Easton Consultants

Easton Index

The Easton Information Index has grown faster than broad market averages, and firms in the index with superior ratings as calculated in 2003 have far outstripped the index overall. (More how corporations, investment firms and investors can use the Easton Index).

In 2003 Easton created the Easton Information Index, a portfolio of public firms in the industry segmented into a 9 box grid according to relative investment attractiveness. The ratings were based on three degrees of positional attractiveness (forces that favor all competitors) and three degrees of performance (superiority over competitors concerning Key Sources of Comparative Advantage, or KSCA). Listings of factors considered can be found elsewhere on our website. The actual stock appreciation of the portfolio since then confirms that firms with superior positional and performance characteristics outperform other firms over at least intermediate periods and presumably longer.

How useful is this approach in other industries? To validate the portability of the framework, in 2007 Easton created the Easton Software Index, a portfolio of firms in the packaged software industry. Again, firms with high performance (KSCA) do better than others over extended periods of time, and appear likely to do so in the future. Even though the software industry is fast moving, and such factors as disruptive technology, and strategic missteps must be tracked closely, high leverage factors such as ubiquity, brand and channel position to name three, are still stable. We will learn more as we track this index in the future.

A third index was added in 2008 to track the media sector, a reflection of its convergence with the software and information industries. The firms in the Easton Media Index are also dealing with disruptive technologies often enabled by software but can extend their expertise in subscription and advertising supported business models to other forms of intellectual content, including software.

Both Easton Indexes are updated quarterly; if you would like us to notify you when the indexes have been updated, provide the following information:

Please call us if you would like to discuss our framework and how it may apply to your situation.