Investor conferences, fairs and forums offer IROs a convenient way to introduce a select group of active retail investors to their company’s stock. Attendance at these events generally rises and falls in line with the market’s performance. But recently, despite a bearish market, these events are attracting an impressive number of retail holders. The number of IROs in attendance is also on the upswing, suggesting a potential rebirth of retail investor targeting.
InterShow, a Sarasota-based conference organizer, draws the biggest crowd with its four US-based conferences attracting a combined total of 45,000 attendees a year. According to InterShow’s chairman, Charles Githler, attendance increased by between 5 percent and 10 percent in 2004.
These conferences attract experienced retail investors, many of whom are out to verify they’re doing the right thing with their portfolio. ‘These are self-directed investors who are serious about their investments,’ comments Githler. ‘Many of them view the conferences as an annual continuing education experience. By listening to the speakers and talking to fellow investors, they can get a really good idea about what’s going on in the markets now and whether they should stick with what they’ve been doing or change things a bit.’
InterShow’s individual investor conferences include the World Money Show in Orlando, and the Money Show, which takes place in San Francisco and Las Vegas, as well as in one east coast location that changes every year. The conferences feature around 120 to 150 speakers and usually have about 10,000 to 12,000 attendees, who can choose from an array of workshops, panel discussions, general sessions and exhibits over a three-day period. Public companies reach out to investors through exhibit booths and speaking opportunities.
Face time
IROs have similar opportunities at events sponsored by the US-based National Association of Investors Corporation (NAIC), an organization of about 244,000 members and 21,000 investment clubs. NAIC conducts two annual events: a national conference and CompuFest, which focuses on computerized investing. Both are popular with investors and investor relations professionals alike.
‘Our total focus is on investment education so both of these events have extensive seminars that run anywhere from 45 minutes to two hours,’ says Robert O’Hara, vice president of development for NAIC. ‘Topics include annual reports, financial statements, the economy, market sectors, and so on.’
NAIC’s national meeting, which attracts about 600 attendees, has more speaking opportunities for public companies than its CompuFest program, which attracts between 500 and 600 people. It also includes an exhibition hall where companies can interact with retail attendees. ‘Corporate presentations are all focused around the meal functions at the events, so if you sign up to give a corporate presentation you’re sure that you’re talking to just about every single attendee,’ says O’Hara. ‘This is a tremendously educated audience that is investing a lot of new money into the market every month. We’ve seen over the years that [individual investors] are very, very good shareholders. They’re long term – and they normally side with management.’
‘It’s been a great way to get our message out there and watch our registered shareholder numbers and Street name shareholders grow by double digits each year,’ says Cheryl Hansen, IR director at Aqua America, a water utility based in Pennsylvania. IR folks at Aqua America have participated in NAIC’s conferences since 1995 and more recently added several Money Shows to their investor outreach program. They normally exhibit at these events and sometimes speak or participate in a panel discussion.
‘It’s a great opportunity to meet existing investors as well as answer questions from prospective investors,’ Hansen says. ‘We are always trying to expand the knowledge of Aqua America on the west coast, since we are largely east of the Mississippi as a company.’
Avid investors
The American Association of Individual Investors (AAII), an organization of about 150,000 members, claims it also attracts the cream of the crop in retail holders. Its annual conference draws around 700 people, mainly members of AAII. ‘Attendees are the most avid investors among our membership,’ reports Arlene Zamudio, director of organizational programs at AAII.
Like other retail events, the overall goal of this conference is to provide members with information they need to be more effective investors, and attendees can choose from up to seven concurrent programs over a two-day period, according to Zamudio.
The conference, which is held every other year, includes presentations, panel discussions and an exhibit hall. ‘We provide each one of our exhibitors with a 45-60 minute workshop with the understanding that it must be an educational presentation,’ explains Zamudio. In 2003 the AAII opened up the exhibit hall to public companies and will do so again in 2005. Space, however, is extremely limited.
Virtual targeting
For IROs who don’t have the time to travel to retail conferences and greet prospective shareholders at company exhibit booths, there are other options. WILink, for example, hosts Informed Investors Forums, online events that focus on particular market sectors.
‘Informed Investors Forums are a platform for companies to tell their story directly to a targeted group of investors,’ explains Cary Loeser, product manager for Informed Investors Forums at WILink. ‘It’s an analyst style forum very similar to what you would see at an institutional banking conference.’
As Loeser explains, between five and ten companies present on a given sector day and the typical presentation lasts about 20 minutes. A company may elect to have several presenters including the CEO, CFO and head of business development. The forum is then archived for a year and companies can link to it from their web site.
Virtual attendance for these forums is catching on with an average of 558 attendees in 2004 compared with around 400 in 2003. Forums with particularly high attendance rates from 2004 include a couple on the security and defense industry and two on metals and mining. Similarly, a Canadian energy trust virtual event attracted over 1,100 investors, while a live biotechnology/pharmaceutical event drew more than 930 shareholders in total.
‘IROs don’t have to leave their desk,’ says Loeser. They record their audio file over the phone and e-mail their PowerPoint slides; Informed Investors Forums then circulates a press release to the company for approval. ‘One of the things company executives like about [virtual forums] is that there are no time constraints on the actual day of the event,’ adds Loeser. ‘They can record a week ahead of time and their time commitment is already done.’
Quantifying success
According to Hansen, it’s tough to measure the success of retail investor conferences in terms of attracting retail shareholders. ‘We struggle with that question ourselves,’ agrees Chris Barry, VP of corporate communications at Commercial Net Lease Realty, a Florida-based real estate investment trust (Reit). Retail investors might show an interest in the stock at the event but not actually purchase it until many months later when they have the cash to do so, he explains. ‘It’s hard to quantify an immediate result,’ he says. ‘Unless someone actually tells us he purchased our stock as a result of the show, it’s hard to tell from just the normal volume of our stock trading.’
Still, Barry believes investor conferences are worthwhile. ‘We like to be involved with people who have such an interest in investing,’ he says. ‘A lot of them are savvy investors and long-term holders of stock.’ His company’s sector has enjoyed a boost in popularity recently, which makes these events even more useful in building the company’s profile. ‘A big reason for us attending is to get name recognition among some potential investors who might not already be familiar with our company,’ he concludes.
