Dutton & Associates Research

Dutton & Associates is an investment research firm offering high-quality, independent, fundamental research on public companies. It was founded by John M. Dutton on the model he successfully built while president and director of research of Investrend Research. Dutton & Associates provides economically bias-free, continuing analyst coverage of enrolled companies, and its research has wide distribution.

Modeled in terms of prepaid compensation after the Standard & Poor's and other credit rating services, Dutton & Associates' one-year program is used by investment banking firms, institutions, and individual companies to obtain independent company equity research. Dutton & Associates performs no investment banking services or brokerage, and receives no equity-related compensation by enrolled companies. Its securities analysts also are not permitted to own or trade in the shares of any covered company.

Dutton & Associates is a research firm known for the quality of its investment research. Its analysts are industry specialists in fields including health care, technology, gaming, energy, and financial stocks. Companies that enroll in the continuing research program gain a thorough, independent analysis of their competitive investment position, along with earnings and valuation models that otherwise wouldn't be available to interested investors and institutions. Companies also benefit from the extensive worldwide distribution of Dutton & Associates research. Details in our section "Impact of Research," below, show the changes in price and volume that occurred in companies after independent research coverage was initiated by our analysts.

Dutton & Associates Companies

Of the 9,522 U.S. public companies tracked by MultexNET, only 4,780 (50.2%) have analyst coverage, and only 3,695 (38.8%) have any analyst projections or recommendations. These companies trade on the NYSE, ASE, NASDAQ, and Bulletin Board. Without analyst coverage, the current market prices of these companies are significantly below their intrinsic value and are many times below their analyst-covered competitors. The amount of this discount attributable to lack of analyst coverage, while hard to measure, is suggested to range up to 50%. Many institutional and individual investors will not invest in companies lacking independent third-party research coverage.

In addition to covering U.S. public companies, Dutton & Associates has growing coverage of companies domiciled in the United Kingdom and elsewhere in the European Union that trade in the United States or have issued ADRs. It will also expand its research to include companies listed on exchanges in the UK and selected other countries of the EU. Dutton & Associates also provides research coverage on Canadian companies trading on the TSE or CDNX. Some of these companies trade solely in Canada; others are dual-listed in the United States.

Our Research Product

The analysts of Dutton & Associates provide continuing research coverage of enrolled companies. The one-year coverage commences with an institutional quality Initial Report, followed by up to three quarterly updates that are issued by the analyst following the release of quarterly earnings. As with all quality research programs, the analyst spends time with management and thoroughly reviews each company's competitive position. Dutton & Associates analysts are industry specialists in many industries, including health care, technology, gaming, energy, financial, and others.

Initial Report:
The initial, institutional type report contains our own earnings model that is constructed from our own research. This model, together with a share valuation model, which the analyst constructs, provides the basis for our 6 - 12 month price target and investment recommendation.

Quarterly Updates:
The corporate business and relevant industry events, along with both the earnings and valuation models, are updated in the quarterly reports. This includes our price targets and recommendations. These update reports are prepared and issued after quarterly earnings releases (10-Q or 10K).

Research Notes:
Given that markets are continually receiving new corporate information, Dutton & Associates analysts issue research notes to immediately comment on corporate developments, as well as to change price targets and recommendations. These research notes are issued whenever the analyst desires to immediately communicate or comment on the impact of a corporate announcement or a change in competitive position or economic condition underlying the investment thesis for that company.

Distribution of Our Research

Dutton & Associates research can have significant impact on stock prices. This is due to a combination of quality fundamental company research combined with a worldwide distribution network. Enrolled companies gain exposure to the vast number of institutions, individuals and Web sites that subscribe to the major research databases that carry Dutton research. This is especially important at a time when PR opportunities through small-cap media outlets are shrinking with the suspension of both online and offline publications like the Individual Investor, Online Investor, and The Industry Standard.

All Dutton reports and research notes are available in html and Adobe pdf formats. Traditional printed copies of our reports are provided to the covered companies. Our electronic research distribution entails:

Research Report Summary Distribution:
A summary of each report is provided via Analyst Wire to over 800,000 analysts, money managers, and institutional and retail sales personnel, as well as to most media outlets.

Report and Note Distribution and Continuing Availability:
All Dutton & Associates reports and company research notes are distributed by and available through Multex, Zacks, Thomson, I/B/E/S-First Call, smallcapcenter.com and Investext for their own users and for use across a vast network of financial sites, including Bloomberg, Dow Jones News, Yahoo! Finance and leading European financial networks. The Dutton & Associates Web site is being developed as another major distribution point.

Crucial Databases Accessed by the Worldwide Investment Community:
Dutton & Associates research is included in the consensus estimates of Zacks, First Call-I/B/E/S, and Multex. Coverage by Dutton & Associates places a company in these firms' critical investment databases, which are used widely by the professional investing community in searches and screens involving analyst recommendations and estimates.

Impact of Research - 2001 Statistics

Research can make an impact on the subsequent price and volume of covered stocks. Most of the analysts at Dutton & Associates, LLC represent the core analyst group at Investrend Research who elected to join Mr. Dutton subsequent to his leaving Investrend in July 2001. The quality research program that was developed by Mr. Dutton over the past two years at Investrend Research demonstrated that quality independent research can have, many times, significant effects on the price and volume statistics subsequent to the initial report issuance. We are using the analytical approaches, disciplines, and distribution networks developed during these past two years, including enhanced electronic distribution.

Eight initial reports were issued in the first five months of 2001 at Investrend Research under Mr. Dutton's direction. The same analysts who are now at Dutton & Associates issued all of these reports. For these eight companies, we looked at the subsequent price performance versus the iInitial report price, and the change in the four-week trading volume ending 30 days, 60 days, and 90 days following issuance of the initial report. We broke these eight recommendations into two groups, Buy and Speculative Buy, as determined by the analyst on the report. The five buy recommendations were all traded on the NASDAQ NMS or AMEX, while the three speculative buys traded on the Bulletin Board, AMEX, and NASDAQ. (See Note 1.)

The Dutton & Associates Team

John M. Dutton
John M. Dutton is member of both the Boston and Los Angeles Security Analyst Societies, and the Association of Investment Management and Research (AIMR). He also serves on the 14-member NASDAQ Committee for the Future of the Bulletin Board. Prior to building Investrend into one of the three largest independent equity research firms in the U.S., he was president for over 14 years of Corsair Asset Management, an asset management firm with $125 million of institutional and ERISA funds under management.

A graduate of Brown University with an MBA from the Wharton Graduate School of University of Pennsylvania, Dutton held positions from 1966 to 1975 with New York Stock Exchange member firms Estabrook & Co. and F. S. Moseley & Co., Inc. as security analyst and then as head of Moseley's investment banking and securities research departments.

From 1975 to 1982, he was executive vice president and a director of American Medical International (AMI), which by 1982 had revenues of $1.2 billion as compared to $250 million in 1975. His responsibilities included international and domestic acquisitions, new projects, and project financing. He was responsible for the investment management of the company's pension fund and their two captive malpractice insurance companies.

Dutton Associates

Joining Dutton is an initial team of 14 research analysts, including Sherry Grisewood, a CFA specializing in health care, as Assistant Director of Research, and Richard W. West, a CFA specializing in technology and financial stocks.

Grisewood has had extensive experience as a sell-side analyst, primarily in small-cap stocks, and has worked for such firms as DLJ and EF Hutton. She has over 16 years experience as an independent special situations and small-cap analyst, and has written a cash and futures market commentary since 1982. She is widely interviewed by the media on her company investment views.

West has a range of experience extending over 40 years in securities analysis and investment management. He has worked with Delaware Management, and Brittingham, Inc., where his responsibilities included management of the U.S. portfolio of the Nobel Foundation, one of the premier growth portfolios of its time.

Richard Hefter, Vice President, developed the highly successful MicroCap1000 Web Site. He is a former vice president of N. America media operations for London-based GlobalNetFinancial and was previously associate director of development communications at Northwestern University in Evanston, Illinois. He joins Dutton & Associates to lead sales and marketing. Hefter has a wide range of relationships in the online financial media in the U.S., Canada, and UK.

Lou J. Meade is Director, Business Development. Most recently, Mr. Meade was Director, Equity Sales for the American Stock Exchange, discussing and evaluating with companies in the Northeast Region the advantages of their listing on the AMEX. He was responsible for over 30 companies listing on the AMEX, and made presentations at major biotech, banking, and technology events to represent the auction market alternative for trading. Prior to the AMEX, Mr. Meade was involved through his consulting firm in the founding and startup financing of four companies, including a multi-million dollar construction company, a finance company, and the raising of $2 million initial funding for a biotech company. He began his career with Merrill Lynch. Mr. Meade was awarded an MBA from Pace University and his BAA from City University of New York, and has received his CPA designation.

Our initial analyst staff, most holding the CFA designation, encompasses many years of major firm sell side experience and represents many areas of industry and technical knowledge. Industry specializations range from energy, healthcare, technology, finance, banking, consumer products, to I-gaming, to name a few.

To review our analyst research staff, click here.

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