I understand MM analysts cover 50-100 names each. Do they closely follow all of the names (including ones with no position) and model everything down to minute accounting idiosyncrasies to have a pre-earnings view for all of the names in coverage?
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Based on the most helpful WSO content, MM analysts typically do not update models for all the names in their coverage, especially when covering 50-100 names. The reality is that most analysts focus on a smaller subset of high-priority companies, often around 15-20 names, where they have deeper and more up-to-date knowledge. These are usually the names they actively follow or have positions in.
For the rest of the coverage, analysts may maintain a more surface-level understanding or rely on sell-side models and research. The focus is often on names that are likely to present opportunities, such as those with potential dislocations in pricing or upcoming catalysts. Analysts prioritize their time and resources to ensure their models for high-priority names are detailed and accurate, while lower-priority names may not receive the same level of attention unless circumstances change.
Sources: Modeling Test - Quarterly, How to convert sell-side models to your own models faster?, Q&A: Equity Analyst at a Sovereign Wealth/Pension Fund, https://www.wallstreetoasis.com/forums/mm-analyst-comp?customgpt=1, Q&A: HF Analyst
MM analysts cover 30-50 names tops each, and yes they update ALL of them
Citadel lets analysts cover up to 30-35 names with a junior person under them I'm pretty sure. Exodus Point Verition etc can be the wild ones with people covering 85 stocks ha ha.
yes analysts update their own models...often manually. but sometimes with use of resources (eg canalyst) and even outsourced (eg like M&A in the investment banks). but generally is done by the analysts. models infrastructure needs to be built so it can be quickly and easily updated
Echoing what others have been saying ... it's more like 40 names and you update all of them. But you might have technology and outsourced folks to help you with it.
I think building the models is much more terrible than updating them, though. I like to have clean models, and the fact that you have to rebuild all of them when switching seats is a massive turn-off. Unnecessarily wastes months of your young life and feels extremely stupid.
If you are replacing another analyst with similar coverage, could you not reuse their existing models?
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