15 Tips for Presenting Impressive Stock Pitches

If you survey a room of 100 people and ask them to self-evaluate their professional skills, the vast majority will say they are “above average.”  This unworkable math has been studied by psychologists who find the human mind is hard-wired to overestimate our abilities, possibly as a survival technique dating back to our caveman days.  Unfortunately, too many equity research analysts assume they’re great presenters, which runs counter to the scores of evaluations I’ve seen and heard over the years from portfolio managers and institutional salespeople.  As much as it might seem like common sense to present an idea to others, it’s actually quite complex…if you want to get it right.  Preparing for an 18-minute TED talk can take hours or even days in order to deliver in a way that will resonate with the audience.

I’m not suggesting analysts should spend days preparing for each stock pitch, but it should involve thoughtful preparation, even for experienced analysts.  To help break down these best practices, I’ve summarized them under 1) Content, 2) Slides and 3) Delivery.

I’m not suggesting analysts should spend days preparing for each stock pitch, but it should involve thoughtful preparation

Content

1. To ensure your presentation is clear, thorough and concise, create an outline first (you may want to use PowerPoint’s “outline” view found on the “View” ribbon to make it seamless in building your presentation)
2. Remember the presentation isn’t to show how much you know, but rather to provide the audience the insights they need to make an investment decision. This philosophy can cut a 30-minute presentation down to 3 minutes.  The audience will ask questions if they need background.
3. To meet the needs of portfolio managers, equity research presentations should contain specific elements on both a strategic and tactical level.
   1. Strategically, ensure the outline/presentation includes these components below (not necessarily in this order), which make up our ADViCE™ framework (for examples of each see QRC, Utilize ADViCE™ Framework to Maximize Message Delivery Impact):
      1. Aware: Make others aware of alternative scenarios and views, as well as adjustments to your thesis
      2. Differentiated: Explain how you differ from the consensus thinking about the stock and its catalyst(s)
      3. Validated: Support your out-of-consensus view with independent research
      4. Conclusion-oriented: Be conclusive about stocks and their catalysts (the first slide should start with a conclusion)
      5. Easy to Consume: Make it easy for others to consume by avoiding highly-specific jargon, complicated charts and dense tables of numbers
   2. Tactically, ensure the outline/presentation includes these components below (preferably in this order and no more than one slide per item):
      1. Start with your conclusion, which should be stock-specific (e.g. becoming more/less bullish, upgrading/downgrading, raising/lowering estimates)
      2. Show the price target math
      3. Provide a brief explanation highlighting your out-of-consensus view which will be one of the following (FaVeS™ framework*). If you don’t have one of these, you probably have no reason to be presenting:
         1. Your financial forecast; and/or
         2. Valuation multiple/method
      4. Research to support the out-of-consensus view mentioned above
      5. Quantify how much your forecast or valuation differs from consensus (how much upside is due to your out-of-consensus view)
      6. When and why will consensus adopt your view?
      7. What could go wrong?

* When quantifying the unique FaVeS™ element above, it’s often much better to show comparisons of new estimates vs. prior estimates or vs. consensus in a table format such as below:

Slides

1. Use your firm’s slide template, if one exists. If not, create one that has the same header, footer, and font throughout
2. Do not have more than five lines of text per slide
3. The font size should be easily readable for everyone in the room (or for viewing online) — at least 14 point, and preferably larger, which shouldn’t be a problem if you’re following the “5 line max” rule directly above
4. Let pictures and easy-to-read charts tell as much of the story as possible. Do this by breaking up the text with relevant images and exhibits. Places to find good stock photos include iStock, com, and Adobe Stock. With this said, avoid graphics that do not help convey or reinforce your message (e.g. background clipart, irrelevant images, etc.)
5. Include video if it’s critical for conveying your point, but understand it adds technical complexity, which raises the odds of a technical glitch
6. If others in your firm will likely find value in the slides, save the presentation on a company network
7. Avoid the mistakes mentioned in “Death by PowerPoint” (if the link breaks, search the web for “Death by PowerPoint” by Alexei Kapterev)
8. If portions of the presentation will likely be made again and it relies on market data (such as a sell-side marketing deck), set it up to automatically link to a market data feed. This can be a big time saver, but requires the slides be manually reviewed before each presentation to ensure the data updated correctly and is consistent with the text

Delivery

1. When presenting, keep in mind the human mind can read much faster than the typical person can speak. By the time you get halfway through reading the slide aloud, everyone else is finished, allowing their minds time to wander. In order to avoid this problem:
   1. Rather than read slides verbatim, use them to accentuate or support the points where you provide greater elaboration or an anecdote
   2. Don’t use your slides as a lazy man’s speaker notes. Use PowerPoint’s “presenter” view or Keynote’s “presenter” display so you can see your notes while the audience sees your slides (search YouTube for videos that provide a brief tutorial on how to use)
   3. Practice, practice, practice so you’re not reading your notes verbatim, which tends to be slow and often lowers the confidence level you convey to your audience. The more important the presentation, the more you should practice
2. Get to the meeting room at least 15 minutes early and ensure everything is working correctly (at least 20% of the time when I’m presenting, I discover something that needs to be adjusted in the room). Use a microphone if it’s available (nobody will complain if you use one but they may not understand you if you don’t)
3. Speak at at the optimal speed and volume:
   1. In general, speak at the maximum speed that will be understood by most of the participants (slow down if your audience is made up of individuals who do not speak your language as proficiently as you)
   2. Slow down to make important points, and speed up to convey enthusiasm
   3. Lower the tone of your voice to demonstrate confidence
4. Convey the right body language
   1. If in person, convey the right body language (research has shown that 65% to 93% of the message delivered can be nonverbal…which is why practice is so important)
   2. The objective is to appear in control (relaxed and confident)
      1. Be energetic
      2. Make good eye contact
      3. Maintain good posture
      4. Don’t cross your hands or legs
      5. Smile, if appropriate
      6. Stand up if presenting to more than five people

None of this is rocket science which is probably why so many analysts consider presenting skills as innate, something you either have or you don’t.  But based on my experience, working with thousands of analysts around the world, it’s clear that the best presentation skills can be learned, even by experienced analysts.

This Best Practices Bulletin™ targets #4. Motivate Others to Act, of GAMMA PI™, within our Pathway to Success Framework.

Let me know if this Best Practices Bulletin™ helps and how I can improve upon this best practice. If you’re interested in presenting your ideas more effectively, AnalystSolutions provides equity research training with a specialized workshop to help: Communicate Unique Stock Calls Successfully So Others Take Action.

Improve you or your team’s stock picking and communication skills with our equity research analyst training tools, which includes workshops such as the one above, as well as our GAMMA PI™ assessment and one-on-one coaching.  Also, consider ordering the book that inspired the founding of AnalystSolutions and the Best Practices Bulletin: Best Practices for Equity Research Analysts.

Visit our new Resource Center to find more helpful articles, reference cards, and advice towards your growth as an Equity Research Analyst.

©AnalystSolutions LLP All rights reserved. James J. Valentine, CFA is author of Best Practices for Equity Research Analysts, founder of AnalystSolutions and was a top-ranked equity research analyst for ten consecutive years