Reflecting the liquidity demands of institutional investors, Wall Street analysts tend to focus on larger companies.  Given Sidoti’s criteria, however, we can choose from a universe of more than 5,000 common stocks.  The companies we cover generally share three characteristics: profits; market capitalization below $3 billion; and little to no research coverage by the larger Wall Street brokerage houses.

Coverage by Sidoti & Company, LLC is not contingent upon corporate finance fees; recommendations are based on the heretofore-undiscovered investment merits of a company.  The process begins and ends with our industry-leading analysts, who employ several selection methods: financial screens comparing and contrasting financial criteria; discovery of additional equities in a sector after the analyst finds the first; and recommendations from our institutional clients, as the leading small- and micro-cap money managers usually have favorite, undiscovered jewels in their portfolios.

Sidoti analysts conduct their own due diligence, visiting companies and key operating and financial management; our analysts will not cover companies that limit access to the CEO and CFO.  Moreover, our analysts focus on fundamentals – cash flow from operations and EPS, in particular – and interact regularly with customers, suppliers and competitors – or as we like to say, fundamental “blocking and tackling.”  

Most of our analysts cover specific segments, while others uncover value in "special situations," where companies do not neatly fall into one industry.  Our sectors include housing, retail, basic industries, technology, business services, capital goods, automotive, computer software, regional banking, telecommunications, entertainment, healthcare, and consumer products.