HARTFORD, Conn.--(BUSINESS WIRE)--Corbin Perception Group, an investor research and investor relations (IR) advisory firm, released today its quarterly research report Inside The Buy-side®, which captures trends in institutional investor sentiment heading into the earnings season.
“a clear capital allocation strategy and demonstrated track record of shareholder value creation can serve to positively differentiate a company as an investment.”
According to surveyed investors, management teams continue to temper expectations and they describe executives’ tone as “more negative”. Not surprisingly, global concerns take a back seat to Washington dysfunction this quarter. With a quasi-fiscal cliff resolution in place, the continuing debate on the debt ceiling and threat of sequestration are top of mind.
Despite more conservative messaging from the C-suite heading into 4Q and FY 2012 earnings season, investors maintain a cautiously optimistic stance amid views that uncertainty over the fiscal cliff resulted in “pent-up demand and people are feeling more secure”, the Euro situation is “largely reflected in the markets” and China is staging a rebound.
Continuing, Corbin Perception’s channel checks on best uses of excess free cash reveal that dividends remain investors’ top pick though euphoria over cash payouts has waned somewhat, receding to 57% from a record 71% last quarter. A new trend, preference for share buybacks is on the rise, surging to 50% from 29% last quarter.
“Capital deployment continues to be a top theme amongst investors”, commented Rebecca Corbin, Founder and President of Corbin Perception, adding, “a clear capital allocation strategy and demonstrated track record of shareholder value creation can serve to positively differentiate a company as an investment.”
Since 2008, Corbin Perception has tracked investor sentiment on a quarterly basis. Inside The Buy-side® and other research on real-time investor sentiment, IR best practices and case studies are available at CorbinPerception.com.
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Excerpts from Inside The Buy Side®
Corbin Perception interviewed 38 global institutional investors across diverse industries and investment styles in an effort to capture current sentiment heading into the current earnings season:
- Investors forecast muted results for 4Q12 following a mostly disappointing 3Q12; looking forward, top-line growth is of keen interest along with quality of earnings
- 74% characterize management’s tone as “more negative” from an already cautious stance
- As companies prepare to provide annual guidance, 86% expect 2013 outlooks to be “conservative” given continued political uncertainty and questionable global growth; management insight into the spending environment, cost cutting initiatives and 2013 guidance is sought
- In our ongoing research on investor preferences for uses of excess free cash, a penchant for buybacks and reinvestments gained significant ground; still, dividends remain the preferred option “even with the tax law changes”
Contributing investors note that outside of fundamentals, management
quality, sustainable competitive advantages and market position are
the leading qualitative investment factors
- 94% of the study group reports that management quality is important to critical to their investment decisions
About Corbin Perception
Corbin Perception is an investor research and IR advisory firm assisting public companies with unlocking their full market potential. Core advisory services include Investor Perception Studies, Strategy Communication, Investor Presentations and Investor Days.