A mid-cap diversified industrial company was coming off of a multi-year restructuring plan with the goal of diversifying into higher growth, higher margin areas to offset cyclical pressures. Despite consistent execution, shares were trading at a significant discount on several benchmarks. The Company was preparing for its Analyst Day aimed at updating the financial community on its progress, as well as outlining a more offensive strategy.


Opportunity

Corbin Advisors was retained to conduct a follow-up study to:

  • Uncover changes and differences in opinion from baseline study findings
  • Identify and quantify factors impacting valuation, both within and outside of management’s control
  • Benchmark perceived progress made on restructuring front, determine whether misperceptions about the Company’s level of cyclicality persisted
  • Provide management with primary investor research to present at upcoming BoD meeting 

Key Discoveries

  • Perception of management credibility and IR efforts vastly improved from baseline study
    • Participants reported having a stronger relationship with and understanding of the Company
  • Valuation was impacted by several factors
    • Misperceptions about business cyclicality were persistent and, in some cases, overblown
  • Sell-side exhibited a relatively low understanding of the Company’s strategy due to diversified nature of the business
  • While viewed as being more “shareholder friendly”, management still perceived as less accessible relative to portfolio peers
  • Via plus-delta analysis, identified eight improvement areas

Impact

  • Corbin Advisors presented findings to BoD Chairman, senior executives and business leaders
    • Outlined key themes and advised on critical strategy communications 

  • Management gained a better understanding of:
    • Issues impacting valuation, including factors within their control to address, clarify
    • Critical messaging to incorporate into investor communication at Analyst Day and beyond
    • Strategic measures, communication enhancements to increase shareholder value
    • Importance of management’s involvement in investor marketing, non-deal roadshows
  • Qualified 11 prospective investors interested in meeting management
    • Two prospective investors interviewed established new positions within one quarter’s time, both in the top 25 

  • Investor relations leveraged the research to prepare for the Company’s Analyst Day, which was well received by Wall Street; shares outperformed the S&P 500 by 2% week of event

"Following the comprehensive presentations, we continue to believe earnings are likely to exceed both the Company’s guidance and current consensus expectations over the next several years. In our view, the key take-away from the presentations is that…strategy of diversifying its products and services, entering higher growth markets, and focusing on operational improvements will continue to pay dividends over the next several years. With respect to the segment outlooks, we were further encouraged by the sense of justifiable confidence that the business leaders displayed as they talked about their respective growth and profit opportunities."

"We attended the company’s analyst day in New York City, where management offered a strong analysis of the current state of their portfolio and the potential for continued outperformance in the long term."