Investment Banking Data Analysis Tools

By Matt Krantz, Robert R. Johnson

EDGAR gives you just the facts. The SEC puts almost no effort into getting the data into a format that’s easy for investment bankers to analyze. And that’s by design. EDGAR is built to simply be a central storage place for all the documents filed by companies and investors.

Investment bankers need much more than comes out of EDGAR. Reading a regulatory filing word by word like a book isn’t how analysis is done. The numbers must be examined and dissected, and making this happen takes some data mining.

But before you start building complex mathematical formulas and spreadsheets, it’s always a good idea to see if you’re able to get the data you need from a pre-built system. Here are examples from three of the most dominant players in the business that do much of the analysis of EDGAR data:

  • Bloomberg: If knowledge is power on Wall Street, then investment bankers’ go-to weapon is their Bloomberg machine. These devices, which you see perched on many investment bankers’ desks, pull financial data from thousands of sources, including from EDGAR. All the data are organized and accessible with just a few keystrokes.

    You can find data about the specific company you’re examining, but also the stock and bond data of the company’s competitors. If you work at a firm that has Bloomberg access, you’ll most likely be able to extract the data you need there.

  • S&P Capital IQ: Standard & Poor’s is a household name, but when it comes to ranking the creditworthiness of companies and governments, it’s becoming more well known when it comes to data services.

    S&P Capital IQ is a web-based financial information system that provides in-depth access to just about anything you’d want to know about companies. The system calculates various financial ratios. S&P Capital IQ is especially good at pulling data out of EDGAR and presenting it in a way that makes analysis easy.

  • Thomson Reuters: This data service has a long history of being invaluable for investment bankers, especially in Europe. It, too, contains a wealth of knowledge from companies, and if your office has access to the system, you can save yourself lots of time by pulling the data out here.

Keep in mind that Bloomberg, S&P Capital IQ, and Thomson Reuters are all, first and foremost, professional products. The subscription fees for these services are pretty steep, because they’re not designed for consumer use. But if you work at a bank, brokerage firm, or investment banking operation, most likely you can gain access to one of these three systems.

Even if your workplace doesn’t have Bloomberg or Thomson Reuters access, you can still gain from their wealth of information. Both Bloomberg and Thomson Reuters operate robust public websites that contain a good helping of aggregated data from EDGAR.

Thomson Reuters’s website is particularly good at providing investors with a bevy of commonly used financial ratios. You can save yourself a ton of time by looking up financial ratios on Thomson Reuters’s site as opposed to calculating them yourself.