Putting a Premium on Investor Relations

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Serial entrepreneur Paul Marino, who’s launched a printing company and a Web development firm, now wants to cash in on stocks but not by buying low and selling high.

His latest venture is Investor Awareness Index Inc., a Chatsworth company that rates companies based on their investor relations efforts. He’s hoping that people shopping for shares will check his site before buying.

“If you have two stocks you’re contemplating and the financial performance is pretty much even but one is doing a lot better job of creating awareness in the investment community, it should be a factor in your decision,” Marino said. “The company that is more successful in communicating its message has a better chance of driving up demand for its stock.”

He’s funded the 14-person company from his own pocket along with some money from a partner as well as from advertising. His Web site offers tips on how a company can improve its score, but Marino’s firm doesn’t actually help in the improvement process. Firms that advertise on the site offer that service, such as Expansion Plus, an Internet marketing firm in Pasadena. Other advertisers include Scottrade Inc. and PR Newswire.

David Waldman, president of investor relations firm Crescendo Communications in New York, advertises on the site. He believes the index has good timing, as a possible incipient recession will move money out of small-cap markets into blue chip or cash holdings. As a result, investor relations will become ever more important for smaller companies.

“Ultimately, if they drive a lot of investors to the site, there are a lot of advertisers who would like to reach them,” Waldman said.

The index measures how effectively a company generates awareness for its stock in the investment community. It currently rates 3,200 companies. Access to the ratings at InvestorAwarenessIndex.com is free.

Factors that influence a company’s rating include the number of institutional stockholders, media coverage and whether the company employs investor relations and/or public relations firms.

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