As stated before, the most important part of an equity analyst interview is the stock recommendation (AKA the pitch). The flow of your interview pitch should go something like this:
- My first long (or short) is stock ABC. Ask the interviewing portfolio manager if he/she knows stock ABC – if not give a 1-2 minute overview of what they do. Sometimes the PM may not know the stock and ask you to pitch another stock. (see prior post about number of stock pitches to have).
- Explain what your differentiated view is on the stock (e.g., ABC should beat Street consensus EPS estimates by at least 20% over the next year because the Street is underestimating a product cycle). Know your key stock drivers.
- Give a target price – Target price should rely predominantly on improving fundamentals (like EPS). Do not rely heavily on multiple expansion. That may come, but your recommendation should not rely on it.
Related posts:
Tips for Preparing a Stock Recommendation
Stand Out by Going the Extra Mile
Know Your Audience’s Investment Time Frame
Know the 3 Key “What Counts” Factors for Your Stock Picks
Don’t Live in the Past
Image credit: iqoncept / 123RF Stock Photo
Copyright © 2012 Kingdom Ridge Capital, LLC. All Rights Reserved. Not a Public Solicitation.
Kingdom Ridge Web Site
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.