Communicating investment ideas.

Sell side analysts need to communicate their investment ideas to the buy side to help them make their investment decisions and this is done in a number of ways. The primary way of communicating investment ideas is through research reports. This is a summary of the analyst investment thesis. So it will explain their recommendation their valuation and why they think the market has missed prices stock. Another way of communicating investment ideas is at the morning meeting. This is a daily meeting held on the trading floor before the Market opens the analysts providing the main research ideas each day are usually given a couple of minutes to present their research to sales and trading. Sales will use this research to call their clients on the buy side that they think will be interested in the investment idea based on their knowledge of the client's investment strategy and their current positions. Traders will use this research to consider the likely impact on trading volumes and prices.

Final way for communicating investment ideas is through calls and meetings with the buy side. These meetings allow by side analysts and portfolio managers to discuss the research in more detail and sometimes request additional analysis to support the idea. The key features of research report are shown here on a mock-up of a research report for the company amazon.

Key items worth highlighting are firstly the company name and ticker. That's the stock exchange code for the company shares are shown at the top of the report. The investment rating and target price are also shown at the top analysis need to use attention grabbing headlines as so much research is published each day. The analyst needs to differentiate themselves from others and that's in the same way as journalists do this for news articles.

The front page report also usually provides a brief summary of the investment thesis. This is the 32nd roundup of all the work that the analyst has done and it helped for by side to decide whether they want to read on the front page will also show the financial and valuation metrics that support the investment thesis in particular the analyst EPS forecast for the company and the implied valuation multiples. The final item of note is that the analyst and their team are mentioned on the front page. This helps the buy side to know who to contact to discuss the research.