Thematic Investment Research

Thematic Investment Research Framework

Overview

Thematic investing identifies structural, long-duration trends reshaping economies and captures value across industries united by common secular drivers. This skill provides an eight-phase methodology from theme identification through portfolio implementation.

Research Workflow

Execute phases sequentially, with gate reviews between major phases:

Phase I:   Theme Identification & Validation
Phase II:  Structural Analysis (TAM, Value Chain, Competition)
Phase III: Universe Construction & Screening
Phase IV:  Company Deep Dives
Phase V:   Valuation Architecture
Phase VI:  Risk Assessment
Phase VII: Report Construction
Phase VIII: Implementation & Monitoring

Phase I: Theme Identification & Validation

Theme Discovery Sources

Monitor systematically:

• Primary: Academic journals, patent databases, regulatory filings, conference proceedings, expert networks
• Secondary: Institutional research, consultancy reports, multilateral publications
• Alternative: Search trends, VC flows, job postings, satellite data

DRIVER Validation Framework

Validate every theme against six criteria before proceeding:

| Criterion | Question | |-----------|----------| | Durability | Is this structural (demographics, physics, regulation) or temporary? | | Relevance | Does it drive revenue growth, margin expansion, or re-rating? | | Investability | Are there listed equities with genuine, liquid exposure? | | Verifiability | Can thesis elements be empirically tested with leading indicators? | | Expansion | Is TAM growing through new use cases or geographies? | | Rationality | Is opportunity not fully discounted in current valuations? |

Theme Statement Construction

Structure: [DRIVER] is causing [STRUCTURAL CHANGE], benefiting [BENEFICIARIES] over [TIME HORIZON], measured by [KEY METRICS].

Deliverable: Initial Scoping Document (2-3 pages)

• Theme statement and thesis points
• DRIVER validation assessment
• Hype cycle positioning
• Initial value chain sketch
• Key research questions and data sources
• Preliminary risks and thesis killers

Gate Review: Obtain approval before committing to full research.

→ For detailed validation frameworks: See references/theme-validation.md

Phase II: Structural Analysis

Market Sizing

Apply both approaches and triangulate:

Top-Down: Macro data → penetration rates → growth assumptions → industry forecasts Bottom-Up: Customer segments → adoption curves → company validation → reconciliation

Value Chain Mapping

For each layer (Upstream → Midstream → Downstream → Adjacent), analyze:

• Gross margin profile
• Competitive intensity
• Bargaining power
• Scale economics
• Capital intensity
• Technology risk

Competitive Dynamics (Porter's Five Forces)

• Industry rivalry: concentration, differentiation, growth vs. capacity
• New entrants: capital, technology, regulatory barriers
• Supplier power: concentration, substitutes, forward integration threat
• Buyer power: concentration, price sensitivity, alternatives
• Substitutes: alternative technologies, price-performance, switching costs

Regulatory Landscape

Document: current framework, pending legislation, subsidies/incentives, geographic variance, political durability

→ For detailed frameworks: See references/structural-analysis.md

Phase III: Universe Construction

Inclusion Criteria

| Criterion | Pure-Play | Diversified | |-----------|-----------|-------------| | Revenue Exposure | >75% | >10% | | Strategic Commitment | High | Moderate | | Growth Attribution | >50% | >30% | | Daily Volume | >$5M | >$5M |

Exposure Categories

• Pure-Play (>75%): Highest beta, often premium valuation
• Significant (25-75%): Meaningful leverage with diversification
• Enabler (10-25%): Indirect beneficiary, downside protection
• Optionality (<10%): Strategic upside, early-stage exposure

Screening Factors

Quantitative: Market cap, ADV, revenue CAGR, margins, ROIC, leverage, valuation, momentum Qualitative: Management quality, technology leadership, customer quality, IP strength, ESG, governance

Universe Documentation Fields

Company ID | Thematic Classification | Fundamental Snapshot | Thematic Thesis | Research Status | Catalysts & Risks

→ For detailed criteria: See references/universe-construction.md

Phase IV: Company Deep Dives

Selection Criteria (10-20 companies)

• Highest thematic purity
• Attractive fundamental profile
• Strategic value chain importance
• Differentiated insight potential
• Sufficient liquidity

Business Quality Assessment

Competitive Moat: Network effects, switching costs, intangibles, cost advantages, efficient scale Management: Track record, incentive alignment, strategic vision, board composition

Financial Analysis Framework

| Area | Key Metrics | |------|-------------| | Revenue | Segment breakdown, volume/price/mix, recurring %, customer concentration | | Profitability | Gross margin drivers, operating leverage, R&D intensity, path to profit | | Cash Flow | OCF conversion, working capital, capex (maintenance vs. growth), FCF margin | | Balance Sheet | Leverage, liquidity, asset quality, return capacity |

Thematic Leverage Assessment

• Revenue attribution (current % and projected trajectory)
• Strategic positioning and share dynamics
• Technology alignment and disruption risk
• Customer relationship quality
• Execution capability and track record

Financial Model Requirements

• 5+ years historical, 5-10 years forecast
• Bottom-up revenue by segment with theme drivers
• Margin assumptions tied to scale/competition/mix
• Capital requirements: capex, working capital, M&A

Scenario Framework

| Scenario | Theme Assumption | Probability | |----------|------------------|-------------| | Bull | Accelerates; company gains share | 20-25% | | Base | Develops as expected; executes to plan | 50-60% | | Bear | Disappoints/delays; loses position | 20-25% | | Stress | Theme fails or thesis breaks | 5-10% |

→ For detailed templates: See references/company-analysis.md

Phase V: Valuation Architecture

Methodology Selection

| Method | Best For | Limitations | |--------|----------|-------------| | DCF/FCFF | Profitable, visible cash flows | Terminal value sensitivity | | Reverse DCF | Expectation gap identification | Requires assumed WACC/margins | | EV/Revenue | High-growth unprofitable | Ignores profitability | | EV/EBITDA | Profitable comparisons | Capex/D&A differences | | Sum-of-Parts | Diversified theme exposure | Segment data quality | | rNPV | Pipeline/binary outcomes | Probability subjectivity | | LTV/CAC | Subscription models | Requires cohort data |

DCF Construction

Revenue: TAM trajectory → SAM → market share → pricing → cross-check Margins: Material costs (learning curves) → pricing power → mix → target vs. mature peers WACC: Beta (historical vs. implied), size premium, country risk, execution premium Terminal Value: Extended forecast (10+ years), conservative perpetual growth, exit multiple cross-check

Valuation Integration

1. Scenario-weighted DCF (probability × value per scenario)
2. Comparable multiples on forecast financials
3. Sum-of-parts where applicable
4. Triangulate to conviction range
5. Set target at weighted average or conservative bound

→ For detailed methodologies: See references/valuation-methods.md

Phase VI: Risk Assessment

Theme-Level Risks

| Risk | Description | Monitoring | |------|-------------|------------| | Timing | Longer development than anticipated | Adoption curves, milestones | | Magnitude | TAM overestimated | Market size revisions, unit economics | | Displacement | Alternative supersedes thesis | Patents, VC activity, breakthroughs | | Regulatory | Policy undermines economics | Legislation, political shifts | | Crowding | Consensus; valuations discount gains | Fund flows, ETF assets, multiples |

Company-Level Risks

• Execution: Management track record, guidance accuracy
• Competitive: Win/loss tracking, customer surveys
• Financial: Cash runway, covenants, capital access
• Key Person: Management depth, succession
• Technology: Patent strength, R&D productivity
• ESG/Reputation: Ratings, controversy tracking

Risk Scoring Matrix

| | Low Impact (1) | Medium (2) | High (3) | |--|----------------|------------|----------| | Low Prob (1) | 1: Monitor | 2: Monitor | 3: Plan | | Med Prob (2) | 2: Monitor | 4: Plan | 6: Mitigate | | High Prob (3) | 3: Plan | 6: Mitigate | 9: Critical |

Thesis Killer Definition

Must be: Specific & measurable, Observable, Pre-committed, Action-triggering

Examples:

• Theme: "EV battery costs rise for two consecutive quarters"
• Company: "Market share falls below 15% in core segment"
• Valuation: "Stock trades above 50x forward for 6+ months"

→ For detailed frameworks: See references/risk-assessment.md

Phase VII: Report Construction

Standard Structure

| Section | Length | Content | |---------|--------|---------| | Executive Summary | 1-2 pp | Thesis, findings, recommendations, risks, sizing | | Theme Deep Dive | 5-10 pp | Drivers, TAM, value chain, competition, regulation | | Company Profiles | 3-5 pp each | Overview, positioning, financials, valuation, risks | | Risk Assessment | 2-3 pp | Theme/company risks, thesis killers, mitigants | | Implementation | 1-2 pp | Portfolio construction, timing, monitoring, exits | | Appendices | Variable | Models, universe, sources, glossary, disclosures |

Quality Standards

• All claims sourced or derived from explicit assumptions
• Forecasts include sensitivity analysis
• Competing hypotheses acknowledged
• Logic chain explicit: drivers → recommendations
• Executive summary enables standalone decision-making

→ For detailed templates: See references/report-structure.md

Phase VIII: Implementation & Monitoring

Position Sizing

| Conviction | Size | Criteria | Review | |------------|------|----------|--------| | High | 4-6% | Deep dive complete; multiple valuation support; clear catalysts | Monthly | | Medium | 2-4% | Fundamental work complete; timing/execution uncertainty | Bi-weekly | | Speculative | 1-2% | High potential but significant risks; option-like payoff | Weekly | | Watch List | 0% | Interesting but valuation/thesis not compelling | Quarterly |

Adjust for: volatility, correlation, downside scenario survival, portfolio constraints

Entry Execution

• Timing: Catalyst proximity, technical context, liquidity, market regime
• Staged Entry: Initial (40-50%) → Confirmation (30-40%) → Catalyst (10-30%)

Monitoring Framework

| Level | Indicators | Frequency | |-------|------------|-----------| | Theme | Adoption, pricing, competition, policy, sentiment | Monthly-Quarterly | | Company | Earnings, KPIs, strategy, positioning, valuation | Post-earnings minimum |

Exit Criteria

| Type | Trigger | Action | |------|---------|--------| | Target Achieved | Price at target; thesis reflected | Trim 50-100% | | Thesis Broken | Assumption invalidated; killer triggered | Exit 100% | | Better Opportunity | Superior risk/reward in theme | Rotate | | Theme Maturation | Consensus; crowding elevated | Reduce systematically | | Risk Management | Position exceeds limits | Trim to target |

Review Cadence

• Position: After earnings; monthly minimum
• Theme: Quarterly
• Universe Refresh: Semi-annually
• Full Research Update: Annually

→ For detailed frameworks: See references/implementation.md

Quick Reference: Checklists

Use checklists in assets/ for standardized execution:

• theme-validation-checklist.md: DRIVER framework validation
• company-deep-dive-checklist.md: Fundamental analysis completion
• risk-scoring-template.md: Probability/impact assessment

Research Sources Reference

Data: Bloomberg, FactSet, Capital IQ, Refinitiv, PitchBook Industry: Gartner, IDC, IHS Markit, Wood Mackenzie, IQVIA, BloombergNEF Alternative: Google Trends, SimilarWeb, Glassdoor, Orbital Insight, Thinknum

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: HHFinAi
• Source: HHFinAi/claude-equity-research-skills
• License: MIT

Install and usage instructions live in the source repository linked above.