Security Analyst

Reviewed by Vineeth | Updated on Aug 27, 2020

Introduction

Security analysts are financial professionals that study and analyse several companies and industries and offer their valuation reports and research information. They also provide recommendations on the actions of buy, sell, or hold of stocks, depending on the current scenario.

Breaking Down Security Analyst

A security analyst will follow the performance of several stocks, sectors, markets, economies, and industries in operation. Future contracts cannot be considered securities as their performance does not rely on the management and the activities of other parties involved. However, options on these contracts are considered to be securities as performance is relying on third-party activities.

Analysis

Security analysts will perform technical and fundamental analysis on securities available in the market to help institutional and retail investors decide on their decisions regarding investing in such securities. The fundamental analysis is dependent on the business parameters, such as the financial statements, while the technical analysis is going to focus on momentum and price trends.

The evaluation or findings made by security analysts is going to determine if he or she is going to make sell, buy, or hold recommendations based on the trend in the financial markets. Investors, clients, or third parties are supposed to pay in order to get access to such reports prepared by the security analysts.

The analysis made on the securities will gather and interpret financial information. This information is obtained from several sources, which include financial statements that are made public through Electronic Data Gathering, Analysis, and Retrieval (EDGAR), online databases, publications, and information shared with financial analysts, researchers, and other similar individuals.

By developing financial models in the information available, the security analysts will then be able to understand the financial health and revenues aspects of a company better.