Research Equity Analyst Skills (Examples and How to Improve)
Updated 24 August 2023
Equity research analysts are financial professionals who use financial models and stock market research to help investors and organisations make better financial decisions. A research equity analyst possesses technical financial expertise and uses a mix of different skills to perform their job. If you want to improve your stock recommendations, it helps to understand the important skills that a successful equity research analyst requires. In this article, we explain what research equity analyst skills are, discuss the different types of skills and explain how you can develop and highlight these skills in your job applications.
What are research equity analyst skills?
Research equity analyst skills are the attributes and abilities that research equity analysts use to evaluate companies to determine the financial health, valuation and potential of their stock. They conduct market research, analyse economic data and use financial modelling to forecast stock prices. They gather this information to publish analyst reports that companies, clients and brokerage houses use to aid their investment decisions. Companies can hire research equity analysts on the buy-side or sell-side to focus on different types of financial transactions.
Research equity analysts on the buy side analyse data and the market to help their employers make sound financial and investment decisions. On the sell side, analysts monitor individual companies' financials and forecast their position in the market. Research equity analysts in both the buy-side and sell-side seek to provide the best information and financial advice to help their clients maximise their return on investments. Here are some of their other important responsibilities:
calculate valuations of companies using different financial modelling techniques
analyse the company's financial filings, annual reports and news
study industry trends, market developments and other economic indices to predict stock price movements
attend earnings calls and board meetings, conduct surveys and conference calls to understand the company's financial behaviour and decisions
write research papers and analyst reports to cover industry news and financial developments associated with companies in a particular sector
prepare recommendations for equity prices
Examples of research equity analyst skills
Here are some examples of research equity analyst skills you can develop:
Research equity analysts use their strong communication skills to convey complex financial information and data to investors and organisations in a timely and effective manner. Analysts can communicate with important company executives over earnings calls, board meetings or in person at industry-related events to discuss market trends and investment opportunities. They may also correspond using email to exchange company financial information and reports with other colleagues. Their analyst reports also communicate valuable industry insights that may help sales and marketing teams within the organisation.
Research equity analysts use their excellent analytical abilities to interpret complex information and parse economic and market data into actionable insights. They notice details about market trends or shifts in the company finances that may signal new developments. Analysts perform rigorous research to verify the information and draw reliable conclusions from data analysis, which can help them provide accurate reports to help improve investment decisions. They also use financial models to analyse companies' valuation, which help guide financial decisions and outcomes.
Attention to detail
Research equity analysts constantly survey the market and monitor the price movements of companies' stock. They're detail-oriented which helps them stay up-to-date with the latest news or developments in different industries. Research equity analysts document significant changes and produce financial reports with graphs and tables to help explain the changes and forecasts from their research. By providing timely and accurate information, they can help businesses, organisations and investors understand different financial scenarios and make informed investment decisions.
Research equity analysts possess advanced financial knowledge like valuation techniques, accounting principles and investment methodologies that help them understand the stock market. Analysts undergo training and certifications to ensure they're qualified to provide investment analysis. They also use their financial acumen to provide valuable analysis that can improve their clients' investment returns and portfolio performance.
Investors and organisations rely on professional investment research and analysis from research equity analysts to make financial decisions. Analysts are dependable professionals who provide accurate and timely reports that explain market trends and forecast stock prices in the market. A successful research equity analyst is readily available to take calls from their clients and offer important advice whenever possible. They prioritise their clients' and employers' financial interests and work to increase their overall portfolio returns.
Equity research analysts require good writing skills to publish reports that provide information in a clear and concise format. They use statistics and mathematical models to interpret key financial data before writing their analysis and findings. Equity research analysts are familiar with communication best practices and have a good foundational knowledge of grammar and sentence structure. They're good writers who can combine business knowledge, economic data and financial analysis into useful investment insights for clients.
How to improve research analyst equity skills
Here are some tips that show you how to improve research analyst equity skills:
1. Advance your financial certifications
It's important for financial professionals, especially equity analysts to acquire new skills and competencies such as technical analysis, financial valuations and modelling techniques. You can consider pursuing certifications like Chartered Financial Analyst (CFA) and Financial Risk Manager (FRM) to upgrade your knowledge and improve your analysis.
2. Study the stock market and equities
Reputable and successful research equity analysts hone their skills by studying equities regularly. They conduct independent research to learn more about a particular industry or vertical and analyse economic and financial data to improve their knowledge. In addition, try practising financial modelling techniques to value companies' stock and use simulators to measure your performance against the market.
3. Read widely
Research equity analysts read widely to maintain awareness of current financial news and market trends. They read reports from banks and financial institutions to improve their knowledge of the industry, companies' business model and other macroeconomic factors that can affect the market. Allocate time daily to read and understand political issues or economic developments. Then, apply your knowledge by determining the appropriate investment strategies to respond to these market changes.
4. Grow your professional network
Efficient research equity analysts leverage their network of finance professionals and executives to deliver timely and valuable information to their clients. They're constantly connecting and engaging with influential professionals and industry leaders to learn more about company strategies and their financial decisions. Attend financial conferences or industry seminars to build your network. Speak with influential professionals in the community and get their market sentiments and opinions about certain equities to improve your knowledge.
Research equity analyst skills in the workplace
Apply these tips to develop your research equity analyst skills in the workplace:
Adapt to the market. The stock price of a company may move constantly and change due to new or unexpected developments. Learn to process large volumes of data efficiently which can help you optimise your investment approaches and better adapt to market changes.
Read other analyst reports. Brokerages, banks and other financial institutions regularly publish reports on the economy and industry. Review their analysis and learn alternative ways of presenting information and data, which can help you refine your writing and communication skills.
Compile a list of sources. Research equity analysts often use credible sources of information such as the financial regulator or industry insiders to obtain key financial data and breaking news. Compile reliable sources and identify new information outlets such as press releases or quarterly financial statements that you can add to the list.
How to highlight research equity analyst skills
Follow these tips to learn how to highlight these skills on your resume, cover letter and during your job interviews:
Research equity analyst skills for a resume
Include all finance industry certifications like financial modelling, wealth management, and financial analysis in your resume. Companies may prefer hiring candidates with the necessary qualifications and credentials that validate their knowledge and skills in investment analysis. Share relevant work experience where you demonstrated skills such as leadership or communication, which are important attributes that employers desire. For instance, you can mention your past role as a financial wealth advisor where you actively consulted with clients. This may suggest applicable experience in investment advisory and also showcase your relationship management skills to interviewers.
Research equity analyst skills for a cover letter
In your cover letter, mention your educational background and explain how you've committed to professional training to increase your skills and competencies as an investment professional. Reiterate your interest in the organisation and briefly state your career goals as a research equity analyst. Research the company before drafting your cover letter to find out more about the investment strategy, horizon and expectations. Then, outline your skills and traits that can meet their requirements for the role.
Research equity analyst skills for a job interview
Walk interviewers through your daily work routine, such as researching companies, writing investment reports and managing portfolios. Elaborate on your duties and provide examples of how you gather your research and source for information, like taking notes during annual meetings or quarterly earnings calls. If you have management responsibilities, such as supervising junior analysts, explain the details of your role, which can help demonstrate your leadership abilities.
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