Why is Equity Research Important?

Published On December 26, 2019
In Investment Research, Blog Archives

The equity market is considered to be one of the most unreliable investment markets. This is the reason why laymen shy away from investing their money in equity shares. While there is a possibility of high profits with equity, there are also chances for losing one’s hard-earned money. The volatility of the stock market is the key reason why people have been relying on equity research in the recent times.

What is Equity Research?

Equity research is done by analysts who analyze the companies that have been listed in the stock exchange for trading purposes. The analysts research about the company’s equity shares based on different parameters to come up with reports that predict the company’s share rates in the near future. These reports help people to make investments cautiously.

How is Equity Research Done?

Equity research is done by using several methods and parameters that help analysts to know the current stock situation of a particular company. Here are some of the ways used for researching the equity market:

  • Economic and industry parameters like growth rates and GDP are considered.
  • The analysis process also includes the company’s past performances.
  • Fundamental analysis at industrial, economic and corporate level is done, where cash flows, balance sheets, income statements, etc. are also considered.
  • Equity valuation models that include relative valuations, discounted cash flows, etc. are also subject to analysis.
  • Technical analysis that includes studying graphs and charts to gauge stock prices are also a part of the research process.

Importance of Equity Research

Equity market is a volatile market, where the share price of a company can go high and low overnight. Equity research acts like an investment guidance as it gives people an insight into the trends and fluctuations happening in the stock market.

Analysts do critical analysis of a company’s stock to know about their right or fair value. Through research, equity analysts strive to bring the real picture of the company’s affairs. Equity research brings forth findings of the growth and decline of the company, making it possible for the investors to gauge what the future of the company stocks is.

In short, equity research has made even the most volatile stock prices predictable. With the help of the equity market investment research services, it becomes possible for investors to make informative decisions before investing in stocks and thus receive the best possible returns for their investments.

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SGA Digital Marketing Team
SGA Digital Marketing Team
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