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Equity analysts study and analyze companies to determine their financial value and potential investment risks. They consider current and future financial statements, meet with management, and keep up with industry trends. They typically have an accounting background and industry experience, and may hold professional certifications.
A stock analyst studies and analyzes companies to determine the overall financial value of the company. Analysts arrive at a company’s complete financial value by examining financial reports and conducting interviews with company management and industry professionals. Equity analysts are usually employed by those seeking sound investment knowledge.
Securities firms, banks, mutual funds, hedge funds, pension funds and insurance companies rely heavily on equity analysts. As analysts determine the value of a company, an analysis performed by an equity analyst can also determine whether or not a company is considered an investment risk.
In addition to assessing a company’s current financial value, equity analysts also consider a company’s future value. Determining the future financial value of a company is completed based on financial statements, sales, costs, commodity prices and tax information. Analysts also often meet with management to get a better overall financial picture.
While an equity analyst is usually given company-specific profiles to work with, he will also take a broader approach. By studying a particular industry as a whole, an analyst can gain a greater understanding of a particular company. Comparing several companies in an industry against each other will provide the analyst with a complete financial view of a specific industry. This in turn will help create a comprehensive company profile.
Additionally, a stock analyst is expected to keep up to date with current trends in a specific industry. Keeping track of a country’s current economic state is an integral part of an equity analyst’s job. While much of an analyst’s work requires reviewing printed statistical information, financial software is also widely used.
Once an equity analyst has gathered all possible data related to a company, he or she will put together a complete report. Upon completion of the report, a presentation is often presented to an analyst’s employer. The information contained in the presentation will determine whether or not a company represents a sound financial investment.
In terms of education, equity analysts usually have an accounting background. Some analysts also hold a Master of Science in Finance or a Master of Business Administration. In addition to proper educational certification, most analysts have a wealth of industry experience. In recent years, a form of professional certification has been required to secure an equity analyst position. This type of certification includes the Chartered Financial Analyst certification or a Certified International Investment Analyst certification.
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