How Do Analyst Prepare Equity Research Report

When we talk about an equity research report, we talk about a varied level of details like the information about the company ticker symbol, the primary exchange, the primary sector and industry in which it operates, the current stock price and so on and so forth. When it comes to preparing an industry research report, there is no fixed template or a format that needs to be adhered. However, it becomes essential to make sure that most of the details about equity are all-inclusive.

We present to you as to what you can expect in an industry research report.

Basic Information

The research report should have some information, about the liquidity and float of a security. These are important considerations that are needed for an equity analyst. An analyst should be aware that financial stress can affect the liquidity of a security. Smaller than the market capitalization is the float of the stock. This is considered as an important consideration in terms of large institutional investors. This proves beneficial when it comes to investing in companies of smaller market capitalizations.

Investment Summary

The section comes inclusive of a brief description of what the company is about. It will also include the significant developments that have transpired in the recent years. In the event of a sale or a security being advised, the analyst needs to make a concise explanation as to why the security is mispriced.

Business Description

The products and services always need a detailed explanation. It is that section that needs to be given prime most importance when writing an industry research report. The paragraph should convey a clear understanding of the company’s economics. This includes a discussion of key driving factors of revenues and expenses.

Valuation

The valuation process should involve conventional value metrics and formulas. Equity valuation models can be formulated through the concise explanation of absolute and relative values. These normally are inclusive of price/earnings, price/book, price/cash flow, and price/sales value.

Financial Analysis

The historical financial performance of a company through a year needs to be made visible in this paragraph. Financial modelling aids to understanding and measure the effects of change in certain inputs on financial statements. This is extremely important in the case of cyclical firms.

Investment Risks

This sections usually should comprise of the negative effects and the risk consequences that could appear in case of the financial investments go bad. This is a tricky situation for an analyst to analyze the risk as every company has different risks attached and is extremely subjective making it hard to quantify in a certain risk bracket.

In case you are looking for preparing an Industry research report, you could get in touch with JMFL. Their panel of expert analyst makes sure that they weigh and scrutinize all parameters of your organization before coming out with a systematic and meticulously prepared equity research report. Do visit their website and find out more about their business dealings and the service that come along with it.



Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.