New York, NY – Starting on Monday, May 21, 2007, Integrity Research Associates will launch a brand new research service called ResearchFocus, which provides detailed information, comparative analysis, and Integrity’s Top Picks in a variety of investment research sectors over the coming twelve months.
The first report in this series covers nineteen (19) firms in the dynamic forensic accounting, quality of earnings, and short ideas research business. This segment of the alternative research industry has seen renewed interest in recent months in the wake of the sub prime mortgage debacle.
Integrity Research Associates believes that this recent development, plus the concern of long only asset managers trying to eliminate stocks that could “torpedo” their portfolios, will increase demand for this type of research. Historically, the most consistent demand for forensic research and short recommendations has been from Long / Short Equity hedge funds who have found it very difficult to find good short ideas from traditional sell-side research.
Due to these and other factors, the team at Integrity Research Associates expects that forensic accounting, quality of earnings, and short ideas specialitsts will experience significant annual growth of close to 20% over the coming five years.
The comprehensive 100 plus page ResearchFocus report includes information and analysis on a variety of important topics, including:
- Sector Definitions
- Research Firms in the Sector
- Academic Underpinnings of the research
- Sector Size and Growth
- Methodological Style
- Pricing and Exclusivity
- Analytical Resources
- Integrity’s Top Picks
- Company Summaries
The new ResearchFocus service will provide detailed assessments of various types of research in the coming months, including channel checks, small cap research, expert networks, SRI / ESG research, search based primary research, insider trading research, and research outsourcing services. Clients will be able to purchase ResearchFocus reports either a la carte, or as part of a discounted annual subscription. For more information about this service, contact Mr. Thomas Rossman at 212-710-2603.
We have included the complete Press Release for this new service below.
Demand for Forensic Research Grows From Investors
Integrity Research Launches New ResearchFocus Service
New York-May 21, 2007-Investors are spending $60 million a year to purchase forensic accounting research, according to a new service released by Integrity Research, a specialist firm which evaluates investment research. Forensic research, which analyzes companies for accounting irregularities, is now one of the fastest-growing areas of investment research.
The study is included in a new service called ResearchFocus which reviews and evaluates the research firms in each sector of the research industry. “We began with forensic research because our clients kept asking us about firms in the sector,” said Michael Mayhew, founder and chairman of Integrity Research. “Given the global interest in this sector, we are projecting a 20% annual growth in spending on this type of research over the next five years.”
Over the past five years, the number of firms providing forensic research to investors has more than tripled from six firms to nineteen. With more countries adopting the International Financial Reporting Standards (IFRS), forensic research is expanding internationally, as globalizing U.S. firms compete with local providers in the U.K. and Canada.
“Investors like forensic research because it has something most Wall Street research lacks: sell recommendations,” Director of Research Tom Hutchinson said. “Hedge funds like forensic research as a source of short ideas and long-only investors like it because it helps them avoid stocks which can torpedo a portfolio.”
Recent examples of the value of forensic research were timely calls on subprime lender New Century Financial Corporation months before its stock was delisted in March of this year. In an August 2005 report, Gradient Analytics Inc. flagged heavy selling of shares by New Century’s three founders as a sign that prospects for the company were clouding. In November 2006, the Center for Financial Research and Analysis (CFRA) identified concerns about New Century’s third-quarter 2006 earnings release.
Integrity’s ResearchFocus report reviews the providers of forensic research and earnings quality analysis, in addition to related firms which specialize in providing short recommendations. “We were surprised by how vibrant this research sector is,” said Will Greene, an analyst at Integrity. “New firms are jumping into this space, while the existing firms are developing new services. Analysis is now spreading to legal risks and governance issues generally.”
Integrity’s new ResearchFocus service will review additional research sectors in the coming months including primary research firms which offer “channel checking”, and specialists in researching small cap stocks, among others. The service is designed for buy-side directors of research, analysts, portfolio managers, and broker liaison professionals.
ResearchFocus reports compare and contrast the strengths and weaknesses of each research firm, and make recommendations on how best to use the firm’s research. Reports include Integrity’s Top Picks for the sector plus profiles of new firms which Integrity views as the “up and comers” in the sector.
For additional information on ResearchFocus and a complimentary copy of the executive summary of the current review of forensic research firms, contact Tom Rossman at 212.710.2603.
About Integrity Research
Integrity Research Associates, LLC is the only research firm focused on the fast-moving investment research industry itself. Integrity Research’s analysts cover over 1,200 research firms and other sources of investment research in the U.S., Europe and Asia, collecting information on performance, analytic resources, business strength, research style, coverage and potential conflicts. Integrity’s clients are research directors, analysts and portfolio managers within money management firms and hedge funds. Additional information about Integrity can be found at www.integrity-research.com.
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