“GOOD INSIGHT INTO THE SOCIAL ECOSYSTEM”

“GOOD INSIGHT INTO THE SOCIAL ECOSYSTEM”

Originally Posted at Text Medic, May 25, 2014 “Customers, employees, and suppliers are empowered” through social media, said Barbara Gray, CFA, Equity Analyst and Founder of Brady Capital Research, (BCR) and this fosters the growth of firms that behave responsibly to them. Her company actively promotes investment in companies with “positive social capital.” Gray was the second panellist (of four) to address the topic “The Impact of Social Media on the Investment Process” at a CFA Toronto Society gathering held in the gallery of the TMX Broadcast Centre on the evening of May 21, 2014. As an example of negative social capital, she cited a case of Air Canada cancelling flights and then rebooking them more than a day later at highly inconvenient times—and not caring that it had created a dissatisfied client who would use it as an example of poor service in a public forum. By contrast, a bungled reservation throughAirBnB that required rebooking and a change of plans, became a positive experience due to fast response time on social media from persons high up in the corporation. “Good companies are using social tools to disrupt” established methods of customer interaction. “Most investors don’t realize this,” said Gray. Brady Capital Research closely follows six companies. “We monitor mention of these companies on Twitter, especially during the all-important earnings season.” Brady Capital Research uses the number of followers on LinkedIn, plus other variables, to assess a company’s social reach. “It gives good insight into the social ecosystem,” said Gray. Moderator Eric Lam posited there were risks to moving faster on social media, such as the recent scare, spread through a hacked Twitter account, that the White House...
Time to Start an Open Diialog on Culture

Time to Start an Open Diialog on Culture

I met him in the summer of 2006. I still remember our first date – we went rollerblading around the Stanley Park seawall and we bonded over our mutual passion for creativity and he shared with me his vision for creating a company to help match people to their ideal corporate culture. And in July 2008, his company, Jiibe, described as “Monster meets Match.com with a dash of LinkedIn” was named as one of the top 20 Canadian Web 2.0 companies by Backbone magazine and KPMG. Fast forward to today. Sadly Jiibe didn’t make it through the recession, but our relationship did and we are now married with two young boys. I now realize how truly visionary Greg was, as back in August 2008 in an interview, with Sean Moffitt, he stated: “Jiibe wants to help people identify the best companies and shift the other companies towards that ideal…the greatest insight was finding out how many companies are really open to this global transition towards greater authenticity – greater trust. Those companies, from the data, clearly will attract the best people and have the most engaged staff.” Greg has been the muse behind Brady Capital Research (BCR), as he made me aware of the exposing disruptive force of social media and inspired me to look into corporate culture. One of the first business strategy books I read, back in 2006, was “Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time”. I have to admit that back then, I was still mired in the numbers-focused mindset of a traditional sell-side analyst and didn’t fully...
Shared Value and the Street

Shared Value and the Street

Guest Post by Valerie Bockstette, Managing Director, FSG – There has long been a debate on whether or not corporate engagement on societal issues effects corporate performance and related to that, whether shareholders should care. For many realms of corporate engagement with society, the answer is a clear no. When it comes to shared value, the answer is a clear yes. First, let’s differentiate three different ways that corporations engage with society: (1) giving back, (2) following standards, and (3) creating shared value. Companies can and should engage in all these ways. But if you throw them into one pot, shareholders and their advisors will be ambivalent or confused. You must differentiate and only selectively share information with the street. Giving back Through philanthropy, corporate foundations, and volunteering, companies act as good corporate citizens by sharing a slice of what they’ve earned with society. Data revolves around: How many dollars were given? How many hours were volunteered? How many people received free medications? Complementing this data are stories that fill glossy, 100-page corporate citizenship brochures. It is right that companies give back this way. And there may be indirect impact on the business. Studies show that employees become more engaged when companies act socially. Volunteering can be motivating to staff. Customers may become more loyal. PR on this might help the brand. But be honest, if you’re investing in a stock, would you care? Would you invest in Company A over B only because its foundation donates twice as much or its citizenship brochure has better stories? It is difficult to make a direct link to competitiveness and cash flow...
Social Impact Growth Companies: The New Alpha

Social Impact Growth Companies: The New Alpha

Barbara Gray, CFA – April 7, 2014 What is a Social Impact Growth Company? A Social Impact Growth company is an elite class of company that is Purpose-Driven, Stakeholder-Centric and focused on Sustainable Long-Term Growth. Why Invest in Social Impact Growth Companies? Our investment thesis, that Social Impact Growth companies will deliver alpha, is starting to play out. In November 2011, we published our research report titled “Social Capital: A New Strategic Play for Investors: Look for Companies with “Heart and Soul”” and launched Brady Capital Research (BCR) with four “heart and soul” companies in our BCR Portfolio. Although all four companies have significantly outperformed the S&P 500 at different points over the past two and a half years, as of now, Whole Foods (WFM-NASDAQ) is up 49%, in-line with the gain in the S&P 500 over this period, lululemon (LULU-NASDAQ) is down 3%, Starbucks (SBUX-NASDAQ) is up 62%, and Chipotle (CMG-NYSE) is up 64%. In May 2012, we published an in-depth research report on LinkedIn (LNKD-NYSE) titled “LinkedIn: Disrupting By the “Power of We”” and added LinkedIn as a fifth name to our BCR Portfolio. LinkedIn’s stock price, which rose by 130% from our $110 initiation price to peak at over $250 in late September, is currently at $166. Who Should Invest in Social Impact Growth Stocks? As Social Impact Growth stocks tend to trade at premium valuation multiples and have a high beta (i.e. stock price is highly volatile), they are suitable only for growth-oriented investors with a high level of risk tolerance and a long-term investment horizon. Due to their social mission, these stocks are ideal...
Zillow Inc. (Z-NASDAQ)

Zillow Inc. (Z-NASDAQ)

In February 2006, Richard Barton and Lloyd Frink planted the seed for Zillow’s movement to “lead a revolution in online real estate to empower consumers”. [divider_padding] We are a small company whose culture is built on transparency and collaboration as we work together to transform an industry…It’s a casual work environment where every Zillow employee has the freedom and voice to make their mark while working at one of real estate’s most popular websites. Some of our perks include free beverages, Ping-Pong, a JSS dress code (jeans, sneakers, sandals) and a downtown Seattle location with dramatic views of Elliott Bay and the surrounding mountains. We care so much about our company culture that we even have committee of “culture beacons” who creatively organize regular social events. Tweets by @zillow No items found in feed URL: http://www.zillow.com/blog/. You requested 15 items.powered by RSS Just Better 1.4...