USA Today ran an interesting look at analyst coverage. Many stocks have a surprisingly small analyst following.
USATODAY.com - 'Consensus estimate' may be from one analyst: "Currently, more than half the 8,416 public companies have no analyst coverage, says Ashwani Kaul, chief spokesman for Reuters Estimates. An additional 7% of publicly traded companies are covered by just one analyst.
Most of the single-covered stocks are small, with an average market value of $284 million, Kaul says. But the ranks still include some well-known companies such as 1-800-Contacts, A.T. Cross and Rocky Mountain Chocolate Factory."
As analysts play roles in reducing information asymmetries and even in control agency costs, the relative scarcity of analysts brings up interesting questions: how do returns vary with coverage? How about agency costs?
1 comment:
A terrible fact of "public" corporate life, is that most small public companies have to PAY for unbiased (yeah... sure.... maybe...) analyst coverage.
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