Do You Think Like an Investor

By Staff Report

Jun. 23, 2006

Building shareholder value means assuming a new point of view on an organization. Knowing it from the inside out isn’t enough. It’s also necessary to know it from the outside in. How well do you understand the point of view of your company’s investors? Try this quiz, developed by Dave Ulrich and Wayne Brockbank, authors of The HR Value Proposition.

  • Who are your company’s five major shareholders, and what percentage does each of them own?

  • Why do those investors own your company’s stock? What are their investing criteria (i.e., dividends, growth, etc.)?

  • What is your company’s tangible value? What portion of the company’s value is intangible?

  • What is the company’s price/earnings ratio for the past decade? How does the P/E ratio compare with the industry average? How does it compare with the company with the highest P/E ratio in the industry?

  • Who are the top analysts who follow your industry? How do they view your company compared with your competition?

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