How To Get The Most Out of Equity Research Services

The current investment landscape is anything but static. The evolution of the space is making it harder for businesses to navigate complex activities such as mergers, acquisitions, and even trade broking. It may be time to obtain the services of an equity research service provider.

Equity research in a nutshell

Credible equity research is all about getting the requisite insights on investment opportunities, market developments and stock responsiveness. Investors and businesses can, therefore, make good use of nuggets of research to proactively prepare for global fluctuations and respond to the changing landscape in terms of domestic and even foreign stocks.

Equity research service providers offer the requisite level of financial expertise and assistance to organisations, helping them make the best decisions regarding equity investments. Equity research optimises investment performance, enabling businesses to drive competitive outcomes, perpetuates a sense of transparency, and reduces underlying threats, if any.

How must organisations approach equity research?

Equity research enables investors to make authoritative and calculated decisions, especially in highly diversified markets. The functionality drives results only when equity research is outsourced to efficient service providers.

Targeted and growth-driving research services are the need of the hour, especially when they are backed by fundamental client-centric modelling and reliable financial validations. The approach must also take investment strategies and client relationships into account.

The following are areas an organisation needs to ensure an equity research service provider covers:

• Comparable business analysis
• Idea generation
• Broker research and monitoring
• Background profile monitoring
• Sensitivity analysis
• Discounted cash flow analysis
• IPO analysis
• Financial modelling
• ESG analysis
• Channel monitoring
• Thematic research
• Weighted average cost of capital mapping

These are some of the most essential and auxiliary services offered by credible equity research companies. The focus must also be on monitoring the latest market developments, relevant sectors and macro factors, and lending marketing support, if and when necessary.

The relevance of equity research

Equity research makes a lot of sense to trading firms, investment banks, hedge funds, asset managers and stock exchanges. Each of these corporate conglomerates relies on top-notch equity valuation as part of fair value analysis. The relevance of equity research extends beyond the concepts of company profiling and enterprise grading, with both these metrics concentrating on analysing and evaluating the financial standing of the particular fund or a company in general.

Investors independently resort to company earnings analysis and sector-wise reporting to assess the financial standing of an investment opportunity. Such investors can be classified as professional investors and retail investors, with each group having their own take on equity research.

Professional investors or buy-side corporate professionals delegate equity research services to gain context, generate ideas, speed up the processes, gain more relevant insights, and even secure the highest levels of corporate access.

The relevance of research for retail investors is comparatively straightforward, focusing on framing investment narratives, providing recommendations, and assistance with financial and corporate modelling. However, the sheer amount of data compels investors to rely on outsourced services for procuring relevant equity research data.

How does equity research help?

Credible third-party researchers rely on their unparalleled research pedigree, scalability, and outstanding levels of quality when offering their equity research services. From a generic point of view, the highest quality of research yields the following results:

• Strategic decision making – Ensures investors manoeuvre their financial movements and responses according to key market and stock signifiers

• Forecasting prices – Enables investment firms or standalone investors to stay ahead of the competition via reliable evaluations

• Better ideation – Identifies new and promising stocks, investment opportunities and newer market disruptors

• Clear market insight – Helps investors analyse the meaning of available market data while deciphering patterns, trends, and market-moving tendencies in real time

The bottom line

Equity research is one of the most potent tools that investors can rely on, especially if they have cost saving and strategic decision making on their mind. While own employees can always be assigned to handle the tedious work, it is prudent to outsource equity research so as to obtain the highest levels of valuation modelling, screening and impact analysis of the investment opportunities.