April Turnover Declines a Bit But Future Remains Rosy

Liberum's executive turnover data for April 2014 seemed to conflict a bit with the latest employment growth and unemployment figures that were recently announced for April 2014.  CEO and CFO changes monitored by Liberum Research saw reasonably high percentage declines from the same month a year earlier.  The numbers were a bit better for those two categories, when compared with the previous month's total for March 2014.  The trend was a somewhat more positive when we examined the same changes with regard to overall C-level turnover (as defined by Liberum as all C-level executives down to VP level) and Board of Director changes.  C-level turnover increased a mere 2% from the year earlier period of April 2013 and  saw a slight increase of 3% when compared with the previous month of March 2014.  Board of Director turnover was slightly different with a 7% increase from the year earlier and a static change for the previous month of March 2014.  Overall, Liberum was not very concerned with the slight declines recorded for April 2014.  We still see positive changes continuing in executive turnover totals and expect them to remain the same or higher as we move forward in to the spring and summer.  Investors should keep this in mind.

Last week both ADP's Employment Report for April 2014 and the government's monthly report from the Bureau of Labor Statistics (BLS) illustrated truly positive news for employment growth and unemployment.  While a significant part of the large employment increases and declines in unemployed were due to end of the difficult winter, Liberum still views the overall numbers as being quite positive.   According to the ADP Employment Report:

Private-sector employment increased by 220,000 from March to April, on a seasonally adjusted basis. 

The government's BLS Report was even more positive:

Total nonfarm payroll employment rose by 288,000, and the unemployment rate fell by 0.4 percentage point to 6.3 percent in April, the U.S. Bureau of Labor Statistics reported. Employment gains were widespread, led by job growth in professional and business services, retail trade, food services and drinking places, and construction.

Below is a breakdown of Liberum's key executive category percentage changes for April 2014 compared with April a year earlier and the previous month of March 2014.   

• For April 2014 declines took place in two key categories.  CEO changes declined 32% from a year earlier, CFO changes declined 12%,  overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) changes increased 2% and board of director changes increased 7%.

• The month to month change in executive turnover (March 2014 to February 2014) showed a slightly different picture with a decline of 7%  for CEOs, CFO changes increased a mere 1%, C-level changes increased 3% and board of director changes remained static.       

Below are the overall turnover totals for April.  

 

KEY CEO CHANGES - APRIL 2014
53 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING 

According to Liberum's Management Change Database, a total of 153 CEO related changes occurred during April 2014. Here are 53 from the time period that caught my eye.  By significant, I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation. 

DATE   COMPANY TICKER  EXCHANGE  MARKET CAP $ MILLIONS    

04-01 Core Resource Man CRMI  OTN  47

04-01 Sun Bancorp, Inc.  SNBCNASDAQ  337

04-02 Epcylon Technolog PRFC  OTN  26

04-02 Reachlocal, Inc. RLOC  NASDAQ  302

04-03 Modern Mobility A MDRM  OTN  34

04-03 Taylor Consulting TAYO  OBB  17

04-03 Vapor Hub Interna VHUB  OTN

04-04 GTx, Inc.   GTXI  NASDAQ  116

04-07 Efftec Intl Inc EFFI  OTN  381

04-07 Equity One, Inc. EQY  NYSE  2663

04-07 Patriot Berry Far PBFI  OBB  47

04-07 Plures Technologi MANY  OTN  170

04-07 Rango Energy, Inc RAGO  OTN  10

04-07 Vonage Holdings Corp.  VG  NYSE  880

04-08 Harsco Corporation HSC  NYSE  1852

04-08 L&L Energy, Inc. LLEN  OTN  54

04-09 Attune Rtd AURT  OTN  520

04-09 Chimerix, Inc. CMRX  NASDAQ  591

04-09 Tierra Grande Res TGRI  OTN  1

04-10 Cal-Bay Intl Inc CBYI  OTN  777

04-10 Infosys Technologies LTD (ADR)  INFY  NYSE

04-11 CMG Holdings Group, Inc.  CMGO  OTN  6

04-11 Crossbox Inc. CBXX  23

04-14 Sw China Imports SWCI  OBB

04-14 Thermoenergy Corp TMEN  OTN  2

04-14 Uni-Pixel, Inc. UNXL  NASDAQ  93

04-15 As Seen On Tv Inc ASTV  OBB  4

04-15 Finmeccanica Adr FINMY  OTN  5111

04-15 Integrated Drilli IRIG  OTN  27

04-15 Noble Energy, Inc. NBL  NYSE  25920

04-16 Glow Holdings, In GLOH  OTN

04-16 Higher One Holdin ONE  NYSE  288

04-17 Agricon Global Co AGRC  OTN  4

04-17 Impax Laboratories Inc.  IPXL  NASDAQ  1733

04-18 Ford Motor Company F  NYSE  64363

04-18 Telecom Italia Sp TIAJF  OTN

04-22 Ashland Inc. ASH  NYSE  7600

04-22 Health Rev Assurn HRAA  OBB  5

04-22 Helios Advantage HAV  NYSE

04-22 Independence Res SNKTY  OTN  17

04-22 Reneuron Group Pl RNUGF  OTN  58

04-22 Strategic Mng Cor SMNG  OTN

04-23 Accretive Health ACHI  OTN  882

04-23 Capital Product P CPLP  NASDAQ  946

04-23 Digi International Inc.  DGII  NASDAQ  228

04-23 Newcrest Mining L NCMGF  OTN  7430

04-23 Vermillion Inc VRML  NASDAQ  108

04-24 Canadian Imperial CM  NYSE  34609

04-24 WesBanco, Inc. WSBC  NASDAQ  878

04-25 Bg Group BG  LONDON  408

04-25 Big Sky Petroleum BSP.V

04-28 Intertech Solutio ITEC  295

04-30 Superior Industries Intl Inc.  SUP  NYSE  565

 

APRIL 2014 MANAGEMENT CHANGE STATISTICS

C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1398

TOP INDUSTRY SECTORS

> Drugs/Biotech - 150> Banking - 120
> Energy - 87

APRIL 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 153

TOP INDUSTRY SECTORS

> Energy - 16> Drugs - 15
> Banking - 12

APRIL 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 167

TOP INDUSTRY SECTORS

> Drugs/Biotech - 16
> Energy - 12
> Banking - 11

> Metals Mining - 11

APRIL 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 495

TOP INDUSTRY SECTORS

> Drugs/Biotech - 47
> Chemicals - 43
> Banking - 33

Investors need to diligently monitor key management changes. Certain management changes should be viewed as a "special situation" that can have a direct and major impact on a company's performance and share price.

• New CEOs know more than the market about the company.  Their decision to take the position contains information.  Likewise the departing CEO. 

• Likewise departing CFOs New CEOs will bring new skills and often-times a new direction.  This is normally significant, and worth analyzing.

Liberum Research, the independent research firm focused on corporate management change, has developed an online relational database designed to assist institutional investors develop special situation investment ideas related to executive management change. While special situation investing traditionally revolves around corporate restructuring, spin-offs and acquisitions, executive management changes, depending on the circumstances, can represent a short or long-term investment opportunity.  Using Liberum's database could offer a totally new perspective on investment and is a potential way to come up with unique special situation opportunities.

If interested, call now (212-988-5497) or email richard@twst.com and get a no obligation one week trial to Liberum's online management change database.