Many public companies withdrew, or never introduced, formal financial guidance in spring 2020 as a result of severe and widespread business disruption and the high level of uncertainty surrounding the COVID-19 pandemic. We are now roughly two weeks into the fourth quarter and fiscal year 2020 earnings reporting season and wanted to share a few notable trends and key considerations that public company management teams should bear in mind as they evaluate whether to give formal financial guidance for 2021.
Posts by Mike Piccinino, CFA
The continued uncertainty created by the COVID-19 pandemic will continue to present unique challenges for public company management teams as they report Q2 earnings and attempt to provide the investment community with an appropriate update on the business.
Medical meetings allow analysts and investors to explore an array of public and private healthcare companies in one place and gain deeper insight into the industry’s competitive dynamics as they meet with management teams and learn about new products and strategies.
These and other industry events play an important role in enhancing Wall Street professionals’ understanding of the quickly changing healthcare landscape – helping them reinforce and update their investment ideas, conduct due diligence, evaluate new prospects, and spot emerging competitive threats.
While it seems as though legislative uncertainty is increasingly an issue that the investment community needs to deal with on a year-round basis, at this time of year, many public companies in the healthcare sector are navigating the challenges of a “legislative overhang.”
With tax reform a key focus of President Trump’s legislative agenda, investors are keenly focused on how potential changes in healthcare policy may affect public companies’ growth and profitability profiles going forward. As always, heightened focus from investors means more questions for executive management teams; with legislative uncertainty however, there are no clean answers to these questions. So, what should you do?
As much as CEOs and CFOs know that they should focus on the long-term performance of their stocks, it’s impossible not to at least notice and wonder about day-to-day, hour-to-hour fluctuations, especially when they seem arbitrary and divorced from fundamentals.
Trading before the market opens and after it closes can be particularly confusing. For instance, outside of the regular market session, spreads can widen dramatically (see chart).
The Division of Corporation Finance (the Division) is a branch of the U.S. Securities and Exchange Commission (SEC) that supports the SEC’s mission to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” Among its duties, the Division “provides interpretive assistance to companies with respect to SEC rules and forms and makes recommendations to the Commission regarding new rules and revisions to existing rules.” This duty is performed, in part, through the issuance of Compliance and Disclosure Interpretations (or “C&DIs”) on a variety of subjects.
In the world of small-cap healthcare, we have observed that the class of asset managers who are collectively referred to as “hedge funds” are often viewed negatively by executive management teams, particularly those that are new to the public markets.
This tendency is understandable in light of the fact that hedge funds, as a whole, most often attract media attention when they’ve disclosed a sizable position in a company with activist intentions (“corporate raiders”), or when they’ve come under the scrutiny of regulators. These high-profile examples distort the public perception of hedge funds overall.
A well-run Investor Day can be an incredibly valuable part of your investor relations strategy. It’s a great way to cultivate relationships with existing investors and covering analysts, and to introduce/enhance prospective investors’ and analysts’ understanding of your story.
Timely and strategic planning are integral to hosting a successful event. Drawing on our many years of attending and participating in Investor Days, we can be a valuable resource as you prepare for yours.
The day you report earnings is obviously crucial, and even veteran IR professionals frequently botch them — sometimes due to poor preparation or just nerves. This week and next, we’ll offer tips to help you de-stress the event and execute it flawlessly — beginning today with four pre-call tips to help you get ready.
When it comes to investor relations (IR), remember that your company’s Internet presence often makes the first impression. In today’s frenetic capital markets environment, potential investors will often use your corporate website to quickly understand the fundamentals of your business before they decide to allocate time to a meeting with management.
The primary purpose of having a corporate website, of course, is so that you can easily share your company’s “story” with the marketplace. In order to be effective, the story must be communicated thoroughly, accurately and consistently across your website and all of your digital media, in a way that is easy for visitors to consume, understand and navigate.