Small-cap corporate access closest to what investors want

Jun 05, 2018
Smaller firms most likely to see value in site visits

When it comes to corporate access, it seems smaller is better, with small-cap company practices on investor engagement more in line with what investors want than practices at their larger counterparts. 

IR Magazine recently revealed that when it comes to the type of corporate access those on the investment side prefer, site visits come out on top, with 80 percent naming them as the most valuable type of engagement – despite being offered by just 72 percent of companies, compared with investor conferences (94 percent) and roadshows (91 percent). 

No regional or market cap group comes anywhere near the 80 percent of investors that rate site visits as the top form of engagement. At the cap size level, however, small-cap companies are more likely to favor site visits, with 16 percent saying they find them to be the most valuable form of engagement – a number that drops slowly as cap size rises to a low of 4 percent at mega-caps, according to the Investor Engagement report 2018.

And it’s not just site visits where small-cap activities lie closer to investor wants. While many on the investment side have no preference on how they receive a roadshow invitation (from a broker or directly from the company), 40 percent overall and more than half (53 percent) of those that focus on small caps say they want a direct invitation. 

Across each cap size and region, no group sees more than 7 percent sending only direct invitations; many more use a mix of both brokers and direct contact. Among small caps, however, 15 percent send only direct invitations to roadshows, while a further 57 percent use both methods – a total high of 72 percent. 

‘In terms of who takes part, small-cap meetings are more likely to feature both IROs and senior management than [the meetings] of larger companies,’ write the report authors. 

All this means that while small-cap companies continue to work with typically leaner resources, fewer analysts and less research coverage than their larger peers, the result is more closely aligned to what investors really want. 

Get your copy of the Investor Engagement report here

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