Management paints a very rosy picture during an analyst meeting. What should the analyst do?
The internet cannot replace direct contact with management, which gives insight into vision and strategy. But managements may paint a rosy picture to get positive coverage, so analysts must cross-verify claims before recommending. Principles for meeting management: - Pre-meeting research: meetings are rare, so study the products, industry, competitors, financials and past annual reports (did the company meet its earlier goals?). - Independence and neutrality: base views on facts, not personal leanings, and make clear that management must not share unpublished information. - Network: talk to knowledgeable people, who need not be top managers, and to competitors, suppliers, distributors, retailers and customers. - Clear questions: go with a specific questionnaire.