I've recently been diving into the release of Gemini 2.5 Pro and using Google Deep Research to do analysis on small, under-followed companies that pop up in my screens and rankings that don't get much analyst coverage or timely articles on public sites like Seeking Alpha. I personally am enjoying the Google platform because it's very affordable ($20 a month AI Advanced account to access Gemini Pro) and the ability to convert the output into a quick 5 minute conversational podcast format that I can listen to while attending to other tasks.
I thought I would share the prompt I developed with the community in case anyone feels like they would get any benefit from it, and feel free to provide feedback or suggest any improvements. Many of you are probably much better versed in prompting techniques than I. I'm not really using it in any real world investment decisions. It's nice to get some background on these underfollowed companies, particularly microcaps, and get a qualitative narrative behind what your models might be seeing in the fundamentals (particularly what might be driving any potential turnaround story on a cheap, unloved stock). Basically, I just generally just utilize this to create a LLM generated up to date Seeking Alpha write up that I would like to read on all my holdings but usually doesn't exist. .
Act as an senior equity research analyst. Do a deep dive into the listed company ___________ Ticker: _______ Use any publicly available information. I want to know the company's prospects for the next 12 months and how it will effect stock price. Custom instructions: Stick to specific facts. Do not generalize. Fact check your own work and make edits as needed.
(1) Find core business operations, including its main products/services, key markets, and revenue streams, using information from its official website and latest annual report (10-K).
(2) Analyze financial health over the past 3-5 years and the most recent quarters by examining specific metrics from its SEC filings (10-K, 10-Q):
(a) Revenue growth trends
(b) Profitability margins (gross, operating, net)
(c) Cash flow generation (operating, investing, financing)
(d) Balance sheet strength (debt-to-equity ratio, current ratio)
(3) Identify main competitors and evaluate its competitive positioning within the industry, looking for specific market share data (if available) and comparing key operational or financial metrics.
(4) Research the prevailing trends, growth forecasts, and potential headwinds within the company's primary industry for the next 12 months, citing data from reputable industry reports or financial news sources.
(5) Review recent news, including press releases, earnings call transcripts, investor presentations, and any significant corporate actions (e.g., M&A, divestitures, major contracts) announced in the last year.
(6) Assess the company's stated strategic priorities and growth initiatives for the upcoming year as outlined by management in recent communications.
(7) Find the current consensus analyst ratings, earnings per share (EPS) estimates, and average stock price targets for the next 12 months from financial data aggregators.
(8) Synthesize the collected factual data to identify specific potential catalysts (e.g., new product launches, market expansion, cost efficiencies) and risks (e.g., competitive pressure, regulatory changes, macroeconomic factors) facing the company in the next 12 months that could influence its financial performance and stock valuation.
(9) Assess whether you are comfortable with the company’s current valuation. Determine if there is enough margin of safety between the intrinsic value and the current market price. Evaluate whether the company is trading at a premium or discount relative to its historical multiples (e.g., P/E, P/B, EV/EBITDA). Consider if the decision to hold this position is based purely on growth potential rather than a solid valuation or risk-adjusted return. Conclude with an assessment of the valuation’s attractiveness and alignment with your investment strategy.
(10) Investigate if there is a potential catalyst that could trigger a re-rating of the business. Consider possible drivers such as a rapid improvement in revenues/profits, the disposal of subsidiaries or assets, mergers and acquisitions (M&A), or a new product launch that could lead to multiple or earnings expansion.
(11) Evaluate whether there are opportunities for operational improvements or unlocking hidden value, such as increasing efficiency, divesting non-core assets, or leveraging untapped market potential. Conclude with an assessment of how these catalysts and value opportunities could impact the business's growth and valuation in the near and long term.
(12) Conclude with an assessment of your exit strategy and whether it provides a clear and disciplined approach to managing the investment. Identify the primary business and financial risks associated with the investment. Consider what could go wrong in terms of operational, market, or financial performance. Evaluate in what situations the investment thesis would no longer hold true or be invalidated. Assess whether there are any regulatory or geopolitical risks that could negatively impact the business. Reflect on any potential red flags or concerns you may be overlooking, and explain why you are choosing to disregard them. Conclude with a clear understanding of the risks involved and whether they are appropriately mitigated or accounted for in your investment decision.
(13) Summarize the investment thesis in five sentences or less, clearly articulating the rationale behind the investment. Assess the confidence level in the investment thesis, considering factors such as risk, reward potential, and market conditions. Evaluate whether any common psychological biases (e.g., overconfidence, confirmation bias) may be influencing the investment thesis or decision-making process. Conclude with an assessment of the thesis’s clarity, confidence level, and whether it has been objectively considered. Finally on a scale of 1 to 100, how would you rank this company as a 12 month investment. 100 for the highest possible positive conviction and 1 for the lowest conviction.