Returning to the office from the summer holidays is always challenging, but this September seems tougher than most. Persistent inflation, falling consumer confidence, rising geopolitical tensions and a possible economic recession all indicate increasing pressures on companies and IR teams.
Nasdaq IR Intelligence discussed several of these topics at this summer’s investor relations conferences. We spoke with IROs and investors about best practice investor engagement strategies in today’s volatile markets, including how companies can adapt at a time of heightened stock market correlation and how investor relations teams can gain efficiencies and use management time more wisely. The consensus from many we spoke with is that the economic outlook remains very uncertain.
“Volatility is inherent in markets. The future will be different than what the consensus thinks today. The only certainty is that there is always uncertainty,” commented Alberto Chiandetti, Portfolio Manager at Fidelity International, at a recent Italian IR Association event.
Nasdaq Global Perception Lead Analyst Arnas Kulnys added, “Maintaining a strong connection with the financial community at all times is critical, as investors will have a higher comfort level with your investment case.”
To that end, it’s worth mentioning that—even in times of economic uncertainty—investors are still focused on analyzing companies’ business models. Investors want to understand which companies will get through the downturn and come out stronger in the end.
“We focus on analyzing business models. We seek to form our own view on where the business will go in terms of earnings and create our own assessment of what the future will be like,” said Chiandetti.
Nasdaq IR Intelligence found that in this uncertain economic backdrop, companies are being more selective in terms of the prioritization of their investor engagement activities. While the pandemic made virtual meetings and conferences a standard feature of IR programs—and brought time efficiencies and cost savings—IROs are increasingly focused on investor meeting quality.
“It’s important to look at the quality of meetings,” said Valeria Ricciotti, Head of Investor Relations at aerospace and defense company Leonardo. “In-person meetings provide additional quality, while virtual meetings provide the chance to be more efficient and flexible. The most important goal for IROs is to find the right balance between virtual and in-person meetings.”
Having a defined strategy on which meetings should be in-person versus virtual is now being considered by corporates alongside traditional investor prioritization of management access versus IR-only. For their part, investors are also being choosy as to which meetings should be virtual or in-person; it is important that corporates understand and align with these preferences to avoid turning up to empty meeting rooms.
“The meetings that I think can be avoided by corporates and done by video are the usual quarterly results meetings,” said Chiandetti.
The perceived value of the format of investor meetings has shifted; the traditional post-results roadshows are increasingly seen as meetings that can—and should—be done virtually while investors are prioritizing in-person attendance at specific corporate events. Investors told Nasdaq IR Intelligence they put greater value on in-person activities such as capital markets days or headquarters/site visits.
“Capital markets days every one to two years is important. It’s best to be there in person to feel the organization and meet the people. Meetings at headquarters or plant visits are another way to better understand the company,” said Chiandetti.
Investor engagement strategies have an important new consideration alongside the traditional understanding of core shareholders and targets with the greatest potential. Nasdaq IR Intelligence investor engagement practice supports companies in their prioritization efforts with people-level intelligence, corporate meetings data and activity, and behavioral analytics - invaluable insights to inform the increasingly important consideration of virtual/in-person.
Learn more about the Nasdaq IR Intelligence investor engagement practice.