A big part of the due diligence process always involves meeting with management teams + IR and getting your questions in. Often times, the job of a research analyst can feel more like being an investigative journalist. I have found that asking the right questions the right way can be a huge factor to getting the information you need on an investment thesis. "Walk me through TAM" (or whatever it is to understand how the company looks at their growth going forward) + "how do you think about capital allocation" are low level questions with a predetermined (almost scripted) answer, but often need to be asked. Often times, going in a round about way to extract information and getting them off script + a natural back and forth feels like the best way to get unique information (not inside information, but a take or perspective that may be unappreciated or otherwise not shared).
While a lot of questions can be company/time/space specific, I was wondering if anyone wanted to share some of the questions they like to ask in meetings.
A few of my not especially unique questions:
- What is most misunderstood by the street about you guys?
- What is the biggest risk to your success / long term targets?
- Is anyone acting irrationally in the space?
On the flip side, is this overrated and are the meetings mostly to get your basics in and you already are finding better information / perspective elsewhere? Then there are the MMs who I assume are focused on nailing the quarterlies and managements just hate the meetings.
Is your stock going up or down over the next 3 months?
One quick follow-up - by how much?
"And we don't want any insider information. Give us in a compliant way, thx."
Lol ok sounds like there really isn't anything special to learn here. I have been telling myself that part of my qualitative secret sauce is my adeptness at running these meetings, building relationships, and getting the right information. Maybe it just is a check box to get the standard pieces of information though. Or maybe it is more useful when working in the tech/growth/consumer/internet space where vision of the future and an understanding of the competitive landscape (at least how the company itself views it) is much more important vs. for example just chatting with a company like CCI every quarter to get some anecdotal evidence on new tower sites and commentary on uptake of small cells, etc.
There is, but the challenge is getting the advice you want because some trade quarters and some have longer holding periods.
Which is why the following post was well-received:
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