Unlocking Sell-Side Coverage: Essential Steps to Attracting New Analysts

Building up sell-side coverage can be a major challenge for any investor relations team. However, the effort is worth it - expanding coverage will unlock a range of new investor relationships while also opening the door to broader market visibility for your company.

Here are four key steps to follow while you’re on the hunt to gain attention from the right analysts who can amplify your message:

1) Identify the analysts who will be your greatest advocates:

• Start with peer coverage: Analysts who already cover industry peers are primed to understand your company’s narrative quickly and will be your quickest wins.
• Consider boutique firms: These analysts often seek unique opportunities to differentiate from larger competitors and are more willing to cover companies in a niche market.

2) Pinpoint your hurdles to coverage and get out ahead of them:

• Figure out the issues that are holding the Street back (whether real or perceived): There are many reasons why sell-side firms are hesitant to cover certain companies, ranging from low trading volumes to poor growth prospects. That said, hesitancy from analysts could also be based on misperceptions which your team can remedy by repositioning the narrative.
• Address your weaknesses: When engaging analysts, be prepared to speak to what your management team is doing to address the challenges you’ve identified. If you aren’t sure what these are, just ask the analysts.

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3) Keep it 3P: Proactive, Patient, and Persistent:

• Stay on analysts’ radars: Don’t wait for them to come to you. Reach out proactively as your company narrative evolves, whether it is after quarterly earnings releases or a major company event.
• Patience and generosity are virtues: It will take time for analysts to get familiar with your company. Make sure they have the exposure to management they need to get comfortable.
• Analysts have limitations too: Keep in mind that there may be resource limitations on the side of the sell-side firms preventing them from launching coverage right this moment. Maintain an open line of communication and keep consistent engagement to improve your chances for coverage.

4) Don’t shy away from engagements before a firm launches coverage:

• Make the first move: Many firms allow companies to attend sponsored investor conferences even if they don’t currently cover them. Don’t hesitate to reach out and request an invitation, giving you the dual benefit of more facetime with the target analyst while also showcasing your company’s ability to attract investor interest.

Expanding your company’s sell-side coverage might feel like a daunting journey, but can yield immense rewards as you work to increase visibility.

By following the strategic and proactive approach we’ve outlined, you can take your IR program, and your company’s valuation, to the next level. Or we can do it for you! Reach out – Riveron is here to help.