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How to present a compelling investment proposition on your IR Website

By   10 November 2010 7 Comments

Last week, we began a blog series about IR website best practices. The first instalment shared ways to attract and keep investors engaged on your IR website. Today, we’ll be discussing some best practice examples to help communicate why a person should invest in your company.

WHY INVEST
More companies are incorporating a ‘Why Invest’ section on their IR website.  It is a very important section/page that should tie together key information and connect the dots on the market opportunity and how your company stands out as a good investment in this particular industry.

I’m sure you can think of many reasons why someone would want to invest in your company.  You can get more impact from text as the content in this section lends itself to visuals and can be easily incorporated into a presentation/video. For example, Agnico-Eagle* uses charts and graphs to convey the strength of their business from four key areas:

AEM

http://agnico-eagle.com/English/Investor-Centre/WhyInvestInAEM/default.aspx

Charts and graphs help investors visualize the company’s current and future performance which can help them decide whether to invest or not.

In addition to charts and graphs, we have seen companies use a slideshow to walk investors through the reasons for considering buying shares in their company. For example, Potash uses ‘6 Keys to Understanding our Business’ that clearly outline the opportunity and outlook:

Potash

http://www.potashcorp.com/investors/why_invest/

Similarly, Cameco outlines ‘Strengths’ as well as providing a link to a ‘Business Overview’ video to help investors understand the merits of investing in them:Cameco

http://www.cameco.com/investors/strengths/

You don’t need to have pages of information in your ‘Why Invest’ section but each point must be supportable – not a claim – and should be expanded on with more detail elsewhere on the site.

In addition to blatantly asking the question ‘Why Invest?’, companies are also providing background and context on their business in the ‘About’, ‘Our Company’, ‘Industry Overview’ and ‘At-A-Glance’ sections.  Some are also detailing their mission, objectives and strategy overview to help stakeholders better understand their investment proposition (which I’ll be talking about in a separate post).

BUSINESS/COMPANY OVERVIEW
The ‘About’ section is commonly used by companies to provide context about their business.  We are seeing an increasing number of companies incorporate this in their main navigation like Femsa.  Femsa uses this section to provide a few words about their financial results and a brief history of when the company was formed.  They also succinctly describe their business and overall strategy:

Femsa

http://www.femsa.com/en/about/

Investors are also given the option to find out more as they also have links that provide additional background information on the company such as philosophy and strategy in the left-hand navigation.

Another way companies are providing context about their business is through the ‘Our Company’ section. For example, GE uses this section to describe their different business units. They also provide a link to their fact sheet that supplements other commentary provided on the homepage of the ‘Our Company’ section:

GE

http://www.ge.com/company/index.html

‘Industry Overview’ is yet another way companies provide context for their business, industry and market position.  This can be especially useful during/following a market downturn when investors are more open to diversify their portfolios.

For example, Cara Therapeutics provides an industry overview through an explanation of the ‘Therapeutic Market’ – which links to the three main markets in which they operate:

Cara

http://www.caratherapeutics.com/therapeutic-market.php

At-A-Glance
It’s important to give a top-level view of your company to provide context and pull the user into greater detail. We are seeing many companies use the investor section with a company page or section that begins with At-A-Glance information.

The type of information offered by companies in this section varies, but we are seeing that many companies update At-a-Glance information quarterly – as Bell does here:

BCE

http://www.bce.ca/en/investors/investmentoverview/investingbce/

They provide an overview of the company, business units, their customer breakdown & financial information including revenues by segment and product. They also link to additional information in their Company section.

Newmont also provides At-a-Glance information in their company section. It covers key stats with financial highlights that (like BCE) are also updated quarterly:

Newmont

http://www.newmont.com/about/company-glance

Companies that don’t convey or summarize a compelling investment proposition are missing an opportunity to come right out and state the reasons for investing in their company.

We outlined many ways that this can be easily accomplished. For example, including a top level view of your company in the “About’, ‘Our Company’ or ‘Industry Overview’. At the very least, the investor section should have a company page or section that begins with ‘At-A-Glance’ Information.

Coming right out and telling investors ‘Why Invest’ is another way to convey your investment proposition.  Using visuals such as graphs, charts, videos and presentations will help tell the story.

I’m not quite finished with this section yet, as there are a few additional areas that companies are including on their IR website to help tell their investment story.

But due to the length of today’s post, I’ll be elaborating more on how companies are communicating a clear mission, sound strategy and taking the time to tell investors that they have the right leadership team to execute their strategy in my next post.

*Disclosure: Agnico-Eagle is a Q4 client

  • http://stefanpettersson.posterous.com/ Stefan Pettersson

    Thanks for sharing this! As I’ve pointed out many times (probably too many…), I really like the way PotashCorp clarifies their “investment story” using a number of key messages, linking to more in-depth information for those who are interesed. Too many IR websites are just “dumb” archives in my view. Companies should make key information much more accessible. Requires a robust story though, which a surprising number of companies lack… Will take a closer look at the other examples you list.

    • http://www.q4blog.com/author/sheryl Sheryl

      Thanks Stefan – I have to agree with you about Potash; companies need to pay attention to what their peers are doing to see how they can incorporate these ideas for their own circumstance. IROs also need to begin to shift from using their websites as filing cabinets and instead to tell their investment story in some of the ways I’ve outlined here.

      As always, I really value your input!

  • http://www.kaimenco.com Julie Huang

    This blog post is well done. I like how the article starts off with examples on how companies have created a “Why Invest” section on their site. I hope this becomes a standard for all companies. The “About Us” or “At-A-Glance” or even “Industry Overview” is no longer enough.

    • http://www.q4blog.com/author/sheryl Sheryl

      Thanks Julie. There are many great examples from companies who are using their IR websites to its fullest!

      We like to share what we are seeing to help other companies see the potential.

      Cheers
      Sheryl

  • http://www.blackhawkpartners.com Ziad K. Abdelnour

    Hi Sheryl,
    Thanks for your Great Post. That was an Informative Post explaining clearly with the Examples regarding More companies incorporating a ‘Why Invest’ section.

    Thank for being with this Post.

    • http://www.q4blog.com/author/sheryl Sheryl

      Thanks Ziad,

      It is beneficial to include a Why Invest’ section on your IR website and we are slowly seeing increased use by companies.

      Sheryl

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