Before that, it is important to mention one point:
Do not spend too much time looking for the perfect research report
The industry is good, the national policies are supportive, the company has a turning point in performance, the team is also very good, and the valuation is still very low, but there is no perfect stock like this.
When everyone agrees on a research report, we find that it always has flaws. A truly perfect research report is difficult to afford.
So how should we read research reports?#
Seller's report & Buyer's report
One type is the research report of securities companies, also known as seller's research report. Ordinary investors can browse for free online, mainly the research reports of securities companies. The reason why it is called seller's report is because the main income of securities companies comes from the commission (commission) generated by their clients' transactions.
Another type is the buyer's research report. Funds, private equity, etc. are used for self-management of funds, rather than making money from other people's transactions. Their research reports are mainly for their own use, and the content of the research reports is relatively objective.
Another type is the buyer's research report.
Funds, private equity, etc. are used for self-management of funds, rather than making money from other people's transactions. Their research reports are mainly for their own use, and the content of the research reports is relatively objective.
Another type is the buyer's research report.
Funds, private equity, etc. are used for self-management of funds, rather than making money from other people's transactions. Their research reports are mainly for their own use, and the content of the research reports is relatively objective.
What needs to be paid attention to in research reports?
- The so-called "hard data": the actual product data of the company, including product types, output, prices, etc., as well as financial data of the company, these are all factual data.
Reading brokerage reports can save you time and effort in searching for information and summarizing data.
- In-depth research reports. This type of research report will include some content introducing relevant industry policies, development prospects, and macro data. These materials are also difficult for individuals to collect.
For example, if you are researching liquor companies, you need to know the development trend of the entire liquor industry, tax policies, and the position of individual stocks in the industry.
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Research reports. Research reports are generally questions raised by institutions to companies in the near future, and the company's answers to these questions. Reading this type of report can understand the recent development of the company and the handling of focus issues.
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Industry reports. Generally speaking, there is a type of company whose impact is greater than its own changes with the changes in the industry, such as the engineering machinery industry and the securities industry. When an industry is doing well, all companies in the industry are doing well, and when the industry is not good, good companies are inevitably affected.
Therefore, reading this type of report is a window to understand macro changes in the industry!
What can be ignored?#
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In-depth research reports. This type of research report will include some content introducing relevant industry policies, development prospects, and macro data. These materials are also difficult for individuals to collect. For example, if you are researching liquor companies, you need to know the development trend of the entire liquor industry, tax policies, and the position of individual stocks in the industry.
-
Research reports. Research reports are generally questions raised by institutions to companies in the near future, and the company's answers to these questions. Reading this type of report can understand the recent development of the company and the handling of focus issues.
-
Industry reports. Generally speaking, there is a type of company whose impact is greater than its own changes with the changes in the industry, such as the engineering machinery industry and the securities industry. When an industry is doing well, all companies in the industry are doing well, and when the industry is not good, good companies are inevitably affected. Therefore, reading this type of report is a window to understand macro changes in the industry!
What can be ignored?
- Assumptions about the future growth rate of the company.
This data is the most speculative data I have seen in all reports, and in most cases, it is not accurate. Because even the company's leaders dare not guarantee this data, let alone the brokerage.
- All hypothetical data created for valuation.
The biggest characteristic of company development is uncertainty and change. Analysts at brokerage firms either believe that they know more about the company than the company's leaders, or they have to make assumptions because they have to give a valuation.
- Conclusions.
Looking back, the conclusions given in the reports are basically inaccurate. And you will find that all the evaluation prices given in the reports are a price range that is 10%-30% higher than the current price.
Key points for reading research reports provided by securities firms#
(1) Facts are more important than opinions, and objective descriptions are more important than subjective inferences.
A few research reports mainly include communication records with relevant personnel of listed companies and research reports. These reports often reveal some content that is not detailed in the information disclosure of listed companies, so they have a relatively high reference value.
(2) Pay attention to knowledge popularization.
These investment reports often provide opportunities for investors to learn industry knowledge. In addition, in research reports, macroeconomic data or industry data are often collected and organized. Investors who are interested in macroeconomics may collect them for future reference and comparison.
(3) About the reliability of the report.
From an objective perspective, in research reports, the content related to macroeconomic forecasts is relatively reliable, followed by industry research, and listed company reports are the least reliable. This is because judgments on macroeconomics are furthest from timing operations, so even if there are some negative judgments, researchers do not have too much consideration.
(4) Silence is better than sound.
If a listed company has not received attention from brokerage firms for a long time, it is likely that the company lacks attractiveness and its development prospects are worrying. After all, for many listed companies that lack attractiveness or have significant risks, researchers can choose not to issue research reports.
There is another situation,
that is, a brokerage firm that has been paying attention to a certain listed company does not issue corresponding research reports at important points in time (such as the publication of periodic reports, announcement of asset restructuring, etc.). This may indicate that the analyst believes that the company's value is significantly overestimated. However, if the analyst expresses the opinion truthfully in the research report, it is difficult to avoid offending the listed company, but they are unwilling to make controversial comments, so they choose to remain silent.
(5) Pay attention to contrarian opinions.
In view of the research reports of listed companies, the possibility of recommending selling is very small, especially in a bull market. Once such a report appears, investors should pay special attention. The fact that analysts can "take great risks" often reveals risks.
(6) The conclusion is secondary, and the process of inference is important.
Many investment reports are just for the occasion. When an important conclusion is made in the report, pay attention to whether the process of inference is credible. In short, research reports cannot replace investors' thinking, they can only provide a source of information.
(7) Read research reports continuously and compare them.
For key companies, brokerage analysts will continue to pay attention. Comparing research reports written by the same analyst for the same listed company continuously, investors will have a clearer understanding of the analyst's research ideas, value judgment orientation, research level, etc. Comparing research reports on the same issue by different analysts is more conducive to inspiring investors' thinking and taking advantage of their strengths.
(8) Pay attention to the level of analysts.
It is also advisable to pay attention to research reports from the perspective of analysts. At present, the most authoritative institution for evaluating analysts' level is the analyst ranking published annually by "New Fortune" magazine.
Eight special considerations for research reports#
- Changes in policies
- Technological innovation
- Expanding into new markets
Whether it is overseas markets or regional new markets
- Entering new fields
(such as entering modern fields from traditional fields)
- Launching new products
- Corporate transformation
(Analyze the market space, competition, and evaluate the success rate of the company)
- Look at asset injection and turning points
(See if the company has a new story)
- Look at its story and whether the logic is coherent
Research reports generally require covering the current development status of the industry, competitive landscape, benchmark company analysis, industry investment analysis, and trends.