Do Your LifeSci Advisors Homework: Five Things to Know About Sell Side Research Coverage
Many businesses see sell side research coverage as an obligatory fee on the bill each month. Sell side research has many opportunities to offer past the topical stock reports. By fully understanding your sell side research team, you can gain the most from our services.
Equity Research Definitions
We understand that our reports are full of investor jargon. These terms can quickly become confusing, and learning the terms can be as difficult as learning a new language. There’s a few definitions we need can establish so you can fully understand what sell side research is.
● Equity research. Equity research is the study of a small bundle of stocks. By studying the activity patterns of the stocks, equity research analysts can recommend sound investment decisions for both professional investors and, increasingly, the public. Their research is demonstrated by reports that place Buy, Sell, or Hold ratings on covered companies.
● Equity research coverage. A “covered” company is one that is included and rated in an equity research report. Analysts often become experts of the industry in order to make educated and complete investment recommendation, so many equity research teams opt to focus on one specific area. Life science advisors focus on lifesci research companies, ranging from pharmaceutical research to cochlear implant research, cell therapy, stent research, and more.
● Sell side research. Sell ride equity research is opposed to buy side research. Sell side research focuses on covered companies and produces stock reports and recommendations. Buy side research uses research on individual companies to offer private recommendations to fund managers to offer the highest risk adjusted return on investment.
Why Do I Need Sell Side Research Coverage?
Getting focus and attention from investors is one of the most difficult parts of getting a life science research company rolling. No matter how many skilled scientists you have on your team, little to nothing can get done without the proper funds.
By partnering with life science advisors, you can get your company in front of both professional investors and the public. Our sell side research analyses can help attract investors to your company. Our research is the direct conduit to a large audience of investors waiting for a company like yours to come along.
1. Communication Is Key
Our analysts are experts on your business’s stocks and the industry surrounding it. Without the right communication, however, we may not fully understand the foundation and fundamentals of your company. With this miscommunication, your analyst may not fully understand the positives and possibilities of your company. This can lead to downgraded stocks that never reach the target price. Equity research isn’t a “one and done” contract. Consistent communication between companies and the research team is a great way to achieve the best analyses.
After you set up your sell side research coverage, be sure to speak to our analysts to explain the foundations of your strategy for growth and your business model.
2. Sell Side Research Makes a Difference
Millionaire private investors aren’t the only audience for our sell side reports. Unlike buy side research, sell side research is open to the public. This way, the layman with a side venture in small-time investments can see and respond to our reports. Don’t count out the power behind many small investments! They can often come to overpower individual large investments made by professional investors.
Sell side research has an impact on stocks in the short-term. Investors (especially nonprofessionals) place a lot of trust in sell side equity research. Don’t count out sell side research as just another business expense. The proper relationship and communication with your equity research analyst team can lead to huge success.
3. Analyst Ratings Can Be Negative, But They Can Change
Getting back a downgraded rating on a report can be an awful feeling. We’ve been there. We understand how difficult it can be, but it’s not the analyst’s fault. Unforeseen circumstances and situations out of your control can lead to a stock downgrade. It’s not necessarily the fault of your business or something you did incorrectly.
Analysts are people too, and we’re an important part of the team leading your business to success. Finger pointing and assigning blame for a downgraded stock can cause tension. A strained relationship between your company and our analysts is inevitably negative. This results in faulty communication, possibly leading to further downgrading.
If your stock gets downgraded, try to address it as the need for more open communication. Work to better educate your analyst on your company’s foundation and business models. With a positive attitude and open communication, you have a much better chance of getting to your target price.
4. Sell Side Researchers Offer More Than Just Stock Reports
Being a sell side researcher means that our analysts are experts in your industry. While this is crucial for understanding your company’s place in the industry and its potential, it’s also helpful for ascertaining how the industry sees your company.
Talk to your analyst about how other companies in the industry see your business. Does the industry seem to be headed in a specific direction? How can your business capitalize on the new focus of the industry? What opinions do the investment community have about your business? Are you well respected, or are investors skeptical about your success?
Your analyst is your partner in success. Capitalize on their knowledge of the industry to get the most out of your sell side research coverage.
5. Each Analyst Has Unique Strengths
Your report isn’t written by a robot cranking out numbers. It’s important to remember that behind every report, there’s a person investigating your company. Each analyst has unique skills and network connections. Some analysts excel at establishing institutional relationships that can benefit your company; others may be focused on the scope at which their reports get distributed.
By talking to your equity research team, you can expand on your analyst’s strengths. Involving your analyst as a team member rather than an employee can lead to new opportunities and improved connections.