workflow-er-sector-overview

# Equity Research: Sector Overview ## What this skill covers A comprehensive 10-15 page sector report covering market structure, competitive dynamics, performance trends, key player profiles, growth and risk drivers, and a full valuation heat map. Provides the thematic context that underpins stock-specific recommendations. ## Inputs - Sector or industry name (e.g., "US Large-Cap Technology", "European Financials") - Peer set: top 5-10 companies by market cap (or user-specified list) - Coverage scope: full sector report or targeted sub-segment ## Workflow ### Step 1 — Market landscape and competitive structure Call `comps_analysis` for the full peer group: - Market share distribution by revenue (or AUM for financials) - Herfindahl-Hirschman Index (HHI) to classify concentration: <1,500 (fragmented), 1,500-2,500 (moderate), >2,500 (concentrated) - Competitive moats analysis: scale economies, network effects, switching costs, IP/patents, regulatory barriers - Recent market share shifts (who is gaining vs losing and why) ### Step 2 — Sector performance trends Call `fmp_sector_performance` for historical data: - Absolute sector total return (1M, 3M, 6M, 1Y, 3Y) - Relative performance vs broad market benchmark (S&P 500 or regional equivalent) - Sector rotation context: early/mid/late economic cycle positioning - Beta relative to market: cyclical (beta >1) or defensive (beta <1) ### Step 3 — Key player profiling For each of the top 5-10 companies, call `fmp_company_profile` and `fmp_key_metrics`: - Revenue scale and 3-year CAGR - EBITDA margin and margin trajectory - ROIC and capital allocation track record - Management tenure and recent strategic decisions - Valuation: EV/EBITDA, P/E, EV/Revenue at current prices Present as a comparative table with all metrics standardised. ### Step 4 — Growth drivers, headwinds, and regulatory environment Structured analysis of the sector's forward outlook: **Demand drivers:** - Demographic tailwinds (ageing populations, urbanisation, workforce trends) - Technology adoption curves and disruption risk - Policy-driven demand (infrastructure spend, energy transition, defence) **Headwinds:** - Input cost sensitivity (labour, commodities, energy) - Competitive intensity: new entrants, pricing pressure, substitution risk - Cyclicality: revenue volatility vs GDP; operating leverage **Regulatory landscape:** - Current regulatory framework and pending changes - Sector-specific risks: antitrust, environmental, consumer protection - Regulatory tailwinds: subsidies, procurement, mandated adoption ### Step 5 — Valuation heat map Produce a valuation map across the sector: **EV/EBITDA ranges by sub-segment:** - Premium names (structural growers, moat leaders): EV/EBITDA range - Core / mid-tier: EV/EBITDA range - Value / discount names (cyclical, challenged): EV/EBITDA range **PEG analysis (P/E vs growth):** - Call `comps_analysis` for P/E and consensus growth rates - PEG < 1.0: potentially undervalued relative to growth; PEG > 2.0: expensive relative to growth **Historical valuation bands:** - Current EV/EBITDA vs 5-year average and standard deviation - Premium/discount to historical mean: is the sector cheap or expensive in context? ## Report structure (10-15 pages) 1. Sector snapshot (market cap, revenue, key growth rate — 1 page) 2. Competitive landscape (HHI, moat classification, market share table — 2 pages) 3. Performance trends (sector vs market, rotation context — 1 page) 4. Key player profiles (comparative table — 2-3 pages) 5. Growth drivers and headwinds (structured analysis — 2 pages) 6. Regulatory environment (current + pending — 1-2 pages) 7. Valuation heat map (EV/EBITDA by tier, PEG, historical bands — 2 pages) 8. Investment conclusions (top picks and avoids with one-line rationale) ## Output format - 10-15 pages (markdown with structured tables) - All financial metrics sourced from FMP tools with as-of date - Comps and valuation from `comps_analysis` with tool citation ## Quality gates - [ ] HHI computed from market share data — not estimated - [ ] Sector performance from `fmp_sector_performance` with date - [ ] Key player metrics from `fmp_key_metrics` — standardised to the same period - [ ] Historical valuation bands include at least 3 years of data - [ ] Valuation heat map covers all three tiers (premium / core / value) ## Related skills - `workflow-er-initiating-coverage` — single-stock deep dives within the sector context - `workflow-er-idea-screening` — quantitative screening of sector names for investment candidates - `workflow-er-morning-note` — sector rotation signals used in morning briefs