Anthony J. Cantone—President, Cantone Research, Inc.

"I won't recommend stock in a company unless it's good enough for my own money," says Cantone. "I want to grow my assets more rapidly than the Dow Jones average, so if a client is looking for aggresive growth, he or she can buy what I buy."

Reprint of an article which orginally appeared in Registered Representative Magazine in October of 1996.

Anthony Cantone might not have become a million dollar producer overnight, but he sure makes it sound easy.

Combining his interest in working with small companies, with his passion for researching and analyzing these companies, he has developed a market niche that has kept him at the million dollar production level for the last five years.

Founder and president of Cantone Research Inc., a small research boutique that focuses exclusively on researching and trading small-cap stocks, Cantone manages close to $60 million of assets in-house. Conservative stocks and bonds are fine, but he only wants a client's " aggresive money," he says.

" The market is a psychology game," he says. " If you buy a stock when everyone else wants it, you're going to pay top dollar for that stock." So Cantone looks for companies nobody wants, typically firms that are losing money or have fallen out of favor.

Cantone, whose company monitors between 500 to 1,000 companies at any given time, says the next step is to conduct extensive research into that company's operation.

"Isolate the problem within a company, then determine at what point that problem has been solved.

The question then becomes, when is it the right time to buy?

Cantone talks to key officials within the company, and manufacturers and distributors of a company's products. He wants to access new products and the effectiveness of turnaround strategies.

He cites an example of a small retail women's apparel company that had been losing money for more than two years. Once the problem-poor management- was resolved, Cantone bought stock. " It had a book value of 2 a share, and we bought it at 1-3/4 a share." Nine months later, the stock hit 8 before settling down around 7.*

"Here's an example of a company nobody in the industry was interested in except me. I was able to accumulate a large block of stock and make huge profits in a relatively short time."

Cantone, who received his degree in business and finance from Pace University in New York, became interested in small companies while working for Chemical Bank as a field auditor and analyst.

One year later, in 1982, he became a broker, working over the next 13 years in New York for Janney Montgomery Scott, Dean Witter and Gruntal, before going out on his own in 1995. His interest in research developed at Gruntal where he began writing research reports on small companies he believed had large growth potential.

Highly focused and extremely motivated, Cantone works 12 to 14 hour days and says he enjoys every minute of it. " You can't achieve anything without hard work. Whatever area of business you're in, if you want to succeed, you have to be willing to put in the hours to make it happen."

The key, he points out, is to find something you really like doing.

"I love investigating companies and telling clients what I've discovered. I'm a good gatherer of information on financial data, so working 12 hours or more a day is not a burden to me."

Nor are the challenges of the market place. After the 1987 crash, Cantone's business fell 40% to 50%. That was even after he was on the phone constantly explaining that with small companies it was not unusual to experience extreme volatility.

Cantone's record remains impressive. In 20 recommendations made since 1995, he claims to have had only three companies not perform as well as expected. His client, whom he describes as mostly executive like himself, are young (he's 37) and very growth-oriented.

* The small retail women's apparel company cited in the article is Paul Harris, Inc. The stock was recommended by Cantone Research at $1 3/4 on September 7, 1995. The stock was sold at $10 on September 7, 1996. Research materials documenting the performance of Paul Harris are available upon request.
** Reprinted with permission. Registered Representative Magazine is published by Plaza Communications, Inc. All rights reserved.
*** Cantone Research usually makes a market in the securities being recommended and will sell to or buy from customers on a principal basis.

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