Annual Meetings

by Kathy "kathycourt" Courtney

Have you ever thought about attending the annual meetings of companies whose
stocks you own? You should, especially if you own any small caps.

These meetings really give you a feel for a company and whether you think it
can succeed. For one, you can observe the optimism (or pessimism) in the
attitude of the officers -- believe me, it's apparent. And you can have a
chance to shake hands with the officers of a company and ask them questions
directly. Just like an insider.

I-Flow Initiation
The first annual meeting I ever attended was I-Flow Corp.'s (Nasdaq: IFLOW).
The company, which makes all kinds of infusion devises for pain management
for patients to use at home or in the hospital, is close to where I live in
Southern California. Since it's a small cap, only a handful of people
attended, and several of those were company employees (I didn't know that at
the time).

I received many handouts describing the company (a separate sheet for each
product -- a lot of very interesting detailed information you don't receive
in your annual reports). Plus, I was able to meet the CEO and several other
officers and discuss their products with them. Since there was a small group
of shareholders in attendance, they took us all on a tour of the plant that
taught me a lot about I-Flow's organization and how they process orders,
manufacture the devices, maintain cleanliness in packaging, etc. And I
partook of some delicious breakfast rolls, juice, fruit and coffee!

The meeting began about 15 minutes late (we waited until the last group had
returned from their tour) with the CEO at the helm. He spoke for about 20
minutes, introducing company officers who were sitting in the audience and
giving us a slide presentation. After the meeting, we went to the display
table and viewed the various infusion devices, while talking with company
representatives. I learned a lot about these devices at that meeting. The
entire affair seemed to be rather efolksy in manner (I had always thought
annual meetings were very Robert's-Rules-of-Order formal).

Bio-Source Bonanza
My next annual meeting was Bio-Source International (Nasdaq: BIOI), a small
bio-tech company located in Camarillo, California, near Los Angeles.
Bio-Source develops, manufactures, markets and distributes immunological
reagents, test kits and oligonucleotides, which are used in biomedical
research.

The annual meeting was held at their local country club -- very posh! We
were offered a very appetizing breakfast display -- again, fruit, rolls,
juice and coffee -- this time served in silver urns and on silver platters.
The meeting seemed somewhat similar to the I-Flow meeting: Shareholders
received various sheets on all of their reagents to study and were able to
meet the officers and listen to them respond to audience questions.

Vertel Vortex
That same year, I also attended the annual meeting for Vertel Corp. (Nasdaq:
VRTL) in Woodland Hills, California, near Los Angeles, at the local Hilton
Hotel. Vertel provides mediation software for telecommunications networks.
Its new mediation software, e*ORB, continues to be adopted by top
telecommunications, e-business and manufacturing companies.

This time, in addition to a wonderful breakfast display, we also received
large note pads, handsome pens and rubber balls with the world printed on
them -- quite nifty. I was particularly anxious to attend this meeting as I
manage the Vertel Message Board here on Individualinvestor.com and wanted
more insight into the company.

Vertel had a price surge -- from under $2 to the $50 range last year (quite
exciting!) -- but the stock is back down under $2 a share again. I attended
their meeting again this May so I could see what the future holds. Whereas
last year's meeting was quite upbeat, I expected some skepticism and hard
questions from shareholders this year.

Vertel gave a very informative presentation on their company, followed by a
Q & A session. They appeared to be very candid and open about the business
and attempted to calm our fears about the company's future. I went away
feeling we might just make it -- and, in fact, might show a profit by early
next year.

Major League Meetings
At large meetings things can be a bit more interesting. For instance, this
past April at the Bank of America (NYSE: BAC) annual meeting, Hugh McColl
announced his resignation, handing the reins to President and Chief
Operating Officer Kenneth Lewis at the meeting. McColl said he was leaving
BAC due to a 25% drop in its stock during the past two years, at a time when
bad loans are rising as the economy slows and customers struggle to repay
debt. A shocker to all in attendance, I am sure.

At the General Electric (NYSE: GE) meeting, also in April, there was some
lively activity. Shareholders voted down two proposals -- one which required
the company to disclose how much it had spent on advertising opposing the
dredging of the Hudson river. Wow, that was a bombshell! Jack Welsh admitted
to spending between $10-$15 million, as well as to opposing the shareowner
proposal that required this disclosure. It was Welsh's last appearance as
CEO and he tried to avoid the subject of his departure, although several
shareholders talked about it in their comments.

Abbott Labs (NYSE: ABT) has spent the past year trying to drop its
trouble-prone image, but shareholders at the company's annual meeting in
April continued to ask hard questions. A former employee, a researcher I
believe, asked for the resignation of the company's CEO and members of its
board of directors over an alleged price-fixing scheme at TAP
Pharmaceuticals Inc. (its 50/50 joint venture with Japan's Takeda Chemical
Industries Ltd.). You usually don't get all this action at a small cap
meeting with only a handful of shareholders in attendance.

Berkshire Hathaway's (NYSE: BRK/A) annual meeting lasts for an entire
weekend! About 12,000 people traveled to Omaha for the gathering this year
which was held at the Omaha Civic Auditorium. When you entered, you felt you
had reached the Mall of America. All of the companies Warren Buffett owns
display their products, which are for sale, of course.

Each Berkshire conference opens with a homespun movie in which Buffett pokes
fun at himself. In this year's film, Buffett appeared as Tiger Woods' caddy,
drawing huge laughs from the audience. Buffett spends only about 10 minutes
on the business meeting and then uses the rest of the time talking about
stocks and investing. I have friends who own Class B shares and they attend
each year. They say they get a wonderful learning experience from the
"master" himself (and they also love all the wonderful food served).

Web Watch
Something new this year, I watched two company's annual meetings over the
Web: PepsiCo (NYSE: PEP) and Qwest Communications (NYSE: Q) . I think the
new disclosure act has prompted companies to make as much company
information as possible available easily to their shareholders.

The Bottom Line
I have been very lighthearted as I talk about these meetings, but I do feel
attending them can be useful for investors. Sometimes they reveal unexpected
news, believe me!