The Equity Group conducts perception studies on behalf of ongoing clients, or on a project basis. Each Perception Study is a thorough, yet tailored, objective assessment of investor and analyst sentiment.
Companies typically embark on perception studies in order to:
- Gain insight into
- how the strategy, business model, execution, capital structure and corporate governance are being perceived by the investment community;
- marketplace misperceptions that may be causing a valuation gap;
- company- and/or sector-specific factors that are impacting valuation;
- the level of confidence in management and other factors that are influencing investment decisions and stock performance.
- Conduct periodic benchmarking, and assess the effectiveness of communication strategies relative to peers. In many cases “peers” includes similar market-cap companies, not just those in the same sector.
Common catalysts for perception studies include:
- A shift in strategy or structure, or a change in management.
- Concerns surrounding absolute or relative valuation.
- In consideration of an Offering, or post-Offering.
- Preparation for an Investor Day – assessing interest, expectations, and relevant topics – and following up on the event for feedback.
- Assessment of vulnerability to shareholder activism.
In consultation with the client, we prepare a list of questions designed to generate insight into specific areas of interest or concern. We also develop a list of potential participants that can include top institutional holders, former holders, peer holders, and analysts that cover the Company and/or peers. The Perception Study is conducted via phone and responses are anonymous, which supports more candid and thoughtful answers. Using the collected feedback, we then prepare a detailed report consisting of qualitative and quantitative findings that provide both a feel for what investors are thinking and the necessary context to discuss any potential actions.
The studies enable our clients and our firm to:
- Develop a comprehensive understanding of investor/analyst sentiment and expectations, as opposed to segmented feedback following particular meetings.
- Develop strategies that can be employed to: (i) clarify misconceptions; (ii) positively influence investor perception to close the gap between market value and intrinsic value, or generally drive shareholder value; (iii) differentiate the Company.
- Better understand their investment community audiences.
- Formally inform the Board about these topics and any steps being taken.