Writing in Traders Magazine, Wall Street Horizon CEO Barry Star says that companies use ‘verbal’ communication all the time to provide information to various audiences and constituencies. It’s everything they say publicly, including quotes in their press releases, what their executives say on investor conference calls, what gets communicated internally to employees and what the CEO says in the annual letter to shareholders.
But companies also give signals that are remarkably similar to human body language. For those who know what to look for, how to interpret these signals, and are able to act on them, these unspoken cues can reveal sources of alpha that others don’t see.
These unspoken cues often provide the earliest indications that something really good or really bad is about to happen in a company. The most common examples include earnings and dividend dates that are moved up or pushed back, stock split timing changes, and sudden changes in participation in conferences. That is, are they attending more or fewer investor conferences?
For those who know what to look for, how to interpret these signals, and are able to act on them, these unspoken cues can reveal sources of alpha that others don’t see. That valuable market intelligence can inform strategies and create openings to capitalize on opportunities or sidestep risks.
Read the full article here.