NEW YORK, NY / ACCESSWIRE / July 29, 2021 / Sidoti & Company, LLC announced today that the firm has restructured operations to increase its focus on products services that mutually benefit small and microcap issuers and investors. The firm will no longer offer trading services and will reallocate resources to expanding its businesses that provide:
- independent equity research on companies with market capitalizations below $6 billion, including research on issuers participating in Sidoti's Company Sponsored Research (CSR) program;
- institutional sales support, to assist investors in determining which Sidoti research ideas are most appropriate their portfolios, and to further build its extensive distribution network so covered companies can convey their investment theses to a growing number of money managers specifically focused on small and microcap equities; and
- corporate access, including small and microcap conferences which facilitate interaction between issuers and investors in that sector.
Peter Sidoti, CEO, commented: "Given sea changes in securities industry dynamics, five years ago we predicted that brokerages would increasingly be compensated for their efforts by the companies they cover on a research basis. That prediction turned out to be prescient, as today the revenue we derive from issuers is as meaningful to this firm as revenue provided by the buyside. Accordingly, we decided that we should dedicate all available resources to businesses that contemporaneously add value to companies and investors alike."
Mr. Sidoti added: "For most of this firm's 20+ year history, our trading desk played a fundamental role in enabling Sidoti to be a premier provider of securities-related services to the small and microcap investment community, in large part due to the exceptional people we had undertaking the effort. However, as trading has become more of a commodity business, it became evident that the buyside was using our trading services solely as a conduit to compensate us for research and advice, and that our desk was no longer demonstrably and regularly benefitting the issuers we covered. By exiting this business, Sidoti & Company will be able to grow its research team faster and more effectively and focus on building a large, broad-based, and effective small- and microcap distribution network to the benefit of all our clients. Moreover, our restructuring appears to be in keeping with industry trends whereby many money managers have expressed not just a willingness, but a preference to compensate our firm through commission sharing agreements or CSAs."
The cornerstone of Sidoti & Company, LLC will continue to be its small and microcap research effort, with an increasing emphasis on companies with little or no research coverage that commission research through Sidoti's Company Sponsored Research offering. This research effort serves as the foundation for Sidoti's other main business lines, including extensive small and microcap institutional sales support and its seven annual investor conferences.
About Sidoti & Company, LLC
For over two decades, Sidoti (www.sidoti.com) has been a premier provider of independent securities research focused specifically on small and microcap companies and the institutions that invest in their securities, with most of its coverage in the $50 million-$5 billion market cap range. The firm's approach affords companies and institutional clients a combination of high-quality research, a small- and microcap-focused nationwide sales effort and broad access to corporate management teams. With over 200 equities under coverage, Sidoti serves 500+ institutional clients in North America, including many leading managers of portfolios with $200 million to $2 billion of AUM. Sidoti promotes meaningful interaction between issuers and investors through its conferences (www.sidoti.com/events) and the hundreds of non-deal roadshows hosted each year. The firm also provides companies that have no or limited equity research coverage the ability to commission securities research from Sidoti through its Company Sponsored Research ("CSR") Program.
SOURCE: Sidoti & Company, LLC