Investor Relations

Stern And Company is pragmatic, innovative and eminently effective in its practice of Investor Relations. Our financial relations strategies, as all of our programs, are tailored expressly for individual clients. Our financial communications strategies are based on the following assumptions:

  • The stock market will always extract a discount for uncertainty and never issue a premium for that incertitude.
  • Financial communications, in and of itself, will not increase the value of a stock and maintain that value over the long term, i.e. though it is possible to promote a stock much like any other commodity, it is not possible to maintain a promoted price without the appropriate associated fundamentals.

In his classic work, Creating Shareholder Value, Alfred Rappaport wrote “The fundamental purpose of investor [financial] communications is to provide information, within competitive limits, that enables security analysts and investors to make soundly based forecasts of (the company’s) value drivers.” To accomplish this we design programs for our clients that:

  • Explain the business and the environment in which the business operates, so the market does not discount the stock for something it does not understand.
  • Emphasize future prospects, without ignoring historic strengths and performance.
  • Focus on strategies and opportunities for long-term value enhancement, rather than the outlook for the near term.
  • Avoid the creation of excessive expectations. Too often when actual results fall short of expectations, the reaction usually diminishes any benefit that may have been gained by a temporary run up in market values.
  • Provide systems for candidly resolving or mitigating negative issues or perceptions.

Financial communications functions must be based upon communication with maximum efficiency, within regulatory and competitive parameters, and with consistent and specific messages concerning four core issues:

  • Earnings
  • Operations
  • Management
  • Strategy

Stern And Company differs from other firms who view Investor Relations as promoting or even selling a client’s stock. The long-term enhancement of shareholder value cannot be derived from publicity campaigns directed at a targeted financial community audience.

Long-term, fair valuation of a company’s equities can only be derived from performance, the communication of which is strategically imparted through a structured program, in a timely and efficient manner to the financial community and other key publics.

To be effective in communicating to the financial communications, requires a higher degree of skill and subtlety than ever before, as well as significant cost efficiencies that provide long term, substantive returns. The hard sell and promotion for short term gains are out of date, and dangerous.

Stern And Company
Strategic Communications
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