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Buy-Side Analyst

Last updated 30th Sep 2022
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Definition

The term buy-side analyst refers to an individual that evaluates the future earnings and investment quality of companies on behalf of their clients. Buy-side analysts will normally work for hedge funds, pension plans, mutual funds, high net-worth individuals, and other types of non-brokerage investment firms.

Explanation

Also known as buy-siders, buy-side analysts identify investment opportunities that will increase the net worth of a fund. They do this by providing research reports and investment recommendations to their company's money managers. Buy-side reports are not available for purchase, and their approach to valuing a security is not made public.

Sell-Side versus Buy-Side Analysts

The objective of sell-side analysts is to provide valuable insights into a security so the buy-side investor purchases the security from the brokerage firm that employs them. Ultimately, the service they provide is the marketing of securities. Sell-side analysts also specialize in a specific industry and track a limited number of securities.

Buy-side analysts use the information provided by sell-side analysts; combining this information with their own proprietary models. Portfolio managers would then use the buy-side analyst's research reports when making their buy and sell decisions. Buy-side analysts don't specialize to the degree seen on the sell-side. A buy-side analyst might specialize in the securities of a segment of the economy. For example, they might specialize in analyzing technology stocks.

Related Terms

accumulate, sell-side analyst, hold, underperform, strong buy, strong sell

Moneyzine Editor

Moneyzine Editor