Almost all analysts (95 percent) say conference calls are the most important and informative form of technology-aided communication between public companies and the financial community. A new study by the Association for Investment Management and Research found that conference calls rank ahead of web sites (77 percent) and e-mail (72 percent) as the most valuable source of strategic or financial information on companies among the high-tech communications methods measured in the survey.
Corporations have generally turned to of teleconference calls, the Internet, e-mail, and other emerging technologies to better communicate with the financial markets. The survey, conducted by Stratcom Associates of Grantham, NH, was distributed to 2,000 financial analysts and portfolio managers.
“We see from these results that the value, quality, timeliness and specificity of strategic and financial information provided in conference calls is considered superior to that provided on the Internet or through e-mail,” said Thomas Bowman, president and CEO of AIMR. “This seems to indicate that direct access to the CFO, CEO, and Investor Relations Officer remains an important factor when trying to evaluate the potential of a company and its stock price.”
The majority of respondents reported that most companies they follow have created and maintain a corporate web site with an Investor Relations section. Only 25 percent of the respondents, however, rated the Internet as a “very valuable” source of information. Sixty-seven percent of survey participants reported that almost all of the strategic financial information found on the web could be found via other sources. At the same time, a similar number, 65 percent, noted that easy access to corporate information by way of a corporate web-site makes it easier to provide accurate analysis of companies they cover.
“The expense of upgrading the investor relations portion of the corporate web site may be high, but companies should deem the benefits of providing information to the financial community sufficient to offset the costs,” Bowman said. “As seen in our survey, however, corporations have not yet done this as analysts are disappointed by the quality, timeliness, and specificity of financial information provided on the Internet.”
In addition:
·         80 percent of those surveyed requested that a company provide a breakdown of financials by business line when reporting quarterly earnings
·         Analysts were equally divided on the best time for a company to schedule a conference call. 33 percent said, “Before Market Opens”; 34 percent said, “During Market Hours”; 33 percent said, “After Market Closes”
·         An overwhelming majority, 63 percent, stated that the media should not be allowed to participate in a conference call regarding financial information; 26 percent agreed to media participating but not allowed to ask questions
·         66 percent felt that the quality of strategic or financial information provided on company web sites is “average”
·         Only 11 percent of respondents reported logging on to their companies’ web sites hourly or daily; 24 percent said they logged on weekly; 41 percent logged on monthly; while 24 percent logged on quarterly
·         38 percent of the respondents go to Bloomberg’s Web site for their source of financial information online; 12 percent to Standard and Poor’s online news site; 10 percent to; 9 percent to Reuters’ online site.
According to NIRI president Louis Thompson, “The research contains a very clear and important message for investor relations officers: IR web sites are being accessed by financial analysts and portfolio managers at a much higher rate than most people realize yet these sites are often found wanting for timely information. Two years ago, the use of IR web sites by analysts and portfolio managers was relatively low. Today, it's a very different story.”