BB Equity Research 2nd Round Interview

I have a second round interview with a BB ER coming up. From looking up the names of the people I'm going to be meeting with, they seem very senior and are not actually part of the coverage team I would work with.

For the first round, I met with the Research Analyst and Associate I'm going to be working with. There were no technical questions as the coverage area is very specialized. Anybody have an idea what I should expect in the second round ? Is it going to be mostly FIT or should I expect technical stuff ?

If you pm me, I can divulge more details but I don't want to reveal the exact group and firm name publicly.

Comments (15)

May 30, 2010

I interviewed with GS GIR before. Second round they asked me two market sizing question questions, a stock pitch, and fit. Also general knowledge about markets etc. This was for a graduate level though.

May 30, 2010

You could expect some technical, depending on the firm. I would really watch Cramer the night before and just pitch his stock pitch the next day ;)

May 31, 2010

Thanks. I'll prepare a stock pitch and for market sizing questions. Anything else ?

May 31, 2010

If you are meeting outside the group, maybe it is something like what I did. I spoke with the head of research, who also was part of recruiting. I will never work with him though, given my location. One of the main things I impressed him with was being able to walk throught the steps of a DCF w/no problem at all. When I was done he said something like "Great. You would be surprised how many people say they have done excel modeling and worked through a DCF analysis, but cannot walk through it with me." So I would be look into that. Also, it is VERY improtant to know how to walk through an I/S B/S & S-C/F. I/S is especially important (and easy--revenue thru net income--take it a step further and volunteer the DCF discussion from there).

And like everyone else said, be able to pitch. Also, know how to explain why you like ER

May 31, 2010

Thanks for the info sk. That helps a lot. What info did you incorporate into your stock pitch ? And the DCF, how detailed were you ?

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May 31, 2010

I incorporated b/s health, i/s growth & health, and CF health. Also, and to me most important, you should really find a company "story" that you like. I said all of the statement stuff and finished with something like "but what I really like is their story" and explained that.

With the DCF I was not over the top, but could cite perfect. I rehersed, and remember what I said so here ya go:

Sales less COGS to gross profit. Less sg&a to EBITDA. Less D&A to EBIT. Less taxes for to EBIAT. project this out and use your assumptions for the line items, including D&A and Working capital to add back d&a over the years and less the net increase in WC. This gives unlevered FCF. Discount at your discount factor to the PV of FCF. Sum up these, get a terminal growth value, discount that, and arrive at enterprise value. Subtract debt, preferred securities, and noncontrolling interest, add cash and equivalents, to arrive at implied equity value. Divide by # shares to finally arrive at a share price.

Long winded, but you get the point that you should sound like this isnt your first/second time.

Jun 1, 2010
sk8247365:

I incorporated b/s health, i/s growth & health, and CF health. Also, and to me most important, you should really find a company "story" that you like. I said all of the statement stuff and finished with something like "but what I really like is their story" and explained that.

With the DCF I was not over the top, but could cite perfect. I rehersed, and remember what I said so here ya go:

Sales less COGS to gross profit. Less sg&a to EBITDA. Less D&A to EBIT. Less taxes for to EBIAT. project this out and use your assumptions for the line items, including D&A and Working capital to add back d&a over the years and less the net increase in WC. This gives unlevered FCF. Discount at your discount factor to the PV of FCF. Sum up these, get a terminal growth value, discount that, and arrive at enterprise value. Subtract debt, preferred securities, and noncontrolling interest, add cash and equivalents, to arrive at implied equity value. Divide by # shares to finally arrive at a share price.

Long winded, but you get the point that you should sound like this isnt your first/second time.

this is great advice... would you mind elaborating a bit more on a company 'story'. thanks

May 31, 2010

Allright, thanks a lot man. Appreciate it.

Jun 1, 2010

When you do the DCF analysis in ER, wouldn't you calculate the levered free cash flows and not the unlevered??

May 31, 2010

When I learned the DCF it was from an IB website. In this case, I think it is the point that matters.

A company "story" is what the company does. For example, off the top of my head, take Chipotle.
You could say they have a strong BS and strong CF combined with a stable capex plan blah blah blah. But what you really warmed up to was the story of the business expanding overseas and creating a restaurant atmosphere.

I just made that up, but you get the point.

Take health care. Most companies in HC specialize in something. Their "story" is what they do. Lets say....Stryker. They make meds that are very expensive and that nobody else makes. They are so specialized that the FDA said they would not take contaminated drugs off the market, because people would suffer too much w/o them. The have tons of cash. That is their story, and you can say you like/dislike it.

To get a good idea of a companies story, just thorougly read the investor presentation in investor relations on their website, and some news articles / press releases.

Jun 1, 2010
sk8247365:

When I learned the DCF it was from an IB website. In this case, I think it is the point that matters.

A company "story" is what the company does. For example, off the top of my head, take Chipotle.
You could say they have a strong BS and strong CF combined with a stable capex plan blah blah blah. But what you really warmed up to was the story of the business expanding overseas and creating a restaurant atmosphere.

I just made that up, but you get the point.

Take health care. Most companies in HC specialize in something. Their "story" is what they do. Lets say....Stryker. They make meds that are very expensive and that nobody else makes. They are so specialized that the FDA said they would not take contaminated drugs off the market, because people would suffer too much w/o them. The have tons of cash. That is their story, and you can say you like/dislike it.

To get a good idea of a companies story, just thorougly read the investor presentation in investor relations on their website, and some news articles / press releases.

thanks ill look out for this

May 31, 2010

it is what you will have to do in the job. Investors will call and want to know why you recommend the stock. The quant reasons are easy/easier. The qualitative reason are what really help.

Oh and use phrases like "warming up to the story" and "catalyst". People in ER do, and you will sound like you belong.

Jun 3, 2010

sk, your comments are great. thank you so much!

Oct 9, 2011

great post

lol

Oct 17, 2011
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