How Do KPIs Make You Better?
Key Performance Indicators (KPIs) represent a great way to quickly take the pulse of a given business or activity.
Knowing the right KPIs in Capital Markets (Top Eight Sell-Side Research KPIs) and Investor Relations (Top Seven Investor Relations KPIs) will provide you the steps to achieve your goal(s).
When you know what matters most to be effective across Capital Markets and Investor Relations, you can drive better outcomes around a myriad of items, including:
1. Valuation
2. Engagement
3. Coverage
There are five magic variables based on these common KPIs for Investor Relations and Sell-Side Research that can solve most public company stock related problems. If a company has these five variables, the stock should work out over time.
Top Five Public Company Variables Based on Common IR and Sell-Side Research KPIs
1. Catalysts
2. Volatility
3. Events
4. Industry Insights
5. Transactions
These are the five variables any company can utilize to improve its stature across valuation, investor engagement, and research coverage.
Catalysts: The more catalysts you have the more there is to talk about your company and engage the investor community. The more reasons you have to engage investors the better. Numerous catalysts naturally create a positive sales environment for the stock.
Volatility: Related to catalysts, the more volatility you can inject into a stock that has flat lined or is below $5 per share the better. The volatility will help improve trading liquidity and will help improve the company’s position on valuation, engagement, and coverage, over time.
Events: If a company has numerous catalysts and volatility, then there are a lot of reasons for investors to engage with the stock. Lots of reasons for engagement means that investors will want to meet with the company. In turn, the Company has actual currency in terms of non-deal roadshows (NDRs) and investor conference appearances.
Industry Insights: An overlooked lever, as many management teams are reticent to discuss the competition. Sometimes, all it takes to re-ignite investor interest is to have compelling insights about the competitive environment of a given industry. Investors will always engage a management team or company that plays an important role in an industry, even if only tangentially.
Transactions: Investment banking transactions are the most powerful lever for a company, but the problem revolves around the fact that positive impacts are often short-term in nature. A company can improve valuation, engagement, and coverage with a transaction, but the positive effects are not sustainable without catalysts, volatility, events, and industry insights.
Remember, catalysts and volatility are the friends of an unloved stock price!
Wishing you an epic Thursday.
Always here to help with your Capital Markets, Investor Relations, and Corporate Finance needs.
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