BCG's recent pulse survey of institutional investors on COVID-19 matters revealed these key takeaways about their views on otherwise financially healthy company board and management actions and decision-making:
- Nearly 80% of investors want companies to provide or revise guidance within 90 days, but 44% are comfortable with companies not meeting near-term EPS guidance.
- 73% of respondents said it is important for companies to intensely focus on preserving liquidity over the next 12 months - even if it is at the expense of investing to achieve advantage in their businesses.
- Nearly 90% agreed that it is important for companies to prioritize building key business capabilities to create advantage, drive future growth, and be better positioned to bounce back, even if it means lowering EPS guidance or delivering below-consensus estimates.
- Just 39% of investors agreed it is important for companies to take advantage of today’s low valuations and aggressively repurchase shares; 61% somewhat or strongly disagreed.
- Just 41% agreed it is important for companies to maintain their dividend per share even if it is at the expense of other uses of cash (such as buybacks and cap-ex spending).
- Nearly 60% of respondents said companies should expect increased activist activity at today’s low valuations and should proactively mitigate activism risk.
Respondents represented investment firm portfolio managers and senior analysts directly responsible for making buy, sell, and hold decisions with more than $4 trillion AUM covering a range of investing approaches including deep value, income, growth at a reasonable price, and core growth; they also include some quantitative, technical, and special situation investors.
This post first appeared in the weekly Society Alert!