A Value Investor’s Experience Calling Investor Relations

The following post is about a value investor’s experience in calling the investor relations department of public companies. Credits go to our fellow value investor Mr. Tyrone John Gotera for sharing his experience with us.

If you’re one of my fellow value investors who are reading books about our craft I’m confident that you came across some tips on how to acquire annual reports from publicly listed companies that you are interested to analyze and eventually to invest with your hard earned money, I first encountered this tip when I read One Up On Wall Street by Peter Lynch in which he gave an advice on how to do it by calling the company’s public relations office, same advice was also given by Mary Buffett (Warren’s former daughter in law and ex wife of Peter Buffett). During the days before the popularity of the internet this was one of the few ways you can obtain financial information about different publicly listed companies aside from subscribing to Value Line or Standard and Poor’s Journal (unfortunately these publications do not cover Filipino publicly listed companies and I don’t think they have Filipino counterparts as of this writing) unlike now you can easily access it through PSE’s EDGE or by simply going to publicly listed company’s website. However, the downside of PSE’s EDGE is you can only go as far as 2016 since the previous annual reports on its old website were not migrated when they launched EDGE sometime in 2015 or 2016 so the work around is going to the company’s website.

Most of the publicly listed companies’ websites are very helpful since they publish their annual reports even as far as 10 or 11 years ago, some even publish reports even before their IPO, a good example of this is East West Bank in which they published annual reports as early as 2009 (three years before their IPO). But some only publish just two or three years ago like the three publicly listed schools (I think it’s prudent not to name drop these schools but to give you a clue two of them are operating in U belt and the other is in Intramuros) that I’m interested to analyze which are not enough for me, because I prefer looking at eight to 10 year historical trend on its finances so I can come up with a reasonable valuation. So this prompted me to call these schools’ investor relations office. Unfortunately, all of them are unsatisfactory here’s why: The first one simply said that the annual reports published on their website (the earliest published in 2015) are the only reports they have and they cannot retrieve the old copies of it even though their school has been publicly listed since 1986! Very unhelpful right? The second one was very defensive and the person I spoke to doesn’t even have a clue that she’s working in a publicly listed company by asking “why do you need it? you’re not even authorized”, this was said in spite of me properly explaining to her that I am an independent investor running a small equity fund and I just need to get those copies so I can make a sound investment decision. The third one is seemingly helpful by saying something to this effect “Let me see what I can do, I may actually contact our accounting department to retrieve the reports that you need or I may get it from our warehouse”, however before she said that and while I was introducing myself to her she put her phone away and exclaimed “Oh my god!!!”, and I think she thought I didn’t hear that but I let it pass nevertheless(what a rude lady!).

I also had an experience contacting a publicly listed restaurant that was listed in 2016 through email because I was curious if they can provide annual reports during the years they were privately held because I really liked this restaurant since I had my sixth birthday celebrated there plus I had joyful childhood memories with them. The next day they replied (similar to the first school that I mentioned) they don’t have copies of annual reports prior to their listing date and advised me to get those copies from SEC (what a hassle! since I think I need to pay SEC for that).

So far the most satisfactory among the companies that I dealt with is East West Bank (again), I called their public relations office last year (after several transfers from one department to another) just few days after they released their 2017 annual report because I needed to clarify one of the expense items that they didn’t clearly specify in the Notes section, he was very helpful and explained what that particular expense for.

With these experiences I think a significant number of investor relations officers must be easily reached, properly trained, courteous and equipped to handle inquiries from investors regardless whether they are retail or institutional just like the way they train their customer service representatives.

Disclaimer: All stocks mentioned are for informational purposes only.

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