The words escape his lips with the velocity of a Nagano-Tokyo bullet train. But every so often, one in particular stops you cold.

It’s “sell” - a term seldom heard from the market-analyst subspecies known (in polite company) as cheerleaders.

But Jason Donville is building a reputation for plain talk, albeit at warp speed.

One of a new breed of youngish, no-fear analysts, the 38-year-old president of Lightyear Capital wants to turn honesty into a selling point.

Chris Wood, Business Edge
Jason Donville, president of Lightyear Capital, doesn't shy away from the truth.

He freely admits he woos reporters, and loves to be asked his opinion on ROB-TV. He also sleeps soundly at night because he won’t whisper “hold” when he wants to scream “sell.”

Want evidence? Call Zi Corp. Though impressed by the company’s technology, Lightyear analysts, who concentrate on small-cap stocks, slapped a “sell” on ’em.

“They didn’t have any earnings,” he shrugged.

Or CryptoLogic Inc., which recently took a “sell” on the chin, when share price was near $28.

“It’s around $23 now (late last week), so that was a good call,” he said.

Or MedcomSoft Inc. “We just felt we were getting the runaround from management. We said: ‘We’re out, and we’re saying so publicly.’ ”

This unclubby approach has its detractors, particularly among the companies which get zapped. But Lightyear’s growing institutional client base isn’t complaining.

Nor are the market dabblers who seek nuggets of truth in the analytic triplespeak which spews from soothsayers every business day.

Lightyear Capital has only been on the investment-banking block a little more than a year, so it’s too early to proclaim Donville a saviour. But the commitment to deliver the straight goods cuts to the heart of the business plan. Donville calls his company “research driven.” Sneerers call it overkill.

The prez doubles as director of research, and he can toss a rubber eraser across the office in Bow Valley Square and bounce it off five more analysts. It’s one of the deepest research teams in Western Canada.

“People wonder how we can afford all these analysts,” Donville said. “I say how can we not afford it?”

Burned investors have been digesting books such as The Pied Pipers of Wall Street: How Analysts Sell You Down the River, and are raising clenched fists in open rebellion.

Other burnt fingers buttonhole a tough lawyer. Then they sue.

Since the antics of super-spin analysts such as Mary Meeker of Morgan Stanley Dean Witter began making headlines, investment bankers and their cheerleading analysts have tumbled in public esteem. Once penthouse dwellers, they now share a closet in the outhouse with drive-by killers, poor-box thieves and all us misunderstood journalists.

They deserve it. While Enron shareholder equity was evaporating, Goldman Sachs was still urging clients to buy in.

To paraphrase U.S. scribe William Greider, you can only trust the analyst who keeps his/her mouth shut.

“The whole brokerage industry across North America is being called to task,” said Donville.

Though born in Calgary, he cut his analytic teeth in Singapore, where he worked for Credit Lyonais and headed up Singapore/Indonesian research for Credit Suisse First Boston.

“In the early ’90s over there, we were deal junkies. We did a lot of crap deals and didn’t care what happened,” Donville remembered.

“Then our institutional clients clamped down. They said: ‘If you put me in two or three crap deals, I’m not going to give you any business.’ ”

Result: The investment houses began watching their Ps and Qs.

“So I came back to Canada, and checked out how some of the junior firms were policing themselves . . . well, it just wasn’t there. So we decided to approach our business a different way,” he said.

It’s too soon to know whether Lightyear’s game plan can go the distance. Early returns are encouraging. With a staff of 18, the company reached the break-even point three months after opening, and is on course to earn a modest profit.

Meanwhile, the Lightyear team follows about 500 small-cap consumer, industrial, technology, bio-medical and financial-service stocks.

Donville will rhapsodize about his current darlings - Stantec Inc., BW Technologies Ltd., Home Capital Group – at the drop of a price/earnings ratio.

But if he ever tempers the praise with a “sell” recommendation, it might be an idea to listen.