Listing The Unlisted

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The late, great, new-issues boom was a bonanza for underwriters, but it has created headaches for stockbrokers, investors, and even some of the newly public companies themselves.

The problem is that a relatively small number of the companies are listed by the standard reference works -- among them, those published by Moody's Investors Service Inc. and Standard & Poor's Corp. -- where investors traditionally check out potential investments and hunt for leads. Because of fairly stringent listing requirements, moreover, many of these newly public companies normally would be doomed to years of obscurity -- unknown to investors and, therefore, unwanted.

Enter The Unlisted Market Guide, a new directory for investo.rs seeking bargains in the out-of-the-way areas -- of the over-the-counter market. Since its debut in April, it has compiled more than 150 listings -- some of which have made their initial public offerings during the past year -- and is adding others at the rate of about 8 per week. The information is similar to that offered by Standard & Poor's on larger companies and will be updated from time to time as developments warrant.

The man behind the guide is editor Scott Wm. Emerich, a former research analyst for the New York investment firm of Muller & Co. During his two years there, he specialized in uncovering undervalued over-the-counter offerings. "I found they represented a far more profitable opportunity for investment than a lot of the more visible companies," he says. He also realized that the unlisted companies "represent, in total, a tremendous amount of trading volume, but [there was] no accredited source for obtaining information about them." So, in April of this year, he left Muller & Co. to found The Unlisted Market Service Corp., located in Glen Head, N.Y., and began putting together The Unlisted Market Guide.

Considering that there are nearly 15,000 public companies in the United States -- about 9,000 of which are covered by Standard & Poor's -- Emerich certainly has his work cut out for him. Nevertheless, he already has his venerable competition concerned. In the past, Standard & Poor's Register of Corporations, Directors & Executives has generally insisted that a company have at least $1 million in annual sales, or 50 employees, in order to be listed. (In contrast, Emerich's guide requires only that a company be operating.) Officials at S&P concede that, as a result, they have missed a segment of the overthe-counter market, and they say they are expanding their 1984 edition to include smaller companies.

But "there's no way that Standard & Poor's can cover all the stocks that are available," says Alan Denzer, a registered broker at Drexel Burnham Lambert Inc., and a subscriber to The Unlisted Market Guide. The latter "lists small companies that are not exactly top-quality, but there are some diamonds in the rough if you're smart enough to recognize them. It's just a nifty way to find some new ideas."