When attempting to articulate the exciting things happening within a business, management teams often rely on buzzwords and catch phrases to grab investors’ attention and paint a picture of the story they’re trying to tell. The problem, however, is that relying on clichés to bulk up your remarks often has the opposite effect. Having listened to thousands of conference calls, investors have heard it all before and view those hackneyed words and phrases as verbal fluff. Listed below are ten incredibly overused buzzwords that may sound exciting to you at first, but when used with investors, will fall on deaf ears.
The Westwicke Blog is designed to deliver information and insights into the ever-changing world of investor relations and the capital markets, with a specific focus on the healthcare industry.
Over time, all management teams want to build relationships, or at least a healthy rapport, with shareholders. Consistent execution of your business plan and proper communication with current and potential shareholders can help you build credibility, which in turn can bolster your company’s valuation and even allow your management team to earn “the benefit of the doubt” when things are not easy.
Last month, we looked at the top 10 ways companies can build credibility with shareholders. This month, we consider the opposite, and explore common ways companies get into hot water. Here are the top 10 credibility busters you want to work hard to avoid.
Legendary “60 Minutes” reporter Mike Wallace once said: “If there’s anything that’s important to a reporter, it is integrity. It is credibility.” The same should be true for every management team. Credibility with The Street – both on the buy side and the sell side – is an extremely important element in a successful investor relations program. In this month’s Top 10 list, we offer simple practices that help build and maintain corporate credibility.
- First and Foremost: Under-promise and over-deliver.
- Make sure your message and metrics are consistent.
- Provide the appropriate level of financial transparency. Continue Reading
Westwicke has been partnering with public companies for over seven years, and in that time we’ve helped companies effectively communicate to the Street.
We’ve compiled a list of best practices to engage in when it comes to your investor relations strategy.
- Cover both the good and the bad. It is easy to highlight the positive news and trends impacting your company and to gloss over the negatives. The best companies do a great job providing balanced information.
- Stay visible. After reporting a mixed quarter, it is important to maintain a dialog with your shareholders. Investors want to be reassured by the senior management that you are on top of managing the company.
- Adapt. Recognize that the metrics you provide to the Street need to evolve to best demonstrate the health of your business and to allow the investment community to gauge your progress. Continue Reading
Sell ratings got you bothered? Can’t shake the feeling that an analyst is holding a grudge? Wish you could just make them go away?
Let’s discuss your negative analyst strategy in 3 steps:
- Remember the big picture
- Avoid the pitfalls
- Engage and execute
1. Remember the big picture.
There will always be analysts who are negative on your company. They won’t go away. Why?
Smaller-cap companies, like many of those in the health services, life sciences and medical technology sectors, experience more volatile stock price action than some of their mid- and large- cap peers. These small companies tend to lack the liquidity of larger firms and are therefore more vulnerable to news events (and often, big price movements will occur for no reason at all). For the executives and investor relations professionals of these companies, such price movements can be gut-wrenching.
In their quest for a solution to stock price volatility, some management teams monitor stock price movements on a daily basis and try to find explanations for this movement. This short-term focus is often non-productive and can even be distracting. It’s better for executives to concentrate on building long-term, sustainable shareholder value by providing the Street with identifiable milestones and successfully achieving those milestones.