EquityResearchHANDBOOK.docx

Analyst Handbook
Clients will pay us if we make them money or if we make them smart.

The mandments
Develop proprietary opinions based on primary research. Regularly check petitors, customers, and suppliers of each of panies. Develop unique approaches to financial analysis. Perform proprietary surveys. Avoid at all costs simply repeating guidance or management opinions unless you disagree with them.
Be proactive. Strive to be the first to market with any new idea or piece of information--if we aren’t, petitors will. All information es modity very quickly. Each analyst should be in front of the institutional sales force no fewer than two to three times per week.
Be provocative. Playing it safe turns into a loser’s game over time. It dulls our senses and results in lackluster analysis with no impact on our clients.
Follow and publish regularly on at least 12-15 institutional-quality stocks with market caps generally in the $300 million - $3 billion range and with an average daily volume greater than 200,000 shares. Write all research with an eye to the institutional market--it can always be encapsulated for the retail client.
Launch coverage on at least one new stock per quarter, pruning unproductive names from the list as required.
Maintain an above-average stock picking performance. According to a Nelson’s survey, the average Wall Street analyst is right about 55% of the time; our goal should be to be right 65%-70% of the time.
Develop a following with our top accounts. Each focus account should be contacted at least once per month. This list will be developed with the sales force and will be monitored regularly.
Cooperate with corporate finance. Every idea generated by corporate finance deserves our attention, but be sure to operate within the regulations that require a gatekeeper to be present for most conversations.
Expand our relationship with retail. Only a small amount of retail's equity business is in our names, and it can be much higher with