In Focus no. 40 Equity Analyst Bjørn Schwarz, Sydbank Markets, describes the concept shareholder value and studies the possibilities of assessing whether the shareholder value initiatives have generated value to the shareholders.
Bjørn Schwarz has selected a small group of companies and against this background he examines whether gearing, good information policies, share-based remuneration and buy-back of own shares generate shareholder value. Moreover, the author assesses whether the size of the companies has an influence on shareholder value and whether 'pure' companies generate more shareholder value than conglomerates.
The author lists factors that create successful companies and thus a positive movement in market prices:
- A good, ready-for-change, innovative and timely acting management
- The corporate culture
- The company's placing in the value chain
- The company's relative competitiveness and knowledge of the market
- The competitive position on the market and the company's possibility of affecting the pricing of the product
- High stable cash flows
- Freedom to act - the ability to seize the opportunity while it is there
Read the entire article "What factors generate shareholder value?" in Focus no. 40 on our website www.cse.dk.
