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Ethos Environmental, Inc.
OTCBB : ETEV
03/07/2008
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Is Analyst Coverage Necessary?
Take a look at these facts:
- 70.9% in an Investopedia.com survey said that "a company that hires a legitimate fee-based research firm is making a positive statement about its investment potential."
- According to a survey by Charles Schwab & Co. reported in the NY
Times, an astonishing 78% of active stockholders now "value research from independent firms over analysis by Wall Street firms with financial ties to the companies they are rating..."
So why is independent research so important? It is much more than simply telling the story from an outside pair of eyes (though it does that). Independent research provides a benchmark by which potential investors can gauge a company's fair value, eliminating such extraneous factors as wars, political uncertainty, market-maker manipulation, etc. And perhaps most importantly, it is a statement by management to current shareholders and investors that, "We have the confidence in our business model to pay an independent analyst to perform a fair, accurate valuation on our stock. Not only do we not have anything to hide, we are sure the market will share
our enthusiasm once all the facts are elicited."
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