John Borrowman, CPC
Borrowman Baker, LLC, BV Staffing + Consulting
We recently surveyed some of our BV friends asking them “if you had more resources, what additional information would you like to have to improve the accuracy of your valuations?” The most frequently mentioned need was related to industry information. Most everyone expressed the importance of good industry data, focusing on the need for a discussion of trends and the outlook for the industry, including estimates of expected growth rates. Also, most everyone mentioned how difficult it is to find such information.
Related to the industry data, the difficulty of developing an accurate list of public guideline companies was often noted. A few specific needs were also mentioned, including a resource for compensation statistics.
We do not know all that’s out there in the BV research world, but we are aware of some the better-known resources, so we will try to be value-added by noting some services that we do not hear others mentioning.
Given the fairly recent dramatic forces of change influencing all industries (including the Internet-related technology advances of the last decade, the aftermath of the late-90s tech bubble, and the influences of 9/11) it is not surprising that is difficult to find research that can address these changes and offer informed estimates of the trends and outlooks. One group of observers whose job is to monitor such changes is the universe of security analysts. The problem is getting access to their work, but there are vehicles to gain such access.
One source is “The Wall Street Transcript” (www.twst.com), which features interviews with security analysts, portfolio managers and company managements. You will find discussions of both industries and individual companies. Another vehicle is the “Bloomberg Professional” service that lists analyst projections for individual companies, which include 5-year growth estimates when available. (The Bloomberg service also has as extensive archive of news stories on many categories, including companies, industries and geographic regions). One more resource is “Value Line”, with their own team of analysts covering nearly 100 industries and over 1,500 companies, with quarterly updates that include 3-5 year growth rate estimates.
A good resource for developing a list of public guideline companies is the “Bloomberg Professional” service. The service continues to improve with recently added abilities to screen for key words in the description of the company’s activities (in addition to SIC screens and companies in related SICs).
Lastly, there’s a website that has executive compensation data, much of it for free. The site is www.ecomponline.com. You can enter a company name and see highlights of the compensation data for no charge. If you register for their network, you can easily do industry searches, also for free.