Liberum Research, the independent research firm focused solely on corporate management change, has developed a relational database designed to provide institutional investors a method for developing special situation investment ideas related to management change. While special situation investing traditionally revolves around corporate restructuring, spin-offs and acquisitions, management changes, depending on the specific circumstances, can also represent a short or long-term investment opportunity.
Liberum's database, which after a little more than three years contains nearly 100,000 specific data points, offers institutional investors the opportunity to examine a company, sector, group of companies, and/or geographic regions/locations via a metric of their own choosing that when used individually or in combination with a number of other financial variables or tools can help in the development of investment ideas. Companies that subscribe to Liberum's database often take the service as an electronic feed rather than as an online service. Through the use of the electronic feed, investors have the ability to easily integrate Liberum's management change data with a variety of other feeds and data applications the company might already have in use which when combined could be used as a unique way for developing potential short and long-term investment ideas. Use of the electronic feed also allows companies the ability to use the information throughout a company allowing for a variety of applications and use by different groups within the company and for different purposes.
Liberum's database whether used online or as an electronic feed provides a number of highly specific fields that afford the user the ability to search and manipulate data via a number of ways. The database contains the following fields:
Title, Date of Change, Company Name,Ticker, Employee Status, Sector, Market Cap, Rating Score, Notes on the Management Change, Company Report, Geographic location (country or state).
Investors interested in special situation opportunities or corporate management changes should consider taking a free trial to Liberum's Management Change Database to determine for themselves the usefulness of the information. To get a no obligation free trial call Richard Jacovitz at 212-952-7400 x1797 or send an email request. Below find some of the latest data on management changes along with specific CEO changes that might be considered "significant" from an investment perspective.
May 1 - 12, 2008 Key Management Change Data
The turnover numbers for the first twelve days of May when compared with those of May 2007 continued to be somewhat surprising as was the data for April. All three key category totals showed a drop in executive turnovers. CEO turnover for the May 1 - 12, 2008 declined 16% from April 2007's totals, CFO turnover declined 20% and overall C-level turnover declined 5% from the totals registered for April 2007.
The continuing impact of the sub-prime credit problems, increasing gas and food prices, conflicting news on corporate earnings and overall sluggish growth would indicate an increase in executive turnover. Liberum expects turnover numbers to increase as we move into the summer months. It is likely there has been a lag in executive turnover for April and early May while the economy has continued to slow down. Despite the surprising declines in executive turnover, there were a number of high-level executive changes that demand investors take a second look at the companies in question.
Key Management Changes May 1 - 12, 2008
7 Companies with CEO Changes Worth Re-examining
According to Liberum's Management Change Database, a total of 70 CEO related changes occurred during MAY 1 - 12, 2008. Here are 7 from the time period that caught my eye. I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation.
5/1 Applied Signal Technology APSG (NASDAQ) $171 million (check Liberum blog)
5/5 Corel Corporation CREL (NASDAQ) $276 million
5/5 SatCon Technology Corporation SATC (NYSE) $98 million
5/6 Tat Tech Ltd TATTF (NASDAQ) $54 million
5/8 Alcoa Inc. AA (NYSE ADR) $32.318 billion
5/8 Epic Corporation EPIO (Other OTC) $398 million
5/9 Alon USA Energy, Inc. ALJ (NASDAQ) $622 million
5/12 Endologix, Inc. ELGX (NASDAQ) $118 million
Below you will find a breakout of a portion of the key management change data categories Liberum follows. The breakdowns are for May 1 - 12, 2008.
May 1 - 12, 2008 Management Change Statistics
C-level management change statistics
Grand Total - 1,043
Top Industry Sectors
Drugs/Biotech - 97
Top Industry New Hires from Outside
Grand Total - 477 or 46% of grand total
Drugs/Biotech - 60
Insurance - 32
May 1 - 12, 2008 C-level Total Breakdowns by Status
23% or 244 were internal moves
46% or 477 were new hires from outside the firm
0% or 2 left firms without clear explanation
18% or 186 were promoted within the firm
13% or 134 resigned or retired from the firm
0% or 0 was terminated
MAY 1 - 12, 2008 CEO Change Statistics
Grand Total - 70
Top Industry sectors
Semiconductor - 7
Insurance - 6
Metals/Mining - 6
Top Industry Outside CEO Hires Only
TotalL - 16 or 23% of Grand Total
Semiconductor - 2
May 1 - 12, 2008 CEO Level Breakdowns By Status
23% or 16 were internal moves
23% or 16 were new hires from outside the firm
0% or 0 left firm without clear explanation
31% or 22 were promoted within the firm
23% or 16 resigned or retired from the firm
0% or 0 was terminated
May 1 - 12, 2008 CFO Change Statistics
Grand Total - 81 Top Industry Sectors
Drugs/Biotech - 9
Business Services - 6
Top Industry Outside CFO Hires Only
Total - 25 Or 31% Of Grand Total
MAY 1 - 12, 2008 Board of Director Change Statistics
Grand Total - 420 Top Industry Sectors
Drugs/Biotech - 42
Insurance - 26
Manufacturing - 25
Top Industry outside Director Hires Only
Total - 205 or 49% of Grand Total
Drugs/Biotech - 25
Insurance - 17
Manufacturing - 12
Investors need to diligently monitor key management changes. Certain management changes should be viewed as a "special situation" that can have a direct and major impact on a company's performance and share price.
* New CEOs know more than the market about the company. Their decision to take the position contains information. Likewise the departing CEO. Likewise departing CFOs.
* New CEOs will bring new skills and often-times a new direction. This is normally significant, and worth analyzing.
The next step is to get a reliable source of these investment leads - and that's why funds use Liberum (a division of The Wall Street Transcript.
The largest database of C-level executive change at public companies. Frequently quoted in the financial press, Liberum helps investors monitor this important, continuous stream of investment events. The data is also useful for investment bankers, private equity, executive
search and consulting firms. The data can be used in numerous ways.
Daily customizable alerts, a searchable database, custom reports, xml feeds. Liberum clients get the data the way they can best exploit it. Get a short trial. And check out our management change blog.