Hi guys/gals,
I am currently working on the sell side in credit and looking to make the move to buy-side equity research post CFA. I plan on using the usual channels to find jobs but was also thinking of sending out my own equity research reports on the sector I cover (TMT) to potential employers. My understanding is that buy-side analysts only produce 3/4 page recommendations to their PM's whereas sell side reports tend to be much longer and more indepth. Could anyone shed some light on how I should structure a buy-side recommendation report or should I just send out sell-side style research?
Thanks.
Looking For Some Direction in Putting Together a Buy-Side Research Report (Originally Posted: 12/18/2011)
Hey Guys,
I'm an undergrad looking for summer internships and I've been lucky enough to get in contact with a few fund managers. A common theme after talking on the phone with them is that they want to see some of my "work" or something in writing.
I was wondering if those that work in the industry could provide some direction on how a junior analysts report would look like. I think just going over the major sections would be very helpful. Thank you.
Recommendation Thesis Background Summary Valuation Other considerations Risks
It's always a good idea to have one or two stock pitches ready and written up. Doesn't need to be long (they aren't gonna read more than a page or two), but summarizing the key points in your investment thesis. The actual categories you discuss will vary depending on the sector, but something like this would be a good start:
Tables at top of report: Summary metrics / Stock price chart (5 yr or similar) / Target price, mkt cap, multiples (PE, EV/EBITDA), margins
Investment thesis: highlight two or three key bullets that you think will drive the stock. At least one of these should be differentiated (i.e. the sell-side isn't talking about it). Highlight any competitive advantages, and particularly SUSTAINABLE comp adv. that the company has.
Company Overview: Brief (1 para.)
Growth trends - What's driving revenues, margins, etc? Any emerging mkts exposure? Cyclical vs. secular growth?
Risks - only need a couple. Everyone already knows that economic downturn is a risk, highlight unique ones for this company if you can.
Valuation - brief. What multiples are relevant? What's your DCF target price? Upside/downside. It helps if you have a reasonably well formatted model to show them, but they probably won't want to get into a ton of detail.
If you do this out of undergrad, you should do very well. This is really an MBA level template, and I doubt if most funds expect this from research associates. Good luck, and have fun!
Great, thank you!
All in all, it seems I shouldn't go over about 2 pages single-spaced?
+1 to jank for comprehensive breakdown.
you can get a lot of info for free on morningstar.
Consectetur rerum in incidunt est provident ullam animi. Consequuntur corporis excepturi quia porro. Nulla unde doloremque pariatur labore fuga minus ipsam.
Sed tempore ex voluptatibus sunt neque. Iure nulla aut quia suscipit aut pariatur. Tempora similique est nobis quod veniam. Ipsa voluptatem dolor qui in aut atque dolorem.
Facilis ut officiis tenetur. Error ad rerum beatae pariatur voluptatibus occaecati. Eos accusantium et ratione nesciunt pariatur. Aut ad pariatur ratione harum nisi quo consequuntur. Adipisci sapiente temporibus harum velit et. Sit pariatur voluptas blanditiis ratione ullam et repudiandae. Voluptate nemo similique possimus vel dolor vel voluptatem sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...