Looking toward the future

Listen to the vision that the company's executives portray for the future. Does the vision they present inspire you, or are they unclear about their vision for the company's future and how they plan to get there? If you find the executives uninspiring, they may not be doing a good job of inspiring their employees, either. If you see a downward trend in the company, this may be one of the reasons for that trend. When executives lack inspiration for the company's future, you have a good reason to stay away from investing in that firm.

Employee satisfaction

Keeping employees happy is important for the future of any company. During the call, you can judge whether employees are satisfied by listening for information about the success or failure the company's having attracting new employees or retaining existing ones. If the business reports a problem with either of these two things, trouble may be on the horizon. High employee turnover is bad for the growth of any company, and a firm that has trouble finding and recruiting qualified employees may also face a difficult future.

Don't ever plan to buy or sell stock based only on what you hear during analyst calls. Use the calls as one more way to gather information about a stock that you're thinking of buying or for tracking stocks that you already own.

Knowing when to expect analyst calls

To find out when a company plans to host an analyst call, check out the investor relations section of its Web site. Some companies may just post a recording of the call on their Web site. A few companies don't even mention the calls at all; in this case, you can call the investor relations department and ask them if you can attend their analyst calls. Some firms do ban investors from analyst calls.

^ Some companies offer investors a service that alerts them to upcoming yjjk events. If the companies you plan to follow don't offer these services, your ■ foil best way of tracking upcoming analyst calls is through one of two Web sites: Best Calls (www.bestcalls.com) and VCall (www.vcall.com).

Staying Up to Date Using Company Web Sites

The Internet provides an excellent way for companies to stay in touch with their investors. Companies can include an unlimited number of pages on Web sites that investors can access whenever it's convenient for them. Because investors can print multiple copies of the information provided online for free, businesses can save the expense of providing thousands of pages of information to their investors.

In addition to basic information — such as company headquarters, mailing address, phone numbers, and key executives — many companies post their firm's history, market share, vision and mission statements, credit ratings, and stock dividend history. Many companies also post all the information from their annual meetings, financial reports, press releases, and key executives' speeches, as well as allowing investors to order paper copies of previous annual and quarterly reports up to five years old. So the Internet is a handy tool that gives investors greater access to company activities and helps the firm keep its investors better informed — which improves the company's long-term relations with its investors.

Regarding Reinvestment Plans

Another way a company can build better relations with its investors is to offer them stock directly so they can avoid broker costs on every share they buy. Some companies offer their investors dividend-reinvestment plans and direct-stock-purchase plans. Both plans provide companies effective ways to maintain direct contact with their shareholders instead of going through a broker.

Dividend-reinvestment plans

Dividend-reinvestment plans give current investors a way to automatically reinvest any dividends toward the purchase of new shares of stock. In order to take advantage of this plan, a shareholder must register her stock directly with the company rather than open an account with a broker.

Shareholders can reinvest all or just part of their dividends through the reinvestment plans. Many times, these plans offer investors the opportunity to buy additional shares by using cash, check, or a debit that's automatically taken from the investor's bank account. This option gives small investors a way to steadily increase their ownership in the company. Many firms also allow investors to access their dividend-reinvestment plan on the company Web site, making maintaining accounts and managing transactions even easier.

Direct-stock-purchase plans

Through direct-stock-purchase plans, companies can offer stock directly to the public so that investors don't have to contact a broker to purchase even the first share of stock. Prior to these programs, investors had to buy stock through a broker before they could participate in a dividend-reinvestment plan.

Today, shareholders can buy all their stock directly from a company, if it offers the service, and avoid paying any broker fees. Direct-stock-purchase plans also provide the same features as dividend-reinvestment plans, such as the ability to reinvest dividends.

^ Depending on how a company sets up its program, the shareholder or the company may pay the direct-stock-purchase plan's fees. Some companies ■ foj 1 offer this service for free; others charge a fee for every transaction, which can amount to more than what a broker would charge. Be sure you understand the fees involved if you buy directly from a company, and compare those fees with the cost of buying through your broker to make sure that you're getting a good deal.

0 0

Post a comment