Helpful Resources For Breaking Into Equity Research

What's up WSO,

I decided to write my piece on breaking into sell-side equity research. I doubt this information is anything new, but I wanted to give my take on what resources I found useful. This list is by no means all encompassing.

For background, I was an economics major at a small, non-target school and therefore my exposure to financial accounting, valuation and investing theory was limited. I came out of college with a decent job in PubFin, but it did not spark my interest so I lateraled into equity research. Below are my recommendations for students and/or working professionals with similar weaknesses.

I strongly recommend the financial modeling course, Breaking Into Wall Street (BIWS). My only experience with a financial modeling course is BIWS, however there are several other well-known modeling courses such as Wall Street Prep, Wall Street Training and Corporate Finance Institute. BIWS Premium includes in-depth excel training, an overview of financial modeling fundamentals and a deep dive into advanced financial modeling (e.g. M&A, LBO). Without going into too much detail, the courses cover a breadth of topics, including:

1. Excel: financial modeling formatting, keyboard shortcuts, formulas (vlookups, index/match, etc.) and basic VBA
2. Financial modeling: financial accounting and valuation (comparable company analysis, DCFs, LBOs and other methodologies)
3. Advanced financial modeling: in-depth case studies (i.e. M&A situation and a merger model)

I found it most useful for financial accounting. It breaks down every line item on the three financial statements in great detail. It helped me gain a solid understanding of the relationship between the financial statements, equipping me with the skills to handle tough interview questions. For the financial modeling part, take it with a grain of salt because it is through the lens of an investment banker. However, there is a comments section at the end of the videos to clarify confusing topics and ask how the subject matter might be different in other roles such as equity research (BIWS employees respond within 24 hours). All in all, the course is great and a key reason why I was able to break into the industry and hit the ground running.

I also suggest signing up for the CFA. First and foremost, it looks good on a resume as it showcases a dedication to breaking into the industry and the ability to self-learn. A large portion of the test in immaterial to sell-side research, however all the information is useful in some capacity. Personally, I wish the test included more corporate finance and valuation related topics, but nonetheless, it is worth taking, especially given its prestige in the industry and cheapness relative to a graduate degree.

Next, I endorse Wall Street Oasis’ Investment Banking Interview Guide, and again there are many interview guides in the market but this is the only one I have exposure to. In short, the guide takes all of the advice on WSO and compacts it into three key parts: 1) Behaviorals, 2) Technicals, and 3) Networking. It is extremely comprehensive and covers everything from sample responses for the guaranteed “walk me through your resume” question to company-specific interview statistics (difficulty level, frequent questions, etc.). For the person who has no clue how to interview or network, these guides are for you. If you are an interviewing and networking pro, give the guides a read and I promise you will learn something new.

Last, read. Take all of the knowledge you gain and put it to work. If you are a fan of current events, read the WSJ or the Economist and try to understand all the moving pieces (e.g. the Fed wants to hike rates, what does that mean for the valuation of X?). If your long-term goal is to work on the sell-side or buy-side, pick up a few books with different investment philosophies. A few suggestions are Security Analysis, Damodaran on Valuation, Margin of Safety, Irrational Exuberance and One Up on Wall Street. And of course, forums like Wall Street Oasis are great place to gather as much information as possible (thanks Patrick Curtis and all his co-workers).

I am happy to answer more in-depth questions about interview guides, modeling courses and the CFA to the best of my ability.