Sometimes the best research is done in a slightly less than formal setting.
Investors for the most part know that earnings drive stocks and there is a wealth of information that can be gleaned from the earnings conference call. There is also a wealth of information in the 10Q's and 10K documents published by the company and available at the Securities Exchange Commission website (www.sec.gov).
Those are great sources of detailed information on the company, but where they excel in data they lack in story. Suffice it to say that James Cameron or Steven Spielberg would want to present the company, its history and potential in a different light.
Enter the idea of the investor conference presentation. A chance to tell the story in a less formal setting than the earnings conference call and certainly more colorful that any regulatory document. These presentations can deliver the company history, the present and the future in a way that helps new investors get a better sense that just what comes on the earnings calls.
Investor conferences can be thematic in nature if they are put on the bulge bracket, location based (think chip companies are mostly in the Valley) or companies covered by the research department. Most of the time these meetings are webcast live for individuals to listen in. A presentation document may sometimes also accompany the presentation.
Recently I was at the Barrington Research conference at the Four Seasons in Chicago IL. The conference brought in several regional companies like Groupon & Orbitz, but also had out of state visitors like Constant Contact and Pandora. Barrington also provided a platform for some local private companies to tell their story as well, a welcome innovation to a standard practice.
During the Orbtiz (OWW) presentation by CEO Barney Harford we heard a nice overview of the company and some unique information that probably won't be found on the 10Q or a conference call. Mr. Hardford noted that Mac users spend $20 a day more than PC users when travelling. That tidbit doesn't make Orbtiz a buy or a sell, but it a valuable piece of information that might not have been conveyed in any other public setting.
For the lucky attendees, there is a chance to attend a break out session for Q&A focused meeting. I had the chance to sit in on three of those meetings at the Barrington Research Conference. Pandora (P) CFO Steve Cakebread told an interesting story about running into Little John at a Miami Heat basketball game and gave some good insights on the music business.
Groupon (GRPN) VP, Investor Relations & Corp Dev Finance provided insight into the recent acquisitions the company has made and how they track repeat customers. He was also intrigued by my proposal to have their quarterly earnings calls recorded until CEO Andrew Mason is a little more comfortable. Stay tuned to see if any dividends are paid on that one.
Constant Contact (CTCT) talked to institutional holders about how they increased ARPU by $1 in the most recent quarter and how their new social media product works with the overall strategy. Just hearing their questions made the time spent well worth it.
The bulge bracket holds these conferences, and regular investors are generally invited to those large scale events. Smaller events are usually restricted to clients only, so check to make sure you can get in before just showing up.
These conferences are learning opportunities. The tidbits you may get on data or product usage can surprise you. The clarity on how a product works on the client level can bring more faith to management. The questions others ask can give insight on how they are thinking about their current investments and how you might do the same. Finally, you might learn that a CFO likes Abba, and sometimes that's all you need to make a wise investment.
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service
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