Fernando Rodriguez | Alfredo Echevarría, Director of financial analysis at Ligthouse -the IEAF’s financial analysis service for Small &Mid Cap companies supported by BME- explains their next steps to The Corner…
-What is the profile of the user of your reports?
Lighthouse’s reports are designed for any institutional investor. But it should also be useful to retail investors. In the case of Spanish institutional investors, our product is distributed directly to all the main managers specialised in medium and small-cap companies and so far the feedback has been very positive. Probably, because we have started by offering quality fundamental analysis of companies for which there has been a complete lack of information up to now. In the case of international institutional investors, our reports are available free of charge on the market information platforms – Bloomberg, Capital IQ, Factset and Thomson Reuters – They are distributed in Spanish and English and have proved to be quite popular.
-With regard to the number of analysts and companies surveyed, what are IEAF’s plans for Lighthouse in the short and medium term?
By December 2020 we expect to have analysed over 20 companies. And in the long term the goal is to be able to analyse over 40 stocks with our focus always on orphan stocks. Achieving this long-term objective would mean bringing the ratio of orphan stocks in the Spanish stock market down to 15% and to less than 5% in the Continuous Market, which would be quite exceptional. This objective must be achieved with the original team of five people.
-Are you considering any other types of reports apart from the current one or other projects or collaborations?
Lighthouse is a project of the IEAF which enjoys the backing of BME. This project was born to help Spanish Small & Mid Cap companies increase their visibility in the market. That will contribute to an improvement in their liquidity and valuation. In this respect, the central pillar is the fundamental analysis of these companies, but not the only important one. In June 2020, Lighthouse announced the launching of a project to use ESG criteria to analyse small companies. This project is now almost complete and in the fourth quarter of 2020 we will begin analysing companies with ESG criteria and Lighthouse’s methodology, specially designed for this type of small capitalisation securities. This is a new project that complements fundamental analysis and will help us to achieve our goal of being of service to Spanish Small & Mid Cap-companies.