Nearly one in three companies listed on the nation’s stock exchanges have little or no analyst coverage, and most of these are small caps, with market capitalization of less than $250 million, according to a report from Keating Capital.
Of the 5,044 companies listed on exchanges at year’s end, 1,443 had no coverage or no meaningful coverage, said the white paper put together by CEO Timothy Keating and released Thursday. This represents 29% of exchange-listed companies. Keating defined meaningful coverage as having at least one analyst from the 100 or so firms on the Institutional Investor or StarMine lists of firms with ranked analysts.
The majority of the uncovered companies – 1,105 – have market caps of less than $250 million, the paper found. This represents 55% of all companies with market caps under this mark.
The challenge attracting analyst coverage is one hurdle facing young companies contemplating initial public offerings.
Here is a link to the white paper.