Analyst Days

A public company can utilize a number of channels to communicate its story and business progress to the investment community, be it non-deal road shows, corporate Web sites, conference calls, investment conferences and a variety of online forums. While each of these has a role, LHA encourages more small-cap companies to consider an additional proven channel — the analyst day — to generate interest.

The term analyst day broadly describes an event attended by the buy- and sell-side, and sometimes media, and lasting from a couple of hours to a full day. A key analyst day benefit is that it allows attendees to take a “deep dive” into the company, including current and future market opportunities, products and technologies, competitive advantages, industry dynamics and growth strategy. The depth and breadth of the event can address misperceptions, clarify the business or simply build (or re-build) support for the story.

Successful analyst days can take different paths in terms of content and structure. Some have a company-wide perspective, while others focus on one or two areas seen as key value drivers, such as product development/R&D or high-growth business segments. Either way, the most effective programs demonstrate management strength by including presentations from executives who do not generally interact with the investment community.

Uniquely, analyst days are also opportunities to provide endorsement for the company’s story by third parties – perhaps as speakers or panelists. Including this outside perspective from prominent technology experts, customers, researchers, academics, etc. can also be important in attracting potential investors and analysts to the event.

While most analyst days are held in cities with large institutional investor communities, companies wanting to demonstrate their R&D or production capabilities can consider hosting the event on-site. In our experience, when there is something valuable to see and experience, many investors and analysts will make the trip. Furthermore, we also see that tight budgets that might have precluded such travel in the past year or two are loosening up, as is hiring.

Besides creating a set of compelling presentations perhaps under a unifying theme, the “best practices” of an analyst day takes into account venue selection, scheduling, room dressing and leave-behinds, arranging for a webcast, the pros and cons of announcing news at the event, and a number of logistics do’s and don’ts. For example, knowing when potentially competing events are scheduled, or how to dovetail with a popular investment conference, can significantly affect attendance and impact of the event. Also, the broader management participation mentioned above may require an advance briefing on disclosure, so as to avoid inadvertent release of non-public information while controlling the message. This is especially true if the agenda includes informal interaction with investors during lunch or a reception.

LHA has assisted many clients in planning and executing successful analyst days. We welcome the opportunity to help you integrate this important channel into your IR program.