Break from the status quo and add more content to your release headlines to reach new investors, says IR firm
To assess the reach potential of today’s IR communications, we reviewed 84 quarterly releases, the workhorse of IR messaging, issued on three summer days in 2016.
We focused on headlines – the point of discovery for any quarterly release – and what became clear is that most companies avoid discussion of their numerical results, underlying trends or drivers in their headline.
Most also opt not to explain the nature of what their company does beyond providing the company name, which in 42 percent of instances provides no help. In general, the headlines we reviewed provide little information or perspective that might help their company story become discovered by new investors.
|
Quarterly release headline analysis |
Yes |
No |
|
Is there a financial measure in the headline? For example: EPS of $1.25, net income of $23.2 mn, revenue of $3.8 bn |
9% |
91% |
|
Is there any indication of quarterly performance direction? |
18% |
82% |
|
Is there an explanation of drivers behind the results? Such as ‘due to sales of the new software release’ or ‘improved cost-management and acquisition synergies’ |
0% |
100% |
|
Is it clear what the company does/its general industry category? United Rentals & Puget Sound Bancorp are clear, but it’s hard to guess what PTC, or Umpqua actually do |
58% |
42% |
The following recommendations will optimize the reach of quarterly releases – without impacting existing investor dialogues:
1. Remove obvious, empty-calorie words from your headline and replace with value-added content such as the date and/or time of the webcast. Investors are busy: get to the point, make things easy for them. Plus fewer words are cheaper!
Rather than: ABC Group, Incorporated to report fiscal 2016 third quarter financial results of operations and host an investor conference call and internet webcast (22 words)
Try: ABC Group reports Q3 results and hosts call Wednesday, November 2, at 4.30 pm ET (14 words)
2. If your company name does not clearly explain your business, add a phrase in your headline to clarify your sector/industry to increase the odds your news will be discovered by editors, investors, reporters, blogs, other industry participants and search engines interested in your sector.
Rather than: ‘Company X reports fiscal 2016 second….
Try: ‘Connectivity and networking solutions provider Company X reports…’
3. Use a financial measure(s) (revenue, net income, EPS, and so on) in your headline to provide a clear window on the scale of your business and valuation, relative to readily available share price/market cap data, to help readers assess your story’s relevance to their strategy.
Rather than: ‘Company Y announces fiscal 2016 second quarter …results’
We suggest: ‘Company Y reports Q2 revenues of $125 mn
4. Add an element of performance direction to your headline to attract new investors with appropriate investment styles (growth, special situations, turnaround, value, and so on). Getting the direction of your performance out more broadly – whether up or down – should reach more new relevant investors.
We suggest: ‘[Digital content provider] Company Y Q2 revenues rise 22% to $125 mn
5. A step further would be to explain a key driver behind the change of the measure.
We suggest: ‘[Digital content provider] Company Y Q2 revenues rise 22% to $125 mn, driven principally by new distribution relationships
6. Similarly, we recommend you include key elements of your conference call comments in the press release – not just on the call, which has a fraction of a release’s reach and engagement, particularly with retail investors. This includes business drivers, industry trends and management strategy that will affect your future results.
7. Include comprehensive financial statements in your wire service release, because 13 percent of releases we surveyed did not take this simple step to push their financials to investment portals on a global basis. This is where investors may first discover you.
Further, if your performance is strong and the numbers show it clearly, a comparison table with percentages is a great addition to a successful release: 56 percent of releases surveyed did not take advantage of this opportunity.
Clearly, we advocate breaking with the IR status quo by adding more relevant content to your headline to optimize discovery by relevant investors. The reasons to consider this approach outweigh any rationale for turning a possible communication into merely a disclosure.
A longer version of this article is published on the Catalyst Global website.
David Collins is founder and managing director and Anna Vikentiev is an associate at Catalyst Global
