Security Analyst

A financial professional who researches equities and makes recommendations to either money managing institutions, special clients, or the general public.

It is important to differentiate from a buy-side and sell-side analyst. Security analysts usually publish their stance on a certain security and their rationale. It may be useful for investors as a reference.

Some firms have star analysts that supposedly have done well over a period of time. While many of them may be authentic, it is important to keep in mind that if you choose a winner from a thousand coin flippers, you can ultimately choose one that won by pure randomness.

Analysts that follow a stock also issue earnings estimates. A stock may fall sharply if it misses the consensus of these estimates.

A peak in the a stock often coincides with high analyst coverage and overly optimistic future projections, which is something to be aware of.

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