Tag: CEOs

“G” Matters. Throw Out The “ES”.

“G” Matters. Throw Out The “ES”.

If we have said it once we have said it a thousand times: "G" is what matters in ESG investing. The "G" stands for Governance. Nothing is more determinant to a company's success than the people who lead that company, beginning with the CEO (which of course is the reason why we started CEORater 5 … Continue reading “G” Matters. Throw Out The “ES”.

Don’t Count On M&A To Bail You Out

Don’t Count On M&A To Bail You Out

CEOs and Institutional Investors should not count on strategic acquirers or PE firms to bail out underperforming stocks (or private company holdings for that matter). Not only is the cost of capital significantly higher for would-be acquirers, but target company revenue and profitability forecasts have substantially less visibility and therefore more risk today than they … Continue reading Don’t Count On M&A To Bail You Out

Make It Easy For Investors

Make It Easy For Investors

A general piece of advice that we have provided to CEOs and CFOs over the years is to make your company's story easy for investors to understand. One can not overstate the importance of simplicity when communicating a company's story to investors. It is important for management teams to succinctly describe: the market opportunity;the customer … Continue reading Make It Easy For Investors

The Stock Buyback Scam

The Stock Buyback Scam

Prior to the 2008-2009 Financial crisis, stock buybacks were typically used by management teams to offset options dilution and to acquire undervalued company shares. Today, companies primarily use stock buybacks to goose the value of CEO options packages as well as to goose the value of shares held by CEOs and large institutional holders. The … Continue reading The Stock Buyback Scam

For Stock Returns, Look Where Others Are Not

For Stock Returns, Look Where Others Are Not

Small cap equities and international equities are generally good places for investors to begin their work of finding undervalued companies. In this age of ultra-low interest rates and overvalued assets it makes sense for public company investors to look for value in areas of the market that receive less investor attention than sectors that garner … Continue reading For Stock Returns, Look Where Others Are Not

Management Team Analytics – The Last Frontier

Management Team Analytics – The Last Frontier

Capital Markets professionals ingest every tidbit of industry and company-specific data under the sun in an effort to gain an edge toward Alpha generation. Yet, one large data set remains virtually untapped. That dataset is corporate Management Teams. It encompasses variations of traditional performance metrics such as equity ownership, Return on Invested Capital (ROIC), cash … Continue reading Management Team Analytics – The Last Frontier

Quality Companies Outperform Over The Long-Term

Quality Companies Outperform Over The Long-Term

We will say it until we are blue in the face: Management Teams Matter. A high quality management team starts with a high-quality CEO. Quality management teams build quality companies. They do the hard, tedious work required to build the best products and processes in order to deliver maximum customer value. CEOs of these companies … Continue reading Quality Companies Outperform Over The Long-Term

The CEO Job Is More Difficult Than Ever

The CEO Job Is More Difficult Than Ever

Consider the different variables that were not CEO focus points a decade ago: Diversity policies, ESG policies and the associated costs of compliance, political activism, and activist investors. Low interest rate policy has created a double-edged sword that CEOs have used to issue mountains of low interest rate debt. The Fed's ultra low interest rate … Continue reading The CEO Job Is More Difficult Than Ever

Investors Should Ask More of Their Management Teams

Investors Should Ask More of Their Management Teams

One of the great distortions caused by the joint fiscal and monetary policy of 2020 and 2021 is that equities and the lowest-rated non-investment grade credits are two of the all too rare places where investors may earn a return. Savers and Fixed Income investors be damned. Many companies are enjoying their stocks trading at … Continue reading Investors Should Ask More of Their Management Teams