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Some Thirty
students at Tulane's Freeman School of Business are following 13 publicly
traded companies that tend to be too small and out of the way for
professional analysts to bother with. After a year of tracking these
Louisiana-based companies, they publish reports -- complete with
recommendations -- in what the American Assembly of Collegiate Schools of
Business calls the only program of its kind. |
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Although
Tulane's Freeman Reports are little known on Wall Street, they are being
taken seriously by a loyal coterie of Cajun investors. Bryan Dutt, an oil and gas analyst at Howard, Weil Financial
Corp. in "I
bought it at five [dollars a share], and sold it six months later at
nine," Mr. Dutt says. "That's pretty good
-- just like they said." The stock was quoted yesterday at $8.594 on the
Nasdaq Stock Market. Not all
of the students' picks soar 80% in six months, of course. Steve Rueb, an analyst at Dorsey & Co. in A 25%
gain is nothing to sneeze at, but Mr. Rueb says the
stock is "still pretty slow." He figures that for it to move
sharply higher, a larger volume of Ambar shares
need to be traded -- which is an argument, he says, for wider distribution of
the Freeman Reports. (Only 5,200 shares of Ambar
changed hands yesterday.) "You need to get traders and sellers to
see" these analyses, he says. But
Tulane, which spends about $12,000 a year on the program, doesn't have the
incentive -- or money -- for vast printings and mailings. In all, it
distributes about 200 reports on each company, free of charge, to large shareholders,
analysts and others. In the
two years the Freeman Reports have been up and running, the students have yet
to issue a "sell" recommendation. Peter Ricchiuti, the program's
director and an assistant dean, says that's largely because the stocks aren't
widely followed and, therefore, are rarely overpriced. "These
are just estimates on companies that no one's really cared about," Mr.
Ricchiuti says. But, he adds, "We may get a sell this year."
Meanwhile, eight stocks are currently rated either "buy" or
"market performer," which means share price is keeping pace with
that of comparable companies. Five others are also being analyzed and are
awaiting a rating. Despite
the Freeman Reports' relatively small circulation, market players praise them
for their quality and for avoiding the conflicts inherent when analysts
follow a company in which their firm has a financial stake. Mostly, though,
investors say they rely on the Freeman Reports because there's often no place
else to turn to for information on these firms. "The
students provide a source of information that's unbiased and pretty
credible," says Gerald Kennedy, chief investment officer of Kennedy
Capital Management in Not
surprisingly, some of the program's participants have gone on to become
professional analysts. And they say following companies in the real world
isn't much different from what they did in the classroom. "It's
learning how to analyze the company, what questions to ask, what measures to
consider," says Ray Carpenter, who graduated from Tulane in June and now
works as a corporate-finance analyst at Rauscher
Pierce Refsnes Inc. in Dallas. For
their part, company executives say they welcome the students' scrutiny. "Would
I prefer to have an analyst from Morgan Stanley? Sure," says Richard
Gonzalez, chief financial officer at Bayou Steel Corp., which has been rated
a buy for two years. "But I'm happy to have any coverage." ---
Student Stock Picks Current
ratings of STOCK
SYMBOL MARKET RECOMMENDATION American
Oilfield Divers DIVE Nasdaq Buy Ambar AMBR Nasdaq
Market performer Bayou
Steel BYX Amex Buy Campo
Electronics CMPO Nasdaq Market performer Melamine
Chemicals MTWO Nasdaq Market performer Piccadilly
Cafeterias PIC NYSE Buy Ramsay
Healthcare RHCI Nasdaq Market performer Shaw
Group SHAW Nasdaq Market performer New
companies, not yet rated: Akorn AKRN Nasdaq -- Avondale
Industries AVDL Nasdaq -- Amedysis AMED Nasdaq -- International
Shipholding ISH NYSE -- Network
Long Distance NTWK Nasdaq -- |
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