Data sources and background work

Initiating analysis of a new company starts with understanding the business model. This is absolutely crucial, as it will help understand how changes in the operating environment affect the company and its figures later on. This also provides the basis for the company's excel modeling. The company's competitive advantages begin to emerge with a thorough understanding of the business model.

Equity Research Insights Data 1

Company materials and meetings

The most important source of information about the company is typically the prospectus because it gives a far better insight into the business than, e.g., annual reports. This is particularly true for more recent listed companies, who were listed within the past 5 years. Some companies also host really good Capital Markets Days(CMD) that shed light on the business and it is worth watching related webcasts also afterwards. Visits to the company's premises and management meetings bring concreteness to research and improve data collection. Even though publicly available information is discussed in the meetings the bonus of the visits is that the mood and culture of the management and the company can be gaged based on the prevailing atmosphere. 

Naturally interim reports, result presentations and annual reports are also important information sources. They explain how the company's strategy has progressed and how key company-specific indicators (revenue, earnings, cash flow, etc.) have developed and whether there are changes in the outlook for the rest of the year. Earnings calls are also good places to ask the management clarifying questions and the analyst can call the company outside the silent period if surprising news arise. In summary, the company is generally the best source of its own affairs, but company communications typically have an inherent optimism. Thus the company's subjective view is not sufficient for a good analyst.

Market data and competitors

The analyst should primarily seek to anticipate what the company is facing and confirm information from different sources. Forward-looking information is especially sought from market data and reports of listed peer competitors. Also, if the company has listed suppliers/subcontractors/customers their reports can reveal a starting trend turnaround in the industry . 

Good information sources in the consumer market include credit card data from banks, or market-specific data collected in certain industries like household appliances. Statistics Finland also collects extensive data.

Media and investors

Industry-specific magazines are also good information sources for example for Rapala or Angling International Sievi's KH-Koneet Review videos of professional magazines. We must be critical of information, bearing in mind that different sources have their own motives. For example, consumer companies in the media have a natural drive to promote their own sales, which you must be able to filter from the message. In recent years, our growing Investor Community has also become an important helping hand for the analyst when digging up nuggets of information for Inderes Forum. Google is also used a lot. 

My experience is that Bloomberg’s or Refinitiv’s paid tools are not much needed in general data collection. However, the exception is examination of peer companies’ valuation, where these tools are excellent with excel interfaces. This is an important part of data collection because the analyst must understand how the capital markets value other companies in the sector, what expectations these valuations are based on and whether there are major changes in these valuation levels.


For unlisted important competitors, their financial statements and press releases are also good information sources. Potential direct contacts in unlisted industry companies are also valuable. These allow for a more critical approach to how the monitored listed company performs in competition and whether there are some essential factors in the industry that the listed company does not address in its communication. There may also be experts in the industry whose views it is useful to follow. Usually, the analyst finds themselves in this position after several years of monitoring an industry. 

Observing the surrounding world

A Peter Lynch like approach to analysis, i.e. listening to the company's customers, or other stakeholders, and own experiences, also give analysis direction. For example, when I was monitoring Musti I spoke to many friends who are pet parents, as well as a couple of breeders and a veterinary nurse. Although I do not have a pet, I also visited many of the company's stores to observe and I was impressed by how many dogs were excited already at the door to enter the store. However, the sample on the consumer market is inevitably small and must therefore always be viewed critically.

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