Buy-Side Report Fundamentals..

buddha Wrote:
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> ^
> Buy side
>
> Table should be 4-5 rows sized, company
> description usually a small paragraph I copy from
> bloomberg, Thesis, Risk, Valuation, Difference
> from consensus usually makes it 2 pages long.
>
> Then I end up having all the other stuff as an
> appendix that I refer to in my two pages.
>
> For comparison when the sell side initiates on a
> space or a name it is 30-100 pages.
I don’t know what sell side reports you’re reading but my firm’s are generally 10-15 pages (for initiating on a company.. and they are only that long because the font/spacing is quite large), follow up notes/reports are 3-5 pages including updated models
who is going to read an 100 page report? Not an effective selling tool
 
IH8FSA Wrote:
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> I like the qualitative side of the buy-sider
> mentioned above, (company meetings, conferences
> etc)
>
> Is there such shops that only use sell-side
> research and therefore dont really let their buy
> side analysts travel anywhere?
Those would be pretty useless funds, I’m not aware of their exsistence.
 
JasonU Wrote:
——————————————————-
> buddha Wrote:
> ————————————————–
> —–
> > ^
> > Buy side
> >
> > Table should be 4-5 rows sized, company
> > description usually a small paragraph I copy
> from
> > bloomberg, Thesis, Risk, Valuation, Difference
> > from consensus usually makes it 2 pages long.
> >
> > Then I end up having all the other stuff as an
> > appendix that I refer to in my two pages.
> >
> > For comparison when the sell side initiates on
> a
> > space or a name it is 30-100 pages.
>
>
> I don’t know what sell side reports you’re reading
> but my firm’s are generally 10-15 pages (for
> initiating on a company.. and they are only that
> long because the font/spacing is quite large),
> follow up notes/reports are 3-5 pages including
> updated models
>
> who is going to read an 100 page report? Not an
> effective selling tool
Depending what space you are talking about. When Solar-mania look at every piece DB, Citi etc they went through the technology supply and demand factors if i remember correctly each report was 130+ pages.
Also bernsteins normal pieces are so long the are usually 100 pages.
Is it long? yes. but depending on the topic it may be necessary.
Also a 10 page intiation is pretty useless, considering 3 pages are stupid things from compliance about the ratings system yada yada yada. The first page is usually a summary form. So you are left with 6 pages, given how the spacing is, there is no way you can give enough details about a new company.
 
^
like I said it depends on the item.
A new E&P I like the 10 page intiation that says how many acres, where it’s located. I don’t need info on the overall natural gas market supply and demand (I have been through it 100x)
A solar company with a unique conductive material for their PV like CiGS, I want as much detailed info as possible. and that usually requires a long report.
 
buddha Wrote:
>
> Typing in all caps just made your argument all the
> more authoritative.
sorry dude. I do it on threads where I quote someone else. I hope this is easier on your eyes
>
> . But do I have a
> IS that is linked to a CF statement that is linked
> to a BS for every company?
you dont, but some firms do. In my case, it was not all the analysts there, it was just a couple of the Wharton MBAs who were in their 30s. absolute monsters on excel. they were all about the models and I guess seeing their firm wide emails with models colored my view.
>
> Not sure what shop you work at, maybe a hedge fund
> with an outrageous expense ratio, but even then I
> doubt that the modeling is that comprehensive.
I dont mean to be a know it all. trust me. I am younger than you and have less experience. that I know for sure. I am just saying that at a particulatr east coast shop, modeling was huge. I had never seen something like it.
 
> >
> >
> > who is going to read an 100 page report? Not an
> > effective selling tool
>
>
>
when you need to ramp up on an industry, you have to.
 
Im on the buyside and we dont build models at all, I believe it is a complete waste of time when you can download a sellside model and change the variables. Sectors generally move together, picking the correct direction of a sector is probably more important than deciding if a company is going to meet or beat earnings expectations.
 
I’ll throw my hat in the ring on this discussion. I work on the sell-side and generally think our models are almost worthless. They are basically just earnings models (like everyone else) with a few growth assumptions. Not that helpful or difficult to produce.
I interviewed with a hedge fund yesterday and they don’t use models at all, and in fact, really couldn’t care less about what the sell-side is doing. The fudn focuses on directional calls so it’s pretty irrelevant if some analyst on the sell-side shaves 10 bp off his gross margin assumption, result in a penny or two difference to his EPS estimate.
Also, a lot of the bigger firms do produce 100 page reports. They are supposed to be used as comprehensive references. I don’t think many people sit down and read the entire report – the point is that the sell-side analyst who wrote the report establishes his name and, to a certain extent, credibility with the stock or industry. This drives revenue for the research department.
 
From the hedge fund perspective it depends alot on the particular funds strategy and investment process. I worked for one fund that was a fundamentally driven long short equity fund where sell side models and modelling definitely played a key role in the invest process. If the fund didn’t have it’s own model a sell-side model would be used as a quick and dirty substitute until our own model could be built. Now I am at a quant fund and we couldn’t care less about the sell side. Either way the sell side models primarily give a feeling about the street consensus on a name and the money is typically made when you can find the opportunity that isn’t already priced into the consensus.
 
bsider Wrote:
——————————————————-
> Im on the buyside and we dont build models at all,
> I believe it is a complete waste of time when you
> can download a sellside model and change the
> variables. Sectors generally move together,
> picking the correct direction of a sector is
> probably more important than deciding if a company
> is going to meet or beat earnings expectations.
Where do you download these sell side models from bsider?
 
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