Using Investor Relations

The companies you invest in must answer your questions

Have you ever wished you could have access to the same type of investment information that institutional investors have? Well, you can — you just have to ask a company’s investor relations department.

Most publicly traded companies have an investor relations group that is charged with delivering information about that company and its industry to current and prospective shareholders. Most individual investors don’t take advantage of the resources these offices place at their disposal. “What we do is provide information in an unbiased way to individual and institutional investors,” explains Lynn Tyson, vice president, investor relations at Dell Inc. (pictured). “We deliver fact-based information so you can make your investment decisions.”

Obtaining as much information as possible about companies you intend to invest in is key to making wise selections for your portfolio. While the investor relations office cannot give you advice on investing, it can help by providing the following:

SEC filings and reports:
The Securities and Exchange Commission requires publicly traded companies to file certain reports regularly. The two main reports are the 10Q and the 10K. The 10Q report is filed every quarter after a company announces its earnings and is often available on a company’s Website. “It will give you a [slightly] broader perspective on how the quarter went,” says Tyson. “It will give you the raw [earnings] numbers to explain why something was up or down, and how that was different from the preceding period.”

The 10K report is filed annually within 90 days of the end of the fiscal year. It delivers information such as the company’s business operations, historical financial data, legal matters, and other pertinent data. The company’s annual report contains much of the same information as the 10K. These are also available on many company Websites.

Shareholder Accounts:
Corporations that offer direct stock investing programs generally handle all inquiries through the investor relations office. Shareholders can also get answers to any questions they might have about dividends from the investor relations office.

Company news releases:
This includes transcripts of speeches that key executives may make at industry conferences, press releases about company decisions, and new product announcements. You may also be able to obtain video or audio clips of press conferences or industry conference calls via company Websites.

Proxy Statements:
These documents authorize a shareholder’s vote on the election of company directors or the approval of mergers and acquisitions.

Industry Questions:
Many individual investors don’t call the company directly because they think their questions may be too mundane or routine. “In most cases, [individual investors] ask similar questions to the so-called more sophisticated investors,” says Tyson. “If you want to ask about the growth prospects for Dell, or how the digital home consumer electronics strategy fits into our overall strategy, we’ll be happy to answer such questions.”

Tyson encourages investors to go to the company Website and review the basic information on the stock they are inquiring about “so you at least have some base knowledge before you ask questions.”

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