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How Canadian IR Teams Can Effectively Target International Investors

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Canadian Investor Relations (IR) teams: Are you interested in effectively targeting international funds & investors outside of Canada?

Listen to our Head of Global Investor Targeting, James Tickner, as he discusses targeting tips for Canadian companies with the President & CEO of the Canadian Investor Relations Institute (CIRI), Yvette Lokker.

Watch the video here at CIRI‘s website:  http://bit.ly/15NLPDJ

Gain insights about investor targeting in this IRchat video and learn:

  • What is the top reason why Canadian companies should be targeting international funds now?
  • Which European and Asian markets are the most attractive for targeting investors?
  • The top metrics buy-side investors value.
  • Which sectors are in favor now with the buy-side.
  • How to measure the success of your road show.

 

To learn more about targeting investors including identifying which investors can impact your valuation & shareholder base and how you should tailor your message for each targeted investor, please contact james.tickner@thomsonreuters.com

 


This entry was posted in Best Practices and Tips, Investor Relations, Investor Targeting, Investors, Road shows, Targeting Investors in Europe, Tips for IROs and tagged , , , , , by Arzu Cevik. Bookmark the permalink. No Comments

SEC Says Social Media OK for Corporate Disclosure

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On April 2nd, the Securities & Exchange Commission (SEC) stated that companies may use social media for corporate disclosure and still be compliant with Regulation Fair Disclosure (Reg FD), if they tell investors ahead of time where to look.

Social media platforms companies can use include Twitter and Facebook in addition to a company’s own website, which many companies already use. This report comes after the CEO of Netflix, Reed Hastings, posted on his personal Facebook page stating that Netflix‘s monthly online viewing had exceeded one billion hours for the first time.

Netflix did not file an 8-K and did not issue a press release, as is customary with most companies when issuing material non-public information, as per SEC requirements. Mr. Hastings had not previously used his Facebook page to communicate information about Netflix. But social media platforms such as Twitter and Facebook did not exist when the SEC created rules about disclosure under Reg FD.

Yesterday’s announcement from the SEC helps to clear up any uncertainty about using social media and being Reg FD compliant, which was a major concern for many IROs.

From the SEC: “Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively. It is intended to ensure that all investors have the ability to gain access to material information at the same time.”

What does this mean for your company? If you haven’t already started using social media, will the SEC’s announcement be the catalyst you need to start using Twitter to communicate company information? The likelihood that companies will use social media exclusively to distribute material, non-public information is low.

IROs that have a corporate IR Twitter account, do communicate information about the company but with redirects back to the company’s website. All external communications have to be approved by a company’s compliance department and the rule of thumb among investor relations teams is to use a mix of distribution methods to communicate information including:

Top 6 IR Communication Tools 

1) Filing with the SEC

2) Issuing a press release

3) Updating the company’s website

4) Using Twitter to redirect to a company’s website

5) Email distribution

6) Web-based disclosure

IR teams use a combination of all of these mediums to ensure their messaging is distributed to as wide an audience as possible. Using Twitter or Facebook alone doesn’t ensure that your earnings release will be picked up by the news services, such as Yahoo Finance, at least not yet.

Thus, social media is one way to distribute information but it may not be used as the exclusive tool for IROs to disseminate information.

However, companies that specialize in social media may take this opportunity to start using their own social media platforms to exclusively distribute material, non-public information. One such example? Perhaps Facebook (Nasdaq: FB). 

To read the full release from the SEC, please click here: http://1.usa.gov/12derR7

Will you start using social media for investor relations? Leave your response.


This entry was posted in Uncategorized and tagged , , , by Arzu Cevik. Bookmark the permalink. No Comments

Investor Targeting: Attracting Tier 2 Capital – Key Points

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Last week, we hosted a webinar for IR teams about Targeting Tier 2 Investors. Below, I highlight a few key points from the webinar.

Concentrated at the top – the top 100 funds account for half the actively managed assets of the largest 1,000 funds.

james blog jpost pix 

Opportunity within the 100-500 tranche – While most companies will be chasing the top 100 largest funds, considerable opportunities exist within the next tranche between 100 to 500, opening up another 30% of the pool of institutional capital. These funds have the purchasing power to take sizeable positions and exhibit medium or long term investment horizons.

Diamonds in the Rough – Consider also that in deeper markets such as London, New York or Boston that many medium or even large funds may fall below the radar for brokers organizing road shows given their low turnover and inherent value in terms of trading commissions.

What Should IROs Do? – We would encourage IR teams to take control of this process in terms of knowing which funds they want to meet outside the largest institutions.

Try to capture some carefully selected tier 2 money centers. Often visiting these funds at their offices can be far more effective than seeing them on the conference schedule.

To learn more, please listen to the replay of our webinar, available on demand and join our upcoming Investor Targeting webinars.

Register once and you will be able to access the webinars of your choice, live and on-demand, without needing to register for each individually.

All webinars will be hosted live at 11 a.m. New York Time

  • Targeting Investors in Europe (May 30)
  • Targeting Investors in Asia (June 26)

 Register today!

If you’re interested in building your investor targeting strategy, please contact us.

 James Tickner, Head of Global Investor Targeting james.tickner@thomsonreuters.com

targeting@thomsonreuters.com

 


This entry was posted in Best Practices Webinars, Buy-Side Investors, Investor Relations, Targeting, Tips for IROs and tagged , , , , by James Tickner. Bookmark the permalink. 1 Comment

IROs Select Thomson Reuters as their Favorite IR Services Provider

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IR Magazine conducted a global IR survey in 2012 asking investor relations officers questions related to IR departmental responsibility, outsourcing and external IR service providers.

In the area of external IR service providers, the overwhelming majority of IR officers voted  Thomson Reuters as their favorite  provider.

Thomson Reuters was voted the top provider globally and across all regions: U.S. & Canada, Europe and Asia. Clients cited our breadth of offerings, responsiveness, quality of service, timeliness and reliability as key reasons for their top vote.

Thank you to everyone who voted for us. Exceeding your expectations is and will remain our #1 priority.

To read the full report from IR Magazine, please use the link below:

http://bit.ly/Yy0Yiy

 


This entry was posted in Best IR Service Provider, Investor Relations, IR in the news and tagged , by Arzu Cevik. Bookmark the permalink. No Comments

Building Your Investor Targeting Strategy

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Yesterday, we hosted a webinar for IR teams about Building Your Investor Targeting Strategy. Below, I highlight a few key points from the webinar.

Competitive Environment

Thomson Reuters Lipper data shows that during 2012, there were persistent outflows from actively managed mutual funds.

 

With less money to compete with in the hands of active money managers, a well-thought investor targeting strategy is critical to gain a competitive advantage.

Although every company and region is different, there are key questions that all IR teams should ask before building a Targeting Strategy:

  • What do we look like as an investment rather than as a company?
  • Who are we competing with for capital outside of our close industry peers?
  • How does our financial profile enhance/limit the pool of investors we can attract?
  • How does our business strategy impact the investors who may buy our stock?

Putting it into Action

  • The importance of defining your target market is growing as active assets shrink and funds with wider remits prevail.
  • Involve key stakeholders (board, management, sell-side, etc) in all aspects of your plan
  • Be realistic about what can be achieved with the resources you have – C-level time allocated to investors, Travel Time/Cost
  • Know strategic priorities and investor strategy won’t always align. Competing influences are inevitable – stay the course.
  • Commit to measurement from the outset

To learn more, please listen to the replay of our webinar, available on demand and join our upcoming Investor Targeting webinars.

Register once and you will be able to access the webinars of your choice, live and on-demand, without needing to register for each individually.

All webinars will be hosted live at 11 a.m. New York Time, 4 p.m. London time.

  • Attracting Tier 2 Investors (March 20)
  • Targeting Investors in Europe (May 30)
  • Targeting Investors in Asia (June 26)

 

Register today!

If you’re interested in building your investor targeting strategy, please contact us.

 

James Tickner, Head of Global Investor Targeting

james.tickner@thomsonreuters.com

targeting@thomsonreuters.com


This entry was posted in Buy-Side Investors, Investors, IR Best Practices, Targeting, Tips for IROs and tagged , , , , , by James Tickner. Bookmark the permalink. No Comments

Understanding Recent Equity Inflows: Is There a Shift in Investor Preferences?

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The week after the resolution of the fiscal cliff, in which Washington avoided over $500 billion in automatic spending cuts and tax increases, investors poured an astounding $9.2 billion into US equity markets, which rallied significantly in the process.

This led much of the media and many sell side analysts, to declare the ‘historic equity inflows’ signaled the beginning of a ‘great rotation’. As Reuters journalist Mike Dolan puts it, “The gist of the [‘great rotation’] argument is that investor holdings of now expensive, ultra-low yielding government debt – following a virtually unbroken 20-year bull market in bonds – are ripe for rebalancing.

The attraction of relative and absolute valuations in equity will coax the outflow to stocks.” Such a paradigm shift in investor preferences would have broad implications for companies seeking to attract investors to their stock. Under a ‘great rotation’ type scenario where investors are flocking bond markets to rebalance towards equities, that objective would be made easier, and one would expect such inflows to continue and be supportive of a broader market rally.

However, if the ‘great rotation’ is nothing but a myth, then the nature of the recent equity inflows may be more of a transitory phenomena than a broad based shift in investor preferences.

Recent data has cast into doubt the existence of a ‘great rotation’. Bond flows haven’t skipped a beat…

Source: Thomson Reuters Lipper Funds Data. Flows include both mutual funds and ETFs.

Note: Data is obtained on a weekly basis; dates indicate the Friday of that week.

…and money market flows YTD have been mixed at best. And while equity inflows have been substantial, most of that money has gone abroad.


Source: Thomson Reuters Lipper Funds Data. Flows include both mutual funds and ETFs.

Note: Data is obtained on a weekly basis; dates indicate the Friday of that week.

In fact, domestic equities have not seen a steady inflow; while the first and last weeks of January saw very large inflows, investors drew some of their money out of the market in the second and third weeks.

So evidence for the great rotation simply isn’t there—that’s not to say this event won’t happen at some point when the macro environment improves and interest rates begin to rise, just that it hasn’t happened yet. Still, cumulative domestic equity inflows YTD have been impressive enough to warrant an explanation.

If it’s not a rotation away from bonds that’s bringing money into the equity markets, where is the money coming from? We believe this is an important question to ask, as it can give us insight into (i) how long these equity inflows will continue and (ii) the sustainability of this ongoing rally.

Many analysts, including Andrew Hollenhorst at Citi and Jeffrey Hopson at Stifel Nicolaus, believe the significant amount of accelerated dividend and bonus payments—paid out in the run-up to the fiscal cliff to avoid expected tax increases—are the best explanation for the recent jump in equity inflows.

First, data from the Federal Reserve shows an unusual climb in deposit inflows during December, supportive of a one off income increase. This was corroborated by data released by the Bureau of Economic Analysis last week, which showed an abnormally high increase in December personal income.

Accelerated bonus and dividend payments would explain the jump in (i) bank deposits and personal income in December and (ii) large deposit outflows and money market fund/equity/bond inflows in the first week of January. Thus, investors appear to be re-investing these one-off income payments rather than rotating out of bonds into equities. Given this is a one-time source of income, the duration of these equity inflows is likely more transitory in nature than one would assume under the ‘great rotation’ scenario.

In summary, the shift towards equities may well occur as part of a long-term trend when the macro environment improves and interest rates begin to rise. That being said, that time has not yet come. Recent equity inflows are not only disproportionately international, but also more likely a transitory phenomena. As such, IR teams should refrain from operating under the assumption that investor preferences are undergoing a broad based shift towards equities.

For more information, please contact Ted McHugh at edward.mchugh@thomsonreuters.com


This entry was posted in Buy-Side Investors, Investor Relations, Market Insights and tagged , , , by Arzu Cevik. Bookmark the permalink. No Comments

Understanding Investor Behavior: Trends in Buying & Selling Large-Cap Stocks & the Implications for Small-Cap Stocks

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Want to better understand how buy-side investors behave when buying and selling large cap stocks? What are the implications for small cap stocks?
Our analytics team has reviewed five years’ worth of data to understand trading patterns among the buy-side.  Read more to learn how you can benefit from this analysis, regardless of your market cap.
  • Investor Relations teams at large cap companies have to deal with investors selling out completely less often than their smaller cap brethren – that’s the conclusion from research from our IR Analytics team.
  • But on the flip side, there are fewer brand new investors taking entire positions in the stock.
  • The Thomson Reuters Investor Relations Analytics team (based in San Francisco), spend their days (and many nights) immersed in data that is relevant to our IR clients, including looking for trends in ownership among institutional investors.
  • In the course of a year-long analysis into understanding & modelling U.S. investor behavior, they have found a number of fascinating insights.
  • When reviewing the trends in ownership over a five-year period, the tendency is for investors in large cap companies to ‘trade around’ their positions, rather than to sell out or buy-in completely.
The chart below shows the historic trend for a select group of small and large cap stocks using public data:
  • The proportion of new buyers initiating a position or selling their entire position in a stock is inversely related to the stock’s market cap and to the number of holders. In other words, the larger the stock, the fewer the number of completely new buyers or existing holders who sell out entirely.
  • Turnover in the investor base of large cap companies is driven by churn from existing holders, who tend to reduce or increase existing positions. Inclusion in indices and wider recognition of large cap companies tend to drive existing holders to ‘trade around’ their position rather than exit entirely.
  • Although there are fewer complete sell outs for large cap companies, the flip side is that there are fewer opportunities available to find entirely new buyers.
  • For smaller cap companies, it is far more common to see institutions entirely selling out of their position, but also more common to see investors initiate a brand new position in a stock.
  • For smaller companies, investors tend to have a more clear-cut approach, of taking a new position or exiting entirely.
What are the implications for IROs?
  • For IROs at large cap companies, the take-away is that investors tend to fully sell-out or buy-in relatively rarely. As a result, targeting strategies need to be adjusted. Finding entirely new buyers of the stock is a relative rarity.
  • A company is 3-4 times more likely to experience buying from an existing holder of the stock than from a new buyer, so IROs need to look for opportunities among their existing shareholder base.
  • Similarly, existing holders may be unlikely to sell 100% of their position, but substantial selling pressure can stem from current holders lightening their positions.
What are the implications for IROs of smaller companies?
  • The balance of probabilities is much more even between investors trading around their current position and buying in, or selling out completely.
  • There is more of a need to find brand new investors in the stock, to replace the sell-outs but even here, trading around an existing position can be substantial.

Are you interested in learning more about investor behavior & investor targeting strategies?

We’ll be hosting a series of free targeting webinars as part of our IR thought leadership program this year. The first webinar will focus on Rethinking Your Targeting Strategies and will take place on Feb. 27th. More details to follow.
Thomson Reuters Contacts:
Chris Collett, Global Head of IR Advisory Services
chris.collett@thomsonreuters.com
 or
David Levine, Vice President, Global IR Analytics
david.levine@thomsonreuters.com

This entry was posted in buy-side investment decision-making process, Buy-Side Investors, Investor Relations, Stocks, Tips for IROs, Uncategorized and tagged , by Arzu Cevik. Bookmark the permalink. No Comments

ROE – Top Investment Metric for Buy-Side Investors

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What types of stocks are investors buying?

We analyzed over 25,000 mutual fund portfolios globally in 3Q12 and found that Return on Equity (ROE) was the top investment metric for investors knocking liquidity into 2nd place for the first time in 2012.

Trading volumes became the most important screen for mutual fund managers and hedge fund managers alike in the first two quarters of 2012, as liquidity in the market plunged.

The ability to trade in & out of stocks without adversely affecting price is a serious gating factor for most investors and by extension, a challenge for IROs.

Volumes are still very important but now of the top eight fundamental screens, three relate to company profitability and returns, in particular ROE, ROA and net profit margins.

We run through these and other fundamental screens for mutual funds in more detail below:

•    Profitability is the key attraction. Investors are looking for companies with attractive levels of profitability, buying stocks with solid Return on Equity (ROE at least 5.8%) and attractive Return on Assets (ROA at least 6.8%). Net profit margins need to be solid, at least 3.1%.

•    Comfortable financial headroom.  Another top eight metric that mutual funds are screening for is interest coverage (EBIT/Interest expense). In other words a company’s ability to make its interest payments. Investors are typically looking for companies with a robust 2.7x interest cover.

Interestingly, this factor shot to prominence during the financial crisis – during the bull market years of 2005 and 2006, there was not a single metric focused on balance sheet strength!

•    Investors are also looking for yield.  A popular screen among portfolio managers is dividend yield, looking for 1% on a historic basis (where forward yields are screened for investors are looking for a minimum of 1.5%). The focus on dividend yield has become popular in late 2011 and into 2012, with yield oriented funds seeing strong inflows.

•    Valuation is important, but not a critical factor.  Valuation is another top eight fundamental factor.  We screen for a range of valuation metrics, but find that a composite approach works better than focusing on a single metric, such as PE.

We use an approach that ranks all companies from 1 to 100 (with 1 being the most expensive and 100 the best value), based on six measures, including EV/Sales, PE and Price/ Cash Flow.* Investors are typically buying companies ranked 34 and above, indicating that they’re focused on reasonable value stocks, but not necessarily the cheapest.

•    Trading volume still an important gating factor. Our analysis points to mutual funds only investing in companies where the 30 Day average stock volume is greater than 0.2% of the shares outstanding. For example, a company with 100 million shares would have to have a 30 day average stock volume of 200,000 shares.

What do investors want? Solid, profitable companies with solid balance sheets, dividends and modest valuations. 

If you are interested in learning more about what types of stocks investors are buying and/or about the valuation methodologies, please leave your questions below and/or contact your advisory services analyst.


This entry was posted in buy-side investment decision-making process, Buy-Side Investors, Investor Relations, Investors, Stocks, Top investment metrics and tagged , by Arzu Cevik. Bookmark the permalink. No Comments

IR Thought Leadership Webinars – 2013

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As we near the end of the year, we’d like to thank everyone who joined our Investor Relations Thought Leadership webinars, either live or via on-demand. We hope you found our topics & insights helpful.

We’d like to garner your feedback to help shape our IR Thought Leadership content for next year’s webinars.

What topics would you like to learn more about in 2013?

Please leave your feedback by responding to this post. We’ll take all of your feedback into consideration.

Thank you.

Happy Holidays!


This entry was posted in Best Practices Webinars, Investor Relations, Tips for IROs and tagged , , by Arzu Cevik. Bookmark the permalink. No Comments

5 SIMPLE WAYS TO INCORPORATE MOBILE INTO YOUR IR PROGRAM

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MOBILE WEB USERS WILL SURPASS “TRADITIONAL” DESKTOP INTERNET USERS BY 2014*

With the rapid adoption of mobile technology, there is a sense of an always-online culture where the ability to research and communicate is never more than a click or swipe away. Investor Relations is no exception.

As an IR professional, you need to stay connected to events moving your company, peers and industry, even when you’re on the road. And your stakeholders are also increasingly becoming mobile.

Here are a few simple ways to incorporate mobile into your IR program:

1)  Optimize your IR website for your mobile stakeholders: By 2013, mobile is expected to be the first screen for all Web usage. What does this mean for IR? Well, it means your IR website will probably be viewed on a smartphone or tablet. And as the saying goes, first impressions matter. Ensure your IR website is optimized to be viewed not only on multiple browsers but also multiple devices including tablets and smartphones.

2)  Ensure your earnings and video webcasts are mobile-friendly: A report from Nielsen found that over 26 million U.S. consumers viewed mobile video in the last quarter. Ensure that you offer the same experience to your mobile audiences accessing your earnings & conference webcasts as to your desktop viewers. Learn more on how to optimize your webcasts and webinars for mobile audience by visiting our Multimedia Solutions blog.

3)  Arm yourself (and your team) with a tablet: According to a report by IDC, it is estimated that by 2014, 70% of employees will access company data from outside their office. Increase productivity and collaboration by using a tablet – ideal for when you’re on the road or in the office. Imagine not having to print a 30-slide investor presentation to prepare for a meeting because you can view it and add notes to it directly from your tablet. Or pulling up the most recent sell-side research report to understand investor sentiment from a cab on your way to an investor meeting. There is a lot you can do with a tablet – it’s worth the investment.

4)  Download market-moving apps: Ensure you stay connected to what could potentially be moving your stock and access critical market-moving information such as quotes, news, sell-side research, and estimates whether you’re in the office or away. A variety of news and market data companies have their own apps and mobile websites, but a couple highly rated apps that aggregate news and social media are Pulse News and Flipboard. Save frequently visited market news websites or download respective apps to your smartphone and tablet.

5) Synchronize your tablet and desktop information: Leverage a variety of applications that allow you to access your desktop remotely including GoToMyPC, LogMeIn and Screens VNC. Ensure you have access to the information you need when you’re on the road with content sharing apps including Dropbox and Google Drive.

 

Already have a mobile IR program or a favorite IR app? Tell us how you got started. We’d love to hear your story.

* According to Morgan Stanley


This entry was posted in Best Practices, Investor Relations, Mobile and tagged , , , , by Jenn Rothenberg. Bookmark the permalink. No Comments