Company Website - Your First Stop for Investment Research
We have talked a bit about investor research in the various posts on the site. The internet provides so much information about companies and stocks that this is obviously a good place to start. Unfortunately, it seems many investor websites are starting to charge for their research. It did seem a bit too good to be true and I suspected it was only a matter of time before they started charging for their hard work. It definitely makes things a bit more difficult in terms of calculating ratios and putting in metrics into your investment worksheet. Recently, in the span of a month for example, I noticed Value Line took many of their metrics off the free portion of its page. For the most part, you are not going to be able to calculate some figures you need to calculate which means you have to decide to live with less information OR if you are really serious and keen, look into paying for a monthly subscription.
For the purposes of the blog post today however, I wanted to focus on the research that is available for free on the company websites themselves. Once public, a company is obligated to provide certain information to investors and prospective investors. It is required to keep all parties on the same playing field in terms of what information is available for consumption. While this is the goal, in reality, the playing field may not be level to start - individuals close to the company will have already made sums of money by the very fact the company has gone public. While this is often the situation when the company goes public, the goal of securities regulation and laws going forward from that point is to attempt to ensure that all parties have the same information available to them in making investment decisions. If individuals close to the company are aware of information that the public or other general investors do not have, they cannot act on that information as to do so is illegal and constitutes insider trading. You may recall this is the sort of trouble Martha Stewart got into some years ago. The idea is to present an accurate and realistic portrayal of the company with publicly available information, so all investors can make decisions based on the same information. It no doubt can't get difficult if you are an insider as the lines start to blur as to when and what constitutes insider information.
As a result of such regulations and policies, you will see that public companies have a wealth of information available on their websites. You will typically not find this type of robust information with respect to a private company as they are not legally obligated to provide this type of information. Outside investors, like the public, are not able to invest in a private corporation so the playing field does not need to be levelled as it does in a public company. The investor information available on the public company website is often very informative and interesting. You can learn about what the company is planning on doing to grow into new markets, what certain trends are in its respective area, what executives are being paid, new concepts to be rolled out, etc. I find this all very interesting even from a non-investment point of view! As an example of an excellent investor relation tab on a website, I will highlight Shake Shack below. Although, I have found that most public companies have excellent investor relations tabs on their websites. By the time the company is large enough to go public, they usually have the money to pay an expert team to handle investor relations.
In terms of Shake Shack, I have never eaten here as this chain does not operate in Canada, but it’s website makes me want to try it out! An attractive webpage and investor relations tab can go a long way. You can see from the screenshot below that the Investors tab is often placed at the bottom as it is not usually what most people are looking for when they go to a company webpage.
Once you click on Investors, you typically will get a screen like the following:
What I like to look at to get a great deal of information in a succinct manner is the Events and Presentations tab. This usually has past investor relations slideshow that give you a good idea of what the company is doing. Most of the information you will want, will be found in these presentations. For example, Shake Shack's website has photos of tons of its stores around the world. Here is another screen shot, this one from a 2018 investor presentation to give you an idea what sort of information is found under the Investor tab:
Otherwise, the website typically will have stock information as to what the stock is currently at, a Governance tab which outlines who manages the company and who is on the Board of Directors, a News tab which is typically press releases and anything exciting or newsworthy that the company and finally, Resources which is typically contact information.
The company website is probably your first stop in researching a company. By virtue of the fact the company is obligated to publish all relevant financial information, its website is a great place to start your investment research. Plus, most of the time, the website's are interesting to read and well done in terms of graphics and presentation.
***Top photo by Sharon McCutcheon on Unsplash