COLUMBUS, Ohio, May 12, 2003 (PRIMEZONE) -- In a month-long survey to determine individual investor attitudes toward equity research conducted by Richard J. Wayman, CFA, of researchstock.com and educational investment site Investopedia.com, the biggest surprise from the results being posted today, is 73% believed a public company that hired a fee-based research was making a positive statement about its investment potential.
Other key results were:
-- Investors preferred brief reports with industry and peer group analysis to recommendations and target prices.
-- While most (82%) believed Wall Street research was biased, 78% believed it was useful
-- 80% felt that fee-based research was useful.
Said Rick Wayman, president of researchstock.com, "With Wall Street research discredited, we wanted to know the opinions of individual investors and learn what they valued most."
According to Wayman, individual investors do not look to Wall Street as their main source of research anymore for two main reasons. First is the credibility issue which has been headline news and resulted in the $1.4 billion Spitzer settlement with the major Wall Street investment banks. The bigger problem he said is that Wall Street has 'orphaned' thousands of companies by dropping coverage because of a lack of trading volume or investment banking potential.
Wayman said he believes independent and objective fee-based research will bridge this information gap. This comment is also echoed by Cory Janssen of Investopedia.com
Said Cory Janssen, "CEO's and CFO's of small cap companies should now start to realize that Wall Street is no longer the only game in town. Understanding the difference between 'legitimate' fee-based research (used to inform) and biased fee-based research (used to manipulate the market) will be the key to individual investors making informed decisions."
The survey and results are free to anyone visiting http://www.investopedia.com/articles/analyst/ and anyone can still visit to record their opinion. It includes six True/False questions and one question that asked investors to rank the importance of information in a research report.
To view the commentary click on: http://www.researchstock.com/members/companies/commenta/.Role%20of%20Research%20Give%20Investors.pdf
About researchstock.com
researchstock.com is an independent equity research firm that focuses on stocks that are not widely followed. The website has research reports (free and pay-per-view) and commentary. Most of the free research is done on a fixed fee basis (no form of equity is accepted) paid by the subject company. The site also provides market commentary and educational articles.
About Investopedia.com
Investopedia.com is a website devoted to investing education. The site boasts the most comprehensive financial dictionary on the web, hundreds of educational articles and tutorials, and an investing game that simulates the online trading experience.