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 have the right attitude of putting time and efforts towards it.
Equity Research is all about financial statement analysis, economy 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 track over a period of time
- To generate the quarterly updates
- To write event updates
- To update the sales, dealing, and the 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 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, 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, research associates are assigned to a group, led by senior analyst and begin to cover a group of stocks (usually 5-15) within a specific industry or region.
What 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 report. However, there are equity researchers who do not specialize in any particular industry or companies 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 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 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 earnings model and carry out detailed analysis and valuation of the company.
Below are the different points of Equity Research Career are as follows
Equity Research Career path – Work culture
Research associates are in the office at 7 am and leave by 7-9pm usually. Weekends are not always working and is limited to situations like an initiation report. This can be considered favorable as compared to 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 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 analyst, 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 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 career 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.
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