Job Description - Final

Equity Researcher

Do you know when is the best time to buy a stock? If you do, you must have a big fortune! If you don’t,

you need an Equity research analyst to help you! Having been working as an equity research analyst, I will

tell you how the researchers make a fortune for you!

An equity researcher is a person who, by the name, does research on equities on a daily basis. Equities in

this context contain companies, industries, and stocks. The job of researchers is to make analyses on the

industry/companies they are responsible for in their team, and provide recommendations for their clients

on whether to buy, sell, or hold a stock at a certain time.

These are three main day-to-day tasks of an equity researcher:

• Monitoring Market Trends

• Doing Financial Analysis

• Making Recommendations

I will describe these using examples of me in this job!

1. Monitoring Market Trends

This is the first thing in a day for every equity researcher regardless of what company you work for!

Understanding how the market goes will set important fundamentals for your judgments on individual

companies. Here are the major to-dos:

• Watching out breaking news

• Making analyses on what the news means

• Predict what is going to happen

Here is an example. When I wake up at 6:30 am in the morning, I open my phone and briefly skim over

what happened in the overseas market overnight - any big news such as policy changes that will impact the

US sector? When I arrive in the office at 9:00 am, I open the news tracker on my working device as a

window. When I see a piece of news I think is impactful, I analyze it by pulling out related historical data,

and evaluate what is going to happen next. If necessary, I will discuss with my team members and hear

their opinions. This work will last throughout the day, to make sure I don’t miss any important potential

opportunities or risk signs!

2. Doing Financial Analysis

Then comes the mostly afternoon work! An equity researcher always has a few (usually<20) companies

that they are responsible for publishing analysis reports for their clients. Here is what an analyst would do

when analyzing a company for the first time:

• Understanding the company’s business model

• Identifying important drivers of growth

• Building Forecasting Models

This is a set but also a dynamic process. I usually learn the company’s business model (i.e. how they make

money) by going through its financial report, and looking at the presentation slides to learn their growing

highlights of the year/quarter. These materials are usually available on companies’ websites! Then I will

analyze its performance, and point out some important future drivers. This process is somehow time-consuming, because sometimes I need to reach out to industry experts to hear their thoughts on the

company’s products, and to see whether they have growth potential. The last step is to build financial models.

I make assumptions on the company’s future performance based on what I learned, and derive a valuation

model to predict the company’s market value in the future 5 years (or longer).

3. Making recommendations

After knowing a company for the first time, an equity research analyst is responsible for tracking that

company and frequently update the clients on what is going on. This is usually done through equity

research reports by the following steps:

• Outlining key information to know

• Building Financial Model 

• Summarize your view

A client might not know the company you will write about at all! So the first step is to introduce the

company to them in the most concise way. When I work on a report, I outline the company’s geography,

industry, key products, key competitors, and key financial numbers. I then build the most up-to-date

financial model incorporating my knowledge from the current market. Then, I make final recommendations

on whether to buy, sell, or hold the company for now. If the current market price of the company is higher

than my prediction, I suggest my clients to sell. If it is lower, I suggest clients buy. Remember, while

looking similar to what I introduced on doing financial analysis, this process is very time-sensitive,

because the market price of the company moves all the time!

Passive Sentences: 0

Flesch Reading Ease Score: 59.2

Flesch-Kincaid Grade Level: 8