Research professionals analyze and value stocks and fixed income securities in the industries that they follow. Sell-side equity analysts recommend buy, sell or hold and their responsibility is to generate independent investment ideas to sell to their clients (individuals and institutions). Buy-side research analysts make their investment recommendation and pitch them internally to their portfolio manager.
Sell-side research professionals are either part of a larger bank or are "independent research firms" that sell their research to other larger firms. Nowadays, the research staff is thinly staffed, with no more than a handful of professionals per team. Fewer and increasingly, younger, junior research staff supporting a head analyst or portfolio manager further increases the need to master financial modeling.
Asset managers are the buy-side, typically large institutional investors with sums of money to invest. These can be mutual funds, independent asset managers, pensions, foundations, endowments or insurance companies. These can fall into a multitude of possibilities but either way, they need to evaluate if they should buy a stock or security and therefore, need financial modeling and valuation courses.
Oftentimes, the focus of the job is diverted away from proper learning, training and understanding towards simply "updating the quarterly model." Mastering our financial and valuation courses will give you the leg up to spend more time on qualitative instead of quantitative analysis. A key course is our Segment Build-up Modeling course to better quantify drivers of growth.
Research professionals are supposed to generate investment ideas by identifying the catalyst - what will make this stock move? The rigor of analysis actually is a little bit less focused on financial modeling. Financial modeling is merely step one, and serves as a tool to quantify the research analyst's qualitative assessment; as such, financial modeling is a critical skill, though not the "end-all, is-all." A research analyst's coverage might include 30-50 companies and so when a deal is inevitably announced in their industry they need to be able to analyze the deal and ascertain quickly if this is good or bad for the parties involved.
Thus, research analysts also need to know enough about M&A and LBOs, but not necessarily the super complex deal structuring aspects. Analysts need to know the basics to carry one a good conversation and make the quick determination of good or bad. Get the basic terminology, understand the implications and how to evaluate the results and screen for companies that are ideal LBO candidates for private equity firms to swoop in and snatch up. At a minimum, research professionals need our suite of financial modeling and valuation courses with just the basic merger and LBO courses.
- Package 1: Basic & Fundamental Concepts
- Package 2: Core Fundamental Concepts
- Package 3: Advanced Financial Modeling
- Package 4: Valuation Modeling Topics
- Course: M&A Deal Structuring and Merger Modeling Basics
- Course: LBO Overview and Quick & Dirty LBO Modeling
- Course: Buy-Side Series: Mechanics & Applications of L/S HF
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