As the year comes to a close, it’s time for management teams to start thinking about their 2019 investor relations strategies. How can you learn from your efforts in 2018 — and what needs to change for the year ahead? Should you shift the focus of your activities or hold steady on the path toward the goals you outlined for the past year?
Here, our team of IR experts at Westwicke provide their best advice for creating a top-notch investor relations plan that aligns with your company’s goals and priorities for the upcoming year.
Balance visibility with being too promotional.
It’s a great idea to stay active and present at a handful of investor conferences, as well as participate in non-deal road shows. These events keep you visible with your current shareholders and help build a bench of future potential shareholders. That said, there is a fine line between being too promotional and too visible. A buy-side friend once commented to me that a certain management team “should spend more time running the business; they have been at the last five conferences I’ve attended this quarter alone.” Finding that balance leaves the investment community wanting more and enhances your credibility.
Commit to targeting 10 investment funds to become new shareholders by the end of 2019.
Now is the time to identify potential new investors based on appropriate metrics such as peer group analysis, fit with investment style, previous interactions or relationship building, or even anticipated new news that you think will provide some excitement and motivation. It will usually take at least several meetings to convert any fund to a shareholder, so plan for interactions throughout the year with your newly identified targets. You can start the process with a one-on-one meeting at the J.P. Morgan Healthcare Conference in January and keep at it periodically throughout the year. Never let it slide. Your success rate won’t be 100 percent, but even just a few new holders makes the endeavor worthwhile.
Take a fresh look at last year’s IR plan.
In many cases, it’s easier to dust off last year’s plan and make edits to that, rather starting from scratch. That said, by doing that, you may miss some key opportunities or continue to do things that aren’t working. So don’t be afraid to reevaluate, think creatively, and develop a new plan if necessary.
Plan your year strategically.
If possible, build sufficient time between board meetings and earnings report dates. Both require 100 percent attention from management to prepare properly.
Gauge analyst and investor perceptions.
While no one wants to risk receiving negative feedback, it’s important to take the time to gauge analyst and investor perceptions and potential concerns. Conducting a formal or informal perception audit can help you generate that feedback and develop your strategy for the coming year. If investors or analysts say that they’re confused about a recent reorganization or investment decision, that’s your opportunity to provide clarification and improve your company’s communication.
Schedule out the year.
As you head into the new year, create a schedule that maps out your conferences, analyst events at industry trade shows, bus tours, and non-deal road shows, so you avoid missing out on vital exposure. Nailing down your schedule now will allow you to proactively reach out to analysts to announce your plans and reply to any additional invitations that come your way.
With a solid plan in place, you are better prepared to respond to new opportunities as they arise, which they inevitably do. Having a clear vision on the months ahead also means you’ll be viewed as more credible and your company more well-managed in the eyes of investors and analysts.
Plan for the unexpected.
There’s no way to accurately predict next year’s market, so the best strategy is to plan for every scenario. You should have a plan for a good market and one for a bad market. For example, if it turns out to be a good year, where companies have an easier time raising money, you might focus on getting analyst coverage and new investors. If the market isn’t so good, you may have to focus on more traditional methods of getting attention.
Establish goals for the year ahead.
Before you get into the details of your investor relations plan for the year, spend some time gathering input on what’s important to your company this year. What are the most vital goals you’re trying to accomplish? Maybe it’s expanding your relationships with analysts or attracting additional coverage. Once you understand those priorities, you can make sure your IR plan moves you toward those goals.
Use these tips to start planning now for an effective investor relations program in 2019. For additional guidance, download our eBook, Westwicke Partner’s Insider’s Guide to Investor Relations.