Using Data Science to Analyze Global Research Coverage

Feb 12, 2024

The TDR Three Key Takeaways:

  1. Coverage Gap: Highlights a notable gap in research coverage, with small and micro-cap companies receiving less analysis compared to larger firms.
  2. Revenue Reality: Many small and micro-cap companies do generate significant revenue, debunking the myth that they’re largely speculative with no earnings and deserve research coverage.
  3. Data Science Solution: Data science is identified as key to improving research coverage, allowing for efficient analysis of large datasets and ensuring informed investment decisions across all market caps.

This article explores research coverage of companies listed on global stock exchanges, categorized by market capitalization. It analyzes the current state of coverage and identifies significant gaps, especially among small and micro-cap companies. The article then discusses how data science can offer solutions to these issues, allowing analysts to obtain accurate analysis from large datasets directly from their desktops. By leveraging data science, the aim is to improve research coverage across all market caps, ensuring analysts have the tools needed to make informed decisions.

Measuring the Global Financial Markets by Ticker Symbols

Globally, there are 160,869 ticker symbols. However, this number includes duplicates due to multiple listings of companies and ETFs across different countries or exchanges, excluding futures, options, bonds, mutual funds, and hedge funds.

After removing duplicates, the total comes down to 73,752 listings. For instance, a company listed in both Canada and the USA counts as a duplicate, significantly reducing our dataset. Additionally, our analysis must exclude non-company entities like ETFs, closed-end funds, and other structures. After this refinement, we’re left with 54,895 companies, considering only their primary ticker symbol. The primary symbol is selected based on trading volume and the company’s operational location.

Understanding the Ratio of Mega, Large, Mid, Small, and Micro-Cap Companies

FINRA (Financial Industry Regulatory Authority) is a non-profit organization tasked with regulating member brokerage firms and exchange markets to ensure investor protection and market integrity classifies companies based on market value: mega-cap (over $200 billion), large-cap ($10 billion to $200 billion), mid-cap ($2 billion to $10 billion), small-cap ($250 million to $2 billion), and micro-cap (under $250 million). The breakdown is as follows: 56 mega-caps, 1,596 large-caps, 3,927 mid-caps, 13,382 small-caps, and 34,778 micro-caps.

Despite the prominence of well-known giants such as Amazon and Apple, they constitute only a small segment of the stock market. Furthermore, major indices like the S&P 500, Russell 3000, and Wilshire 5000 encompass just a fraction of public companies, pointing to a more extensive and diverse market landscape that is frequently underestimated.

Research Coverage Across Market Capitalizations

Research coverage decreases with market capitalization. Mega-cap companies enjoy 100% coverage, while small caps see a drop to 50%, and micro-caps are covered at only 15%.

The assumption that small-cap and micro-cap companies are speculative and lack revenue is not entirely accurate. Contrary to common belief, a significant percentage of these companies do generate substantial revenue. According to Data Science based on S&P Data, 100% of Mega Caps, 99% of large-cap companies, 86% of mid-cap companies, 83% of small-cap companies, and 69% of micro-cap companies report annual revenues exceeding $10 million.

Why do these companies with revenue not have any research coverage?  

Research coverage worldwide has been declining over the past 25 years. This trend is primarily due to the lack of motivation among large investment banks to allocate resources for covering small-cap companies that are unlikely to generate future investment banking revenue. Consequently, a small-cap company that is performing well, buying back shares, and repaying debt may never require any future investment banking services.

How many small and micro-cap companies, with annual revenues exceeding $10 million, lack any research coverage?

In total, there are 28,172 companies classified as small or micro-cap, each with a market capitalization of $2 billion or less and annual revenues exceeding $10 million. Of these, 10,125 receive analyst coverage, There is 18,047, or 64%, without any research coverage. It’s important to note that these are real companies with significant revenue, not just speculative entities.

What is a potential solution to this?

Advancements in data science technology have significantly improved our ability to handle large datasets, a task that was once nearly impossible. For instance, to generate the accurate data for this article, we manipulated over 160,000 ticker symbols. Previously, managing such a vast amount of information accurately from a desktop computer was unfeasible, with only three or four variables manageable at a time, let alone more than ten. Additionally, data quality was a major issue, with datasets often containing multiple tickers and listings for a single company. Now, having access to clean, accurate data is the first step towards providing comprehensive research solutions for the many under-covered companies.


The analysis of global research coverage, focusing on using data science, identifies a significant gap in coverage for small and micro-cap companies. Despite the large number of ticker symbols and the crucial role these companies play, they often receive less attention compared to larger firms. Data science offers a solution to this issue by improving the accuracy and reach of market analysis, allowing for a more equitable distribution of research coverage. This approach not only addresses current deficiencies but also enhances the overall market’s transparency and efficiency, making it essential for future research practices. Want to keep up to date with all of TDR’s research, subscribe to our daily Baked In newsletter.   

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