On an early morning last February I was talking with a hedge fund client when apropos of nothing much he let out, “Wow. Company "X" (ticker "XX" for this post) — was just in here, and they are totally pumped. They said RFP (Request For Proposal) activity was off the charts, and they think their telco business is going to explode later this year and next.”
At the time of our conversation (around 10am EST), "XX" was trading at about $50, essentially unchanged on the day — but not for long. Within an hour the stock was up $2, and ended the day near $54, up 8% on the day, increasing the value of the company by hundreds of millions of dollars, and the net worth of the management team participating in the dog and pony show (CEO, CFO, Investor Relations guy) by tens of millions.
These types of “marketing trips” by senior executives, sponsored by the big investment banks (certainly not small research firms like Broadband Research ), are very common, and are often great trading opportunities. The dog and pony show usually starts out in Boston, and long before it reaches New York, on its way down to Philadelphia, the word is out that the management team is talking extremely bullish, and it’s time to get on board the gravy train.