The ticker is ALY. The platform that you’re talking about is called CapitalCube.

Larry King: What does CapitalCube do?

Chaith Kondragunta: CapitalCube is the platform that performs these billions of computations and creates automated research reports on close to 50,000 stocks worldwide every day.

Just to give you a bit of background on this, there are about 50,000 stocks that are actively traded across all the exchanges worldwide. The biggest bank out there covers about 3000 stocks in terms of providing research for the benefit of investors who would need to understand about a company before they invest in a company.

So there is a large proportion of stocks that do not have any type of research coverage, and that’s where AnalytixInsight and CapitalCube come in. We perform, through the basis of a software platform, fundamental research on 50,000 stocks. By fundamental research I mean the kind of things that, for example, a sophisticated investor like Warren Buffett would look at in terms of analyzing the companies’ fundamentals and understanding the true picture.

Larry King: How did you come about to be involved with this?

Chaith Kondragunta: Well, I have been an engineer with a couple of degrees in engineering and then a business school degree in finance as well. I was in a publicly-listed company earlier in southern California, matter of fact, where I realized that a lot of these stocks, even if they’re big companies, do not have research available on them. We were a NASDAQ-listed company and we never had more than two analysts covering us.

Larry King: So, a typical investor, the average investor…

Chaith Kondragunta: Right.

Larry King: …wanting to look at a company…

Chaith Kondragunta: Right.

Larry King: …can’t get the necessary information?

Chaith Kondragunta: Yeah. What they get today is what is simply data, as in you get a stock price chart, you get a few ratios and numbers on a company and that type of thing. For the average investor, that’s not enough. You need to understand what do these numbers mean, what does that mean for me and my portfolio and these types of things.

For that, typically professional investors spend hours, buy-side funds, mutual funds, portfolio managers, brokers, they spend hours analyzing these companies and then getting an opinion on that.

Larry King: How’s the information sent to me?

Chaith Kondragunta: We have two products. CapitalCube has its own online platform. So anybody can come to capitalcube.com and subscribe to the service where you instantly have access to 50,000 stocks getting updated every day with research reports.

We are also launching a mobile product in collaboration with the London Stock Exchange and Samsung where you would get this type of information tailor made to a tablet or to a smartphone, to your TV…

Larry King: On my Samsung smartphone, I can…

Chaith Kondragunta: Absolutely.

Larry King: …get the information.

Chaith Kondragunta: Absolutely. We can produce a lot of analysis on every stock. But, obviously, you wouldn’t want to read all of that on a phone. So we provide the appropriate type of information.

Larry King: Now I’m told you generate content through a series of algorithms.

Chaith Kondragunta: That’s right.

Larry King: How’s that work?

Chaith Kondragunta: Well, we pick up a lot of data which is what our engine does. It picks up a lot of numbers – in this case, company filings, company financial statements, market prices, press releases on earnings, these types of things. The software looks for meaning and insight in these numbers and then converts all of that into written plain English along with charts and tables that would help an investor make up their mind.

Larry King: Does it do recommendations?

Chaith Kondragunta: We don’t. The system is certainly capable of doing recommendations, but we stay away from recommending stocks per se. What we are more interested in is democratizing fundamental research so you can make up your mind after you get the true picture on a company.

Larry King: Now this is any company…

Chaith Kondragunta: Any company in the world.

Larry King: …that’s listed anywhere.

Chaith Kondragunta: Yes.

Larry King: How about ETFs?

Chaith Kondragunta: ETF is a growing product. ETFs are nothing but a basket of stocks. Most people these days, instead of trying to buy a stock in China, might want to consider investing in a China-based ETF being offered by one of the fund families. It’s an easy way to get exposure to a particular asset class.

So ETF is a very large and fast growing segment in the market. Again there is very little information available in terms of what are the fundamental risks and characteristics of various China-based ETFs. That’s where you need an engine like ours with the speed and the scale to analyze thousands of stocks on the fly and then give you an overall recommendation or an overall score in terms of what an ETF is looking like.

Larry King: Who owns the company? Is this a public company?

Chaith Kondragunta: It is a public company listed on the Toronto exchange. There are a few founders who first started it, and then we took it public.

Larry King: You have many clients?

Chaith Kondragunta: We do. We have two kinds of clients. One are individuals who would either sign up online or now through our mobile department…

Larry King: That would be a single individual investor.

Chaith Kondragunta: That’s right.

Larry King: Or?

Chaith Kondragunta: We also have financial advisors, R.I.A.s, brokers, hedge funds. We also have institutional clients. Our product and the engine is such that we can integrate that into any other financial service. So, media companies, financial websites, e-brokerages, all of these are also interested in our product because we are giving them content that is useful for their users and for their customers.

Larry King: How old is the company?

Chaith Kondragunta: We started the company about four years back. It’s been a fun and successful ride thus far.

Larry King: Why do websites like Yahoo Finance, Google Finance…

Chaith Kondragunta: Yeah.

Larry King: How do they benefit? How can they get value from this?

Chaith Kondragunta: Yeah. Today if you go to a site like Yahoo Finance or to any other business publication, you get a bit of information about every company that’s listed on the NASDAQ or the New York Stock Exchange – a stock price, a few ratios, that type of thing.

What these types of websites are looking for is more informative content, something that would help their users get a better picture about a company. That’s where our analysis is integrated in with the content on those websites, so somebody can stay on the site longer and get a better picture.

Larry King: I would imagine that Big Data, a lot of data, is important, that the more you know, the more you know.

Chaith Kondragunta: Absolutely.

Larry King: Right?

Chaith Kondragunta: Yeah.

Larry King: The better off you are.

Chaith Kondragunta: That’s right. Big Data is a growing field. The term Big Data in a sense refers to the ability to process various kinds of data sources, in our case company information, market information, news events, these kinds of things. We’ve been applying that in this stocks and company analysis space.

Larry King: How quick do you get the information? Let’s say I punch up a stock on the…

Chaith Kondragunta: Yeah.

Larry King: …Toronto exchange or the…

Chaith Kondragunta: Yeah.

Larry King: …Argentina exchange.

Chaith Kondragunta: Sure.

Larry King: How quick do you get it?

Chaith Kondragunta: Instantly. It’s updated every night.

Larry King: Speed.

Chaith Kondragunta: We do more than a hundred billion computations run through thousands of financial research rules that a typical stock analyst would have been trained on. So, that’s what we have trained the system to do over four years. Anything that’s out there gets updated and you have this. As fast as you can read you have the information.

Larry King: Tell me about the partnership with Samsung.

Chaith Kondragunta: That’s our mobile initiative. We started off by offering the service for institutional investors, institutional clients, and then online clients. Now with Samsung we’re offering it on the mobile side as well where you can have real time stock prices and what all of these numbers mean in terms of the analysis and the excellence of the company or the rating of the company, these types of things.

Larry King: It seems like a coup.

Chaith Kondragunta: It is, it is. I mean Samsung sells about, I think, 200 million tablets and phones every year, so there’s plenty of opportunity.

Larry King: I understand investors have used PE multiples and other metrics…

Chaith Kondragunta: Right.

Larry King: …to assess investment opportunities. Are there some underutilized metrics that investors have to consider…

Chaith Kondragunta: Absolutely.

Larry King: …or should consider?

Chaith Kondragunta: Absolutely. Ratios like PE multiples, price to book, these kinds of things are simple measures, and they have their place. The problem with them is they’re simple to calculate but they only give you a partial picture on the company. That’s where you need an engine like ours to get you to look at more complex calculations and then offer that in a very simple statement or simple analysis.

For example, dividend investors, people who are looking at dividend income, don’t get that in terms of simple ratios like dividend yield. We perform more comprehensive analysis to give you the quality of the dividends, looking at cash flows and balance sheets to see can a company really pay the dividend, what’s the quality.

Larry King: How do you get that…

Chaith Kondragunta: Same thing with earnings quality. For example, are these numbers really good, are the management team doing something with accounting to where they’re in a sense creating these earnings numbers. We look at all of those types of things and give it to you in a very easy to understand fashion.

Larry King: How do you get the message out about your company?

Chaith Kondragunta: Well, we have been fortunate in getting good partners, like I said, leading business and media publications, certainly some of the leading websites in the world, marquee global product companies like the London Stock Exchange and Samsung. That’s been helping. But, certainly part of it is also going out and getting customers to come to us directly.

Larry King: This would seem a tremendous opportunity for investors to know more. The more that you know, the better off you are.

Chaith Kondragunta: Absolutely…

Larry King: It’s logical.

Chaith Kondragunta: …and that’s the goal. It’s democratizing fundamental research from being with a brokerage just for a few companies to being available on every company instantly on any screen.

Larry King: All of this taking advantage of modern…

Chaith Kondragunta: Yes.

Larry King: …technological ways of delivering information.

Chaith Kondragunta: Absolutely, yeah.

Larry King: Tell me about the growth plans.

Chaith Kondragunta: Our platform itself can do more than financial analysis. It can take any set of numbers and create written words, and sentences, and reports out of that. So, the growth plans include analyzing, for example, options, or bonds, and those kinds of things in the financial space.

Different languages. Because this is all automatically generated, we’re not constrained to English. We can do it in Chinese or Italian. As a matter of fact, we have a prototype already in Italian that’s being generated by our computer.

That’s one part, is the growth in terms of various financial assets. The other part is because the platform is so general purpose we can use it, for example, with health care data. People want to look at what the latest reports tell them, at least from a basic perspective. Or, for hospitals to look at various tests that they’re doing and get an idea about how effective are these tests.

So, health care data, consumer data, anywhere where you’d need data to be consumed fast and reports to be generated on the cheap.

Larry King: So, this is unlimited.

Chaith Kondragunta: Yes, and that’s what’s exciting for us in terms of we have started to prove ourselves with stocks, and we certainly want to move to other areas very quickly.

Larry King: Elaborate the whole value in the B2B space for a company like yours. Is it expected to be the next front door for Big Data?

Chaith Kondragunta: Yes it is. Like I said, Big Data applications have just started for the financial analysis space. That’s where we’re seeing not only individuals coming to our website and signing up as individual customers but major companies signing up as partners and clients of ours. That’s the business to business prospects for us, and that’s exciting.

As we go more and more deep into the Big Data space in terms of providing different kinds of analysis, it’s certainly going to allow us to go and get more growth by going after different kinds of customers.

Larry King: All right. How do I learn more?

Chaith Kondragunta: Well, you’d come to the website, capitalcube.com, or…

Larry King: Capitalcube.com.

Chaith Kondragunta: Right.

Larry King: Or?

Chaith Kondragunta: Or, analytixinsight.com.

Larry King: analytixinsight.com. How are you listed on the Toronto exchange?

Chaith Kondragunta: ALY

Larry King: ALY Thank you so much, Chaith.

Chaith Kondragunta: It’s your ALY Thank you. Pleasure.