James Janesky, managing director at Ryan Beck, has covered business services and outsourcing companies for the last 10 years.
Janesky joined the firm in April 2004 after holding research roles at Janney Montgomery Scott, Banc of America Securities, Stephens, Inc. and ABN AMRO/Chicago Corp. His recent coverage has focused on human capital services companies, healthcare-staffing companies and professional services companies.
How did you come to work in equity research?
I started as a junior analyst with the Chicago Corporation, which was later bought by ABN Amro, in Chicago. I graduated from Penn State University in 1984 and worked for six years at Macy's before I returned to business school at the University of Houston. I developed an interest in equity research between my first and second year. I did an internship with Shell Royal Pension Fund, and found it great to be interacting with executives at companies and tracking fundamentals about stocks and investments. I decided to work on the sell side, where we provide investment advice to the buy side's network of retail brokers and institutional investors.
I finished graduate school in 1993 and worked in research for several few firms before joining Ryan Beck. I was with Stephens Inc., in Little Rock, Ark, and later, Banc of America Securities in San Francisco.
Being on the sell side on the West Coast was rigorous, especially with a wife and three children. There's a lot of travel to the East Coast. So, I moved back East, where I'm from originally, and took a research position with Janney Montgomery Scott.
I have been at Ryan Beck since 2004, when the company moved into coverage of growth stocks. Over the years, larger Wall Street firms have left a void in covering small- to mid-cap names. We're filling that hole.
What's a typical day like for you?
My day can vary depending on the time of year. I typically follow 13 stocks. I spend my day doing due diligence on companies, comprised of independent work and outside communications with companies.
Earnings season is a rigorous period and occurs four times a year. We evaluate what companies have reported and evaluate the quality of those earnings. In between top line revenues and bottom line EPS there may be any number of things. We help interpret it for investors. ltimately we make decisions as to whether individuals should buy, sell or hold stock. We visit companies, conduct supportive research, speak at conferences, and attend them, too. I cover the staffing industry, including both temporary and permanent staffing companies. I follow health care staffing, professional services and consulting firms.
It's the senior analyst who typically publishes research. My first title at Stephens Inc. was as an analyst. Eventually I rose to Vice President and now am a Managing Director. On the sell side, Managing Directors don't do much different than a VP or senior analyst. I have a senior analyst and an associate analyst reporting to me.
Primarily, I am interacting with clients. I spend a lot of time on the phone and also visit clients several times a year. I interact with corporate managers and independent contacts to perform due diligence on companies. Also, I write a lot. It's the means by which we communicate new information to clients. Once we get information, we publish it in a research note.
Each day, we have a pre-market meeting and another one at 2 p.m. In the afternoon, we communicate information to our sales force, and they disseminate it to investors. I'll be on the phone talking to clients. We'll also issue a Basic Report, which runs about 15-20 pages, when we initiate coverage on a company. Occasionally, we'll publish white papers, or industry reports.
Over the past five years I've developed a significant number of contacts, both with clients and on the outside, from which to obtain information. Compared with when I first started, I now have an understanding of the market, specifically what makes stocks move, both as a group and individually.
What advice would you give to students hoping to break into the business?
I love what I do. The most important thing for anyone is to have a passion for the work. The hours are long. There is heavy travel. You have to make difficult decisions -missing birthdays and recitals. You must be passionate to be a sell-side analyst.
How about junior staffers?
For a junior analyst who hopes to advance, it's critical to understand how to communicate. Our job involves taking significant amounts of data and turning it into sound bytes, so that it will get the attention of the buy side. Portfolio managers are inundated with information, phone calls and people pushing research daily. It's important to be interested in interacting with clients as it is a regular part of the job.
What should people interested in a research career be reading?
To work in equity research, it's critical to be reading financial publications such as The Wall Street Journal and the New York Times business section. Since these publications won't cover all types of small-cap stocks, it's important to read industry publications.