Equity Research in Today’s Markets

Any kind of research forms the very basis of every organization’s structure and planning. Businesses and firms invest a lot of time and capital in research-oriented activities designed to oversee market trends, changing lifestyles, mapping potential opportunities and threats and so on. Research becomes even more important in case of stock trading and investing where the capital endowed is often subject to massive fluctuations. This is again one of the reasons why equity research is gaining more and more importance. In fact, investment research firms that carry out equity research services provide a lot of attention to this aspect because of its direct relation to the bull and bear market and the increased relevance of equity in stock investing and other related activities.

In a haste to make money, rationality is more often than not the first causality. Even the slightest mistake in the transaction has an influential impact upon the market. Investors hurry to take advantage of the situation and the market over-allocates capital to the most promising and profitable sectors. Thus, in a broader sense, equity research is a function of a market that is being increasingly affected by these changes. It involves performing critical analyses to assess the fair value of stocks owned by particular companies. On a much broader scale, it can also be used to indicate the likelihood of growth or decline in the share price of a particular company. Thus, the main objective stands at finding out trends through which strategic decisions can be made to maximize the yields from the proposed investments.

The ruling research in today’s market is the Wall Street research which concentrates on more liquid stocks and mostly ignores the publicly traded ones. The Wall Street research often gives a general overview and fails in providing more detailed information and this gap is usually filled by equity research services that are provided by independent investment research firms and other brokerage firms providing research on the stocks that have not been covered by the Wall Street. The fascinating thing about this kind of research is that investors do not pay the costs of the research. This cost is taken up by the brokerage firms while investing the capital to sustain clients. Hence, these days, fee-based research is catching up fast in the market as it not only serves the purpose of proving efficient services, but also fills the gap between investors who want proper research and companies who realize that Wall Street is not likely to put out any information to provide research on their stock.

With the mounting volatility seen in equity markets, decision makers are largely depending on equity analysts who are professionals at providing quality equity research reports to determine the correct value of shares of a particular company and along with that, understand the future course of the fair price after deciphering the equity research report patterns. Hence, using the tools of premium equity research services and reports and skills of a capable research analyst, the investor is in a much better position to make more judicious and informed investment decisions in the equity market.

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