Job Responsibilities
* Maintained financial models based on company filings and
macroeconomic environment (this task was the bulk of my
responsibilities during quarterly earnings seasons). Typically,
the week prior to earnings season, I would spend about 40% of my
time preparing models to be updated and updating the quarterly
comparison sheets for my senior analyst.
* Built financial models based on company filings and
macroeconomic environment. When I was not preparing for earnings
or doing some of the maintenance work required, I was building
models from scratch for initiations of coverage; the historic
financial statements (derived from SEC filings) typically took a
full day to input and inter-link, and the revenues page (which
uses company operating data to feed into the income statement)
could take anywhere from two complete days to five complete days
to build properly. Finally, when projecting earnings, future
cash flows, etc. I had to pore over conference call transcripts
and, in some instances, get on the phone with the subject
company's CFO to get clarity on any issues.
* Wrote company-specific research reports, industry reports, and
initiation reports. This was a very significant portion of my
workload; I would say about 60%. Every other day there was, at
the very least, a sales release or some other event that
required the analyst's comment. For example, a company releases
a monthly sales update for all of its units in the United
States. This sales release is the third consecutive release of
negative sales trends; thus, there may be a problem in the core
business (the analyst then gets on the phone with the company to
see where the problem is in addition to evaluating macroeconomic
factors (e.g. gas prices) that may have played a role in an
otherwise intact core business). Company-specific write-ups
vary in length from the short and sweet one-pager to the
abhorrently long initiation-of-coverage report (10-25 pages).
Every quarter, we wrote at least a two to three page brief on
each company detailing quarterly earnings releases (some
analysts also do quarterly earnings previews). Industry reports
were at least every three to six months, and initiation-of-
coverage reports were dependent upon the analyst's space (some
people were initiating every month, it seemed). Writing, in
general, is something that I expected to do every day at work
for at least a few hours.
* Valued companies using sum-of-the-parts and/or DCF analysis.
When preparing initiation reports or when building a model from
scratch, one can expect to do some valuation work; however,
realistically, this was not a terrificaly significant portion of
my responsibilities. I would say I did this two or three times
over a six-month period (though I did use valuation multiples on
a daily basis).
* Extrapolated and evaluated data from proprietary market data
source. There was tons of data mining, manipulation, and
management to be done in this role. Excel skills were essential;
there were days when I received spreadsheets that were several
megabytes in size, filled with dozens of tabs of data, and I
would have to sift through the data to extrapolate the valauble
information. In one instance, a client requested a PowerPoint
presentation based on the content of our proprietary data source
and I spent upwards of 30 hours bringing the data together in an
aethetically pleasing presentation (in addition to performing my
other duties). Also, there are several databases that need to be
updated on a regular basis (monthly, weekly, etc.). The more
efficient I was in building macros and using software (e.g.
FactSet, Capital IQ, Bloomberg), the easier it was to keep these
things updated.
* Communicated investment recommendations to sales force,
clients. This is a great, fun part of the job that I did not get
to do until I had been working as an Associate for more than six
months. I spent about thirty minutes to an hour on the phone
with clients and sales people every morning after the morning
meeting; however, I was merely getting my senior's overflow
calls. Some Associates, who have been in the position longer,
handle a much more significant amount of this type of
communication. Also, I was required to write and distribute
internal use only emails to members of the sales force.
* Attended company investor/analyst days; interacted with high
levels of company management. Again, this was a great function
of the position. Basically, I was able to fill in for my senior
after I had been at the firm for a while. Investor days,
lunching with CEOs, and interacting with other analysts all made
for great exposure and great experience. This activity was rare,
but again, those who have been Associates for two years or so
participate in these types of activities.
* Monitored industry and market news using Lexis-Nexis and
Google. This was a daily activity that, in some instances,
occupied upwards of an hour every morning. Staying on top of
newsworthy events was crucial to keeping abreast of any
significant changes to our companies.
* Presented historic financial data using charts and graphs.
This one is a real snoozer, but it is a necessary activity that
occupied a significant percentage of my time as I wrote reports
and compiled presentations for clients.
* Other tasks as assigned. At times, due to personnel shortages
I would have to undertake some administrative responsibilities
to support my senior. Answering phones, preparing expense
reports, and assembling marketing books were rare
occurrences...but I was ready to do these activities when they
needed to be done!
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Job Requirements
Typically, this firm hires people who have industry experience
and/or an MBA; however, I have seen people who only have an
undergraduate degree walk in and work incredibly hard to get
promoted. The company recognizes and rewards hard work through
its semi-annual bonuses. The company also support continuing
education (e.g. CFA, relevant schooling).
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Uppers
Generally, sell-side research positions are very intense and the learning curve
is steep. From this position, I gained a greater understanding of financial
markets and I actually saw how investors reacted to analysts' opinions. Great
learning opportunity and a great way to enhance computer skills (presumably, they
already exist to get the job), which is marketable anyway you look at it.
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Downers
Long hours and high pressure. There are days when some seniors
would come in at four in the morning, and then leave at eight at
night to catch a flight to the west coast for a meeting the next
morning. I've seen seniors yell and scream at their
subordinates; I would say that you certainly have to have the
stomach for this position (or get fortunate and find an analyst
who has a more calm approach).
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Lifestyle
My typical weekday:
Awaken at 5:00am
At work by 6:30am - 7:00am (check email, listen to morning meeting, answer
overflow calls from clients and salespeople, read news, talk to senior about the
day's activities, commence work on the day's activities)
Day's activities could include: write a company-specific brief or report, update
or build a financial model, pull data from SEC filings, sieve out information
from proprietary databases, build company-comparison spreadsheets, update
marketing book, review compliance procedures, listen to earnings conference
calls, etc.
1:00pm lunch at desk and then resume work
7:00pm - 8:00pm leave work; go for a run if the weather permits
Beyond that, I would grab dinner and then study for the CFA exam until 11:00pm
or midnight.
On weekends, I would expect to spend about eight hours in the office (dependent
upon needs) and a significant amount of time studying for the CFA
Business travel is pretty straightforward: If you fly to the West Coast and take
the red-eye back, you are expected to be back in the office shortly after you get
off your flight. I traveled a handful of times while at this firm.
Company social events are much more frequent at company headquarters; though the
satellite offices make an effort to have the occasional happy hour or two. During
Halloween, headquarters sponsors a Halloween party whereby analysts' children and
families are invited to the office, with food and drinks available to all. There
are also the typical December-holiday parties, and the company has been known to
celebrate Black History month. I suppose that ties nicely to diversity: the
company embraces ethnic diversity. I know a few gay people at the firm who did
not feel comfortable being "out" at the firm, but I wonder if they would feel
comfortable being "out" elsewhere. I am a woman and there were a few moments
where I felt uncomfortable hearing some of the men speak about women; however, I
addressed the issue with my manager and our entire group was sent to sexual
harassment sensitivity training. Point being: the company is very responsive to
welcoming folks from all walks of life. Also, the management seems to be in-tune
with their accountability on the diversity front.
Insofar as dress code, I would say that the firm adopts a casual dress code,
though it depends on your department. The research department wore collared
shirts and khakis, while the bankers appeared to be more well-dressed for obvious
reasons.
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Compensation
From what I understand, there are three "levels" of compensation
at the Associate level, though these levels are not officially
indicated in the position descriptions. This is based on
conversations with my peers:
Associate I (just received their bachelor's degree, little to no
experience) base ~ $50,000 to $60,000
Associate II (just received MBA or master's degree, non-sector
specific work experience) base ~ $70,000 to $85,000
Associate III (MBA or master's degree with several years of
financial services and/or industry-specific work experience
(e.g. engineer at oil company gets her MBA then becomes an
associate)) base ~$90000 to $110000
Bonuses are awarded twice annually; one in February and one in
August. They can be as high as 100% to 125% of the Associate's
base salary; however, it depends on performance and other
factors, like how well the firm is doing, in general.
Some associates receive commissions on the stocks traded in
their group.
401k plan is offered.
Employee stock purchase plan is offered.
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Advice to Jobseekers
It is very difficult to understand this position without
actually working it. I would suggest speaking to as many sell-
side research associates as possible to get a very full picture
of what you are getting into. Try to understand the differnece
between sell-side and buy-side (and try to explain it - this is
something that we often ask during interviews). Also, if
financial statements and company analysis do not interest you,
then this may not be the right position. I would suggest
enhancing your Excel, PowerPoint and Word skills as best you can
prior to undertaking this position. Especially Excel...the more
keyboard shortcuts you know, the faster you will be able to get
through the nitty-gritty work and into the more interesting
aspects of this position. I think that the knowledge, skills and
abilities gained from this type of position are transferable to
financial and non-financial positions beyond this role.
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