"As you move up in research, you need to develop presentation and public speaking skills, since you'll be interacting with others, ranging from sales people to clients."
Lorraine Maikis is senior director, Fundamental Equity Research Analyst, Merrill Lynch. She spoke recently with eFC writer Sam Berger.
Could you describe your career path?
My career began at Price Waterhouse. I was an auditor, having received a degree in accounting. After a few years there I wanted a change, and landed a position at Merrill Lynch. I worked as a junior analyst covering environmental services - waste management companies, for example.
When my boss moved into a management role, I took over the environmental services group. For the next four years I covered environmental stocks, heavy construction and homebuilding. Last year, my manager gave me the opportunity to switch into a larger, more interesting sector, and I've been covering specialty retail for a year now.
What's a typical day like?
There truly is no such thing as a typical day for me, which is really why I love this career. There is always something different to do, whether it's talking on the phone to company management or visiting with clients, who are investors in the sector.
In addition, I'll meet with company management and do facility tours. I rely on many industry contacts that can provide me with a different perspective, such as other retail specialists and industry experts.
I spend my time in the office reading through SEC filings and other financial documents. I also perform modeling and stock valuation. In addition, we conduct store checks. That's when we literally go to the mall and look at different retailers. We try to take note of things such as inventory levels and in-store promotions. We're concerned with how sales look within the companies we follow.
What's the skill set an equity research analyst should have?
Financial and accounting skills are essential. As analysts, we're reliant on financial models to do company and industry analyses. This includes looking at income-statement cash flows and the balance sheet to get a better picture of a company's performance and financial health. These are the criteria that impact the investment outlook for a company, and usually affect stock price.
So, you must be able to build and run models and understand stock valuation methods. Writing skills are also important because we communicate heavily with clients through our written reports.
As you move up in research, you need to develop presentation and public speaking skills, since you'll be interacting with others, ranging from sales people to clients. And, you must be comfortable handling client interaction on a daily basis.
How would an aspiring research professional get started?
A love and understanding of the markets is important. You can get it in The Wall Street Journal and Barron's, specifically insights into what's happening in the world of financial markets. The CFA program is very useful. In terms of working with investment criteria frequently, the program is helpful.