Anybody in the investment industry will tell you that large shareholders, institutions, and analysts often get preferential access to companies. Slap a 'Media Enquiry' in the title of any email and you're virtually guaranteed a reply within hours, often accompanied by an offer to speak with management.
But how do Australian companies, big and small, stack up when it comes to communicating with ordinary shareholders? I recently emailed a number of Investor Relations ("IR") departments privately, in my role as an ordinary – or prospective – shareholder, and here's how they performed:
Australian Bauxite Ltd (ASX: ABX) – NAUGHTY
During a chance conversation with a chemical engineer in the fertiliser industry the engineer told me he'd never even heard of bauxite being used in fertiliser and nor could I find information about it on the web. ABX doesn't have an investor relations email listed, so I emailed their corporate email over a month ago. Since this is an important prospective sales channel for ABX, I contacted them to ask about it, but have not received a reply.
A2 Milk Company Ltd (Australia) (ASX: A2M) – NAUGHTY
A2 doesn't have an investor relations email listed on their website, so I submitted a general query via a website form. I received a reply informing me that my query had been transferred to someone who was better equipped to answer my questions. It's been 3 weeks since then and I'm no closer to learning about the quality of the company's oversight of its contractors and their behaviour.
CSL Limited (ASX: CSL) – VERY NICE
CSL's investor relations impressed me, and were a definite standout even among the generally high standard of replies I received. In addition to answering a number of questions about competition and potential future uses for certain treatments, the person who responded to my email also quoted the Chief Science Officer's answers to analyst questions at the recent Annual General Meeting.
Insurance Australia Group Ltd (ASX: IAG) – NICE
I had a number of technical questions for IAG about the way that rising interest rates would affect the value of the company's bond investments and similar. The answer I received was technical, yet phrased in a simple and clear manner, which resolved my queries instantly.
Sirtex Medical Limited (ASX: SRX) – NICE
I contacted Sirtex with a number of questions about the way they calculate market share, and a breakdown of the way their doses were sold. Despite (I imagine) being very busy in the wake of their recent downgrade, I received a quality response to my questions later the same afternoon. That said, Sirtex has faced criticism from some in the market over the questionable content of its updates recently, so investors may want to consider multiple views on the topic.
Tower Limited (Australia) (ASX: TWR) – REASONABLY NICE
I emailed Tower with a number of questions about their IT systems and the structure of the business that I needed to clarify before making an investment. I didn't receive a response for just over two weeks – it seems the Investor Relations person was on holidays. Yet when they did reply the response was comprehensive and informative.
Yowie Group Ltd (ASX: YOW) – NAUGHTY
I've contacted Yowie four or five times via email with a number of questions regarding their plans for international expansion, among other things, and didn't receive a reply. After the second failed attempt, I sent a third email briefly asking 'are you alive?' or similar, and received a response very quickly. Yet subsequent emails with my full list of questions have either been ignored or lost in the ether.
Foolish Takeaway
Bigger companies handle more queries, receive much more pressure to answer questions, and generally have much more experience with IR. However, small companies are often eager for the publicity and generally happy to answer questions for smaller shareholders as well.
Readers who are considering contacting management should first try to read all of a company's presentations and reports from the past 12 months at least – you don't want to be fobbed off as an amateur. Yet equally, don't be ashamed to ask questions about things you don't understand. One of the best ways to improve your understanding of a company is to reach out to their Investor Relations people. They can't give you material information that isn't otherwise available to other shareholders, but they can clarify concerns or point you in the right direction for your analysis.
