Janney Increases Small Cap Coverage

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New York – At a time when many research providers are reigning in their coverage and limiting research to those stocks that have adequate liquidity, Janney Montgomery Scott (JMS) has increased its small cap coverage by hiring a small cap analyst: This, according to the weekly publication “The Wall Street Letter”.

JMS has hired Liam Burke from Ferris Baker Watts, a small cap analyst covering small cap stocks across a number of sectors. JMS now has 15 senior analysts, covering 130 stocks, for senior analyst coverage of between 8 and 9 stocks per analyst.

As we have discussed in previous blogs, the state of the market, and particularly in light of the boom is CCA usage in the US, mid-tier investment banks, like JMS, are facing increased pressure to maintain their place at the table.

Several bulge bracket firms have executed third party research offerings specifically to increase or at least maintain execution with their clients. If the CCA can allow a research provider to be paid outside of a specific brokerage arrangement, most believe that their increased acceptance will create a more concentrated execution environment, where the bulge bracket wins.

Despite being generally well-capitalized, mid-tier regional IBs are looking for ways to compete in this new environment, as trading continues to erode. The JMS view appears to be to increase coverage and become the primary investment banker for a number of small cap companies.

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