Create a proactive investor communications program.
Ideal for small- and microcap companies that want direct outreach to fund managers.
Our services can assure full valuation for your stock, greater liquidity and an orderly market.
How We Help
SPS Group recognizes this essential yet unique financial marketing role and is organized to assist the CFO with focused, cost-effective IR programs that treat IR as both a marketing function as well as a compliance responsibility.
- Strengthen your shareholder relationships. Frequent and memorable communications (combined with reinforcement from trusted third parties) is the basis of lasting, confident investor relationships. When existing shareholders are well informed and confident with your business model and long-term strategy they are more likely to resist any short-term selling pressures and hold shares until their investment objectives have been met.
- Broaden Your Shareholder Base: we actively research and target investors based on on a wide range of common (and no-so-common) factors. While many investors take positions in stocks for all the usual reasons: a story, an event, a sell-side recommendation or roadshow presentation, other investors are approachable based on how your financial profile fits their investment strategy. Our methods sell your story AND your fit with an institutional investor’s portfolio strategy.
Let SPS Group join your team to strengthen and expand your investor relationships.
Why Should You Engage SPS Group for Your IR Program?
SPS Group works with you and your team to first develop and hone your story. We apply a rigorous, outsider skepticism combined with creativity and enthusiasm to create compelling, memorable, well-organized messages: an investment thesis tailored to suit the needs (and priorities) of shareholders, portfolio managers and equity researchers.
We then apply proven, quantitative tools to identify likely shareholders for outreach. Our recommendations are based on an analysis of 13F filings from the funds trades to infer a buying pattern than precisely matches your stock’s performance.
Next, we train you (and your staff) on presentation techniques that maximize message retention. We then apply sound targeting strategies to elevate investor interest.
To assure a smooth, trouble-free experience, we professionally organize all the logistics for one-on-one briefings with portfolio managers, analysts and other investors. And finally, we provide you with a detailed follow-up summary of all meetings to ensure a lasting, strong relationship with the investment community.
This professional service is performed by skilled, experienced professionals available to you at a fraction of the cost of maintaining a full-time staff in a similar functional capacity.
IR Case History
SPS Group counselors created an integrated PR/IR program that supported a successful corporate turnaround for a diversified industrial conglomerate. From a low of $4 per share, the stock recovered to $25 per share. Five additional equity and fixed-income analysts initiated coverage, helping drive liquidity from 50,000 to 500,000 shares per day.
Intermec/UNOVA, a promising spin-out from a well-respected defense company, had a series of disappointing quarterly results that caused the stock to plummet from $22 to $4.
To turn operations around, senior management focused primarily on strengthening operating results, raising cash to reduce debt, and managing expectations of bond holders. However, they also concluded that a stabilizing and recovering stock price could help establish credibility among employees, vendors, and customers.
As operating results began to stabilize, an education and outreach program was executed to keep remaining investors apprised of progress and intrinsic value while attracting new investors intrigued by an emerging turnaround story.
Pre-campaign research and fact-finding determined that investors were confused by the consolidated corporate financial reporting which blurred two different operating divisions.
On the surface, investors saw only trouble: a declining rust-belt industrial division combined with a money-losing, faltering technology division.
SPS personnel worked with management to identify an alternate, more positive interpretation: a mature, low-overhead industrial division pursuing a disciplined ‘harvest’ strategy, generating cash to lower debt and rebuild an otherwise sound technology division with the potential for a much higher multiple.
SPS counselors worked to prepare an investor message to clarify the investment thesis, reduce the opacity of the mini-conglomerate structure and encourage “sum-of-the-parts” valuation.
Next, to identify investors most likely to respond to the emerging investment thesis, SPS performed a detailed regression analysis on 6500 mutual funds trades for 60 months to infer the fund’s actual financial performance (not stated) investment styles. From this analysis, a target list of 100 funds was created.
Armed with this targeting information, SPS counselors contacted investors and explained the story. SPS was successful in securing meetings and presentations for senior management (CEO/CFO) among 56 different fund managers and sell-side analysts in North America and Europe.
Among the results:
- 22 of the company’s top 25 shareholders prior to the company’s decline remained committed to the stock through the transition.
- 36 new institutional holders established a position as company’s story migrated from “deep value” to small-cap growth.
- Daily share volume increased from 50K to 500K.
- Market capitalization increased from $400M to $2B.
- Five sell-side analysts initiated coverage.
More importantly, the company’s valuation has recovered relative to its peers, trading at 1.6X sales and 3X book value.
Budget for the entire three-year effort was less than $350,000.
The company has since divested its industrial segment, and operated as pure-play technology company later acquired by Honeywell.
For more information about our Investor Relations Support Services, contact SPS at (646) 808-0977.