Founded in 1931 by Arnold Bernhard, Value Line, Inc. has become one of the most respected names on Wall Street. The firm is best known for publishing the Value Line Investment Survey, a stock analysis newsletter that's updated weekly and kept by subscribers in a large black binder bearing the Value Line name. In 1965, Value Line invented a complex mathematical formula, called the Timeliness Ranking System, that serves as the basis for its survey picks. The company also manages a series of mutual funds, again based on the firm's Timeliness Ranking System, and produces several other publications, both print and electronic.
An American success story
Arnold Bernhard, the son of European immigrants, took an unusual path to success in the stock-picking world. After graduating with honors from Williams College, Bernhard wrote several plays and theater reviews for the New York Post and Time. His interest piqued by Edwin Lefevre's book Reminiscences of a Stock Operator, Bernhard broke into the investment management business, first as an analyst with Moody's Investor Service and later as an account executive managing investments. The stock market crash of 1929 led to his lay off from Moody's, but he retained some of his clients. Bernhard then began to develop his statistical method for picking stocks, and soon began publishing his investment survey. He continued to expand the business, adding the other publications and mutual funds along the way. In May 1983, Value Line sold stock for the public for the first time, though the Bernhard family retained 80% control. Bernhard died in December 1987, and his daughter, Jean Bernhard Buttner was named CEO of Value Line shortly thereafter.
The switch to Jean did not go smoothly. The 80% family stake in Value Line is kept in a holding company called Arnold Bernhard & Co., and Arnold Bernhard willed his daughter 2 more shares than her twin brother, Arnold Van Hoven Bernhard. Arnold Jr. was upset by this arrangement, and sued to get control of the company. In 1996, the suit was settled with Jean buying out her brother's stake.
One tough boss
While the Value Line business has grown steadily, with company shares usually outpacing its peers in the Russell 2000 small stock index, Jean Bernhard Buttner has drawn criticism as a harsh manager. Employees tell horror stories of her controlling and frugal ways. A scathing Business Week article in March 1992 alleged that Buttner handed out demerits to analysts for messy desks and threatened employees who granted unauthorized interviews on any topic to the news media. "Jean Buttner has created a time bomb," one ex-Value Line was quoted as saying. "The only question is when it goes off."
On the subject of Buttner's supposed penny-pinching ways, one anonymous manager said, "Her attitude is that the money is all hers, and she doesn't want to part with a penny." The Business Week article further alleged that employees were forced to sign in and out every workday, and that anyone singing in after 9 A.M. or before 5 P.M. was subject to discharge. Several senior Value Line employees signed a letter to Business Week disputing the charges. Buttner was opened up to more criticism in February 1997 when a lawsuit alleged she was being compensated too highly. The company disputed the charges, saying her pay had been benchmarked against CEOs in her field. To her credit, Buttner has received praise in many circles, including being named to Crain's New York Business' list of 100 influential women in business.
The company had large increases in its overall number of subscriptions in 1999, especially to The Value Line Survey, and had the record revenues and operating income to prove it. In the same year, Value Line took a step forward and hired its first advertising agency, Partners & Shevack/Wolf, in October. Value Line employed Shevack to control and assist its marketing, promotion to investors, and launch of an online investor information center.
The Value Line Investment Survey;Options;Convertible Surveys;OTC Special Situations Service;The Value Line Mutual Fund Survey;The Value Line No-Load Fund Advisor
More Company Profiles
For more career information, go to Vault.com
©2000, Vault.com Inc