Everyone knows the internet is one of the best tools IROs have for data mining. But it’s an environment that never stops evolving. Last year’s best site may be this year’s dinosaur or, more likely, this year’s acquisition. In any case, staying abreast of the best sites is challenging, even if you’re hardwired to your monitor. Whether you use the web to get information about the Street, industry peers, stock market performance or public perceptions, it is incredibly easy to waste time finding what you need. And so that is why we have put together this virtual road map: to separate the best from the rest.
All it takes is a visit to Yahoo! (http://finance.yahoo.com) or your favorite online brokerage site to realize that more and more sources are providing sophisticated market information. And in many cases, it’s free. As the scope and depth of these free sites increase, more people are discovering alternatives to expensive vendor services. Analyst reports, market surveillance, investor profiles and real-time stock charting are no longer the exclusive domain of vendors.
The trade-off is cost versus time: the cost of paying vendors to gather the information versus the time it takes to gather it yourself. Though the do-it-yourself approach is feasible and in many ways attractive, it raises some important questions: Is this an efficient way to spend your time? Can you find everything you need yourself? Can you successfully integrate all the information yourself?
Even if all the answer is yes to all of these, the most important question remains: Does it leave you enough time to do other things? After all, IR is more than data mining.
Thomson Financial’s recent acquisition of the Carson Group was an example of a 400-pound gorilla buying a 300-pound gorilla to become a 700-pound gorilla. By one estimate, Thomson Financial/Carson now claims some 70 percent market share and is the undeniable heavyweight champion when it comes to investor relations services. At least for the moment.
The heavyweight
TF/Carson’s executive vice president John Papa is optimistic about how Thomson and Carson will merge their products. ‘Collectively, the two companies have been getting together to see what the existing product line-up is and how we’re going to move that forward. Obviously we’re very excited about the prospect of what each of us has had in our respective arsenals and the combinations should be great.’
Catherine McEwing, the company’s managing director of product development, says over the next few months Carson’s online product suite, IR Channel (IRchannel.com), will merge with Thomson’s IR Universe (IRuniverse.com), though the new entity doesn’t yet have a name. ‘What we needed to do was to make some near-term decisions about what we were going to offer the clients. Both of us have very large client bases, but Carson’s internet product that had been out there for longer, so it made sense to move Thomson’s non-internet based clients over to that.’
McEwing emphasizes that Thomson’s IR Universe and Animate services continue to function, and the clients of each will not move to Carson until they are ready to do so.
IR Channel offers the lion’s share of IR information, ranging from analyst research reports and earnings estimates to shareholder analysis to stock ownership tracking to market surveillance and valuation services. It offers hundreds of different ways to slice, dice, chop and julienne data, and does a good job of blending it all together in one place. Subscribers can find information in one area and apply it in another without all the mundane re-entry. It is a well integrated site built on sophisticated search-and-sort technology.
TF/Carson’s product is the closest thing to a one-stop shop anywhere on the web. While other sites may boast the same title, there are none out there that are as extensive. Period.
Another feature of IR Channel is its contact management system. Other sites give buy- and sell-side contact information, though IR Channel’s integration of searchable data with contact management is among the most advanced. For instance, clients can identify potential investors and compose messages to send via mail, e-mail, voicemail or blast-fax using the contact management software. Furthermore, the software can take all the responses and log them into the client’s database automatically. This last step saves a great deal of data entry.
‘Other sites show the names of analysts or portfolio managers, but you can’t integrate these contacts into your program,’ McEwing explains. ‘Sure, you can blast them an e-mail but then you can’t track all of your activity with them, which is such an extremely important part of the investor relations function.’
One of the least obvious yet most important benefits of TF/Carson’s product suite is its IR support. Both Thomson and Carson have provided consulting in some form or another for years and both have an army of people behind their products. Many of the free sites, for instance, provide good data, though few have the consultant expertise to transform it into market intelligence.
Individual products
These are all good examples of why TF/Carson is the industry heavyweight. On the downside, however, the entire service suite is very expensive. Sure, everyone would love to sign up for all the advanced features, but few can afford the quarter-million dollar cost. ‘Let’s face it, not everybody out there needs our services,’ McEwing acknowledges. ‘Some companies don’t. Some of them don’t have IR people, so although our tools are nice, there’s nobody to work with them. Stock surveillance would be a waste because they may trade a few hundred shares a day. Contact management isn’t useful because nobody may follow them.’
In fact, the high price tag is becoming increasingly difficult to justify now that so much financial information is available elsewhere for free. The good thing, however, is that Thomson Financial/Carson offers most of its products and services individually. McEwing suggests clients begin with the products they need. ‘First Call (firstcall.com) may be a good product for clients to start with. Then maybe they’ll buy some contact management or some consulting or surveillance. We have a lot of clients with whom our relationship grows over time as their programs grow.’
Mitch Haws, vice president of investor relations at Reynolds & Reynolds, says that he accrues most of his information for tracking investment peers and competitors from First Call. ‘I could probably replicate a lot of the research data elsewhere, but it would take me a lot of time,’ he admits. ‘In terms of the amount of content, I think First Call is the best collection.’
Data for less
Several sources do a good job of aggregating corporate financial data for less. A good example is Multex (multex.com). Multex is more of an internet portal than an individual page. It has several proprietary web sites that bring information together under one umbrella. This database includes equity and fixed-income research, attributed and consensus estimates, as well as intelligent searching, filtering and screening capabilities. Multex also publishes regular research articles and reports on public companies and market performance.
Multex’s clients are analysts, fund managers and IROs in public companies. It has in-depth financial information and message boards with content much more advanced than Yahoo and the other public sites. (Then again, that’s not saying much.) All in all, Multex is an excellent, moderately priced source, available by full enrollment or pay-per-view.
Another good, inexpensive source for analyst research, investor profiling, news and market developments is Zacks Investor Relations (ziri.com). Since the late 1970s Zacks’ core business has been analyst reports, however the Ziri site now offers much more. It has a lot of information about the buy side and sell side. It also has company profiles, Edgar filings and one of the most comprehensive databases of bond-holders.
Another strong point is Zacks Resource Center, which is a page of links to other sources on the web. If ziri.com doesn’t have what you’re looking for, one of its links probably does. The drawback is that you sometimes have to do a lot of clicking and scrolling to find what you want. In fact, Ziri’s greatest shortcoming is that it is very labor- intensive. It is like a good research library – a very good one, in fact – yet you still have to find the right book, the right page, the right paragraph.
Of course the lower cost may make it worth the extra effort, especially for smaller IR departments that do more in-house research. ‘We are more of a niche player,’ explains Scott Ackerman, Zacks Investment Research senior regional manager. ‘In that sense of a lot of emerging companies and burgeoning IR programs like what we’ve got. It’s more economical and it’s all in one place.’
Exchanges
Perhaps the most influential data mining service providers are the major stock exchanges (nasdaq-amex-online.com and NYSEnet.com). Their online resources are comprehensive enough to lure listed companies from the Thomsons of the world, and the best thing about them is they’re absolutely free.
Nasdaq-Amex-Online seems to be somewhat more developed than NYSEnet, though the Big Board’s massive technology budget will likely close that gap soon. Nasdaq’s director of issuer product marketing, Bill Teague, says his site got an early start. ‘We launched Nasdaq Online in 1997 based on focus group meetings we had with IR directors and CFOs’, he explains. ‘It replaced three predecessor products – two print products and a rudimentary online product – and consolidated the best aspects of each.’
Since that time, the site has gone through a series of incarnations to become one of the best sources for market and trading data anywhere. It hosts most of the same data as TF/Carson including analyst reports, earnings estimates, shareholder tracking and analysis, peer valuation models, stock surveillance and market reports. In fact, most of the data not generated by Nasdaq itself comes directly from Thomson. Teague says they didn’t plan it that way, rather Thomson acquired Carson, Primark, I/B/E/S and other Nasdaq partners. In the end, it’s not important where all the information comes from, only that Nasdaq gets it in real time and blends it seamlessly.
‘The intent was to create a one-stop shopping environment where you could enter in one ticker and move across all these vendors’ data without having to re-enter a symbol. Or, if you enter the time frame, as you move from page to page it carries the time frame forward,’ Teague explains.
Nasdaq Online falls short of TF/Carson on three counts. For one, it is only available to Nasdaq- and Amex-listed companies (likewise, NYSEnet is only available to NYSE-listed companies). Second, its contact management system is not as sophisticated as IR Channel’s. This means Nasdaq clients end up doing somewhat more data entry. Finally, Nasdaq lacks Thomson’s consultation services – although, companies could hire several consultants with the money Nasdaq saves them.
Even with these shortcomings, Nasdaq Online is a great site. It seems to offer just as much data as TF/Carson, without the mammoth price tag. Aspasia Alexander, BioSource International’s investor relations manager, is one of the many IROs who sing Nasdaq Online’s praises: ‘It saves a lot of money. This information Carson used to supply and they would charge an arm and a leg. Here you can get it for free if you’re a Nasdaq-listed company.’
Doug Hall, vice president of IR and acquisitions at Staff Leasing, agrees. ‘You can get information on trading volume, the bid-ask price, news releases about your stock and your competitors. It has information about the analysts, what they are saying, their numbers and buy/sell recommendations. It’s a really strong, comprehensive site.’ Hall notes that NYSE quotes are slightly delayed, though that’s no concern – the only quote he worries about getting in real time is his own.
‘I used to use Bloomberg and they’re a great source, but expensive – a thousand dollars a month for access to their terminal. I don’t need them when I can get all the information free elsewhere,’ Hall explains.
Favorite sites
Will these open sources replace the proprietary ones? It depends on who you ask. Some people want all the information laid out for them and will continue to pay for value-added services. Others prefer to cut expenses by doing a little homework themselves. The pay sites will probably never disappear altogether, though they may have to lower their prices to maintain competitiveness.
Even though there are 10 mn-plus web sites on the internet and new ones spring up every minute, some sites manage to hold their own. That is because people like them. Yahoo continues to be among the most trafficked sites anywhere. It has tremendous activity, a multitude of feeds from other partners and real-time updates. Bloomberg (bloomberg.com) also gets a lot of hits, particularly for stock performance charts, news and information. Hoovers (hoovers.com) is a good place to find corporate fundamentals. TheStreet.com (thestreet.com) has become a household name for IROs and investors alike. Even BigDough.com (bigdough.com), despite the nutty name, is enjoying serious traffic. Why? Because it provides good information about the markets.
One thing is certain, the internet has brought the minutiae of market performance out into the open. Mitch Haws puts it succinctly: ‘You have to understand that your strategies are just as well covered as your competitors and you’ve got to take advantage of that. Before the advent of the web and First Call and other services, if you got a copy of a presentation or something, you were ahead of the game. Now there’s simply a lot more data out there.’ Keep your eyes peeled.
Edgar
The official Edgar web site is a good source for 10Ks, 10Qs, 13Fs and 13Ds, though it isn’t the only one. See also: SEC’s Edgar Database (sec.gov/edgarhp.htm) Free Edgar (FreeEdgar.com) Live Edgar (gsionline.com/) Edgar Online (edgar-online.com) Edgar Access (http://edgar.disclosure.com) Federal Filings Online (fedfil.com)
Whisper
What’s in a whisper, anyway? There are many ways to find out: WhisperNumbers.com (whispernumber.com) TheWhisperNumber.com (thewhispernumber.com) Earnings Whispers (earningswhispers.com) Street IQ (streetIQ.com)
tecnology round-up
You’ve got e-mail
In the wake of Regulation FD, disclosure has become a hot topic in the UK IR community. Now Hugin, the European internet information specialist, has launched Hugin100, a new service that allows real-time distribution of FTSE 100 company announcements to both retail and institutional investors. Using e-mail, the messages are sent out as soon as an announcement is released by the London Stock Exchange. Investors can select which sectors or companies they wish to receive information on, and the messages are forwarded free of charge to their PC or WAP mobile phone. According to Richard Lackmann, Hugin’s European marketing and business development director, Hugin100 won’t be developed to replace the LSE’s Regulatory News Service (RNS). But he adds: ‘We should have a shot at a license once the FSA’s review is complete, and this service shows that we have the capability to do the job.’
Big call
The recent fuel protests may have paralyzed much of Western Europe, but one company claims the answer to the travel chaos lay in…..teleconferencing. Never one to miss a marketing opportunity, Genesys Conferencing announced at the height of the fuel crisis that companies could avoid canceled meetings and travel delays by adopting remote conferencing. Executive VP of Genesys Europe, Andrew Pearce, says, ‘Companies could avoid these problems by using conferencing. This way, they wouldn’t have to leave their offices. Companies experienced unnecessary delays in getting things done when arranging a conference is only a phone call away.’
Web watch
insiderscores.com
Before you sell those company stock options, remember insiderscores.com may be watching you. This site tracks trades of corporate insiders which might indicate future stock moves. Operated by a subsidiary of Thomson Financial, insiderscores.com boasts an archive of the transactions of 150,000 corporate executives stretching back 14 years and picks out the ‘all stars’ of insider trading – those whose trades are the best indicators of the future.
cepnyc.org/profiles.htm
With socially responsible investing on the rise, you may want to know how your company is viewed by investors. Thanks to the New York-based Council on Economic Priorities, you can. The CEP site grades 300 small and mid-cap US companies on eight areas.
irconferences.com
From the people who brought you irawards.com, this site contains all the details on the growing number of conferences produced by Investor Relations magazine. The site contains news of the inaugural Israel and Latin America conferences, an online booking form to reserve your place as well as a service providing personal reminders of the events, via e-mail, phone or fax. You can also volunteer yourself as a speaker.
Market news
There are so many sites that serve market researchers – the short list goes on and on: Wall Street Journal/Dow Jones (wsj.com) Bloomberg (bloomberg.com) CNNfn (cnnfn.com) Forbes.com (forbes.com) Hoover’s (hoovers.com) Morningstar (morningstar.com) TheStreet.com (thestreet.com) WorldlyInvestor.com (worldlyinvestor.com)
Events & conference calls
Streaming media events can be some of the best opportunities for peer research. There are many sources on the web to find them: Bestcalls (bestcalls.com) CCBN Street Events (streetevents.com) Streetfusion (streetfusion.com) Vcall (vcall.com) Yahoo!Events (broadcast.com)
