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Investment Thesis: An Argument in Support of Investing Decisions

investor relations thesis

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

investor relations thesis

Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.

investor relations thesis

What Is an Investment Thesis?

An investment thesis is a reasoned argument for a particular investment strategy, backed up by research and analysis. In the financial world, an analyst may prepare a formal document outlining an investment thesis for presentation to potential investors or an investment committee.

Key Takeaways

An investment thesis can help individual investors evaluate investment ideas and select the ones that can best help them meet their investment goals.

As with any thesis, an idea may surface but it is methodical research that takes it from an abstract concept to a recommendation for action. In the world of investments, the thesis serves as a game plan.

Understanding the Investment Thesis

Most investment theses are in written form, and can be used to look back and analyze why a particular decision was made in the first place—and whether it was the right one.

Let's say an investor purchases a stock based on the investment thesis that the stock is undervalued. The thesis further states that the investor plans to hold the stock for three years, during which its price will rise to reflect its true worth. At that point, the stock will be sold at a profit.

A year later, the stock market crashes and the investor's pick crashes with it. The investor recalls the investment thesis, relies on the integrity of its conclusions, and continues to hold the stock.

That is a sound strategy unless some event that is totally unexpected and entirely absent from the investment thesis occurs. Examples of these might include the 2007-2008 global financial crisis or the Brexit vote that forced Great Britain out of the European Union in 2016. These were highly unexpected events, and they might affect someone's investment thesis.

If you think your investment thesis holds up, stick with it through thick and thin.

As markets ever evolve, so do the ideas and strategies investment professionals believe are best suited to take advantage of growth and value creation opportunities.

Documenting an Investment Thesis

An investment thesis is generally formally documented, but there are no universal standards for the contents. Some require fast action and are not elaborate compositions. When a thesis concerns a big trend, such as a global macro perspective, the investment thesis may be well documented and might even include a fair amount of promotional materials for presentation to potential investing partners.

In the last few decades, portfolio management has become a science-based discipline, not unlike engineering or medicine. As in those fields, breakthroughs in basic theory, technology, and market structures continuously translate into improvements in products and in professional practices. The investment thesis has been strengthened with qualitative and quantitative methods that are now widely accepted.

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The Determinants and Effects of Effective Investor Relations (IR)

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How to Build a Compelling Investment Thesis for Your Investor Presentation

In a recent blog post, “ Giving Life to Your Investor Presentation ,” David Calusdian suggests a number of valuable ways to improve not only the investor presentation itself but importantly the delivery of the content. One critical element identified by David is the development of a strong investment thesis that ultimately binds the presentation together. What are the secret ingredients that make for a compelling investment thesis? The answer to this question lies with investors and Wall Street analysts – your audience. As a former equity analyst, global sector head and portfolio manager who’s constructed, presented and reviewed hundreds of investment theses, here are several elements worth mentioning:

In conclusion, don’t forget to speak the financial language of your audience when building an investment thesis. Compelling theses offer revenue, operating leverage and returns elements that communicate a story that is best understood and accepted by investors.

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Investor Presentation , Investment Thesis , Strategic Messaging , Presentation Training , Sell-side Coverage , Investor Conference , Investor Relations

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Connect with your investors.

Establish a sincere connection with investors to communicate key messages during your Investor Day. Download our free e-book on effective presentation habits, and learn to deliver ideas with confidence and clarity.

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When it's time for a change.

Whether planned or sudden, it is crucial to communicate the succession of high-profile positions effectively. Download our three-part e-book and learn the best way to craft a plan for CEO, CFO and Board of Directors transitions.

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With our new Proxy GamePlan, we create a year-round, data-driven strategic roadmap for effective shareholder engagement. Implement a best-in-class program rooted in a deep understanding of your company’s proxy practices, shareholder voting trends and peer landscape.

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Find effective ir counsel.

Whether you’re seeking external IR counsel for the first time or evaluating your current provider, you need a firm that understands your strategy, adapts to your culture and tells your story. Download our free guide on how to assess the effectiveness of an investor relations firm.

How to Assess  an IR Firm

Activism Defense

No company is immune to shareholder activism. Sharon Merrill helps boards of directors and executive management teams  identify the activist red flags lurking in your shareholder base, assess your governance risks and develop an action plan to prevent, detect and neutralize any threats.  Download our free white paper,  “Leveraging Institutional Shareholder Relationships to Reduce Activism Risk,” and learn how the best defense against activism is a strong offense.

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Captivate your Audience

Speaking persuasively is critical in today’s competitive business environment. Effective speakers use voice techniques and body language that project authority and credibility. Download our free e-book, “A Guide to Delivering Captivating Presentations,” for insight into good -and bad- presentation habits, and learn how to improve your skills.

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Perceptions Matter

How do you ensure that investors clearly understand your strategy, growth drivers and market position? The most effective way is through a perception study. By periodically taking the investment community’s pulse you can avoid the knowledge gaps and misperceptions that hurt valuation. Download our free whitepaper, Why Perceptions Matter , to learn more.

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Investor Relations

From a hidden champion in Germany to the leading online broker in Europe

flatexDEGIRO operates the leading and fastest growing online brokerage platform in Europe, executing more than 90 million paperless securities transactions in 2021. More than 2.2 million customers are serviced via the flatex and DEGIRO brands and offered a wide range of independent products at competitive pricing, based on a modern, in-house state-of-the-art technology.

With flatex’s acquisition of DEGIRO in July 2020 flatexDEGIRO became the largest retail online brokers in Europe. In a time of bank consolidation, low interest rates and digitalization, flatexDEGIRO is thus ideally positioned for further growth. Until 2026, we aim to serve 7-8 million customers and execute at least 250-350 million transactions per year - even in a year with only low volatility.

investor relations thesis

Key Performance Indicators flatexDEGIRO

*based on shares outstanding as of 12/31/2021

Achim Schreck

Head of IR and Corporate Communications Mobile +49 160 92774570 [email protected] Omniturm Große Gallusstraße 16-18 60312 Frankfurt am Main

Investieren Sie heute noch. Werden Sie Kunde von

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Investment thesis

Encompass Health’s ability to adapt to changes, build strategic relationships, and consistently provide high-quality, cost-effective care positions the Company for success in the evolving healthcare industry.

Change agility

Demonstrated ability to adapt across economic cycles and in the face of numerous and significant regulatory and legislative changes

Strategic relationships

Joint ventures with acute-care partners comprise one-third of Encompass Health’s inpatient rehabilitation hospital portfolio.

Formed Post-Acute Innovation Center in collaboration with Cerner Corporation to develop enhanced tools to manage patients across the continuum of care

Partnered with the American Heart Association/American Stroke Association to jointly work to elevate national and local awareness that stroke is treatable and beatable through rehabilitation and community support

Quality of patient outcomes

Outcomes exceed national industry standards.

Cost effectiveness

Treatment of more medically complex patients at lower average costs than other post-acute providers through superior clinical protocols, economies of scale, and technology-enabled business processes.

Encompass Health benefits from favorable demographic trends and the nondiscretionary nature of many conditions treated.

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