Equity Analysts: Picking up a new sector?
If you were to pick up a new sector, what would be the things you'd focus on if you were in a hurry to get functional?
Demand and Supply drivers
Entities and niches
Understanding the value chain
What else would you focus on?
- JerryLv 78 years agoFavorite Answer
1) Top down macro.
- How big is the sector?
- What are the sub-sectors?
- Get a list of the companies, largest to smallest. Quick way - just look at the holdings for a sector ETF sorted down by weight.
- Are there significant foreign competitors?
2) How has the sector performed relative to overall market and other sectors over different time horizons? Do you understand why?
3) Laws and regulations
4) Read the most recent quarterly and annual reports for the largest companies to learn what is on the mind of sector CEOs. Read the related investor calls on a site like SeekingAlpha to see what questions are coming from analysts.
5) Research the recent history of analyst estimate changes. Up or down? Figure out why.
6) If you are working for a particular firm, get up to speed on which stocks the firm holds in the sector (and which large stocks they do not hold). Those are going to be the research priorities. They are also cases where the firm should already have some knowledge to share with you.
- Anonymous8 years ago
They're all important, but..."Niches"....Netflix..Palm pilot..Cisco(Servers)...Xerox copier..DaVinci surgical..IPhone Ipad...XBox...Razor..Qualcom(Phone Patents)
If my Corporation could create a better I-Pad than Apple,..
and convince the public it's better,..Ah..hah Ha..
Actually Amazon beat Apple,..."You can own a Kindle(Plain Jane Reader),..and a Kindle Fire(Color Video and Internet),..For less money than an I-Pad....And not having to share your Kindle with the Family..