An Illustrative Example
Most value investors are financially oriented. They appreciate the potential to build value in company, but don’t have the experience to actualize the valuation process.
Our roles are (i) to educate the Value Builder to the range of available functional experts that are available, (ii) to assist in determining the best path(s) to pursue to develop value in the company and (iii) to co-ordinate and to integrate the work of those experts that the Value Builder selects in order to assure the best result.
As a metaphor, consider the activist investor as having identified a home that’s a “fixer-upper”. Comstock’s role parallels that of the “general contractor”. We assist the activist in determining “what the home should look like”. We then assemble the required “subcontractors” (metaphorically, the electricians, masons, plumbers and landscapers) and oversee their work that results in a remodeled and updated “home” that can sell for a premium price.
As an example, let’s assemble a hypothetical Value Builder team:
1. An operationally-oriented consulting firm to increase earnings.
Can estimate probable savings within 3 weeks at its own expense. Only senior people with operating experience to elicit ideas from employees who know that they can speak freely and discreetly. 80% of the firm’s compensation depends upon successful implementation. Clients range from multinational firms to middle market.
2. An intelligence firm that uses Big Data, the Cloud and AI to accurately forecast customer behavior, reduce risk and improve the odds for success.
Can estimate probable savings within 3 weeks at its own expense. Only senior people with operating experience to elicit ideas from employees who know that they can speak freely and discreetly. 80% of the firm’s compensation depends upon successful implementation. Clients range from multinational firms to middle market.
3. Intellectual Property: Most companies don’t realize that value in their patent portfolios can significantly impact other industries.
This firm focuses on capital-efficient patent portfolio development. It evaluates a company’s IP to understand to what other industries it might be applied and licensed to generate incremental revenues. This analysis and its subsequent IP development can significantly (i) increase the value of the original IP and (ii) the quality and the defensibility of the original patent portfolio by making additional claims.
4. An expert in communicating the Value Builder’s goals clearly to the different stakeholders, such as management, employees, the investment community and the regulators.
He understands how to use research-based influence strategies for positive impact to communicate. His research has been published in top academic journals and he previously managed a $200-million business unit for a leading consumer products company.
5. Wargaming to further reduce risk. Leadership experiences potential futures now, at very low cost.
He understands how to use research-based influence strategies for positive impact to communicate. His research has been published in top academic journals and he previously managed a $200-million business unit for a leading consumer products company.
