Covered Stock (Coverage)

You might have seen a guy in a suit on television talking about a stock that he “covers.” This person is paid six figures a year to watch developments at a public company and then make estimates on the firm’s financial performance when earnings season rolls around.

They’re paid to pay attention, and then be, uh.. wildly wrong four times a year.

When Wall Street analysts offer original insights on a company, it's said that the analyst is covering the stock. If they “initiate coverage,” the analyst has just begun covering the stock.

Once a quarter, when the company reports earnings, the analyst will offer price targets, recommendations on whether to buy or sell the stock, and other views on the future of the organization. It’s a great job if you can get it.