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The Q1 tsunami of newsflow: how to stand out during reporting season

I used to play competitive field hockey. For those unfamiliar with the sport, it can be a brutal game - it combines the pace of soccer with the physicality of basketball, oh and everybody carries a wooden stick whilst hitting a giant golf ball at each other.

 

What I’m trying to say is it’s not a sport for the faint of heart. I’ve seen plenty of broken noses, busted lips, black eyes, and torn muscles in my time. So why did I play it?

 

In short, I loved the competition: the need to combine skill, physicality, and courage to outperform my opponents meant that having a competitive mindset was key to winning. I knew that if I ran harder, had cleaner execution, and was more aggressive than my opponents, then on the balance of probabilities, I was going to win.

 

It is probably why I love the world of business so much. It is a cliché to use sports analogies in business, so I will keep mine brief: you are in a competition.

 

The competition where your team is a three letter code.

Specifically, as a code on an exchange, you are in competition for a finite amount of money. If you don’t already have a competitive mindset regarding this, then you’re at a disadvantage to those that do.

 

On any given day, there are roughly 1.5m trades on the ASX. Whilst it can seem that there is “plenty to go around”, the reality is that if you’re outside the index, the percentage of trades that you’re competing for is much much smaller. ASX data shows that on the 4th July, just 20 stocks accounted for 370k of the day’s trading data - that’s 25% of all trades being taken up by 0.8% of listed companies.

 

So – you are competing for a share of investment – a share of wallet. You want more people to put more money into your stock.

 

Both on and off market.

 

And because people will always have a reason to sell – they are getting married, divorced, have another opportunity, are sick, have lost interest in your story, or have found a company with a better offer – you have a constant need to find buyers.

 

Increased supply and decreased demand in Q1.

And over the next quarter, that is going to get even harder as news flow increases and reaches a peak during this quarter.

 

Besides all the normal contract wins, staff changes and the like, the September quarter is packed with annual reporting which injects many additional reports.

 

Over this quarter we have:

-          Quarterly activity reports in July

-          Preliminary Annual reports in August

-          Full year reporting in September

-          FY Investor deck updates

-          Analyst call dial ins, and more

 

And whilst newsflow will increase by 15% at this time, the total amount of trades will decrease by 8%. So – competition for attention is increasing, whilst demand for trades is decreasing. Your role, therefore, is to figure out what to do in order to remain relevant to existing shareholders and appealing to new shareholders.

  Total announcements QoQ differenceTotal tradesQoQ difference
FY24 Q1                                  39,75815%  91,288,310-8%
FY24 Q2                                  41,7035%  89,963,379-1%
FY24 Q3                                  34,024-18%  94,443,7615%
FY24 Q4                                  34,6362%  99,489,3175%

But it is all OK – you have time to plan, and it would be worth having a look at what you did last year for this quarter, and then seeing how you can increase the effort by 15% to help counter the increase in competition.

 

Some examples you can weave into the September quarter plan include:

  1.   Get on a plane. Get out and meet people in a genuine non-deal roadshow. Review your register to see where your significant investors and brokers are located and go meet them.

  2.   Take the roadshow to the next level. When you’re doing this with major holders – likely 1:1 – also put on an event for your mid-register. Put on a lunch for people who hold stock, but are in that 20-400 range on the register. If numbers are small, then ask shareholders to bring a friend - that way you can get in front of prospective investors and tell them your story directly.

    My team has a list of good restaurants with private dining rooms that fit 10-40 people - just email me for a copy.

  3.   Reach out directly. Offer time to people who don’t normally get it. Your top 20 probably get contacted all the time by brokers, advisors, companies. But someone with $10-25k in stock likely never hears from anyone. A direct email saying “Hey” with an offer for a chat or explain recent news goes a long way (it’s how ASX:WAM does it). Even if they don’t take you up, the outcome remains the same: they know you care. It doesn’t take long to send 30 - 50 emails like this.

  4.   Tell a story. At this time of year, the market is inundated with numbers. The trick here is to engage with a story and then build trust with data. What is the story that you are telling, where are you now, and what data helps to validate your (a) success to date and (b) the opportunity you are chasing? Investors are people, and people are irrational: leading with a story is always going to outperform leading with data.

So that’s it! If you’re interested in outperforming the market this quarter, then let me know. From deck reviews to helping you set a baseline compared to your competitors, there is a huge variety of ways I can help you get through the Q1 newsflow tsunami.

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