CityTRC offers an issuer-paid research product that is of the same quality and has practically the same content as our traditional research product offering, except that there is no BUY/NEUTRAL/SELL rating system for a stock. Instead, we chose to use a risk rating system outlining the main risks influencing the valuation of the company. Also we do not differentiate issuer-paid research from traditional one in terms of quality and the analysts providing company sponsored research are the same as the ones producing our traditional research coverage.
We strive to keep clients assured about the independence of the issuer-paid research and for this reason we only take a flat fee from the sponsor company (upfront) for coverage over a year.
Company sponsored research does not have a BUY/NEUTRAL/SELL rating system for a stock but does feature a risk rating system as follows:
- “Low Risk” (L): Suggest that the company has low price volatility, relatively stable cash flows, and contracts with suppliers and clients which provide assurances, stable operating history, low country and industry risk and usually has tangible assets (property-backed and cash-rich).
- “Moderate Risk” (M): suggests companies may have a relatively high price volatility but there is a balance on the stability of the operating history, cash flow, operating environment, asset quality or it is somewhat less competitive.
- “High Risk” (H): suggests that the company may have unprofitable operating history, less predictable operating performance, very high risk associated with success, significant financial or legal issues, high growth prospects by management.
Please note that there is always a risk of capital loss and the rating system is only on a relative basis. Small and mid-cap companies have historically been observed by analysts as more volatile and risky compared to large-cap companies.