Gradient Analytics announced earlier this week that they will be launching Gradient International Analytics. The new equities research product focuses on selected firms in developed and developing countries. Co-Founder and Editor-in-Chief of Gradient Donn Vickrey (Ph.D) stated that he is excited to bring Gradient’s “track record in earnings quality in the U.S. to the wide range of countries and varying reporting standards in the global market place.”Coverage for this research product has been initiated over the past three months. Firms included during the initial phases of development comprise HSBC Holdings PLC, Lindt & Sprüngli AG, Mexichem S.A.B. de C.V., Misys PLC, and ORIX Corp. Gradient is planning on expanding coverage of this product in the coming months with at least one new firm in the U.K/Western European region, a second firm from Japan, Canada, Australia, the U.K./Western Europe or Hong Kong, and a third firm from a developing country in Asia, Central America, Eastern Europe or Africa.
Gradient Analytics, Inc. is an independent research firm with expertise in financial analysis, forensic accounting(including earnings quality analysis), executive compensation, and executive behavior. The firm provides quantitative stock ratings on 5,500 companies and qualitative research reports on roughly 500 companies each year. The companies under coverage include largest 5,000 companies (by market capitalization) as well as select ADRs. Gradient also creates and maintains quantitative models, stock scoring systems, investment platforms and data collection tools for clients. It also develops and licenses turnkey quantitative models. Its clients include institutional money managers and financial information providers.
In late 2005 and 2006, Gradient (along with a number of hedge funds and research providers) was named in two lawsuits involving alleged conspiracies to profit from issuing negative research on two publicly traded firms, Biovail and Overstock.com. Although the SEC dropped its investigation with a “No Action” letter into Gradient’s alleged misconduct, Biovail and Overstock.com’s lawsuits are still unresolved. Feedback from the investment community has indicated that Gradient’s clients are not particularly concerned by these lawsuits. In early 2006, Gradient instituted strong compliance procedures to limit potential conflicts of interest that might be perceived in the research business model.
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