Some companies are announcing their year-end results and AGMs will be conducted for these companies one or two months after the results release. Attending the company’s AGM will prove to be a good decision as it allows the investor to meet the management face-to-face and ask them questions. Before going for an AGM, an investor should prepare before-hand the questions he wants to ask and read through the latest annual report thoroughly. You wouldn’t want to be asking a question that was already answered in the annual report. Some of the questions you can ask are:
- What are some of the mistakes you have done over the past year and how did you rectify them?
- Why do customers buy your products over those of your competitors?
- What are you doing that your competitors aren’t doing yet?
- (To ask the competitor of the company I’m interested in) Which competitor would the company want to eliminate the most and why?
- What is the current biggest threat to the company and industry?
- What are the future growth plans in place to increase shareholders’ value?
- From the time an initial customer prospect is identified, how long does it take to close the sale?
- Are there any important sectors of your market which you don’t address?
- Are there any new entrants into the market in the last 2 years?
- Is there any seasonality in you business other than as reflected in orders and backlog?
- Is the marketing conducted any differently overseas?
- What is the long-term outlook of the company? Where do you see yourself 5 to 10 years into the future?
- What are your long-term objectives for profit margins and how do you intend to achieve those goals?
- Over the next few years, how would you expect the components of your income statement to change in relation to each other?
- Should one expect to see major acquisitions or divestitures as part of your plan for the short-term?
- Do you envision any major functional additions to the senior management staff?
- What are you plans for capital expenditures for the next few years and what specific product areas do you plan to stress?
- What are you currently spending your money on in R&D?
You can also ask other company specific questions that bothers you. For example, if the company took on excessive debt for the year without any future growth plans in place, you can ask the company the rationale for doing so.
Have fun at the AGMs!