In the Money and Investing Section of the May 26th issue of The Wall Street Journal, it was noted that one fourth of research reports on Small Cap stocks so far in 2009 were for the announcement of dropped coverage.   Mid Cap and Large Cap stocks dropped coverage reports represented 17% and 16% respectively of all reports issued.  Belt tightening by the brokage firms has led to a wholesale reduction in the number of analysts now employed.

And, accoring to the article, "when coverage fades, stocks feel the impact".

A study by finance professors at Darmouth and Virginia Tech found that in the year that coverage is dropped on a stock, those shares tend to underperform the industry average and "liquidity begins to dry up".

What's the solution?  Company paid research.  We have provided micro and small cap companies fee based research since the mid-90's with excellent results.  Ask us about our service.

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