Lighthouse’s action research methodology was developed in 2003 to build momentum in investor relations and analyst relations programmes. We help your existing financial communications team by mapping the influencer community in new markets and priming the interest of the most influential institutional fund managers and market analysts. We conduct action research across a wide range of market sectors, but our expertise runs especially deep in telecommunications, technology, media, banking and financial services.

Investor opinion survey

Our survey compares your investors’ perceptions about your business with those of your own. The survey focuses not only on the business and financials, but also includes Non-Financial Indicators (NFIs). NFIs have been shown to be highly-correlated with stock price valuation and largely explain the variance between valuations of securities within a common peer group. Statistically, an improvement in your NFIs has been proven to re-rate your stock positively. The survey has three uses:

* If your company is considering a change in policy, business direction, financing or disclosure the survey is a very useful method of gauging investor support

* On a non-attributable basis investors can raise company-specific issues of concern, which, if acted on by the company, will positively re-rate the value of the stock

* The survey would comply with Combined Code of Corporate Governance, provision D.1.2

Targeted IR

Companies need to know their leading investors and those who would be naturally interested in their stock. The fund management business continues to consolidate. As a result, your investors will diminish over time. With targeted IR we can identify fund managers who are naturally interested in your shares. These are fund mangers whose portfolio interests overlap with your company: either through style, sector, index or a combination of all three. By finding these fund managers, we can help refresh your investor base. Because we are independent, we are not tied to the clients of your stockbrokers. Therefore, our reach is greater.

Road shows

Having identified your target investors, we give you the opportunity to meet them and sell your story. Most investors demand a physical meeting before investing in your security. Roadshows are an excellent opportunity to fulfil this requirement. When combined with targeted IR, we believe the roadshow is a power tool your investor relations programme. We also take great care to provide you with useful feedback from investors on what they thought of the company, its business and management.

IR web content

Most web content providers have very little knowledge of the type and variety of information that is useful for fund managers. To hold investor attention in your company we provide a communications campaign that precisely meets their information needs. Fund managers are increasingly conducting their own primary research and the company website is the first port of call for analyst research. Therefore, it is very important to have an IR section on the company website which is accessible and contains the content – conference calls and press releases – needed to justify an investment decision. We can advise on and write the IR content for your website.

Communications campaign

Having assembled all the above elements we will know what information is needed by your investors to feel confident about your company. We then construct a communications campaign designed to hit the high notes with investors. Our emphasis is investor-focused.

Quantitative Risk Analysis (QRA)

Fund managers are ‘risk averse’, that is they will seek to avoid risk while maximising the return of their investment. Risk (or the volatility of return on an investment) is a measurable statistic, which is calculated as the standard deviation of the return generated by the security.

At Lighthouse we believe that a high risk statistic might be a sign of regular miss-pricing of your shares by the market. This could either be due to information miss-pricing or liquidity miss-pricing.

Quantitative fund managers will take the risk statistic as a given figure and discount that risk factor into their stock selection, which could mean your stock gets discounted out of their portfolio! Our approach is innovative, because rather than take the risk calculation as a given, we establish why the company received that statistic. We then calculate if this statistic is unfavourable to the market or competitors and suggest a methodical approach to controlling that risk.

We believe that by reducing your stock’s risk characteristics your investors will repay you with a higher rating on your stock.

To find out more, contact Duncan Chapple in our London office.