Equity research, in very simple terms, comprises of three basic activities – data collection, data analysis and report writing. All the three activities are of paramount importance in successfully conducting equity research.
Data collection and data analysis is time consuming. Moreover, market movements and trends change daily, even if by a fraction. It is essential for the equity research analyst to lay hands on current data, analyse and report. Time is of essence. Instant access to data, therefore, is necessary.
Further, to complicate matters, there are hundreds of websites which can give you access to this data. However, it is practically impossible to visit each website daily and gather information. What you need to do is use tools which filter daily data and gives you access to only relevant ones.
5 Useful Tools for Equity Research Analysts
Common financial knowledge mandates that usage of various tools and techniques happens only at the analysis stage but it is not completely true. There are various tools available for equity research analysts that can be used for data collection and report writing as well.
Today, in this article, I am going to tell you about 5 useful tools for equity research analysts. They are free of cost, easy to setup and can be used at various stages of equity research.
#1. RSS feeds
If used prudently, the Rich Site Summary (RSS) feed technique is a very helpful and time saving tool for data collection.
Typically, the data collection for equity research is done using a fixed set of websites.
By using RSS feeds, you will get instant access to all the data related to your company or industry.
If you register RSS feeds on a domain, it removes the human element of manually checking uploads and saves a lot of time. Whenever the website/s on which you have signed up for RSS delivery publishes information related to your industry interest, an email containing the information is automatically sent.
All you have to do is access the email, read the information and filter it for your use.
How to Access RSS?
Visit the site you wish to receive information from and look for RSS tabs like Join RSS feed, FeedBurner signup for or the daily email alerts box. Just type in your email id and name (if asked for) and you are done. Sometimes, the websites send a confirmation email. Just visit the email inbox and click on the confirmation link.
You are all set to receive filtered information.
#2. Google Alerts
Google Alerts is a free but extremely useful service provided by Google (of course!) that gives you daily, weekly or as-it-happens instant email updates of your created alerts.
Activating Google Alerts is good in addition to RSS feeds, which will periodically send you data uploaded on the internet related to your company or industry. It is a notification service that gives you info on data uploaded by sending out periodic e-mails to the registered email id.
How to Use Google Alerts?
It hardly takes a minute to setup Google Alerts. Visit their main page, linked above, and type in your research parameter. See this example screenshot.
As visible, you can customize it according to the result type, language and a specific geographical region. Once setup, click Create Alert and see the information flowing in. For more customized data filtering, check out the Google Alerts Cheat Sheet. It mentions many parameters you can use for customized data display.
Lastly, you can make use of Yahoo! Pipes, which is a similar tool like Google Alerts but is better with drawing internal search parameter connections.
Excel is the most commonly used tool for any kind of financial analysis across the world and equity research is no exception. This tool is usually used for small and medium data sets to run financial analysis.
There are numerous functions and formulae in Excel that are very popular amongst equity analysts across the globe.
There are many open source tools like Open Office Spread Sheet, which are also used for such equity research analysis, but not as widely as Microsoft Excel.
Statistical Product and Service Solution (SPSS) is a very popular statistical tool used by researchers from various backgrounds for data mining, data analysis, text analytics, data collaboration, surveys and deployment. The SPSS software is usually used where the data sets are large and usually captured in a pattern.
There are innumerable functions in this tool which create various charts and graphs depending on data analysis. The tool also enables the researchers to represent the analyzed data and patterns in a pictorial manner.
Between Excel and SPSS, the second one is far more complex to deploy. Even though an equity research analyst will require Excel training, it requires a little more training for the same analyst to use SPSS properly.
Developed by the SAS Institute in California, the Statistical Analysis System (SAS) is a software suite used for data management, business intelligence and predictive analysis by many companies and analysts.
Unlike Excel or SPSS, SAS not just performs data analysis but also can be used very effectively for data collection and analytics. However, a working knowledge of programming language is important for you to fully use the potential offered by this tool.
It does not mean that if you do not know programming languages you cannot use SAS. With a little bit of training, you should be able to use it as effectively as any other tool.
How to Access SPSS and SAS Software?
The SPSS software is available for a trial download at IBM whereas the SAS software needs to be purchased. Before buying any of them, make sure to undergo training. Without proper training, either of them won’t be of much use.
I hope this article helps you in doing equity research better in future using these tools.
If you have any questions related to the tools for equity research analysis discussed in this article, please feel free to write back and I will be happy to answer all your queries.