Surveys show...
...three out of every four investors are "most influenced"
by an analyst report, and nearly nine out of ten believe,
"legitimate fee-based research is objective and useful."
However, as traditional Wall Street coverage declines, more and
more companies that are pledged to Good Governance and
shareholder transparency now directly provide their
shareholders with access to professional, credible, third-party
analyst coverage from standards-based independent research
providers.
What are those standards?
Which companies have adopted them?
The Association of Standards-Based Independent Research
Providers, a not-for-profit subsidiary organization of
sponsored analytics, promulgated the Standards for Independent
Research Providers in May, 2003, to be used by investors in
considering the credibility of a published or publicized
research report, and by public companies and funders in
considering enrolment in a credible, professional program
providing analyst coverage.
Now, every company can have coverage. If you are invested in
a company that does not, this is a legitimate question to ask
yourself and the company: Why not?
What can you do?
Begin by asking your company for access to its research.
Then, make certain the research is from a standards-based
provider that:
• Is not conflicted as an owner or trader of the company's
stock.
• Employs and identifies qualified analysts.
• Makes its research available to all classes of investors
in a imely fashion, or discloses any prior
distributions.
• Provides no investor relations, public relations or
promotion to companies under coverage.
• Does not issue ratings or targets as recommendations or
stock price predictors, or in the absence of a full,
publicly accessible report.
• Publishes its ethics and standards detailing how it
maintains objectivity and independence from the companies
it covers.
• Provides full disclosure as to the compensation it has
received, the source of that compensation, and that the
compensation is not exorbitant.
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