Sorry to be a buzzkill but I will take a slightly less sanguine view on this topic.
Not many investors appreciate as to how deeply attached and often addicted management/ promoters can be to stock prices. There is so much to gain (apart from being insanely rich) from rising stock prices that when management starts giving promising guidance during a bull market one should start becoming extra alert.
1- Management guidance (if at all) during bear market
2- Is company guidance for growth consistent with historical performance or we see extreme divergence? Promoter will always cite great order book (the most misleading but most commonly accepted leading indicator of a company’s future prospects.) but one needs to go deeper.
3- Track record of company in meeting their guidance. If first time, go back to fundamentals. Often times well-meaning but inexperienced management can fall prey to urge of pleasing their investors only to learn the hard way.
4- Whether the guidance is coming after a few exceptional quarters in a bull market. This is a perfect opportunity for many promoters to talk up their companies’ prospects by painting even a rosier picture.
5- Peer group guidance
6- The overall tone of management on concall. Are they glossing over the facts and just reiterating how well their company has turned the corner or how good the future looks like? This to me is the biggest red flag. Compare this to the commentary of well run companies’ promoters. They are always cautious, firm with investors and hesitant to give guidance because they know they are in the business for a very long time.
Eventually, there wont be anyway to verify a management’s claim. But if you prfer companies that underpromise and overdeliver then take such guidances with a pinch of salt.
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