Dutton's Forum

Bringing Coverage to Overseas Companies

August 2003.   As we noted recently in a study by our analyst Bob Davis, coverage of small- and mid-cap stocks has been slashed in half during the last two years. In late August 2001, only 14% of stocks with market caps below $50 million were receiving research coverage. By June 2003, only 7% of these stocks had research coverage.

If that number sounds low, it is even lower for the many overseas-based companies trading on the U.S. exchanges. Approximately 17% of companies trading on the N.Y.S.E. are based outside the U.S., and their geography makes them even tougher candidates for research than their U.S.-based counterparts.

Given the need for investors in U.S. equities to have high-quality fundamental research on all listed companies, and the mission of J.M. Dutton to make such research available, we have opened offices and employed analysts overseas to cover companies across the globe.

In London, we added Rafael Kapelinski, who most recently was vice president of equity research at Credit Suisse First Boston in London. His coverage universe has encompassed data networking, enterprise, and communication software, where he ranked #3 in the 2001 Institutional Investor survey.

In Tel Aviv, we opened an office and added Richard Gussow, who has over eight years experience as an equity analyst covering Israeli stocks, most recently for Lehman Brothers in Tel Aviv and ING Barings in London. He has covered companies in various sectors, including technology, medical devices, chemicals, insurance, banking and textiles. That office is run by our new vice president Judith Kleinman, who was director of Israeli equities for UBS Securities.

In Hong Kong, where we opened another office, we added Winnie Tang, CFA, who has extensive experience as an analyst of Asian public companies. She was associate director of research at Deutsche Securities Asia Ltd., specializing in property development, investment and infrastructure companies in Hong Kong and China.

Ms. Tang is in the process of writing initial reports on two China-based companies, one of them in conjunction with our specialty retail analyst Jon Ziegler, who is featured in this month's Analyst Spotlight.

We are pleased to be able to shine the light on good public companies based overseas whose opportunities deserve to be known by interested investors.