So what kind of notes do research analysts make? What’s the difference and why do we care? Well this article is going to outline the different types of articles and their purpose. Before jumping into each type of report we would summarize your time as follows Primers/Initiations/Industry reports will take up 50-60% of your time, off of earnings season and 0% of time during earnings season. Earnings will take up 75% of your time during the tough weeks and 0% of your time between earnings seasons. Maintenance, industry reports, conferences, new product notes and others will take up 10% of your time consistently. Big Events likely take up less than 5% on an average week. While these percentages don’t add up to a hundred percent, it’s a rough guideline to how an entire quarter would work, large projects during the 2 months that have no releases, with a focus on previews, post views and large events during the month of earnings. Note, this breakdown is tailored more to an Associate/ low-end VP, Senior Analysts spend the majority of their off earnings season time on the road marketing with company management and meeting buy-side clients in person.
Primer: A huge report. We’re talking 200+ pages that tells an investor how to invest in your space (software, hardware, restaurants, credit cards, oil and gas, etc.) typically these documents take 3-4 months to make from scratch, or ~1-2 months to update. You’ll be working on them over a long period of time.
Initiations: So “Dot-com” is going public, and you are an Internet analyst. You will initiate coverage on this stock. A 50-100 page document on why buy “Dot-com”? Or why short it? Basically it’s a deep dive into the company you are covering. Time to create? About 2-3 months, oh and if you are a bank taking the company public? You absolutely will cover the stock, unless you want management to hate you.
Earnings Preview: Self explanatory. Do I get long or short into the print? (1 – 4 pages)
Earnings Post View: Unless you are up or downgrading the stock… Not important. You should have given investors ample time (typically hedge funds) to take a position… Hope u were right! (2-7 pages)
Industry Report: Earthquake in Japan? Europe going to collapse? Flooding in Brazil? Huge international currency swing? Have an opinion on the event, which companies in your coverage will be hurt/benefit. Basically explain who is exposed and who is not. (one day write up 2-5 pages)
Maintenance: Simply put update investment community on important items. Consumer? Same store sales monthly reports. Old tech? Update community on backlog updates. Not going to let the investment community think you are not dialled in. Easy to update when on top of your work. (2-8 pages)
Industry Conference/Company Analyst Day: Attend relevant conferences in your coverage universe and write up reports. A company you cover has an analyst day, attend event and give your thoughts. Note, you also do write ups (1-2pages) on what you think is important going into the event. Overall these events will be 6-8 pages, dependent on importance.
Big events, acquisitions, new products: Typically shorter writes ups of a page to give an opinion. If it is a huge acquisition, (think 10%+ addition to sales) research analysts will likely write 20+ pages on the acquisition’s impact on the company at a later date. New game changing product? (think new tablet offering, medical clearance for a drug, etc.) This would likely be a few pages diving into the specs of the product, competitive dynamics and long-term impact to the company’s financial model.
Quick views: These generally become notes, but if a big event happens you write 1-3 paragraphs to your sales team about your opinion and overall views. Products, natural disasters impacting your space, acquisitions and any other event that may cause your phone to ring 700 times a minute.
Conclusion: You’ll always be writing up something, so don’t expect to twiddle your thumbs much. The plus side? Companies generally announce items between 1 hr before market open and 1hr after so don’t expect to pull all nighters.
