While this could probably go in the ER forum, I wanted to post it in here to find of what people think of various firms when it comes to SS research. Who are the best banks? Who are your favorite analysts? Which banks are overrated? Which MM has the best research?
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To be honest, it really depends on the analyst and it is not bank-specific. Plus, someone I might like and think is "good" might not be what another PM or analyst thinks is good. Your best best is to look up the II-ranked analysts if you want to work for someone who is broadly considered the best in their respective industries.
Does II hold a lot of weight? It seems like some shops will campaign for votes and some shops don't bother. I have never had access to the rankings and have never looked at them.
Not a lot of weight (but my opinion doesn't represent the entire industry). However, I do know it is a big deal among the sell side community since it's just another way to market an otherwise undifferentiated product.
Others will have much more experience interacting with the sell-side, but I get a decent amount of written research.
For the written stuff (morning emails, earnings previews/recaps, frequency of updates), UBS and JPM have great coverage and I have no complaints with the analysts. I also like Barclays. DB is pretty comprehensive as well although I feel like the analysts aren't as good. I don't like GS much at all, although I find them to present contrarian viewpoints more than others.
I wish I had more Bernstein and MS access, my sense is pretty good stuff there but haven't seen enough. BAML/Citi I guess I view similarly to DB, maybe they are more like UBS/JPM/Barclays, just don't have as much exposure.
There are a surprising number of smaller firms out there who can give you color on management engagements (to me very valuable) or otherwise bring up an idea or point you may be overlooking (or aware of but want to talk it through). KeyBanc, RBC, CJS, Ray Jay, Benchmark, Northland, JMP, Cowen, BRG, Wunderlich, Jefferies, Cantor all have decent coverage. Other firms have obvious niches like Simmons (Piper), HEA and Tudor in energy. Cleveland Research I wish I had some exposure to apparently they are good. Vertical does a nice job with industrials/materials.
Yeah i pretty much agree with this. Bernstein is very good and I would probably put them at the top of the list for the analysts I've had exposure to. I also work a lot with Cleveland Research and they are great as well - a bit more high frequency looks and channel check type stuff and maybe a bit fluffier on the strategy side, but that's fine. Generally really cool guys. I'd also give a shout out for ISI although I do think the product has gone downhill under Evercore. I like Stifel for select analysts and KeyBanc/PacCrest as well.
Among the bulge guys, MS and JP have the most consistently good product. These are great analysts to talk to as you are ramping up since they know their industries well, have great corp access, and can generally steer you in the right direction on key debates. Their conferences are also the nuts. Agree that I have not been impressed at all by Goldman. They've literally burned through like four analysts in my space in the five years I've been covering the group and they keep replacing them with these super green kids. Some are smart, sure, but they have nothing to add whatsoever.
It's more analyst specific than the firm but MS has the best conferences/corporate access events.
I like whoever agrees with me the most. Hate the ones that don't.
Exactly, whatever bolsters my narrative. Conf bias
interesting point.
This is also a problem (imo) as it takes away the integrity of the sell-side...for example, the buy side gets angry at the sell side for just throwing buy ratings on stocks and not being more idea-driven at times (aka not having the nuts to pitch a bunch of shorts in their space).
But at the same time, when you pitch an idea short, people that have long positions despise you (in addition to mgmt. teams that won't speak with you), and basically blacklist you from trade allocations or votes.
So while I can see where you're coming from, I think that's also a problem with the buyside/sell side dynamic.
We actually just had a discussion about the guys we're turned on for and who is using what to try and redirect our trade flows more towards guys we actually use. Consensus for us was ISI and Bernstein as the favorites. Least favorites were DB and JPM with the rest falling somewhere in the middle.
I'm of the opinion that it 100% depends on the analyst so I can't say I have a favorite provider. I just like to see stuff that has an original angle and isn't just the consensus with their bank's name slapped on or just a regurgitation of management's words with a price target added. I will add that there are some shops that put out trash but they have solid events and management access, so it's worth maintaining the relationship. Can't really judge sell-side with a one size fits all evaluation.
This kind of is in relation to my reply above....some buy siders are this way (value originality) some just want to be in-line with the analyst. So which side does the SS analyst choose? Be more original and step on some toes or be a cheer leader, but lack originality?
Very difficult dilemma imo for sell-siders..
Exactly, sell side faces a double edged sword. They can't come out and shit on a company because they risk losing their access to management or at least straining their relationships with management, but if they don't produce something original guys like me will dismiss their work. Tough business to be in especially if the MiFID makes its way stateside.
It really depends on the sector which is being covered.. E.g. in my space Deutsche, Wells Fargo, BAML and a couple of boutique firms are great, while Goldman absolutely sucks. It also depends on what you're looking for: some analysts are good at dealing with management, some are good at estimates, some are good at high-level ideas and some stay on top on every piece of news that come out which is also helpful.
Bernstein has to be #1 for me... Berenberg do good research also, they may be my #2. GS also does good research and often overlooked IMO.
Can attest to Berenberg!
There seems to be a lot of love for Bernstein. I know they are known as a (the?) top SS ER firm but what about their research makes them so good? Do they just somehow retain all the best analysts? Publish consistently value-added material? Just curious...
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