New on shovel-stocks.com: Custom Made Equity Research
Updated: Mar 14
Democratizing access to quality, independent equity research
Today I am launching Custom Made Equity Research. The first commercial service on shovel-stocks. This service will give you exclusive access to a bespoke research report written specifically for you! By offering this service, I am making it possible for retail/individual and institutional investors to hire me as an equity researcher. Retail, the type of investors that usually would not have access to this type of service, will now have the option to leverage independent equity research for their investment decisions. Moreover, as I am a truly independent research analyst and don't have any conflict of interest, you can expect an unbiased analysis from me. During the last 11 years I have researched & analyzed more than 1,000 companies from multiple sectors & industries. Get a head start and tap into my experience. I have already done the work and can break down the thesis for you in a detailed report!
In this blog post I will cover why I started my first commercial service, why I decided to offer Custom Made Equity Research and why I decided against a subscription business model.
Finding the missing piece of the puzzle
On my blog I only write about stocks I hold myself. That is one of the reasons I can offer the blog completely free of charge. However, there could be instances where you would value my point of view on a company that you are considering investing in. Even though you will likely already have done some research, having access to an additional resource like myself, will help you "find the missing piece of the puzzle".
That is the reason I am launching my commercial "Custom Made Equity Research" service today! This service will give you exclusive access to a bespoke research report on a company of your choice, written specifically for you!
The cost, value & access to equity research
"Equity research can help to highlight opportunities for investment that may otherwise be less visible. Research can provide investors with a valuable consolidated source of information not found in a company’s own financial reporting—offering a second opinion that can support or challenge a firm’s own claims about its future prospects." Reinder Van Dijk
According to Bloomberg Professional Services, prices for high quality equity research vary but are well above six figures per annum.
Barclays Plc may charge $455,000 for its “gold” equity research
Credit Agricole SA’s priciest analyst package will start at $137,000
Nomura Holdings Inc. quoted $134,000 for premium research
At these prices retail or individual investors usually don't have access to equity research. The Bloomberg article also gives insight into why the amount of high quality equity research has declined since 2018. Before the new MiFID II regulation came into effect in January 2018, institutional investors received research reports as part of an added services package they paid fees for. MiFID II forced banks and brokers to unbundle these added services. This in turn led to the decision of banks/brokers to either raise prices for research or to not offer specific research reports anymore.
In addition, the amount of publicly available equity research on microcap / small cap stocks is very limited. This is a shame because research reports can help you build conviction in the investment case for the company in question. The stock market can be very volatile and multi baggers usually retract by 30-50% at any given time during a multi year holding period. When experiencing those draw downs it is important to have something at hand, to look back on, to confirm the fundamentals are still in tact.
An honest research report that also highlights potential bearish scenarios is very valuable as well, because it can prevent you from experiencing losses, and more importantly high opportunity costs.
Above considerations led me to the conclusion that there is a market gap for bespoke, high quality equity research focused on microcap / small cap stocks. This brings us to the question: What is the best business model to offer such service? Subscription or a one off fee?
Why I am offering pay-as-you-go vs a subscription
Subscriptions seem ubiquitous nowadays. Going forward consumers will think twice about which service they are willing to be locked in to for 12 months and which not.
An example in this article about "10 SAAS Companies Who Rocked the Freemium Model" inspired me to choose a pay-as-you-go model. The CEO of the free blogging software WordPress says "We only charge for the things that are really hard to do. The assumption being that customers will think “this is hard, this is expensive, and I'm willing to pay for it". The takeaway is that there are always readers of the blog that will never pay for a service, regardless of its value and that is fine for me. However, there are also readers who are willing to pay for things to be done that are outside of their area of expertise.
On my blog I already offer very high value equity research articles completely free of charge. My intention is to keep it this way. Not everybody is willing to pay a monthly fee for a stock tip newsletter/blog number 705,980. A freemium model will be the best way for me to grow my audience, offer them value and also monetize those services that offer additional value at a reasonable price.
I think the option to get access to a research report, about a stock that you are interested in at that time, specifically created for you, offers great value. While a small monthly subscription is fine for some services and might sound low price, it could also lead to you paying for articles on stocks that you are not interested in. Ultimately this would lead to cancellations. In addition, my writing has a focus on quality over quantity. Writing multiple articles every month to justify a monthly fee will not be sustainable over longer periods of time, without a drop in quality.
What is included in this service offering?
The "Custom Made Equity Research" service will give you exclusive access to a bespoke research report written specifically for you. Exclusive access means that you will receive the research article in pdf format and will be granted the licence for exclusive access for 3 or 6 months. I reserve the right to publish an updated version of the article on the shovel-stocks blog, after the 3/6 months period. This doesn't mean that I will publish the article, but I have the option to. I chose this setup in order to not be restricted regarding future content for my blog. The exclusivity option is fair for both sides and you as a customer can choose which exclusivity level fits you best.
The content of the article includes (not a complete list):
Qualitative analysis of the requested company
Macro view on the market
Share structure & financials
Other relevant factors
Rating (bearish, neutral, bullish)
The stocks I am offering this service for are similar to the ones I featured on my blog and should have the following characteristics:
Microcap or small cap: market cap of $10M - $2bn
Listed on a liquid and easily accessible exchange like NASDAQ, NYSE, TSX-V, CSX, FSE, LSE, ASX,....
Relevant company documents/website available in English or German
I have not written about or mentioned the stock in one of my published articles
It should not be a stock that is already widely discussed and hundreds of seekingalpha articles are already published about it
Get a head start by tapping into my experience
During my 11 year tenure as Strategic Account Executive at international companies like Citrix, Teradata & Salesforce.com, I have researched & analyzed more than 1,000 companies from multiple sectors & industries. Moreover, I did not only research the companies online, but also visited them and led negotiations for 6-7 figure deals with their C-suite.
My experience is rounded off by a BSc in Economics & Business Administration and a MSc in Marketing. I have many years experience in investing in publicly traded companies and currently I am a full time independent, private investor. This ensures my analysis is unbiased and no ulterior motives are in the way of your returns.
During the last 11 years I have gained experiences in a wide variety of sectors & industries ranging from cloud computing to life sciences, commodities, battery metals, energy, and precious metals.
As mentioned above, I decided against a subscription model and will offer this service via the popular pay-as-you-go model. This way you can receive exactly what you want and at the price you are willing to pay instead of having to pay every month, even though I might not write about the stock that you are most interested in.
Who is this new service for?
Would you order such an article, if you are just planning to invest $ 1,500 in a stock? Most likely not. Based on the pricing, I think the audience that will take advantage of this offering are:
Retail investors / Individual investors with sufficient funds, but limited time & resources at hand. It can be tough to get an edge, when investing in a sector that is new to you.
High-net-worth individuals, family office operators, small institutions, brokers, hedge funds and media companies, looking for a contributor or an option to outsource qualitative equity research
Investors who have done some research on the stock but need the missing piece of the puzzle
Investors aiming to invest $ 10K or more in a single stock (over time in increments, for example) and lack the time to do a deeper dive or are not knowledgeable in the sector.
Investors starting in microcap / small cap investing
Investors valuing my point of view
Get a head start by tapping into my experience. I have already done the work and can break down the thesis for you in a detailed report!