Initial findings from XbInsight’s survey of the US investment community
It may be some way off the blockbuster performances of 2006 and 2007 but 2010 won’t be remembered as a dreadful year for investors: the S&P 500 gained more than 200 points over the year, its strongest performance for three years.
In December 2010 and January 2011, our researchers spoke to more than 800 equity analysts and portfolio managers as part of IR magazine’s annual US investor perception study, the research that underpins the IR Magazine US Awards. For this year’s study, respondents were also asked how they felt members of the US IR community had coped with bumps in the road to economic recovery.
As well as broader macroeconomic concerns relating to currency strength, US government debt and economic instability in Europe, investors have had to deal with the usual smattering of crises that periodically affect companies in their portfolio. In the crisis management categories, energy firms and banks dominate the short-listed companies.
Two banks – Bank of America and JPMorgan – were flagged up by investors for their handling of foreclosures in the US. In September JPMorgan became the second major mortgage lender to suspend court cases against defaulting homeowners so it could review its legal procedures. Bank of America soon followed suit. The problems may have been unwelcome, but both companies picked up a nomination in the best crisis management category for their handling of the issue.
The other big crisis of 2010 was without a doubt the BP oil spill off the Gulf of Mexico. This wasn’t solely a disaster for UK firm BP, however: American companies Anadarko Petroleum and Transocean were also implicated. As well as launching litigation against BP, US authorities sued Transocean, owner of the faulty rig, and Anadarko, which part-owned the well.
For the remainder of the awards, 2011 is a mix of old and new, with healthcare company Covidien and JPMorgan short-listed for eight and six awards, respectively. Last year JPMorgan won awards for best overall IR in the large-cap category, best corporate governance and best IR for a company from the financial sector. In 2010 Cole Lannum from Covidien came second in the best IRO category and this year sees him nominated again. Michael Mussallem, chairman and CEO of Edwards Lifesciences, is also short-listed for best IR by a chairman or CEO for the second year in a row.
Feedback from respondents
The good
‘JPMorgan provides thoughtful responses, detailed financial disclosures and conservative financial policies’
‘The IR department at Coach has an excellent pulse on the investment community, excellent access to management and an excellent grasp of its company’
‘Amazon always has informative shareholder letters, written by the CEO, which provide a well-articulated, long-term strategy’
‘The IR department at Cognizant Technology Solutions has a good sense of street expectations’
The bad
‘In my experience, all IR websites are poor’
‘When it comes to CEOs, none of them stands out at the companies I follow, and none is capable of having a good dialogue with investors’
‘American firms make it hard to speak with them. As an investor, I am often stuck on a switchboard all afternoon trying to speak to someone’
‘The information on websites is appalling: links sometimes don’t work and they fail to supply direct phone numbers or email addresses for those I need to speak with’
About XbInsight
XbInsight is IR magazine’s research brand, building on the publication’s established research efforts. Since 1991, IR magazine has taken its renowned investor perception study around the world to markets as diverse as Brazil, China, Singapore, the Nordic region, South Africa, Canada, the UK and the US. Across the global markets, thousands of buy-side analysts, sell-side analysts and portfolio managers are asked which companies have the best IR.
XbInsight is now building on that expertise and launching a series of studies examining successful IR and the key drivers of investor sentiment. It also provides:
- High-quality thought-leadership studies
- Benchmarking initiatives, including IR magazine’s online interactive benchmarking tool
- Global consolidated IR magazine research.
Specifically, the research division at XbInsight is looking to understand why some firms perform better than others in IR magazine’s investor perception studies. The first step in conducting this analysis is to gain a deeper understanding of the different IR practices at listed companies around the world.
