Sell-Side Insights and Wisdom

Recently, our firm sat down with the director of research of a boutique investment bank that provides high-quality research primarily on small-cap stocks. Throughout the course of our conversation, Mr. X (name redacted to protect the innocent!) provided several words of wisdom for investor relations professionals and public companies, so I thought I’d share them here. My thoughts are noted in italics.

  • Don’t add an analyst/portfolio manager/investment professional to your email distribution list unless said analyst/portfolio manager/investment professional has asked to be added. Nobody likes spam.
  • Respond to inbound inquiries in a timely manner. This may seem like “no duh” advice, but you’d be surprised at how many people don’t follow it. The rule of thumb seems to be 24 hours, but I try to respond before the end of the same business day.
  • Keep analysts updated with information that management has shared during investor conferences and non-deal roadshows, even if your team travels with an analyst from another firm. It goes without saying (although I’m going to say it anyway) that you should never keep analysts, or anyone else for that matter, updated on previously undisclosed material information.
  • Guidance is helpful in that it provides a framework for reported results. Anything is fine, including expected ranges in dollars, anticipated growth rates and ongoing trends. We didn’t discuss annual versus quarterly guidance, but a bit of research will show that there is little consensus (pun intended) on guidance practices.
  • Many investment professionals have compliance restrictions on how they interact with social media. While this may be true at the office, investment professionals are people too, and can access social media to their heart’s content at home. So don’t stop using social media as a vehicle for dissemination, but understand that you likely need to keep using more traditional channels as well.
  • Don’t respond via press release to Seeking Alpha articles. We all know that content on Seeking Alpha has the power to move a stock in either direction, but Mr. X believes responding publicly via press release looks defensive. Each situation is different, but in general, I tend to agree.

– Laurie Berman, lberman@pondel.com

Tales from Wall Street: The NDR Warrior’s Toolkit

handbag

The mystery behind what’s in an IR practitioner’s workbag is revealed.

Anyone who has ever been on a non-deal road show or done an investor conference will tell you…it’s not for the faint of heart. I describe it as a planned marathon made up of many, many sprints. Meetings with existing investors, new investors, sell-side analysts, investment bankers – a typical day can start as early as 7 a.m. and run as late as 9 or 10 p.m. (depending upon when you wrap up that last dinner).

My job on these trips is to make sure that my management is on top of their game throughout the day: from making sure they have the right background information on the people they’re meeting with to making introductions and helping facilitate the discussion, and finally, helping them stay on schedule and as energetic about their story at 4 p.m. as they were at 8 a.m.

Just as a builder wouldn’t go to a construction site without his toolbox, my handbag is my silent partner in making sure the day is a success. It’s more than just a place to hold my wallet, ID, business cards, lipstick and cell phone – it’s my NDR toolkit.

So what’s in it?

  • My Surface Pro 3 – it can be a prop-up tablet for when we do a 1×1 (or 1×2 or 1×3) meeting or a fully functioning laptop that management and I can use to do work in between meetings
  • Hard copy of our schedule with background info on our meetings
  • Hard copy of last conference call transcript/earnings release
  • A bound hard copy of the investor presentation
  • Notebook, pen and mechanical pencil
  • Must have apps on my phone:
    o   Google Maps
    o   Waze (much better for managing through traffic)
    o   Starbucks (so I can make sure that my management team is ready to go for that 8 a.m. meeting or re-energized at midafternoon)
    o   Yelp! (to find good eats on the fly)
  • Electronics mini bag contents:
    o   Two UBS flash drives with copies of the investor presentation (just in case that AV guy at the conference walks away with one)
    o   Chargers for my Surface Pro 3 and cell phone
    o   Back up battery charger (just in case an outlet is nowhere to be found)
    o   Screen cleaner and microfiber cloth
  • Small Ziplock bag with:
    o   Altoid mints, Orbit peppermint gum – for eliminating coffee or post-lunch breath
    o   Lozenges – to make sure my CEO or CFO’s throat stays strong throughout the day
    o   A few energy bars (just in case we miss lunch and need to eat on the run)
  • Metro card (when traffic’s tied up, there’s no better way to travel in NYC). In San Francisco, it’s a BART card.
  • Antibacterial soap, hand lotion
  • Colgate Wisps
  • Hairbands (perfect for keeping my long hair tamed but also for organizing all the business cards I’ve collected)
  • My iPod – so when I’m winding down the day, I can kick back with a chill tune

– E.E. Wang, Wang@pondel.com

Time to Get Your NIRI On

NIRIThe film industry has Sundance, technology has the Consumer Electronics Show, and the world of investor relations has the NIRI Annual Conference.  More than 1,000 IR practitioners attend what is considered the preeminent IR event of the year, and 2015 will be no exception with a dynamic lineup of panelists, myriad stimulating topics, and the rare opportunity to sing “Kumbaya” with fellow IR folks.

PondelWilkinson will be at the conference not only as an attendee, but as an active participant.  Evan Pondel will serve as a panelist for the workshop session entitled “Social media: Friend or Foe for Reaching Target Audiences?”  Joining him is Beth Blankespoor, professor of accounting at Stanford University, Nils Paellmann, head of investor relations at T-Mobile, and Serena Ehrlich, director of social and evolving media at BusinessWire.

Evan will also be moderating a panel entitled “Engaging Financial Media, Trade Publications, and Bloggers to Enhance an Investor Relations Program.”  Joining Evan is Peter Frost, business reporter from Crain’s, Paul Hart, editor of Midstream Business magazine, and Guy Cohen, director at Seeking Alpha.

The conference runs June 14 to June 17 at the Hyatt Regency in Chicago.  For more information, please visit www.niri.org.