Which Is the Best Way to Collect Information for Your Equity Research Report?

In my previous financial articles on this website, I have written extensively about various topics such as how to become a successful equity analyst, how to write a good equity research report, how to get a job in an equity research firm, how to prepare for it and so on.

I am sure you have read them and learnt a lot from them.

In fact I have been getting a lot of positive feedback and I am quite pleased about it.

I am happy to help you as much as possible.

Many of you have written to me with various questions and one of them was by an equity research analyst who had just got a job with a small equity research firm.

His question was very simple – Which is the best way to collect information for your equity research report?

He was facing the challenge of understanding how and from where to collect intelligence in the most optimal way and how to structure his data collection process.

The problem he was facing was that he was not able to prioritize his work flow and was going about it in a haphazard way.

Some seniors were telling him to go through various published data while others were advising him to talk to various participants with in the various sectors that he was covering while writing his equity research report.

He was getting really confused with all this varied advice and was not able to find his way through writing a good equity research report.

I know from my interaction with many young analysts that this is a quandary that many of you face in today’s world.

You have limited time to produce a quality equity research report and hence it is imperative that you have an optimal action plan to address this issue.

I am going to talk about exactly this issue in this article.

So please read it carefully and do use it like a check-list when you start to collect data or information from your equity research report.

One of the biggest challenges that most young equity research analysts today face is to decide how much information is enough, and when to decide whether he should go hunting for more information, and from where he can get this information.

Believe me when I say that this is one of the most important problems faced by most equity research analysts as we live in the era of unlimited information!

There is information everywhere around you.

There are thousands of websites dishing out information, there are thousands of company websites where a lot of information is available, and there are a lot of newspapers and magazines that you can refer.

Then you could also talk to various people within the industry or the sector that you are covering in your equity research report.

There could easily be an overload of information.

How do you make sure you don’t fall in this pitfall of running blindly behind information?

The easiest solution to this problem of is to create a process document for yourself wherein you create a detailed check-list for yourself that you can always follow when collecting information when you are writing your equity research report.

There are two main types of collecting information when you are researching various sectors or industries.

They are secondary research and primary research.

1x1.trans Which Is the Best Way to Collect Information for Your Equity Research Report?

Let’s try to understand these two types of research methods and their importance in collecting information for writing an equity research report.

Secondary Research

Secondary research is also known as desk research.

Secondary research is the most typical research methodology used in the world today by most equity research analysts.

Secondary research includes collecting or collating data that has already been accumulated and published by another entity.

In this type of research methodology, equity research analysts will typically refer to earlier studies and findings such as other reports, news articles and earlier market research studies in order to arrive at an inference.

In secondary research, typically no new research is required to be conducted by the research analyst.

However, the key drawback in secondary research is that the facts used in the secondary analysis could be out-dated or old and therefore could result in erroneous results.

Besides, earlier studies might not have targeted the exact issue that the present research necessitates.

Below I have mentioned some key techniques of collecting secondary data:

#1. Company websites

One of the key sources of collecting authentic data is the various company websites.

A lot of companies provide a lot of information about their company as well as the industry in their websites.

This should always be used as a starting point by an analyst when he starts the data collection process for writing an equity research report.

#2. Company financial statements

All public listed companies have to file their quarterly as well as annual financial statements with the registrar of companies regularly.

They provide all the relevant information about the company in these documents.

These documents can be used as an authentic source of information by analysts when they are writing their equity research report.

You can get these financial statements from either the company websites or you can also download them from the regulatory agencies such as:





You can also find these financial statements in databases such as Bloomberg or Reuters.

#3. Company press releases

Most companies publish various press releases whenever a new event takes place or something of material importance happens.

You should always check such press releases for latest information.

These press releases can be downloaded from company websites.

#4. Published news articles        

Many newspapers and financial websites publish periodic information about various industries and sectors.

These news articles can contain a lot of interesting and current information that you can use in your equity research report.

#5. Magazines

Apart from online content I would request you to look at various hard copy publications.

There are many magazines and journals which come out with fantastic data which you can use in your equity research reports.

There are many exclusive magazines and journals for specific industries such as ‘Light India’ for the lighting industry, ‘Chemical weekly’ for the chemical industry, TV vyapaarjournal for the white good industry, ‘The mining journal’ for the mining industry, etc.

These magazines and journals are available at reasonable costs on annual subscriptions and can also be got hold of in various libraries.

Primary Research

Primary research is the type of research method where you go out and collect the data yourself.

You do not depend on any other earlier published sources of information.

Examples of primary research include different types of surveys, personal interviews (telephonic as well as face to face interviews), key observations, and different types of ethnographic research.

A good equity research analyst will quickly recognize how to use both types of research methodologies – primary and secondary research in his writing and how to assimilate them in an organized fashion.

Below I have listed down various types of primary research methods that one can use in his or her data collection methodology.

#1. Talking to company executives

The most common way to collect information through primary research is to talk to various company executives within the sector or the industry that you are covering in your equity research report.

You can get on the ground latest information by speaking to these industry participants.

Important thing for you here is to decide whom to actually talk to and what type of questions to ask.

Also another challenge here is to understand how much to believe a person when he is telling you something about the industry.

#2. Talking to associations

Talking to various industry associations can be a great source of collecting information for your equity research report.

These associations can be in possession of key information about the industry it looks after.

Some important industry associations in India are:

  • ELCOMA – Association for lighting industry
  • ACMA – Automotive Components Manufacturers Association of India
  • IDMA – Indian Drug Manufacturers Association
  • FHRAI- Federation of Hotel & Restaurant Association of India
  • FAI – The Fertiliser Association of India

#3. Talking to channel partners

Many times talking to various channel partners such as dealers, distributors, etc. can be a great idea when you are collecting information for your equity research report.

These are the people who are on the ground and in touch with the actual consumers.

They can provide a lot of real time on the ground information which can help you validate the point that you are trying to make in your equity research report.

#4. Talking to other equity research analysts

You can also talk to other equity research analysts as it will be a good idea to understand different opinions as well as different ways with which people look at the same information.

Sharing intelligence with other equity research analysts will help you improve your perspective as well as gather more intelligence.

#5. Talk to stock traders

Another good idea is to talk to equity stock traders or equity stock brokers to gauge their sentiment about a particular stock or a sector or industry.

Remember sentiment plays an extremely important role in today’s stock market or financial markets.

Many analysts miss this important step while collecting information for their equity research report.

#6. Surveys

Another method is to conduct surveys to collect opinions of key respondents.

Surveys can be conducted in various ways such as online or through quick interviews.

Surveys will allow you to get on the field information to augment your already available information.

They are not in any chronological order, but you can look at each one of them and figure out which one is best suited for you based on the current situation or circumstance.

It will also depend upon the resources that you have.

By resources, I mean time as well as funds.

If you have limited time and money you cannot go for techniques such as surveys or talking to various trade partners.

Then it would make sense to quickly talk to key industry participants to get their expert views on the industry.

But in case you have a decent budget in terms of time as well as funds, you can have an extensive survey, talk to various trade partners to substantiate your findings and add more value to your equity research report.

So once again I would like to reiterate the fact that it is extremely important for you to understand how much information is enough or sufficient.

Do not aim to get every piece of information or intelligence available in the world.

Try and figure out the final goal – what point do you want to make through your equity research report.

Collect that much information which is sufficient for you to prove your point and understand a situation.

Use this piece of intelligence to stress on that point that you want to make and explain it very nicely so that the reader understands it completely and is able to take an optimal decision about their stocks.

1x1.trans Which Is the Best Way to Collect Information for Your Equity Research Report?

Please do understand that both secondary research as well as primary research are important for finding information which will help you create a good equity research report.

One can never be more important than the other.

One can never replace the other.

Secondary research and primary research are complementary to each other and should be used together to collect the best quality intelligence which will in turn enable you to dish out a very effective equity research report.

I hope you have read this article very carefully and understood the point I have really tried to make here.

If you still have any questions, please do feel free to shoot me a mail and as usual I will be more than happy to help you out.

Do let me know if you want me to write on any other issue which is bothering you or if you are stuck anywhere in your career.

I am sure I can use my experience to help you out.

So again all the very best in life and do keep the feedback flowing in!

How to Prepare Yourself for an Equity Research Analyst Job?

1x1.trans How to Prepare Yourself for an Equity Research Analyst Job?

The biggest challenge I think today’s youngsters find is to decide what they want to follow as a career and how to get that most coveted job.

I have observed many times that young graduates see that their seniors from college or older friends are following certain high profile careers such as equity research analysts, private equity analysts, investment banking analysts or hedge fund managers.

Seeing that these guys are doing well in their jobs and earning very attractive compensations the youngsters these days also want to follow them blindly.

But many times they are confused as to how to get these most coveted jobs or how to prepare themselves before approaching these high profile jobs for opportunities.

Many times these youngsters, who are just out of graduation colleges or are at the ending phase of their graduation program, look around for information which will help them prepare themselves in various places and try to put these bits together.

Some youngsters do succeed in doing this effectively but many get confused because information is coming from various sources (many times not the correct or reliable sources) and it’s difficult for them to bead it together in an effective way which will really help them train themselves before approaching say, an equity research company for a job.

Because of this I thought I should dig deep into my experience of the financial sector and write an article which will really explain what a youngster or a fresh finance graduate can do to prepare themselves before approaching an equity research company for an employment opportunity.

I am not saying that I have some magic wand which will make you the best candidate out the in the market but I can promise you that if you follow all the steps I have provided in this article, it will definitely help you enhance your skill sets, improve your confidence and confidently approach your dream company for a job opportunity.

I would like to divide this article in 5 parts which I feel if you follow meticulously and diligently will definitely help you groom yourself nicely for that coveted position of an equity research analyst:

  1. Obtain a finance degree from a reputed educational institute
  2. Attend various additional professional training courses
  3. Understand macro and micro economic indicators
  4. Enhance research skills
  5. Look for internships

I will explain each of these above points individually in detail so that you understand exactly what you need to do and there is no confusion at all.

1. Obtain a finance degree from a reputed educational institute

First thing that you have to remember properly is that if you are looking for any long term and successful profession in the field of finance, you need to get a professional degree.

For becoming a successful equity research analyst, you should ideally have a degree or a diploma in finance, business or accounting from a reputed and recognized university or school.

Remember just having any degree from any university or school is not enough.

You should always aim to graduate from leading and reputed universities or schools.

Top companies always give preference to candidates from top notch universities as the standard of education there is much better than mid-level or lower rung universities.

Remember you are going to be spending three to five years of your life in these universities or schools!

Please consider this as an investment for your future successful career.

Make sure that you aim for the best possible university or school and get an admission there.

Once at the university, please try to give your hundred per cent and score amongst the top.

This is very important as this score will stay on your CV (curriculum vitae) forever till you are trying to get a job in the market! So make sure you don’t get satisfied with mediocrity and always aim for the best.

Once out of graduation, always look out for professional courses which will give you that edge when you are looking out for your dream job.

There are various finance related professional courses that you can choose from.

In USA, the different professional courses that you can pursue could be:

  • Certified Public Accountant from American Institute of Certified Public Accountants
  • Certified Management Accountant from the Institute of Management Accountants

In India you can pursue professional courses such as:

In Europe there are also various professional courses that you can consider:

  • CIMA from the Chartered Institute of Management Accountants
  • ACCA from Association of Chartered Certified Accountants
  • ICAEW  from the Institute of Chartered Accountants in England & Wales

You can also consider taking up a management course such as MBA (Masters in business administration) or PGDBA (Post graduate diploma in business administration) from a reputed business school.

Again remember MBA is a lot of investment – financial as well as time and efforts wise – so make sure you only choose the best available option and not an ordinary lower rung business school.

Remember all these courses are not easy and you will have to invest a lot of time and efforts in pursuing them. But once you have any of the above degrees, it will definitely give your career a jump start and will make it very easy to approach your dream company.

2. Attend various additional professional training courses

Just getting a professional degree is not enough.

Apart from your formal education, it is always a great idea to discover other opportunities where in you can augment your technical and financial knowledge.

There are numerous supplementary professional training courses where you can be present at either classroom sessions or virtual classrooms and where you can hone your equity research skills and learn various new financial and statistical techniques.

Maximum of these training courses encompass all the basics techniques of equity research report writing such as – evaluating sector desirability, financial modelling, equity valuation methods, and equity and investment report writing.

The courses also cover things such as understanding financial markets, advanced financial accounts, securities and stock analysis, micro and macroeconomics, portfolio and wealth management, corporate finance and asset management.

These supplementary professional certification courses will certainly escalate your odds of getting employment as an equity research analyst with your dream company after concluding a formal graduate degree program from a reputed university or school.

Again choose these programs prudently as they will demand both financial as well as time commitment.

Don’t choose a program just because your friend has chosen it or just because you are too lazy to look out for other better options.

Spend time to understand advantages and disadvantages of each program, do a cost benefit analysis and only then decide which program will fit you the best.

3. Understand macro and micro economic indicators

It is very important to remember that the economic environment around you is affecting every industry in one way or the other.

You have to make sure you understand the meaning and implications of all the economic indicators, both micro level indicators as well as macro level indicators.

Macroeconomic indicators means the indicators that effect to general overall economy as a whole while micro level indicators means the indicators that affect the industries or companies within the industry or sector.

You can learn about these things by increasing your reading appetite.

Read as much economic or financial literature you can lay your hands on.

You can start by reading various easily available financial newspapers such as The Economic Times, The Financial Express, The Finance Weekly, The Wall Street Journal, The Economist, The Financial Times, etc. which will help you understand various economic factors and their effect on various industries.

This will actually help you pre-empt many things such as effects on various industries just by looking at how macro-economic indicators are panning out.

You have to make sure that you understand how these economic indicators affect the different industries so that total clarity on the functioning of the market as well as various industries.

4. Enhance research skills

I have already written this in one of my earlier article – GIGO, which means garbage in garbage out.

If you are evaluating sub-standard data, your analysis will definitely be not good. So you have to make sure that your data is of good quality.

And how do you do that?

By having good research skills!

In an equity research job, you will have to do both primary as well as secondary research to gather latest and verified information or intelligence.

Secondary research is gathering something that is already out there – something that is already published in the public domain.

It could be published in company annual or quarterly reports, press releases, company’s websites, sector reports, reports by associations, newspaper reports, etc.

On the other hand, primary research includes getting the intelligence straight from the horse’s mouth!

By that I mean by talking to various important industry participants, interviewing them and getting information about the company and the industry.

While secondary research seems quite simple, it makes a lot of sense to make sure that you become an expert at it and are able to mine the Internet efficiently and optimally to get the maximum possible information available out there.

Primary research on the other hand can be a bit challenging as you have to first find out the people you would want to talk to, then somehow convince them to talk to you and then interview them in detail.

This does need a lot of skills.

So do make sure that you try and improve your research skills (both primary as well as secondary) as a part of your preparations for the job of an equity research analyst.

Other important skill sets mandatory to flourish in this financial career comprise decent communication skills (both written as well as verbal), analytical mind set, conclusive thinking, and brilliant investigation skills.

If you can mix both – exceptional communication and data analysis skills successfully, you can be quite successful in this arena.

5. Look for internships

Finally I can’t impress more on the importance of internships in good and reputed organizations.

Apart from formal education and extra courses, a very important element of your learning will be ‘On the job’ training.

Just having theoretical knowledge is not enough, it will not help you climb the hierarchy faster.

You will almost instantaneously find yourself networking with portfolio managers, hedge fund managers, the company’s in-house salespeople and traders, as well as communicating the senior analyst’s investment philosophy after the company publishes its financial statements.

Important thing is to keep your eyes and ears open and absorb as much as possible.

Most top and reputed companies always look for good and successful internship records when they hire new employees.

An internship gives you direct access to the corporates and help you understand how they work or function.

Getting an internship with a reputed equity research firm is a sure shot key to your dream of getting the most coveted equity research job!

I think I have tried to be quite detailed in this article where I have provided some tips as to how to prepare you self before approaching an equity research company for a job.

1x1.trans How to Prepare Yourself for an Equity Research Analyst Job?

Do let me know if this has been helpful to you.

I wish you all the best in your quest to become a very successful equity research analyst!

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