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Explain the difference between a sell-side analyst and a buy-side analyst.

Explain the difference between a sell-side analyst and a buy-side analyst.

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Expert Solution

Sell side analyst and buy side analyst both focus on the evaluation of the stock intrinsic value with reference to its current market price and its investment potential. The major difference between the sell side analyst and the buy side analyst are that sell side analyst are mostly focused on determining stocks which have reached its maximum potential value or are in overbought zone or those kinds of stock where the price might see a fall in their value and they recommend either to square off their position or take short position in intraday trading. These type of analyst mostly work with brokerage firm where they advise individual clients where as buy side analyst are focused on finding out opportunities where they can find stock which are available at good price and have good potential to grow in price in future, these kinds of stocks can be where some companies whose revenues are increasing but market price has not yet picked up, buy side analyst mostly work with large hedge funds, institutional investors or high net worth clients.

jeff jeffy answered 1 year ago
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