WORK WE’VE DONE: CASE STUDIES
Correcting investor misperceptions
Meetings with analysts, coupled with clear IR messaging, erase negative impressions about an industrial company that were lingering from the past. A better understanding of the new management team’s accomplishments results in sell-side “buy” recommendations and increased institutional ownership.
Client Challenge: Erase negative impressions lingering from the past
Despite a shift in strategic focus under a new management team, five years of slow but steady growth and a solid financial turnaround, few on Wall Street were familiar with this industrial manufacturer. To make matters worse, most of those who did know the company harbored misperceptions stemming from poor performance in the past. The company was followed by only one sell-side analyst, and its institutional ownership dramatically trailed that of its peers.
Sharon Merrill Approach: Selective analyst introductions and clear IR messaging
Sharon Merrill used its proprietary targeting resources to reach out to sell- and buy-side analysts likely to be interested in a company with the client’s industry and investment characteristics. Reinforcing this outreach, the company launched a new communications strategy designed to dispel the prevailing misperceptions and generate awareness of its recent accomplishments. Investors who responded positively to the outreach were introduced to management through one-on-one and group meetings in key U.S. money centers.
Results: Sell-side “buy” recommendations and double-digit growth in institutional ownership
In the first year, more than 50 analysts and portfolio managers met personally with company management. The majority of investors responding to feedback surveys said recent communications had enabled them to better understand the company’s story. Two additional sell-side analysts issued “buy” recommendations, and institutional ownership increased 19 percent over the prior year. The company was eventually acquired for nearly double the market valuation than when its relationship with Sharon Merrill began.
