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What is Equity Research?

Avadhut Nigudkar is an independent online entrepreneur and founder of FinanceWalk. He has over 12 years of experience working with a credit rating agency, a software company, a healthcare company and a boutique investment bank. He has also rendered services as a visiting faculty to top business schools in India and is a member of Mckinsey Online Executive Panel. Avadhut is a Master of Business Administration (Finance) and a CSMP (Certified Securities Markets Professsional).

 

 

 

 

 

 

 

 

 


 

 

What is Equity Research?

Equity research is what an equity research analyst does.

Well, to start with, equity research is a study of equities or stocks for the purpose of investments.

Equities or common stock comprises a big chunk in any company’s capital and shareholders need to know whether to stay invested in the company or sale the shares and come out.

As an individual, it is time consuming to do equity research - that is to study the company, its financial statements, products, management and take a decision about investment.

Exactly for the same reason there are people working in research companies whose job is to do equity research and recommend companies for investment.

Purpose

Purpose of equity research is to study companies, analyze financials, and look at quantitative and qualitative aspects mainly for decision: Whether to invest or not.

Process

Equity research process comprises of multiple steps.

1. Economic Analysis

2. Industry Analysis

3. Company Analysis

4. Financial Statement Analysis

5. Financial and Valuation Modeling

6. Report writing

7. Presentation or recommendation

Skills

1. Excellent financial analysis and research skills

2. Global and business analysis knowledge

3. Presentation and writing capabilities

4. Correct judgment

Application

Equity research is used in many areas. Primarily, the research is used for the following purposes:

1. Investment evaluation

2. In Mutual Fund industry

3. For M&A deals

4. Financial Publications

5. Charitable endowments

Salary

Equity research analysts earn base salary plus bonuses.

Learn more on what is equity research.


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