Dear Reader,

We author research on micro / small cap health care companies. We try to make money off our research, both from having companies pay us, and also by owning the securities we endorse.  Not all of our research will be company sponsored (paid-for), but make no mistake about it, if a company is not paying us now, we are trying to get paid in the future. If indeed there is a financial relationship with the company, this will be clearly disclosed in our research reports and in the disclosure section of the website. In our opinion all equity research is paid-for either directly or indirectly. For those who want to discount the quality of our research because it is sometimes directly paid-for by the company, as opposed to being paid indirectly through banking fees, no problem, we’re simply not for you.

We view our research as an alternative, and arguably complementary source of information, to traditional bank-led sell-side research.  There are many extremely talented sell-side health care analysts that author high quality research, but distribution of their research is generally limited to the bank’s institutional clients, making it hard to access for the broader investing public.  Furthermore, because sell-side research is heavily dictated by banking, many micro / small cap companies remain uncovered or undercovered, at least until they have completed a sizeable financing, and then a flurry of research will follow. We do not take our direction from bankers, so we have the flexibility to cover what we want, and the agility to cover when we want, ideally before the sell-side arrives en masse.   

Unlike the sell-side, we will also be active on social media, predominantly Twitter. After we publish our initiation report, all subsequent updates and comments on a company will be done on Twitter.  Upon a material change to a company under coverage, we may publish an update report on the website, but for our most contemporary commentary and opinions, please follow us on Twitter.  It is best to assume that compensation we have, or hope, to receive, and / or our ownership of a security, may constitute a conflict of interest in our ability to remain objective in our research and social media commentary.

With a focus on micro / small cap companies, we are inherently covering risky names.  We will make aggressive calls. We will not always be right. We will own our successes and our failures. We are not financial advisors, so please seek proper financial advice before investing in a security we cover.

We hope you enjoy our research and our commentary.  Please feel free to connect with us on Twitter @encodelp

– The General Partners and Affiliates of Encode Ideas, L.P.