That first institutional trade. The moment where stock picking changes from an intellectual exercise to a commitment that could either make or lose your client money. The difference between making a trade and publishing an idea is much larger than most analysts think. We’ve been there. We know it matters.
The Analyst was founded by ex buy-siders, and even today, a significant portion of the research team, including the Founder, Head of Research, and some of our senior analysts, worked on the buy-side including as portfolio managers before joining the firm. We select our team for their passion for stocks, curiosity and tenacity in pursuing ideas.
We’ve tried to design a product and client experience that we would like to have had ourselves.
So, for example, we know that we must be able to tell the story of an idea – that’s just good communication – but we also know that not every good story is a good investment idea.
We only write about what we believe is actionable and will help our clients drive performance for their clients. We don’t simply provide amplification to investor relations talking points, we focus our initiation notes on what matters to the investment case and we only write on results when we think they are adding or detracting from the investment case. We remember being peppered with identikit results notes so try to do something different.
Our coverage model of initiating only when we think an idea is in play, covering while interesting and then dropping and moving on replicates the buy-side model. Like buy-side portfolio managers we focus on moving around the market to find the best ideas at a point in time, acknowledging whole sectors or themes may be in or out of play, without the obligation to produce maintenance content when the sector is fairly valued.
Our internal processes also seek to take the best of the buy-side model. All ideas have to pass though our funnel, and ultimately face the challenge of our ICR or investment committee review where we challenge the potential recommendation, bring together the depth of experience in the firm, and make sure we pass our quality threshold.
We recognise that the conviction end of the market is underserved, and deviating from the index requires getting the stocks that matter right. Our aim is to source stocks that we believe could double or halve.
And it also flows deeply into our culture. As a team we talk about the next big idea, we care when an idea isn’t working and we celebrate when they do.
Our performance objectives and compensation structures for our analysts are weighted towards the alpha produced.
