- Improve stock picking and communications by quickly deciphering which information is likely to be material for a stock call.
- Identify the 1-4 factors most likely to cause a stock to out- or under-perform during a typical investment time horizon.
Information overload is one of the biggest contributors to missing great stock calls. Analysts are typically inundated with excessive “noise” about their universe of stocks: hundreds of pieces of information each week from company management, the media and sell-side, much of which has no influence on stock prices. When a stock materially outperforms its peers or the market, it’s usually due to only one key factor that often gets buried among all of this noise. Until an analyst can identify and monitor these few key factors, there’s a good chance great stocks calls will be missed.
Analysts use our process to identify and then monitor the most critical factors that deserve their time and attention. As discussed in the best-selling book Best Practices for Equity Research Analysts, the top performing buy-side and sell-side analysts use this winning formula for their success, by investing time to identify the 2 to 4 critical factors most likely to move their stocks during their investment time horizon. Then they spend a disproportionate amount of their time proactively researching these critical factors to determine where consensus could be wrong, which becomes the basis for great stock calls. Mastering this skill of identifying just the few critical factors per stock helps analysts in generating informed insights, forecasting, making stock calls, communicating their calls, and for sell-side analysts, maximizing their client votes.
Free Sample Module and Materials From This Workshop