Part 3 – Lesson 8


When a hedge fund or mutual fund analyst is looking to learn about a new company (“get up to speed”), they will follow a process similar to the below.  Since many of these resources are not available to individual investors, we will also discuss how an individual investor can go about researching a new company.

  1. Read – Analysts will begin their process by simply reading as much as possible about the company. Read the sell-side research reports including initiation reports and recent upgrades or downgrades.  Read the 10-K filings and earnings call transcripts.  Read any industry primers that have been published by sell-side analysts.

  2. Listen to past earnings calls and presentations – One of the best ways to learn about a new company is to simply listen to the management company speak. The executive team of public companies will speak to investors at least four times a year through the quarterly earnings calls, and most public companies will speak to investors in between earnings calls at the various investor conferences.  These presentations at the investor conferences are webcast, and most public companies maintain a history of these webcasts on their investor relations webpage, which is easy to access.

  3. Talk to the sell-side – After building a base level of understanding of the company, most analysts will then hit the phones and start speaking with all the sell-side research analysts that cover the company. Since many sell-side analysts have followed the companies on their coverage list for many years, they are tremendous resource for learning about how a company’s product performs, who the competition is, pricing trends, upcoming opportunities and risks, etc.

  4. Talk to buy-side friends – Since the investment community is small, many analysts are friends with analysts at other firms who cover the same sectors. When picking up coverage of a new stock, an analyst may call a friend at another firm who has done research on the same company.  Bouncing ideas off other knowledgeable colleagues is a great way for an analyst to build on their understanding of the company and to think of issues the analyst was not previously considering.

  5. Talk to industry experts – If an analyst were doing research on Hilton, for example, that analyst may want to speak with individuals who work in the hotel industry. This may include a general manager of a hotel or a regional manager of multiple multiples.  This could help the analyst to get a better understanding of drivers that affect the hotel business, new competition, cost trends, etc.  Many investment analysts will employ the services of an expert consulting network, whereby the analyst’s firm will pay by the hour to speak to relevant industry experts (which is not cheap!).

  6. Build a preliminary financial model – An analyst may build a preliminary financial model at any point in their process. Armed with information from the sell-side, colleagues, and industry experts, an investment analyst will build their own projections for the company and come to a preliminary view on valuation.  As the analyst learns more, he or she will look to fine-tune and improve upon the accuracy of their projections.

  7. Speak with company management – One of the final steps of the research process is to reach out the management team of the company. Depending on the size of the company and the size and reputation of the investment fund, a management team may or may not choose to speak with the investor.  If provided the opportunity, the analyst may speak with the investor relations team or one of the officers of the company (CEO, CFO).  Speaking to the company management team is a great opportunity to understand management’s strategy and outlook for the company.

  8. Finalize financial model and valuation – The final step of the process is to finalize the financial model based on all the information collected. The analyst will now be able to finalize a valuation / target price for the company and decide if the company’s stock is a compelling investment.

What process can an individual investor follow?

Most individual investors will not have access to sell-side research, the sell-side analysts, and corporate management teams.  Therefore, individual investors must rely primarily on publicly available resources in their research process.  One of the best sources of information for publicly traded companies is their investor relations webpage.  To find the investor relations page, simply search in Google: “XYZ Company Investor Relations.”

Companies provide different levels of resources on the investor relations page, but at a minimum, most companies provide access to past and upcoming management presentations (webcasts), past and upcoming earnings calls (webcasts), SEC filings, and corporate slide decks.

  1. Read – Although an individual investor will not have access to sell-side research, all investors can access company filings, such as 10-K and 10-Q reports. Additionally, an investor can read earnings call transcripts or company presentations, which are often available on the investor relations webpage.

  2. Listen to past earnings calls and presentations – Access past and upcoming earnings calls and investor conference presentations on the investor relations webpage.

  3. Talk to your friends – Although individual investors may not have a large network of friends that are actively picking stocks, it is still helpful to seek out friends who have used a company’s product or service.

  4. Talk to industry experts – While individual investors are not likely to pay for expert consulting services, it is important for individual investors to seek out friends who have expertise in subject matter that is relevant to the company you are analyzing. For example, if an investor is researching Microsoft, it may be helpful to speak with friends or contacts that have a background in computer engineering / software.

  5. Build the financial model and finalize valuation – After getting up to speed on a new company, the final step is to complete the financial model and analyze how a company should be valued.

Let’s look at the investor relations homepage for Amazon (as of August 2018) to get a sense for what resources are available if you are researching Amazon.  To find the Amazon IR webpage, simply search, “Amazon Investor Relations.”

You can see from this screenshot that the IR webpage provides easy access to Amazon’s quarterly results, press releases, archives of past webcasts, and corporate presentations.  For someone new to Amazon, this is a great starting point to learn about the company.  In addition to a company’s IR webpage, individual investors can pull company filings by visiting  Between the IR webpage, the SEC webpage, and publicly available news articles, an individual investor should be able to build a working knowledge of most public companies.