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Corbin Perception Research Shows Institutional Investor Sentiment Increasingly Cautious as Earnings Season Kicks Off

Top-Line Likely To Disappoint

HARTFORD, Conn.--(BUSINESS WIRE)-- Corbin Perception Group, an investor research and investor relations (IR) advisory firm, has released its quarterly research report Inside The Buy-side®, which captures current institutional investor sentiment heading into the earnings season.

For the second consecutive quarter, investors report that management tone is increasingly more cautious with some describing sentiment as “negative.” A new trend, fears over China’s protracted recovery surges to the top this quarter, beating out long-standing concerns about the Eurozone. Meanwhile, as companies continue to hoard and build cash reserves, Corbin’s channel checks reveal that investor preference for dividends is at an all time high, with 71% favoring payouts nearly 2.5x that of acquisitions and share repurchases. This is even more interesting given the uncertainty surrounding tax treatment of dividends in 2013 and beyond.

Meanwhile, investors are largely bullish on the U.S. despite growing concerns about the looming fiscal cliff and ongoing “economic fits and starts.” With the U.S. Presidential race heating up, Corbin tapped into Wall Street perspective on the political landscape. “Interestingly, half of the study group does not have a preference regarding who wins while the remainder is evenly split between President Obama and Governor Romney,” said Rebecca Corbin, Founder and Managing Director of Corbin Perception. “One would think that the sharp economic and fiscal policy differences between the candidates would lead investors to be more resolute in their view.”

For over five years, Corbin Perception has tracked investor sentiment on a quarterly basis. Inside The Buy-side® and other easy-to-access research on real-time investor sentiment, IR best practices and case studies are available on Corbin’s website.

To learn more, visit CorbinPerception.com.

Excerpts from Inside The Buy Side®

Corbin Perception interviewed 25 global institutional investors across diverse industries and investment styles in an effort to capture current sentiment heading into the third quarter earnings season:

  • Investors are bracing for mixed results amid forecasts that top-line growth will likely disappoint; bottom-line should come in as expected owing to companies’ acute focus on cost management, productivity and operational lean
  • The vast majority, or 82%, believe equity markets have gotten ahead of themselves and are “not supported by fundamentals”; according to the group, potential drivers include valuation arbitrage between equities and bonds, European policy developments and QE3
  • Continuing the trend from last quarter, financial professionals see organic and EPS growth metrics staying the same or worsening; cash flow should continue to hold up
  • In general, canvassed investors advocate pre-announcements when materially missing guidance; the stock price will decline regardless but taking a proactive approach can mitigate damage to management credibility

About Corbin Perception

Corbin Perception is an IR research and advisory firm assisting public companies in effectively positioning their investment thesis. Core advisory services include Perception Studies, Investor Presentation Development, Strategy Communication, Analyst Day Strategy and Execution and IR Diagnostic Reviews.

To request a copy of research results, contact bronwyn.swanson@corbinperception.com.

Corbin Perception
Bronwyn Swanson, 203-283-7997
bronwyn.swanson@corbinperception.com

Source: Corbin Perception Group

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