Alternative data could be generated by scraping social media profiles of companies, tracking building permits or hospital purchases, and analyzing satellite imagery to name a few examples. Construction companies file permit requests with local governments when installing components of a house and also when upgrading components. This information could be tracked to better understand the housing market. Some hospitals provide information about purchases of medical equipment and supplies. This could also be used to assess the sales of companies that supply medical equipment to these hospitals. These days, companies have public profiles in major social media platforms. Information about their employee count, job postings, employee ratings of the company, store locations, number of social media followers, number of active users of their mobile apps, number of check-ins by customers, and so on, these can be tracked over time to gain insights into a company. An interesting hypothesis is that companies, which are struggling with reduced sales, may be more likely to increase marketing on social media. So, it’s possible to look for recent increased marketing efforts as a potential alpha factor. Satellite images can also be used to get a high level overview of parking lots, mining sites, oil rigs, shipping ports, and construction zones. A retailer’s customer base can be estimated from counting how many cars visit their retail stores. Empty parking lots likely suggest fewer customers, full parking lots suggest more customers and potentially more sales as well. In fact, the parking lot data generated by a startup, Orbital Insight, closely tracked the downward trend of JC Penney’s stock price from 2012 to 2017. Crude oil storage can be tracked by analyzing satellite and drone images. Now, you may be wondering why oil storage is relevant if you’re trading equities. Well, crude oil storage is tracked closely in order for oil traders to set prices on a barrel of oil. Storage of commodities in general gives an indication of how much is being produced relative to how much is being consumed. Prices are based on both supply and demand. Storage levels and changes in storage levels provide a signal about both supply and demand, and therefore a signal about the price. Price changes of oil trickles down to impact the operation costs of any businesses that rely on petroleum, jet fuel, gasoline, diesel, heating oil, and other products that are derived from crude oil. These include airlines, trucking, shipping, and utility companies to name a few. In the US, oil traders closely monitor the weekly oil and natural gas storage reports issued by the Energy Information Administration or EIA. The EIA surveys crude oil stockholders, which may use floating roof tanks, fixed roof tanks, underground caverns, trains, trucks, and pipelines to store crude oil. Some companies have also looked into tracking oil pipeline flows in order to estimate changes in crude oil storage levels. With aerial footage, it’s possible to track floating roof tank storage levels. Floating roof tanks are cylinders with a roof that floats on top of the stored oil. Computer imaging can track shadows to estimate the height of these roofs and subsequently estimate the volume of crude oil stored in a floating roof tank. Orbital Insight produces energy storage estimates based on his analysis of this image data for the US, OPEC, and China.