LETTER: Equity sell-side analysts need to be more dynamic
They spend the bulk of their time on a metric that fails to provide accurate outcomes in the short to medium term
11 August 2020 - 18:16
As an equity sell-side analyst I perform “fundamental” research into a listed company’s business prospects to determine whether its stock is mispriced. This information is used by asset managers to enable more efficient allocation of funds to those businesses that are likely to outperform in the long term.
I often get asked what fundamental research is all about, when it often fails to predict whether a share price will go up or down. This got me questioning the genesis of fundamental/bottom-up equity research and its efficacy today...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.