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To: Justin C who wrote (42)	6/29/2003 6:57:16 PM
From: StockDung	Respond to of 135

FIRMS USING SELF-ANALYSIS TO GAIN ATTENTION By J.H. KIM June 29, 2003 -- After its Wall Street analyst coverage dried up, Carriage Services took matters into its own hands: It published its own stock research. Its latest update, released this month, runs 25 pages and is chock full of commentary, analysis, industry background and charts predicting free cash flow, earnings, debt-reduction levels and more through 2007. It resembles the work of a Wall Street analyst. But it's radically different. Everything in the report reflects the views of management. "I got a little frustrated because, in the bull market, we had plenty of coverage," said Mel Payne, CEO of Carriage Services, which runs 173 funeral homes and cemeteries. In fact, in the late 1990s, Carriage had eight analysts covering it. "When we lost all coverage, we thought it would be in our best interest to put out a report on ourselves," Payne said. Carriage Services filed the report with the SEC and posted it on its Web site. But in this era of corporate scandal, can a company's self-analysis be trusted? "As a fund manger, you would be a little suspect of the numbers," said Scott Pape, portfolio manager at CastleArk Management, which runs two hedge funds and a mutual fund. "And you would certainly want to do your own visit to confirm that the numbers seem reasonable." Self-research, he noted, is "useful mainly as a good starting point for investors." Still, as more companies lose coverage, more are mulling the idea. According to Thomson First Call, the number of companies with Wall Street coverage has plunged to 3,688 - down nearly 25 percent from 4,824 in 1999. So far, Carriage Services, along with Integrated Electrical Services of Houston, are among the few that have produced their own Wall Street-style stock research. And experts won't be surprised if more companies follow. "We see that trend," said Tom Iacarella, CFO of industrial goods manufacturer Raven Industries. "Everyone has to reach out to shareholders. It's not a world where you can rely on anyone to do that for you." Self-research is no panacea for companies. Carriage Services' stock is now locked in a trading range between $2.90 and $4.65. But the company says its goal wasn't to hype the stock. Two things you won't find in its report: A "buy" recommendation or a stock price "target," which Wall Street analysts used to boost stocks in the go-go years. The goal of the report was simply to convey information to investors and analysts, said Ken Dennard, an investor relations consultant who helped Carriage Services prepare its research. Thanks to its report, "we picked up some new shareholders, and a Wall Street analyst started coverage of us." That analyst, Sidoti & Co.'s Jamie Clement, noted that the report in itself wasn't enough to interest him. "We have to do research that is perhaps a bit more sophisticated," he said. "But any time you see a company willing to make those projections, you get a clearer idea of how they intend to manage the company. "It's also a good sign that the company cares about communicating to investors." And in this era of regulatory scrutiny, proponents say self-research can provide some valuable benefits. Regulation FD forbids companies from giving information selectively to analysts or favored investors. Some companies have run afoul of the SEC by accidentally providing earnings guidance to a select few. By publicly releasing their own research with earnings projections, companies no longer have to worry about what they say at conferences and in private meetings. Their numbers are all disclosed on the record.