Report by Trivariate Research

Trivariate has scanned through all the earnings call transcripts for the top 3000 US equities since 2017 and counted the occurrences of "weasel" words (i.e. words associated with uncertainty, such as “maybe”, “could”, “almost”, “sometimes” and “depends”) in the answers from the executives on these calls. Trivariate found it to be an effective signal in distinguishing winners from losers in the lowest quality quartile of their substance model (“Junk”). The return differential between Junk stocks with declining usages of weasel words vs. those increasing their quarterly usages has generated a 50% cumulative return since 2017. This figure climbs to 85% when combining Value and Junk stocks.

Value / Junk stocks that have recently used less weaselly language (Buy ideas) include Truist Financial Corp, Stanley Black & Decker and OneMain. Sell ideas include Annaly Capital Management, AGNC Investment Corp and Zions Bank.