By Dennis Walsh, Vice President
“Buy-side analysts truly value a company with a responsive investor relations program led by an informed IRO,” shares John Barr, Co-Manager of the Needham Growth Fund (NEEGX) and Manager of the Needham Aggressive Growth Fund (NEAGX).
Most strategic investor relations programs aim to increase institutional ownership with new long-term shareholders. But anyone who has ever worked in IR knows this is often easier said than done. Targeting quality potential investors and conducting outreach can be a major undertaking. Understanding the buy-side’s investment process for identifying long-term holdings is essential to your success. So what are the key elements of a typical buy-side’s stock picking process? At Needham, Barr’s research team sources ideas from a number of methods, including quantitative screens based on various financial metrics, reading trade publications, and talking to people such as buy-side colleagues. Barr says, “If your stock happens to be on our idea list and you call looking for a meeting then we’ll do it. If it’s not on our list, it’s unlikely that we will take a meeting.”
How can IR contribute? Needham analysts like to conduct their own research – it gives them an opportunity to develop their own point of view – so being undercovered by the sell-side is not always a negative. If your company is being considered as a new investment idea for a firm like Needham, a best-in-class IR program can support the due diligence process from start to finish. Consider these insider tips from Barr to help IROs better support the buy-side’s investment process. Continue reading
By Andrew Blazier, Senior Associate
A good friend and colleague of mine used to describe the universe of real estate investment trusts – REITs – as an “us girls” industry. It was difficult to break in, but once you did, the REIT community was so small, and so interconnected, that working within the industry could be done rather smoothly.
The publicly traded REIT community is indeed tightly knit. And the number of institutions investing in REITs isn’t much larger. When management teams go on roadshows or attend conferences, it’s not uncommon for them to meet the same individuals from the same funds four, five or six times in a year. I compare it to one of those small towns you see in Western films, with the two main characters squaring off to see who will ultimately control the town: “This investor pool isn’t big enough for the two of us.” Continue reading
By Jim Buckley
One of the investor relations issues that companies often struggle with is the “quiet period.” Here I’m not talking about the SEC mandated quiet period related to IPOs, other public offerings or around the release of lock-up agreements. Those all have defined legal parameters and lines drawn around what companies can and can’t do. I’m referring to the quarterly quiet period – where individual companies determine if, when and how they want to stop talking to the investment community as they approach the end of the quarter.
The quarterly quiet period is one of those gray areas that investor relations is famous for, and there is certainly no one-size-fits-all approach for companies. The fundamental principle behind the quarterly quiet period (or QQP) is straightforward. At some point around quarter end, management has knowledge of the company’s quarterly performance. So investors start calling in the last two weeks of every quarter and asking “How are things going?” They want to get a read on upcoming results through tone and demeanor. As a result, over time, companies began to institute a quiet period with the Street to avoid taking these calls. Makes sense, right? But how does each company handle its QQP? That’s where things start to get a little fuzzy. Continue reading
Communicating That 1+1 = 3
By David Calusdian, Executive Vice President & Partner
A well-known portfolio manager once said to me that he loved diversified industrial companies “for their break-up value.” If you’re in the industrial space, this is the polar opposite of how you want investors to think about your company. For an industrial, it all comes down to ensuring that investors see your company as being more than a sum of its parts – not less. Here are four tips to ensure that investors believe your company is worth more than its breakup value.
Synergize! An industrial company’s collection of businesses can either be viewed as just that – a disparate group of autonomous operations individually contributing to the corporate P&L. Or they can be seen as interconnected, mutually supporting components of a single profit-generating machine. The first way to demonstrate that your company’s whole is indeed greater than the sum of its parts is to communicate how the portfolio management philosophy of the business fosters cross-selling throughout the organization, driving revenue growth. Also focus on how management realizes cost synergies across the enterprise, such as through lower fixed costs due to shared overhead or greater combined purchasing power. Continue reading
By David Calusdian, Executive Vice President & Partner
We’ve all seen bad investor presentations at various conferences. But what makes them bad? The purpose of an investor presentation is to convey the company’s investment thesis. If the presentation does not succeed in articulating the investment thesis in a memorable way, it has failed. So how do we ensure good presentation slides — and success? In the video below, Executive Vice President & Partner David Calusdian offers up some advice. Continue reading
By Maureen Wolff, President and Partner
Companies planning to go public need to be able to hit the ground running on the day of the IPO pricing with an investor relations program. In order to prepare, Sharon Merrill President and Partner Maureen Wolff provides tips on what to do before and after the S-1 filing in the videos below. Continue reading