Here Are Some Examples of Questions the Investment Board May Ask After a Stock Pitch
i-board faq
Here are some examples of questions the Investment Board may ask after a stock pitch.
general questions
1) The Board will need to consider how this stock will perform within the current economic context. What are the economic conditions? Where are we in the economic cycle (what is the level of unemployment, interest rate, housing market, etc)? Are there any economic conditions that, over time, have been bad for this stock? Are we heading into economic conditions similar to those that have been bad for the stock?
2) What kind of intrinsic risks are associated with this stock? Will the risk associated with this stock decrease or increase the overall risk of our portfolio?
3) How does this stock relate to the rest of our portfolio? Does it diversify it? Do we already hold several similar stocks?
4) How long has the CEO been at the company and in his current position?
5) How does the company handle recruiting? Where do they recruit and how successful are they at getting the best employees?
6) What is the company’s business plans (if accessible)? What is the outlook for the next couple of years?
7) Has the company received any recent media coverage?
8) What margin pressure is the company facing from new competitors or new regulatory legislation?
9) Is there evidence supporting strong demand for the company's new products?
10) How has the company historically performed during downturns?
11) How does the company protect its ideas (patents, trade secrets, etc.)?
12) Please explain a little about the nature of the company's management. New
personnel? Strong management team? High turnover?
13) What do you think the price of this stock will be one year from now?
14) What do you think are some upcoming trends in the market, and why do you think the stock will respond positively to these trends?
15) At what price would you consider selling the stock, and why?
16) How did you arrive at any projected buy/sell prices?
17) Why is your company a better investment opportunity than other companies in the same industry?
18) What industry-specific and company-specific growth opportunities exist?
19) What industry-specific and company-specific growth risks exist? In the event that these risks occurred, is your company likely to be able to successfully deal with them? What components/characteristics does your company have for dealing with these risks?
20) How many competitors does your company face?
21) What are the management's visions for the future and how will they benefit stockholders?
22) Are there any general trends in the company's annual revenue?
23) Is the company likely to sustain the positive trends in revenue growth?
24) How does the company's product fulfill a need in its market? How does it fulfill that need above or better than its competitors?
25) What are its main drivers of growth and how is the company looking to positively grow in the future?
26) How can you justify purchasing a stock with a relatively high PE ratio in comparison to that of its competitors?
27) Given that a company's stock price has been fairly stagnant over the last 3/6/12 months, why do you expect it to start growing over the next 6months to a year?
28) If the company was recently downgraded by analysts, why should we still invest if it appears as if the stock will under perform?
29) If the company was recently upgraded by analysts, why should the board invest if the price in the stock has already risen since the announcement, thereby possibly lowering future growth?
30) What 5 sources did you draw the majority of your information from?
31) How strong are your company’s recent acquisitions?
32) How diversified is your company?
33) Where do you foresee the sector your company is in going in the next decade?
34) Explain the valuation method used for your specific industry.
Industry-specific questions
technology
1) How quickly did the company recover after the tech bubble burst, and did that recovery take place under the current management?
2) What unique technology (i.e. patents) does your company possess that would give it an advantage over its competitors? How much of the technology is owned by the companies versus built on other patents before it?
3) How flexible is the company in allocating its resources (i.e. highly skilled labors) and how multi-faceted is the business model?
4) In a sector that has been responsible for the latest dot com bubble, what has your company done to minimize the effects of such catastrophes?
media
1) What is the company's target audience? Is the company currently looking toward expanding this target audience?
2) The media industry can be characterized as being volatile and risky, yet at the same time can present exciting investment opportunities. Given your research, what do you believe makes your media company a strong investment opportunity and not subject to high risk?
3) How do you assess this company's creativity in terms of its ability to come up with new ideas that appeal to audiences?
financials
1) Is the company's growth dependent on adding more customers?
2) What are sector-specific metrics and how do they predict growth?
3) Do government regulations pose a risk to the company?
4) How stable are the company’s revenues? Could the company survive an economic downturn?
healthcare
1) Are there any drugs (specifically those that are high revenue-producers) that are going off patent within the next 3-5 years? If so, what is the company doing to replace the patent and offset the revenue losses that are expected to follow the patent loss?
2) How will the Democrat's role in Congress impact drug prices? When are they likely to create legislation that could have such an effect on pharmaceutical companies?
3) How is the company's pipeline in comparison to its competitors?
4) Is the company the only one with a drug to treat X? How effective is it compared to drug Y of another company used to treat X?
5) Given rising costs and increasing patient defaults, how can hospitals continue to grow?
consumer
1) What operating advantages (if any) do competitors have over your company? How successfully have they leveraged these advantages in the past?
2) What differentiates your company's product/service from that of the competition?
3) Do companies above and below your company on the supply chain pose any threat?
4) Is your company's target market expected to grow? Would if be feasible to expand your company's definition of its target market?
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