Claridge Company LLC > Client Profile

For the most part, candidates for Claridge’s services include public corporations that are considered to be “micro-cap” and whose enterprise value is generally below that of its peer group or that of relative industry and market indices.

A surprisingly large number of public companies suffer from a lack or recognition by portfolio managers and research analysts, which can result in an undervalued stock situation. Recent data shows that 36% of all NASDAQ companies have no research coverage and that 46% of NYSE companies, with floats of under $250mm, have no coverage. Over the past ten years, there has been a general shrinking of the number of brokerage firms from approximately 40 key players to about 20 today. One factor that has occurred with this diminution is that many firms have been forced by industry conditions to provide research and banking services to relatively larger corporations. This has left a partial void for very small corporations.

Often, companies that fall in this unfortunate circumstance are ones that may have had past internal or external negative developments but have since corrected or have had improving developments, yet investors have not recognized the changes. Another example is a corporation that has been performing well financially, but simply lacks a proper investor relations effort to “get the story out.”

Micro-cap companies, those whose market value is less than $150 million, usually have a hard time attracting research analyst coverage because of the perceived lack of trading volume. While this is logical in many cases, the Claridge Company has supporting evidence that trading volume can increase with broader awareness, certainly as a corporation’s shares appreciate. Claridge focuses on being early in building awareness through introductions to many portfolio managers and analysts in today’s investment world. Claridge’s market reach encompasses the US, Canada and Europe. Because of the significant growth of hedge funds and small-cap portfolios within very large investment firms, there is substantial interest in companies that fit this client profile. The need to learn of small companies and their value is at an all time high. The performance of the Russell 2000 and other indices over the past few years prove this point. Our mission is to put management and the professional investor together.