DOCSLIB.ORG

INFLUENCING SELL-SIDE COVERAGE Growing And/Or Managing Sell-Side Analyst Coverage Is a Key Element of IR Strategy

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
INFLUENCING SELL-SIDE COVERAGE Growing And/Or Managing Sell-Side Analyst Coverage Is a Key Element of IR Strategy SEPTEMBERFEBRUARY 20152011 the voice of the investor relations profession INFLUENCING SELL-SIDE COVERAGE Growing and/or managing sell-side analyst coverage is a key element of IR strategy. A Closer Look at NIRI Approves NIRI Appoints 4 Sell-Side Coverage 20 New Strategic Plan 21 James Cudahy as President and CEO FEBRUARY 2015 Vice President, Communications and Practice Information & Editorial Director Matt Brusch Searching for Editor-in-Chief Al Rickard the Holy Grail [email protected] 6 What small caps can do to make the Advertising Sales search for sell-side coverage easier. Mike Hyatt By David Calusdian Manager, Professional Development 703-562-7684 [email protected] Art Direction Thor Design Studio [email protected] Managing Sell-Side Contributing Editor Linda Daily Analyst Coverage Consensus estimates based on Contributing Staff cumulative analyst coverage influence James Taube 10 investors in a big way – large-cap Letters to the Editor companies must work to ensure that IR Update welcomes letters to the editor. analysts provide educated estimates. Please send feedback to arickard@ By Margo Vanover Porter associationvision.com. About NIRI Founded in 1969, the National Investor Relations Institute (www.niri.org) is the professional association of corporate officers and investor relations consultants responsible More Companies for communication among corporate management, shareholders, securities analysts Providing Guidance and other financial community constituents. 16 A new NIRI survey finds most NIRI is the largest professional investor companies are in the business of relations association in the world, with more discussing their outlook. than 3,300 members representing over 1,600 publicly held companies and $9 trillion in By Alexandra Walsh stock market capitalization. NIRI is dedicated to advancing the practice of investor relations and the professional competency and stature of its members. About IR Update DEPARTMENTS IR Update is published monthly by the National Investor Relations Institute as a service to its members. 4 At the Bell 20 NIRI Now ISSN 1098-5220 Taking a Closer Look at Sell-Side Coverage • NIRI Board Approves New Strategic Plan © 2015 by the National Investor By Mark Donohue • NIRI Appoints James M. Cudahy, CAE, Relations Institute. All rights reserved. President and CEO For Change of Address, Contact: • Quick Takes NIRI–IR Update • In Memoriam: Howard A. Christensen 225 Reinekers Lane, Suite 560 • Professional Development Calendar Alexandria, VA 22314-2875 USA phone: (703) 562-7700 [email protected] www.niri.org IR update FEBRUARY 2015 3 Editorial Advisory Board AT THE BELL DarinAlexandra Arita Deignan INGSchnitzer North Steel America Industries, Inc. MikeScott BecksteadDudley StillwaterThe Laclede Mining Group Company MarjAlan CharlierEngbring Taking a Closer Look at ConatusInvestor RelationsPharmaceuticals Consultant Hala Elsherbini Sell-Side Coverage Halliburton Investor Relations t’s hard to believe it’s been 15 years since Y2K…aka, the Year 2000 Problem. There was JamesLaura Gagnon(J.T.) Farley InvestmentThe Mosaic TechnologyCompany Group, Inc. an incredible amount of fear and hype that there would be an interruption of operations Clint Halverson around the world. Computers were predicted to fail and hundreds of billions of dollars Laura Gagnon I TheExtra Mosaic Space CompanyStorage Inc. were spent on preparation. When New Year’s Day arrived, there was hardly a blip. Julie Kegley How long have we been hearing about the eventual death of sell-side research coverage? The Julie Kegley Tyson Foods, Inc. sell side might not be what it was in the year 2000, but it’s still alive and kicking. This issue of AndreaDave Parker Passalacqua IR Update takes a closer look at sell-side coverage. If you’re a small-cap company, you’ll find TheMEDNAX, New York Inc. Times Company advice on ways to increase your coverage. You’ll also learn about sell-side coverage from the Andrea Passalacqua Heather Rowe The New York Times Company other side of the coin in an article that provides tips to large- and mega-caps that have many Kythera Biopharmaceuticals, Inc. analysts, some of whom aren’t engaged in their story but are influencing consensus. Heather Rowe Maryellen Thielen Kythera Biopharmaceuticals, Inc. One great NIRI member benefit is our research program. In 2014, NIRI conducted IR The Allstate Corporation practice studies on such topics as IRO compensation, earnings calls, and retail shareholder Tony Takazawa EMC Corporation programs, among others. This issue of IR Update highlights the recent member research NIRI Board of Directors report on providing guidance. If you haven’t already read the report, I highly recommend NIRIMark BoardDonohue, of NIRIDirectors Chairman downloading it from the NIRI website. Impax Laboratories At our December 2014 meeting, the board approved the OneNIRI 2015-2018 Strategic Hulus Alpay, NIRI Chairman Lee M. Ahlstrom Medidata Solutions Worldwide Plan. The plan’s vision continues to focus on ensuring that we leverage the unparalleled Paragon Offshore Jane Okun Bomba depth of expertise within our organization and expand the strong NIRI brand. The plan Liz Bauer IHS Inc. includes an aggressive set of goals and objectives across four primary areas: professional CSG Systems International, Inc. development, community, information, and advocacy. In 2015, we will communicate Robert Burton Lambert,Robert Burton Edwards & Associates numerous elements of the plan including the launch of an IR certification credential program Lambert, Edwards & Associates John Chevalier supported by a practitioner-developed, peer-validated, practice-domain framework. TheDavid Procter Calusdian & Gamble Company I look forward to completing the new NIRI website in the second half of 2015. The site Sharon Merrill Associates Ruth Cotter will leverage online tools to provide a customizable platform that incorporates multimedia AdvancedLaura A. Graves Micro Devices Polycom, Inc. and other channels to engage members through an individualized online experience. In addi- Mark Donohue tion, we will continue to expand NIRI professional leadership globally and extend efforts to ImpaxAnne Guimard Laboratories, Inc. FINEO Investor Relations support IR practitioners and communities throughout the world. Anne Guimard This is also a good time to start planning for the NIRI Annual Conference in Chicago, FINEOValerie HaertelInvestor Relations BNY Mellon June 14-17. This marks the first time the conference will be in the “Windy City.” Block the Dennie Kimbrough time on your calendar and register now (www.niri.org.conference). DennieMicrosoft Kimbrough Corporation Microsoft Corporation If you have any questions or comments, please feel free to e-mail or call. Mary Beth Kissane FeliseWalek Kissell& Associates HSN, Inc. Felise Kissell AngelineHSN, Inc. McCabe AndrewOuterwall Kramer Inc. NilsInteractive Paellmann Data Corporation Mark Donohue JeffreyT-Mobile D. USMorgan Chair, NIRI DeborahNational InvestorPawlowski Relations Institute Vice President, Investor Relations and DeborahKei Advisors Pawlowski LLC Kei Advisors LLC Corporate Communications Moriah Shilton Impax Laboratories MichelleTessera Technologies, Levine Schwartz Inc. [email protected] MoriahCharles ShiltonTriano TesseraPfizer Inc. Technologies, Inc. CharlesMark Warren Triano 4 FEBRUARY 2015 IR update VulcanPfizer Inc. Materials Company Valuation = f (growth, returns, investor perceptions) Corbin Perception assists publicly-traded companies with systematically understanding and positively influencing critical investor perceptions. We provide CEOs, CFOs and IROs with company-specific quantitative and qualitative feedback from investors and prospects and then draw upon our firm’s considerable expertise to guide management in shaping those perceptions and maximizing valuation. Our clients range from highly sophisticated mega-caps to micro-caps across industry sectors. To learn more about our services, visit CorbinPerception.com or call (860) 321-7309. Perception Studies | Investor Targeting | Investor Presentations | Investor Days | Investor Communication | Strategy Development & Positioning Corbin Ad_8.5x11.indd 1 2014-05-05 5:54 PM Searching for the Holy Grail What small caps can do to make the search for sell-side coverage easier. By David Calusdian 6 FEBRUARY 2015 IR update SELL SIDE nvestor relations officers of micro- As commissions decrease, it takes a higher ronment by having their analysts each cover and small-cap companies often share of trading volumes for a sell-side firm a larger number of companies, making them hear a common question from their to make money on particular stocks and increasingly time constrained. As a result, for CEOs and CFOs: “Why can’t we defray the cost of issuing research coverage. a director of research at an investment bank get sell-side coverage?” Of course, Therefore, it becomes inherently more dif- to decide to dedicate resources to covering a for a sub-$500 million market-cap ficult for small-cap companies with limited particular company, he or she needs to have company, obtaining analyst coverage trading activity to gain coverage. a high level of confidence in the potential for Ican seem more difficult than finding the One potential solution is to expand the a positive return on investment. Holy Grail, climbing Mount Everest, and buy/sell spreads for small-cap companies. In solving the world’s energy crisis – all in the June 2014, the SEC announced a proposal Evaluate Your Coverage same weekend. In
Load more

Recommended publications
  • Understanding Private Equity in the Healthcare Market June 2019 Table of Contents
    UNDERSTANDING PRIVATE EQUITY IN THE HEALTHCARE MARKET JUNE 2019 TABLE OF CONTENTS SECTION PAGE I. BCA Introduction 1 II. Healthcare Market Dynamics 8 III. What is Private Equity? 13 IV. What is a Recapitalization? 17 V. Appendix 20 I. BCA INTRODUCTION BCA IS ONE OF THE LARGEST HEALTHCARE BOUTIQUE INVESTMENT BANKS KEY FACTS 19 $6.4 billion 1 PARTNER-OWNED Total Investment Bankers Total Transaction Value 90% 10.9x 2 RELATIONSHIP-DRIVEN Closure Rate Avg. EBITDA Mult. For Healthcare Services Deals Closed in 2018 3 HEALTHCARE-FOCUSED 100 $85 million Total Transactions Closed Average Transaction Size 4 RESULTS-ORIENTED RELEVANT HEALTHCARE SERVICES TRANSACTIONS Recapitalization Sell-Side Recapitalization Recapitalization Recapitalization RecapitalizationSell-Side Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Led By Led By Led By Sell-Side Advisory Recapitalization Recapitalization Sell-Side Advisory Led by Led by Led by Led By to Led by Led By to UnitrancheRecapitalization Debt RecapitalizationGrowth Equity RecapitalizationSell-Side Buy Side Recapitalization Sell-Side Recapitalization Recapitalization Recapitalization Recapitalization Acquired Recapitalization Debt-Private placement Equity Investment Sell-Side Advisory Recapitalization Led By Led By Led By Sell-Side Advisory Led by Led by Led By to Led by to $113,000,000 1 OUR HEALTHCARE INVESTMENT BANKING TEAM EXTENSIVE INDUSTRY KNOWLEDGE & EXPERIENCED INVESTMENT BANKERS 2 3 DEEP BENCH 1 TRANSACTION EXPERIENCE
    [Show full text]
  • Capital Markets
    U.S. DEPARTMENT OF THE TREASURY A Financial System That Creates Economic Opportunities Capital Markets OCTOBER 2017 U.S. DEPARTMENT OF THE TREASURY A Financial System That Creates Economic Opportunities Capital Markets Report to President Donald J. Trump Executive Order 13772 on Core Principles for Regulating the United States Financial System Steven T. Mnuchin Secretary Craig S. Phillips Counselor to the Secretary Staff Acknowledgments Secretary Mnuchin and Counselor Phillips would like to thank Treasury staff members for their contributions to this report. The staff’s work on the report was led by Brian Smith and Amyn Moolji, and included contributions from Chloe Cabot, John Dolan, Rebekah Goshorn, Alexander Jackson, W. Moses Kim, John McGrail, Mark Nelson, Peter Nickoloff, Bill Pelton, Fred Pietrangeli, Frank Ragusa, Jessica Renier, Lori Santamorena, Christopher Siderys, James Sonne, Nicholas Steele, Mark Uyeda, and Darren Vieira. iii A Financial System That Creates Economic Opportunities • Capital Markets Table of Contents Executive Summary 1 Introduction 3 Scope of This Report 3 Review of the Process for This Report 4 The U.S. Capital Markets 4 Summary of Issues and Recommendations 6 Capital Markets Overview 11 Introduction 13 Key Asset Classes 13 Key Regulators 18 Access to Capital 19 Overview and Regulatory Landscape 21 Issues and Recommendations 25 Equity Market Structure 47 Overview and Regulatory Landscape 49 Issues and Recommendations 59 The Treasury Market 69 Overview and Regulatory Landscape 71 Issues and Recommendations 79
    [Show full text]
  • A Current Guide to Direct Listings
    January 8, 2021 A CURRENT GUIDE TO DIRECT LISTINGS To Our Clients and Friends: Over the course of December 2019, Gibson Dunn published its “Current Guide to Direct Listings” and “An Interim Update on Direct Listing Rules” discussing, among other things, the direct listing as an evolving pathway to the public capital markets and the U.S. Securities and Exchange Commission’s (SEC) rejection of a proposal by the New York Stock Exchange (NYSE) to permit a privately held company to conduct a direct listing in connection with a primary offering, respectively. The NYSE continued to revise its proposal in consultation with the SEC and, on August 26, 2020, the SEC approved an amendment to the NYSE’s proposal that will permit primary offerings in connection with direct listings. The August 26 order, which would have become effective 30 days after being published in the Federal Register, was stayed by the SEC on September 1, 2020 in response to a notice from the Council of Institutional Investors (CII) that it intended to file a petition for the SEC to review the SEC’s approval. On December 22, 2020, the SEC issued its final approval of the NYSE’s proposed rules. Consequently, Gibson Dunn has updated and republished its Current Guide to Direct Listings to reflect today’s landscape, including an overview of certain issues to monitor as direct listing practice evolves included as Appendix I hereto. Direct Listings: An evolving pathway to the public capital markets. Direct listings have increasingly been gaining attention as a means for a private company to go public.
    [Show full text]
  • The Capital Markets Industry the Times They Are A-Changin’
    THE CAPITAL MARKETS INDUSTRY THE TIMES THEY ARE A-CHANGIN’ EXECUTIVE SUMMARY The past five years have seen unprecedented The success of market participants will depend change in global capital markets. Buy-side on how well they position themselves to and sell-side participants, custodians, market respond to these challenges. They will need infrastructure and financial technology to retain the flexibility to deal with ongoing providers have all had to reassess their uncertainty but also identify their role in strategies, business models and risk the medium-term. In this paper, we pose frameworks. Today we find ourselves at a three questions. critical juncture. A new structure for the capital markets industry is emerging, however a great Addressing these questions will be critical for deal of uncertainty remains. all capital markets participants. 1. Where will opportunities be created Regulation continues to drive much of and lost? the change. The move towards greater transparency, less leverage and improved 2. What risks are emerging? governance is broadly welcomed across the 3. Who is positioned to meet the industry’s industry. However, while some regulations wide-ranging needs in 2020 and beyond? have been chewed and digested, in many places policy and regulatory requirements are still moving targets. Where will opportunities be created and lost? On top of regulation, shifting investor demands, rapid evolution in and increased Market and regulatory forces are reshaping dependence on technology, emergence of new the industry. Economic pressure, constrained risks and ever more interconnectedness are financial resources, greater scrutiny of all substantially affecting the capital markets conduct and conflicts, evolving client needs, value chain.
    [Show full text]
  • Impact of Sell-Side Reccomendation Reports on Stock Returns
    REVISTA EVIDENCIAÇÃO CONTÁBIL & FINANÇAS João Pessoa, v.5, n.3, p.22-36, set./dez. 2017. ISSN 2318-1001 DOI:10.18405/recfin20170302 Available on: http://periodicos.ufpb.br/ojs2/index.php/recfin IMPACT OF SELL-SIDE RECCOMENDATION REPORTS ON STOCK RETURNS Bruno Sun1 Bachelor of Administration by University of São Paulo (USP) [email protected] Liliam Sanchez Carrete PhD of Administration by University of São Paulo (USP) Teacher at University of São Paulo (USP) [email protected] Rosana Tavares PhD of Administration by University of São Paulo (USP) Teacher at University of São Paulo (USP) [email protected] ABSTRACT Objective: this research aims to investigate the impact of sell-side analysts’ reports on stock returns. Foundation: it is inserted in equity investment analysts research contextualized in the Market Efficiency Theory which defines that in efficient markets the market prices reflects all the relevant information of its intrinsic price. Method: this investigation is based on the event study methodology, which event date is the publication of the recommendation report. The abnormal return obtained for the event date and the cumulative abnormal return is obtained from the date of publication of the recommendation for 3 days, 1 week, 1 month, and 3 months. Results: results obtained were consistent in signal with the first hypothesis that abnormal return is positive for each one of the terms from the event date (1 day to 3 months) for recommendation of purchase and strong purchase. On the other hand, the abnormal return was all negative with statistical significance for sale recommendations in favor of the second hypothesis which comprises that the abnormal return is negative for each of the deadlines for the sell recommendations and strong sell.
    [Show full text]
  • How Do Institutional Investors Interact with Sell-Side Analysts?
    The Journal of Applied Business Research – May/June 2018 Volume 34, Number 3 How Do Institutional Investors Interact With Sell-Side Analysts? Grace Il Joo Kang, Singapore University of Social Sciences, Singapore Yong Keun Yoo, Korea University Business School, South Korea Seung Min Cha, Kyonggi University, South Korea ABSTRACT This paper examines how institutional investors interact with sell-side analysts (hereafter, SSAs) in Korean stock market. In particular, we examine the role of institutional investors as a more sophisticated mechanism which incorporates sell-side analysts’ stock recommendation, target price, and earnings forecast more rapidly than individual investors do. Moreover, we examine whether institutional investors differentiate the quality of sell-side analysts’ information. By using a sample of 1,421 firm-year observations in Korean stock market during 2001–2011, we find that the change of institutional investor’s ownership has a significantly positive association with the level of equity value estimates based on SSAs’ earnings forecasts relative to stock prices and their stock recommendation which are considered as SSAs’ indicator of stock market’s mispricing. In addition, we find that only when SSAs provide more accurate earnings forecasts, institutional investors incorporate SSA’s information into their stock trading. Thus, we conclude that institutional investors in Korean stock market contribute to the enhancement of stock market efficiency by incorporating SSAs’ information into their stock trading more rapidly than individual investors. Our findings add to the literature by shedding a light on the unobserved interaction among more sophisticated stock market participants, such as institutional investors and sell-side analysts. Keywords: Sell-Side Analyst; Institutional Ownership; Analysts’ Earnings Forecasts; Target Prices; Stock Recommendations I.
    [Show full text]
  • ENHANCED SCRUTINY on the BUY-SIDE Afra Afsharipour and J
    ENHANCED SCRUTINY ON THE BUY-SIDE Afra Afsharipour and J. Travis Laster** Empirical studies of acquisitions consistently find that public company bidders often overpay for targets, imposing significant losses on bidder shareholders. Numerous studies have connected bidder overpayment with managerial agency costs and behavioral biases that reflect management self-interest. For purposes of corporate law, these concerns implicate the behavior of fiduciaries—the officers and directors of the acquiring entity—and raise questions about whether those fiduciaries are fulfilling their duty of loyalty. To address comparable sell-side concerns, the Delaware courts developed an intermediate standard of review known as enhanced scrutiny. There has been little exploration, however, of whether the rationales for applying enhanced scrutiny to the actions of sell-side fiduciaries extend to comparable fiduciaries on the buy-side. This Article addresses this long-neglected question. Drawing upon the history of Delaware jurisprudence on enhanced scrutiny, it argues that enhanced scrutiny should extend to the decisions of buy-side fiduciaries. The Article also recognizes that, although doctrinally coherent, applying enhanced scrutiny to buy-side decisions would open the door to well-documented stockholder litigation pathologies that have undermined the effectiveness of enhanced scrutiny for sell-side decisions. To address these pathologies, the Delaware * Senior Associate Dean for Academic Affairs, Professor of Law & Martin Luther King, Jr. Hall Research Scholar, University of California, Davis School of Law. ** Vice Chancellor, Delaware Court of Chancery. For helpful comments and conversations, we thank the participants in the Fifth Annual Corporate and Securities Workshop (2017) held at UCLA School of Law, the Tulane Corporate and Securities Law Conference (2018), the Utah Law School Faculty Workshop (2018), and Jill Fisch, Cathy Hwang, Tom Joo, Therese Maynard, Steven Davidoff Solomon, Diego Valderrama and Urska Velikonja.
    [Show full text]
  • FT PARTNERS RESEARCH 2 Fintech Meets Alternative Investments
    FT PARTNERS FINTECH INDUSTRY RESEARCH Alternative Investments FinTech Meets Alternative Investments Innovation in a Burgeoning Asset Class March 2020 DRAFT ©2020 FinTech Meets Alternative Investments Alternative Investments FT Partners | Focused Exclusively on FinTech FT Partners’ Advisory Capabilities FT Partners’ FinTech Industry Research Private Capital Debt & Raising Equity Sell-Side / In-Depth Industry Capital Buy-Side Markets M&A Research Reports Advisory Capital Strategic Structuring / Consortium Efficiency Proprietary FinTech Building Advisory FT Services FINTECH Infographics Partners RESEARCH & Board of INSIGHTS Anti-Raid Advisory Directors / Advisory / Monthly FinTech Special Shareholder Committee Rights Plans Market Analysis Advisory Sell-Side Valuations / LBO Fairness FinTech M&A / Financing Advisory Opinion for M&A Restructuring Transaction Profiles and Divestitures Named Silicon Valley’s #1 FinTech Banker Ranked #1 Most Influential Person in all of Numerous Awards for Transaction (2016) and ranked #2 Overall by The FinTech in Institutional Investors “FinTech Excellence including Information Finance 40” “Deal of the Decade” • Financial Technology Partners ("FT Partners") was founded in 2001 and is the only investment banking firm focused exclusively on FinTech • FT Partners regularly publishes research highlighting the most important transactions, trends and insights impacting the global Financial Technology landscape. Our unique insight into FinTech is a direct result of executing hundreds of transactions in the sector combined with over 18 years of exclusive focus on Financial Technology FT PARTNERS RESEARCH 2 FinTech Meets Alternative Investments I. Executive Summary 5 II. Industry Overview and The Rise of Alternative Investments 8 i. An Introduction to Alternative Investments 9 ii. Trends Within the Alternative Investment Industry 23 III. Executive Interviews 53 IV.
    [Show full text]
  • Deal Advisory / Global
    Protect what is valuable Deal Advisory / Global We can help you achieve successful Sell Side transactions. Supporting growth through active portfolio management and successful divestments. Throughout this document, “KPMG” [“we,” “our,” and “us”] refers to KPMG International, a Swiss entity that serves as a coordinating entity for a network of independent member firms operating under the KPMG name, and/or to any one or more of such firms, and/or to KPMG Deal Advisory professionals working in KPMG member firms around the globe. KPMG International provides no client services. / 1 Your vision. Our proven Learn more about the six critical stages of capabilities. a divestiture and how we can help deliver portfolio value throughout the lifecycle. When it comes to selling a business, every decision counts. Our integrated team of specialists helps you make the right decisions throughout the sales process, combining Integrated services across deep sector knowledge and the foresight that the transaction lifecycle comes from experience. 1Portfolio Strategy 2Exit Options 3Prepare for Exit We take a practical 4 Deal Execution 5Pre-Close approach to 6Post-Close enhancing value. This document reflects a wide range of services and does not differentiate between those services that are permissible or not permissible for KPMG audit clients and their affiliates. Real results achieved by In addition, certain software and technology services, joining integrated specialists. with third parties in service delivery, are also subject to potential independence restrictions based upon the facts and Securing the best value for a divestiture is a circumstances presented in each situation. complex process that involves gaining a more objective view of your company and a more nuanced understanding of current market conditions, as well as divining the agendas of the buyers seated across from you.
    [Show full text]
  • Sell-Side M&A – Divestitures, Trade-Sales and Mergers
    White Paper #6: Sell-Side M&A – Divestitures, Trade-sales and Mergers © Copyright 2017 Remis AS / Ketil Wig Versjon 2.1 – Oct. 2017 While buy-side M&A processes (acquisitions) are focused on alignment of strategy, integration and risk management; the sell- side M&A (divestitures and trade-sales) skill set is concentrated around negotiations and tactics. Sell-side M&A is different! Sell-side and buy-side M&A are obviously different, but this difference goes deeper than most managers realize. For acquisition processes (see White Paper #5 on Buy-side M&A), strategy alignment, post- merger integrations, approach tactics and risk management are keys to success: For divestitures and trade sales the strategic themes are secondary (although by no means irrelevant), and negotiations and tactical skills are primary success factors. While the negotiation strength of the buyers in an acquisition process is influenced by such factors as alternative acquisition targets and their Illustration #1: A model for preconditions, strategic drivers, criteria and decision levels of an M&A divestiture process options for delivering growth (including e.g. organic growth, strategic alliances etc.), it is the seller in a sell-side transaction who to a large extent defines the landscape of negotiation - and the primary tool is the The role of strategy in divestitures and trade number of qualified buyers. sales For divestitures and When the decision to divest a business has been made, the obvious trade sales the The strategic drivers when executing a sell-side transaction (excluding objective of the seller is to maximize price and terms.
    [Show full text]
  • What Drives Sell-Side Analyst Compensation at High-Status Investment Banks?
    WHAT DRIVES SELL-SIDE ANALYST COMPENSATION AT HIGH-STATUS INVESTMENT BANKS? * ** Boris Groysberg Paul M. Healy Harvard Business School Harvard Business School David A. Maber*** USC Marshall School of Business This Draft: December 20, 2010 This research was funded by the Division of Research at Harvard Business School and the USC Marshall School of Business. We wish to thank I/B/E/S for analyst data and, especially, the anonymous financial services firms that provided us with their financial analysts’ compensation data. We also wish to thank Alok Kumar, Douglas Emery, and Xi Li, who generously supplied their Institutional Investor and WSJ star analyst data, Mike Cliff, who kindly supplied his I/B/E/S-SDC link table, and Malcolm Baker and Jeffrey Wurgler for their market sentiment data. Helpful comments were provided by Mark Bagnoli, Jasmijn Bol, Sarah Bonner, Folkert Botma, Jan Bouwens, Mihir Desai, Pat O’Brien, Fabrizio Ferri, Lee Fleming, Joseph Gerakos, Cam Harvey, Kai Li, Kevin J. Murphy, Steve Orpurt, Eddie Riedl, Jenny Tucker, Susan Watts, Michael Welker, and seminar participants at the 2008 Ball & Brown Tribute Conference at the University of New South Wales, 2008 CAAA Doctoral Consortium and 2009 CAAA Annual Meeting, 19th Annual Conference on Financial Economics and Accounting at the University of Texas at Austin, 2008 Financial Management Annual Meeting, 2008 London Business School Trans-Atlantic Doctoral Conference, 2008 Washington Area Finance Conference, 2009 FARS mid-year conference in New Orleans, Boston University, Cornell, HBS, HKUST, Purdue, Singapore Management University, Tilburg, UBC, UNC, USC, and the University of Technology, Sydney. The usual disclaimer applies.
    [Show full text]
  • A Comparison of Buy-Side and Sell-Side Analysts
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by The University of North Carolina at Greensboro Archived version from NCDOCKS Institutional Repository http://libres.uncg.edu/ir/asu/ A Comparison Of Buy-Side And Sell-Side Analysts By: Jeffrey Hobbs and Vivek Singh Abstract There is very little research on the topic of buy-side analyst performance, and that which does exist yields mixed results. We use a large sample from both the buy-side and the sell-side and report several new results. First, while the contemporaneous returns to portfolios based on sell-side recommendations are positive, the returns for buy- side analysts, proxied by changes in institutional holdings, are negative. Second, the buy-side analysts' underperformance is accentuated when they trade against sell-side analysts' recommendations. Third, abnormal returns positively relate to both the portfolio size and the portfolio turnover of buy-side analysts' institutions, suggesting that large institutions employ superior analysts and that superior analysts frequently change their recommendations. Abnormal returns are also positively related to buy-side portfolios with stocks that have higher analyst coverage, greater institutional holding, and lower earnings forecast dispersion. Fourth, there is substantial persistence in buy-side performance, but even the top decile performs poorly. These findings suggest that sell-side analysts still outperform buy-side analysts despite the severe conflicts of interest documented in the literature. Hobbs, J. and V. Singh (2015). "A comparison of buy-side and sell-side analysts." Review of Financial Economics 24: 42-51. https://doi.org/10.1016/j.rfe.2014.12.004.
    [Show full text]