Buy side vs sell side analysts, a designation with different characteristics where both spend time in the market analysing the winners and losers. Their job is the study the behaviour and changes in the industry and figure out the companies future.
Analysts are people who have unbiased opinion about a company or organisation based on the facts, quaterly results and recent deals of the company.
Keypoints from the blog
- Understanding Sell side Analyst
- Buy side analyst
1. Understanding sell side analyst
Sell side analyst is a position where person usually pay keen attention to several companies of the same industry. Prepare a report which may predict the financial future of the firm and give this report to the firm’s client.
From investors standpoint, the research report which sell side analysts prepare is the ultimate result which contain everything about :
- Financial estimates of the company
- Target price
- Recomendation of stock’s expected performance
The estimations derived from several different sell side analysts reports can be averaged together to come up with the most accurate estimate known as consensus estimate.
Share prices may change according to the analysts reports. Rates may fall if the company doesn’t perform up to the mark in their buy season. A quarter of the year when company is expected to grow in sales and revenue.
Sometimes sell side analysts fail to revise their estimates but their expectations do change. In some cases, financial news refer to a number called whisper number. This number is different from consensus estimate and it becomes the newest unspecified expectation of the share.
1. Process of analysis of companies
Whenever an analysis perform their report, it usually indicates buy, sell or hold as an action for a companies share. The rating shows the expectation of an analyst that how a stock price will behave financially in near future.
2. Buy side analyst
Job of a buy side analyst is more crucial as it needs to be accurate data and predictions. Benefitting investors with their high alpha ideas is crucial as is avoiding major mistakes. Major skill in this kind of analyst is to figure out what can go wrong with an idea.
Buy side analyst read the news, track down all the information and build their reports.
Hope you got to learn some information from part 1 of Buy side vs sell side analysts, stay tuned for more upcoming information.