Channel Checking

Channel Checking

The aim of a channel check is to obtain information across a company’s supply chain, in order to analyse a company’s stock.

The information must not be sourced from the company being analysed, so there is no chance the company may be portrayed as performing better than it actually is.

Channel checking is often done before someone makes an investment in a business. For example, if one wanted to find out how a supermarket is performing, an analyst may carry out a channel check in order to gain information directly from all sources.

The analyst may contact the suppliers to find out if the orders have increased or decreased over a period of time.

Once all the information has been gathered from all the sources, it’s the analyst’s job to predict how a company may perform in the other quarters.

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