ART & COMMERCE




Dare to Compare Every craft has its private vocabulary. A common word in the language of investment banking is: whatarethecomps. It means: What companies are comparable to the one I’m looking at? Bankers and analysts utter it as they try to value an outfit that doesn’t have a readily determinable price of its own. For example, to set the price in an initial public offering, a group of peer companies will be examined and the debutante’s offering price will likely be pegged at a modest discount. Wall Streeters, therefore, keep extensive records of stock-price performance by industry grouping alongside data of financial performance. Veronis, Suhler & Associates, a firm that specializes in deals for the “communications” industry, has studied public companies across 14 main subsets. Its 15th annual report is out, and it covers a universe of 456 outfits stretching from Abacus Direct to Yahoo!. Over the years, the number of covered companies has tripled, their aggregate revenues have nearly quintupled and the revenue per average company has gone up by 61 percent. Is that performance good? It depends on what the comps are. –Alan Gottesman (westendal pobox.com) is principal of West End Consulting.

THE GOTTESMAN FILE
Veronis, Suhler’s communications universe has tripled in number of companies and quintupled in revenue over the past 15 years.

…..Year……..Aggregate revenue ($bil.)…..Covered companies…..Average revenue per co. ($mil.)

…..1996…..$195.6…..456…..$428.9
…..1993…..$141.1…..392…..$359.9
…..1990…..$114.3…..274…..$417.2
…..1987…..$81.2…..265…..$306.4
…..1984…..$59.3…..245…..$242.0
…..1981…..$40.5…..152…..$266.4
……….Source: Veronis, Suhler & Associates