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Investor Confidence in Analysts, Financial Info Wanes BEDMINSTER, N.J., July 22, 2002 Investors have a significant lack of confidence in their traditional sources of information about publicly traded companies, according to a survey conducted by Rating Research LLC (RRC), a firm specializing in the assessment of corporate reputation. Only 13 percent of investors say they are "very confident" in investment advisors as a source, and 58 percent say they are "less confident" in financial information than they were one year earlier.
The survey also revealed that analysts themselves lack confidence in the quality of information they receive from their primary sources, which includes SEC filings, financial reports, and direct contacts with a company. Only 23 percent feel "very confident" in the quality of information from corporations.
When asked why they are unhappy with the quality of the information they get, analysts offer several reasons. Forty-three percent mention that the "quality of the information is poor" or "there is not enough information" or that companies need to be "more forthright".
However, despite serious reservations about traditional sources, analysts continue to depend on them. Following direct contact with the company, analysts look to the media for information, other analysts or analyst research, word of mouth, and their own experience. |
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