xavGE

IR and communications
• Detailed premeeting briefing on
current exposure and portfolio
trends for each investor in advance
of an interaction.
In concert with an effective investortargeting
provider, the investor relations
officer will be able to confidently approach
the investment community with the
knowledge that time and resources are
being used effectively.
5.7 Market perception feedback
Ipreo
The market intelligence and surveillance
and investor targeting and outreach
functions provide critical data and insights
on the current and potential states of
the shareholder base, which are both
imperative to running an impactful IR
program. Perception feedback provides a
largely qualitative complement that will
enable an in-depth assessment of the
investment community’s view on various
facets of the company. The key to gaining
valuable feedback from investors and sellside
analysts is the utilization of a third
party to conduct the research. Not only will
a third party bring expertise to the design
and execution of perception research but
the indirect connection it has with the
company will foster an environment that
allows for the free exchange of thoughts
and opinions. Perception feedback can be
used in advance or after major events, such
as an investor day or quarterly earnings
announcement, to assess expectations or
judge performance. Perception feedback
can also be used on a more routine basis
in order to keep a constant finger on the
pulse of investor opinion. Regardless of the
option chosen, expect the following from
the market perception feedback providers:
• assistance and guidance on the topics
that should be covered and the design
of the questionnaire;
• consultation with regard to the
participants most applicable for the
study and the timing of the project;
• a comprehensive analysis of the study
results that provides a synthesis of
the feedback topic-by-topic and puts
forth recommendations to address
the concerns held by the investment
community.
When conducting an initial perception
study, a third party will host a series
of conference calls with the investor
relations officer to better understand the
company’s strategic direction, what was
discussed during the pre-IPO roadshow,
what has been accomplished since the
IPO, as well as its current disclosure
and communication practices. This
understanding allows the perception
feedback consultant to design an effective
questionnaire and ask appropriate probing
questions during the telephone interviews.
The goal is to keep the questions openended
to allow the participants to freely
discuss the critical factors driving their
investment or rating decisions. Themes to
cover may include:
• Overall view as an investment:
competitive strengths, weaknesses,
risks, opportunities, reasons for a
stock’s discount, suggestions for
achieving a premium, events that would
cause a decrease/increase in position,
fundamental metrics used to assess the
stock, relative valuation;
• Business and capital allocation
strategies: confidence in the current
strategy and business model, strategic
concerns, how investors would prefer
the company to utilize their excess
cash, what the potential growth areas
are for the company;
• Earnings and guidance: reaction to
latest earnings release, expectations
for the full year, biggest challenges
going forward from a results
perspective, opinion on information
presented;
• Peer and industry intelligence:
preferred investment choice in the
space, best-in-class disclosure and
communication practices for the
sector;
• Senior executive team: overall opinion
of senior management’s strategic
vision, execution, credibility, capital
management, corporate governance
structure and expectations for
shareholder interactions;
• IR efforts: overall satisfaction with
IR’s articulation of the company story,
accessibility, credibility, frequency
and content of communication and
addressing misperceptions in the
marketplace.
Equally important is choosing the
appropriate study participants to ensure
receiving unbiased, comprehensive
feedback. Participants to be interviewed
are typically dispersed among five
segments: current buy-side institutional
holders, potential buy-side institutional
investors, recent buyers and sellers,
current sell-side analysts and potential
sell-side analysts. Global investors,
focusing on North America, the United
Kingdom, Continental Europe and Asia,
should also be included, as participants’
expectations often vary by region.
When creating the participant list,
those investors should be chosen that
are familiar with the company as well
as the management and IR teams.
The optimal places to locate this
information include the company’s
pre-IPO roadshow agenda, recent
meeting schedules, conference call and
webcast participant lists, as well as
notes entered in the investment
community database and CRM.
The consultant will also provide
guidance on the most favorable times
to conduct a study. Avoid launching the
interviewing period if a major company
announcement is expected to affect
participants’ opinions or during earnings
season, major holidays or well-attended
industry conferences.
Once the interviews are complete,
expect the consultant to provide a
comprehensive analysis of the study
results that includes in-depth, topic-bytopic
summaries, which are supported by
verbatim comments from the participants.
The final study will also identify any
disconnects between what the company is
communicating and what the investment
community is hearing and include
actionable, best-in-class communication
recommendations to address the
investment community’s concerns. Based
on these findings and recommendations,
the company can tailor its disclosure and
messages to shift perceptions closer to the
preferred state.
Companies most commonly utilize
large-scale perception studies annually
in order to get an in-depth assessment
of investor sentiment. These studies
are a terrific benchmarking tool, and the
results, in part or in their entirety, are
60 NYSE IPO Guide