On October 16, 2017, Clermont Partners released a survey on the reliance of Active Investors on non-GAAP versus GAAP reporting, intangible assets and non-financial metrics.  Unlike passive investors who invest in index funds, active investors select securities to buy and sell.  Fifty-six active investors, focused on a variety of industries and investment strategies, participated in the 14-question survey.  Highlights of the survey include the following:

• 74% of the respondents rely on non-GAAP more than GAAP reporting when evaluating a company’s performance.
• 44% of the respondents believe that non-GAAP measures have become more important over time.
• 90% of the respondents will frequently make their own adjustments to a company’s GAAP results based on what they believe is relevant in evaluating performance.
• 64% of the respondents believe that intangible assets are important factors in evaluating performance.

The results of the survey suggest that non-GAAP metrics are viewed more favorably by active investors as they buy and sell securities and that the SEC rules emphasizing GAAP metrics are largely ignored by active investors.  A copy of the survey is available here.