Equity Research Career
The Equity Research career path is for people who enjoy stock markets, those who are really passionate when it comes to analyzing companies, and who have the right attitude of putting time and effort towards it.
Equity Research is all about financial statement analysis, economic analysis, company analysis, valuations and recommendations, investment decisions, management interactions, and a lot more. Equity research analyst career is supposed to be flexible in terms of their mindset, but they must also be absolutely rigid when it comes to meeting deadlines. Punctuality is one of the most important characteristics any entry-level professional must possess in Equity research.
Key Responsibilities s of equity research analyst career
- To bring maximum companies under coverage in the sector he/she tracks over a period of time
- To generate the quarterly updates
- To write event updates
- To update the sales, dealing, and trading team about the latest events in the sector/company
- To build views that are distinct and can stand separately in the market
Equity Research Career Path Options
Equity research is used in many areas. Primarily, these are the companies that require an Equity Research Analyst career:
- Stock Brokerage
- Mutual Funds
- PE firms
- Venture Capital Firms
- Credit Rating Firms
- Media Companies
- Data Base Firms
Are you a good fit for Career in Equity Research?
If you enjoy writing, being on the phone with clients, and getting to know management teams, while at the same time doing a lot of financial modeling and financial analysis
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, and getting home at a reasonable hour career in Equity Research might be for you. Research goes through similar training to that of sales & trading analysts. After 2-3 months of corporate finance, accounting, capital markets, and research, associates are assigned to a group, led by a senior analyst and begin to cover a group of stocks (usually 5-15) within a specific industry or region.
What do equity research analysts do?
The research conducted by equity researchers generally involves studying the official materials published by the company issuing equity, including annual financial reports, company statements, sales reports, etc. Before publishing their research, equity researchers also take into consideration the current market conditions and predict future trends. Mostly the equity researchers are allotted a group of companies that they are expected to follow. All the findings need to be presented in a simple manner to the clients through formal presentations and reports. However, there are equity researchers who do not specialize in any particular industry or company but study and interpret the market conditions. They basically study how external pressures could impact investments in a particular region.
What is Stock Investment Research?
Stock market research analysts work on both—the buy side and the sell side.
What’s the buy-side?
They are the ones buying the securities, hoping for high returns on their investments. The buy-side is made up of the clients of the investment bank, which covers lots of different types of companies, organizations, and everything in between. Buy-side would indicate hedge funds, mutual funds, or investment management companies.
What’s the sell side?
The sell-side is the investment bank itself. The investment bank is the one selling the securities and investment ideas, so it’s easy to remember that they are the sell-side. Sell-side would indicate investment banks and independent research companies. Here the researchers create an earnings model and carry out a detailed analysis and valuation of the company.
Below are the different points of an Equity Research Career are as follows
Equity Research Career path – Work culture
Research associates are in the office at 7 am and leave by 7-9 pm usually. Weekends are not always working and are limited to situations like an initiation report. This can be considered favorable as compared to the investment banking industry, where analysts could work up to 100 hours a week.
Equity Research Career – Quality of work
Equity research associates find themselves almost immediately interacting with portfolio managers and hedge fund managers, the firm’s internal sales force, and traders, and communicating the senior analyst’s investment thesis after the company reports earnings. In addition, they develop modeling skills by constantly updating and analyzing their companies’ operating forecasts. Moreover, research associates are usually not exposed to the M&A, LBO, or IPO process from start to finish like investment banking analysts, due to which they do not spend as much time building those types of financial models.
Equity Research Career path – Exit Opportunities
Equity research associates usually aspire to switch over to the “buy side.” That is, to work for the portfolio managers and hedge fund managers that sell-side research disseminates their reports and ideas too. The buy-side offers an even better lifestyle and actually investing. Being said that, the buy-side is extremely competitive, even for research associates. One tip here could be that the associates should enhance their profile by receiving the CFA charter and or going to business school before getting into the buy side.
Certain buy-side firms look at equity research careers as favorably as investment banking. But when it comes to firms like venture capital and private equity prefer investment bankers.
Equity Research Career Paths
You should have an MBA, preferably specializing in finance. Invest your initial years in understanding the markets and practicing technical and fundamental analysis. Also, basic knowledge of the exchanges should be clear.
Here are some articles that will help you to get more detail about the Equity Research Career so just go through the link.