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.
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
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
GRAND TOTAL - 1398
TOP INDUSTRY SECTORS
> Drugs/Biotech - 150> Banking - 120
> Energy - 87
> Energy - 87
APRIL 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 153
GRAND TOTAL - 153
TOP INDUSTRY SECTORS
> Energy - 16> Drugs - 15
> Banking - 12
> Banking - 12
APRIL 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 167
GRAND TOTAL - 167
TOP INDUSTRY SECTORS
> Drugs/Biotech - 16
> Energy - 12
> Banking - 11
> Energy - 12
> Banking - 11
> Metals Mining - 11
APRIL 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 495
GRAND TOTAL - 495
TOP INDUSTRY SECTORS
> Drugs/Biotech - 47
> Chemicals - 43
> Banking - 33
> 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.
