Earnings Previews and Reviews — PM expectations?
What expectations have you seen from Pod PMs regarding earnings previews (pre-earnings) and reviews (post-earnings/post-mortem)? If you're a PM, what rules do you set?
Given pod analysts usually cover 40-50+ names, just diligently doing all the previews and reviews (4 times a year) implies multiple write-ups per average work day.
And if you have a coverage where earnings concentrate around the same time and 8 names can report in a single day, doing all the reviews can even become infeasible.
Is it normal that PMs require 160-200+ written previews and 160-200+ written reviews per year?
Is this what's needed in this job and does it create alpha, or is there a smarter way to do it?
Why would you need to do a write up on every name for every quarter? There’s prob only a couple interesting/actionable names every earnings season so you would only need to pitch those? Then just review anything interesting/names that are in the book post
Because PM asks for it. Says I can't have an opinion unless I do the work.
Yea N=1 here but certainly my PM doesn’t have this expectation, can’t speak to everyone else though
Ya previews blow. I had a PM who didn’t really care about previews other than what names did I like/dislike into the print and why. Was a pretty simple email and took an afternoon to pull together. Another wanted previews out basically as soon as the quarter ended so we could front run sellside reports. Very detailed write ups and was for most of my coverage. Huge pain in the ass and took days.
Re: day of release, my sector generally releases AMC and 75% report across like 5 days so there’s usually 2 days of 5-6 or more. If we’re there on any name then I’ll try and jam actuals/do a quick model update so I understand the moving pieces and can be a little more thoughtful than regurgitating the pr. If we’re not then I’ll do a quick summary for important names and suggest if/how we should play.
Does writing previews/reviews for all your names generate alpha? Probably not, esp if it takes meaningful from idea gen. I’m not doing a good job if I don’t have a researched view on what’s going to happen for my core coverage and maybe I’m not fully buttoned up on the secondary coverage but at a minimum I have a decent idea for those names. It’s helpful for me to collect all my thoughts in one place but ya pain in the ass.
Write ups should be uniform imo. For previews it’s PM Summary/rec, set up, mkt expectations vs our views, other things I’m looking for, number comparisons for qtr, fwd qtr, FY, FY+1. Then day of its summary/expected reaction, what we got right/wrong or didn’t expect and why it should/wont move the stock, other items of note, what I’m looking for on call.
Worked at an SM for a time where the PM was adamant about EPS previews/reviews...with previews coming typically day before EPS and review the day of or T+1. Found it to be one of the most useless exercises of my career, particularly because the PM wouldn't actually trade based on EPS movements, he just wanted us to send the details. Needless to say, I didn't stick around very long.
What are EPS reviews/previews?
Preview: your EPS prediction as of the day before earnings
Review: how your EPS changed after updating the model post-earnings
?
How many names did you cover? Probably not too bad in a SM setting.
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