When picking stocks to buy or sell, forget company profits and losses, sales and expenses. Forget technical stock charts. Rather, look to management changes, suggests Richard Jacovitz, senior vice president and director of research at Liberum Research, New York.
Doing just that, several hedge funds went to Liberum, which was offering consulting services on management change. Liberum is a unit of The Wall Street Transcript, which, for 40 years, has interviewed corporate executives at mostly small-cap to midcap companies and published transcripts of those interviews.
"A lot of hedge funds said they were looking for a portal … one place where they could search management changes; and that's what we developed," Mr. Jacovitz said. Liberum's newest research product, which is being beta tested by hedge funds and other money managers and is scheduled for a September launch, is an analytical service that flags significant management changes.
"If a new CEO came in and is being paid very highly, we would be concerned, or vice versa," he said. "When (a management change) meets our significance model, we generate a short e-mail that will cover the event, analyze the situation and give a perspective as to whether it's positive, negative or neutral."
