Unspoken cues often provide the earliest indication of corporate financial health
Whether intentional or not, we all communicate non-verbally with our posture, gestures and facial expressions. Sometimes body language is conveyed purposefully (think road rage gestures), but most often it’s subconscious, such as glancing up and to the left when recalling a memory.
Companies use ‘verbal’ communication to provide information to various audiences and constituencies. For a CEO, this can range from media interviews and social media posts to the CFO’s report on quarterly earnings call and the annual letter to shareholders.
What you may not realize is that companies also give signals that resemble human body language. Like the human version, these messages come from what companies do rather than what they say.
These unspoken cues often provide the earliest indications that something positive or negative is about to happen in a company. A telling example (see below) is when a company moves an earnings announcement date forward – which typically indicates good news.
WEC Energy Group moved their Q4 2019 earnings date forward 5 days from 2/5/2020 to 1/30/2020. Wall Street Horizon alerted clients on 12/13/2019 at 7:07 pm of the revision. Within the first two weeks the price rose 4.81%, continuing to increase to 11.7% leading up to the new revised earnings date.
For those who know what to look for, how to interpret these signals and can act on them, these unspoken cues can reveal sources of alpha or risk that others don’t see. That valuable market intelligence can inform strategies and create openings to capitalize on opportunities or sidestep risk.
The key is knowing what to look for and seeing it before your competitors do.
Here at Wall Street Horizon, we are corporate surveillance (corporate body language) experts. There are plenty of news outlets and vendors to report and analyze what companies say. We are focused on what companies do. More specifically, we scrutinize what 12,000 publicly traded companies do across 40 types of corporate events.
For people and companies alike, actions speak louder than words. Watching company actions through their events can provide a clearer picture of the company’s health. Recognizing this allows you to take decisive action before the rest of the market.
You just need to be able to read the corporate body language.