Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, April 28, 1994                   TAG: 9404280196
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: By LON WAGNER STAFF WRITER
DATELINE:                                 LENGTH: Medium

SOFTWARE, SAVVY LET SMALL FIRM COMPETE

No stacks of Securities and Exchange Commission filings, no number crunching on spreadsheets.

Instead, step into a narrow room in Catawba's office, and it's all there on a table: 20 years of financial data on 7,000 public companies, including 400 different data categories.

And it's all on a computer program, called Sentry, developed by Catawba's partners and John Pinkerton, a finance professor at Virginia Tech's Pamplin College of Business.

"As you look at our clients, they all have the opportunity of working with outfits bigger than us," says Terence Crowgey, a Catawba partner. "This is how a small firm in Roanoke can compete with a large firm in New York, or Boston or Charlotte."

Catawba was formed after its partners left Dominion Bankshares Corp. when it was acquired by First Union Corp. The investment firm employs just seven people, but Pinkerton said the computer program gives Catawba data that not many firms its size have.

Catawba each month gets updated numbers on the 7,000 public companies in the United States on CD-ROM - a compact disc on which massive amounts of data can be stored - from Standard and Poor's.

One of the bells and whistles of the Sentry system allows a person to update it monthly by just double-clicking on an icon on the computer screen, Pinkerton said.

The program provides a percentile rank for any company, showing how it stacks up against all other public companies. It also breaks down the overall rank into seven categories - for instance net income/sales - and gives the company a percentile rank by category.

Catawba President Peter Dawyot has been working with Pinkerton on programs similar to Sentry for nearly two decades. Pinkerton credits New York University professor Ed Altman with pioneering "discriminating analysis" of companies. In other words, predicting the likelihood that a company will go bankrupt.

In fact, Pinkerton said the decline of employment on Wall Street is at least in part related to computer programs crunching a lot of the figures that analysts used to do.

"It saves a tremendous amount of analysis," Pinkerton said. "For a firm that size, it's pretty sophisticated. I was surprised when they said they wanted to do that. They're paying a price to get that data every month."

But Dawyot and others at Catawba say Sentry is 20 percent more accurate analyzing a company's health than any other program they've used.

Sentry also sifts through the information and compiles it without bringing an analyst's opinion to bear. Jay Irons, another Catawba partner, said standard rating services often give big companies better scores than smaller companies, but Sentry weighs all companies the same, regardless of their size.

"It's not doing anything magical," Dawyot said of the program. "It's really doing what a good staff of analysts could do - if they could work around the clock, year round, processing the information."

John Clarke, managing partner at Catawba and a Virginia Tech alumnus, likes one other thing about the program: It takes research done in Blacksburg and puts it to use for a Roanoke company.