Lisaveta Ramotar Talks About the One Thing You Must Know Before Reading a Company’s Equity Analysis Report

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In looking at the valuation of a public company, an equity analysis report is an important tool that helps investors determine if they should buy, hold, or sell shares of a company. These reports are written in detail by financial analysts who detail the industry, compare the company to its peers and competitors, review the management team, and analyze its past financial performance. The report ends up with a forecast for the future of the company and a recommendation of whether to buy or sell its stock. In this article, Lisaveta Ramotar looks at why an Equity Analysis Report is important to financial planning and what you need to know before you read a company’s Equity Analysis Report.

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“Many people have asked me my opinion on how a company is doing,” Lisaveta Ramotar says. Rather than use the news media as your source or to guess at the outcome, she recommends going to the company’s Equity Analysis Report. “It tells so much, and I won’t invest without it,” she says, “but there is one thing that most people don’t know.”

Lisaveta Ramotar explains, the Equity Analysis Report is probably the most important tool there is to understand how a company is doing. There are long reports that go into minute detail as well as short 1-2 page summary reports which usually focus on a small part of the company, and there are quarterly reports and other reports with different names, “but what I recommend you look at first before you look at anything else,” she explains, “is to learn who did the research.”

Lisaveta Ramotar says this small bit of information is critical to know because these reports have different uses depending on who wrote it, and there is the potential to be slightly biased. For example, there are firms like asset management companies who create reports for their portfolio managers’ use only, she says. These aren’t distributed to the general public, so it’s unlikely you’ll see these. But other firms like investment banks produce reports to go to their clients with a bias towards persuading the clients to buy, says Lisaveta Ramotar. The investment banks know that when they create a report for a public company, that company is more likely to use their bank to execute their trades for that stock. For these reasons, investment banks are more biased towards companies that they would recommend people buy stocks in.

It’s something we know as analysts, Lisa Ramotar says, but most of the people I’ve talked to aren’t aware of it. “It’s just something to keep in mind as you’re managing your portfolio.”

Lisaveta Ramotar has a Master’s Degree in Business Administration (MBA) degree from the University of Toronto and was awarded the prestigious British Chevening Scholarship for graduate studies in the United Kingdom where she was awarded a Masters In Project Analysis Finance and Investment. Lisaveta Ramotar was the General Manager of the Guyana Gold Board the country’s gold trading and regulatory body and has extensive central banking experience working as an economist at the Bank of Guyana. Lisa Ramotar is experienced in the private sector and business development in transitional economies and has extensive experience in credit and foreign exchange risk management and regulatory and policy development. She lives in Toronto, Canada where she has completed 2 out of 3 levels of the Chartered Financial Analyst program towards earning her CFA designation.