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COPYRIGHT 2007 SourceMedia, Inc.
Forensic research, which analyzes companies for accounting irregularities, is gaining traction in the financial industry again, as the market begins to turn flat, experts say.
The analysis pays close attention to the footnotes on the financial statements, such as stock options, valuations, amortization assumptions, unrealized losses and gains and minority interests, to understand how financials are constructed.
The attractiveness of forensic research comes to the market in waves. In bear or flat markets, it is popular because it is easier to find short ideas; in a bull market it is hard to get good short ideas, said Michael Mayhew, chairman and co-CEO of Integrity Research, which just issued a new service evaluating investment management research called ResearchFocus. Targeted to buy-side directors of research, analysts, portfolio managers and broker liaison...
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