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HOW DOES Scimitar Equity, LLC MEET THE CHALLENGE OF SMALL PUBLIC COMPANIES TO STIMULATE INVESTOR AND INVESTMENT BANKING DECISIONS?
One of the biggest challenges small public companies face is the difficulty of obtaining adequate research coverage to stimulate investors and investment banking initiatives. In today's market, most sophisticated investors will not take management's word for a company's prospects. Companies without legitimate analyst coverage tend to be traded at a discount of 20% to 30% based on the "believability" factor". Since the ties were broken between investment banking and research, there are now few incentives for Wall Street firms to cover less liquid smaller-cap stocks. We have also been called by the investors who have prompted two companies to utilize our services! Our track record and model of disclosure responds to the need for independent research. We would love to cover more healthcare companies, but we select only those companies that are meeting milestones and reaching established goals. The issuer gets equity coverage and institutional access which might have been unavailable. This process has driven capitalization in the past. We also have a list of references which we will provide to potential clients.
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HOW DOES THE SEC AND INVESTORS VIEW THIS MODEL?
Recently, the U.S. Securities and Exchange Commission, involved in the hearings for the SEC Advisory Committee on Smaller Public Companies, communicated that the SEC is very encouraging towards legitimate visibility, such as provided by Scimitar Equity, LLC, because the SEC wants to encourage legitimate market liquidity for smaller public companies as part of its Congressional mandate. The Scimitar model has also become more accepted by US equity buy-side investors: the continued search on the part of institutional investors for innovative investment ideas; institutional investors looking for cost-effective sources of research coverage for companies that are not covered or are under-covered; a reduction in research coverage by the sell-side; sell-side firms choosing to outsource portions of their research coverage to less expensive independent firms and an increased demand by corporations to obtain research coverage as investment banks and brokerage firms decrease their willingness to cover all but the largest most liquid firms.
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WHO IS Scimitar Equity, LLC, INC (SCIMITAR)?
We are industry specific analysts in the healthcare sector and select the number of stocks to provide research coverage. The mission of Scimitar's equity research is to provide investors with value-added objective intelligence and insightful investment conclusions on a timely basis. Scimitar identifies those companies demonstrating real progress toward their vision while meeting quarterly expectation. We are filling a void where there is a serious lack of coverage for mostly mid and small-cap companies. Currently, half of all public companies have two or fewer analysts, and 35% have no analyst coverage. Our research and analysis provide qualitative and quantitative equity coverage for investment recognition. Our reviews allow the small and mid-cap companies to take advantage of the standard model for larger companies. There is a strong demand from companies and buy-side analysts for our service.
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DEFINE ETHICS?
Doctors take the Hippocratic Oath and judges take a Constitutional Oath. We strive for accuracy and completeness in our research from unbiased diligence and investigation. Our opinions reflect our judgment at a particular time following a comprehensive examination of changes due to economic, industry and company specific factors. To ensure governance, disclosure and transparency standards, our recommendations, reviews, disclosures and stock rankings are written in plain English and updated quarterly. We will not have investment-banking relationships with any client company. Professionalism demands uncompromising integrity and Scimitar is committed to uncompromising professionalism. Our equity research will not sacrifice quality for quantity. That's our oath to clients.
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HOW DOES SCIMITAR CREATE ANALYSIS?
One of the first jobs is to create the selection criteria for matching our capacity and capability with a company. Scimitar's research is based on five approaches: detailed diligence, skepticism, expectation versus anticipation definitions, objectivity and thorough investigation. We operate with an analytical discipline that focuses on physical (quantitative) evidence that is cross-indexed against the logical reasoning of intangible (qualitative) values. Our discipline is enhanced by investigative practices which are honed by experience. Scimitar researches reliable as well as conflicting data, analyzing the facts to define the competitive advantage. We remain open minded to contrary information as we initiate a thorough examination of the collected evidence to develop an investment thesis. Reason and deliberation clarifies Scimitar's investment approach to identify the value proposition. Evaluations of the relative performance of a healthcare company can be an important tool in portfolio attraction and retention. Insightful research and thorough comparable analysis can assist in measuring and evaluating investment candidates.
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HOW ARE WE DIFFERENT?
Writing equity research is a very consuming job. Our intensity "to get it right" reflects our conscience and our SEC certification! Our research is read and utilized by investors from the retail and institutional side. On the surface, everyone's research is accepted; yet, the culture of analyst recommendations has been the subject of suspicion and even derision. It is about timely, credible, intelligent and insightful analysis. Not just a regurgitation of public information. If there is to be an investment decision; you can depend on our quality of research and the share purchases it brings.
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WHAT IS THE COST OF RESEARCH COVERAGE?
We seek a one-year subscription commitment payable in 2 installments; January and June. It's not something that we or a company should enter into lightly for "Trust" is a two sided street. We are quite explicit in defining the parameters of our remuneration and there are no hidden costs. Contact us for any additional parameters of our remuneration.
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HOW IS THE RESEARCH DISTRIBUTED?
Thomson's - First Call (Investext) distributes our research and we are always looking for additional distribution arms. Scimitar uses PR Newswire, Research Connect and our own proprietary database to distribute research to retail brokerage and institutional contacts. Our research reviews reach Internet portals and major financial distribution platforms as we provide a press release for each review.
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DOES SCIMITAR COMMUNICATE WITH INVESTORS POST THE RESEARCH PUBLICATION?
Communication with retail and securities professionals, asset managers and institutional advisors is crucial for share value. Attracting institutional support is mission critical investment activity. The criticalness is defining the "right" constituency - asset managers, high-net worth individuals, institutional and other investment professionals that will "listen", "buy" and "hold" on recommendation. The combination of any of these four groups can define a positive contribution to raising equity values. We are known by the company we keep and proud of our long-standing relationships with financial institutions, asset managers and other investment professionals. We have set up a number of meetings with investment professional on all levels. We also work with and assist your Investor Relations department.
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WILL INVESTORS HAVE TO PAY FOR THE RESEARCH?
It is provided on our web-site with access to all. Even other Investment Banks have posted our reviews. It is not part of our model or policy to sell the information. We have been paid and you can't collect twice - remember the word: Ethics - It is our oath to clients.
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HOW DOES SCIMITAR DEFINE DISCLOSURE AND TRANSPARENCY?
Scimitar certifies the views expressed in our reviews and fully support a regulatory framework that ensures "clear and prominently" displayed disclosures of issuer-paid research to maximize transparency standards. This is particularly important since we provide investment analysis on (Scimitar) selected companies for institutional advisors and asset managers. We adhere to recent guidelines defining disclosure of the independent source, solicitation and payment by subject companies. Thus, I, Henry W. McCusker, as the Director of Research and analyst certify that all the views expressed in these reviews accurately reflect my personal views about the subject Company or companies and its or their securities. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views contained in this review.
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WHO IS SCIMITAR COVERING NOW?
SERI is committed to long-term engagements which give us, as the research provider, the freedom to be superior, honest and rigorous in our coverage. We currently provide research coverage on seven (7) companies: Immtech Pharmaceuticals (IMM), Neurobiological Technologies (NTII), Advanced Research Technologies (ARA: TSX), StatSure Diagnostic Systems (SSUR.OB), Arbios Systems, Inc (ABOS: OB), Advanced Cell Technology (ACTC: OB) and Nventa Biopharmaceuticals, Inc (NVN.TO).
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WHO IS HENRY MCCUSKER?
He is the Director of Research and Founder who enters his fifth year with Scimitar Equity, LLC He was until 2002, a Vice President - Strategic Planning and Communication at Curis, Inc. where he was responsible for the first restructuring and the second realignment. Henry worked with Hambrecht and Quist Capital Management (HQCM) focusing on healthcare investments (NYSE:HQH/HQL) from 1986 through 2000. He also founded LifeScience Economics in 1990, a healthcare research and analytics firm with offices in Boston, MA and Palo Alto, CA. Past experiences include manager/director at Thermo Electron, and Stone and Webster following five years at the Federal Bureau of Investigation. A former military officer, Henry has been an adjunct professor at Boston University and Golden Gate University where he taught courses in venture capital, corporate finance and strategic development in the universities' graduate business schools. From 1990 to 2003, Henry was responsible for eleven (11) public offerings and seven (7) turnarounds such as: Curis (CRIS), Metra Biosystems (MTRA), later sold to Nexstar; Maxwell Technologies (MXWL); Technology Modeling Associates (TMAI), sold to Avanti; Neurobiological Technologies (NTII); Progenitor (PGEN), assets sold to Cambridge Antibody Technology; VIMRx Pharmaceuticals and sixteen (16) private equity investments.
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RECENT REGULATORY INITIATIVES!
SEC acceptance and industry guidelines of "sponsored" or "paid for" research have changed our billing policy in 2006. The new policy is universal in nature so that we can be fair to all of our clients on an equal basis. We will not issue research until we have been paid in advance. Our reviews, rankings and price targets have always been independent and objective. We cannot, however, have the slightest appearance of issuing reviews, rankings and price targets based on any outside influence.
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DEFINE MANAGING CONFLICTS IN EQUITY RESEARCH?
We have a Corporate Code of Ethics and Conduct. These policies and procedures, as contained in our website, pertain to both analysts and issuers. Our Policy for Managing Conflicts in Equity Research articulates the roles and responsibilities in equity research. We expect that there could be differences of opinion, which is why we believe guidelines have been formulated since day one that can look at any situation fairly and make decisions that will be constructive to our mission.
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WHERE IS Scimitar Equity, LLC LOCATED?
88 Washington Park
Newton, Ma
02460
TEL ...617.559.1080
FAX ...617.559.1083
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HOW DO l RECEIVE NEWS OR EVENT ALERTS VIA EMAIL?
You can subscribe to receive an alert when Scimitar Equity news is released through the Contact Us section on our website.
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