Wachovia Securities' Jennifer Fritzsche
Industry: Wireless Telecommunication Services, Diversified Telecommunication Services
Her best call of 2006: Cogent Communications Group (nasdaq: CCOI - news - people ). The "outperform" rating she held from the initiation of her coverage in March 2006 through the end of the year would have yielded shareholders a 66% price gain. Fritzsche still holds an "outperform" on this stock.
Fritzsche's insight comes from what she calls a "beat on the street" approach to stock picking. In the vein of some retail analysts, she and her staff call or visit 50 stores for each of the big four wireless carriers every quarter. From the data gleaned through her mystery shopping, she is able to draw conclusions on such items as subscriber growth and churn and get a general overview of the marketplace.
Janco Partners' Donna Jaegers
Industry: Diversified Telecommunication Services
Last year, Jaegers thought Broadwing (nasdaq: BWNG - news - people ) looked cheap relative to assets and was impressed with the small-cap telecom's sales and service improvements. Jaegers' bullish call on Broadwing netted a gain of 157% into October 2006, when Level 3 Communications (nyse: LVLT - news - people ) agreed to acquire Broadwing.
Jefferies & Co.'s Debra Bromberg
Industry: Electric Utilities, Multi-Utilities
Entergy was a top pick of Bromberg's last year and has already enjoyed a strong run. She held a "buy" rating on the stock as it gained 38% in 2006. Shares are up 26% this year through April 25.
Bromberg outperformed industry benchmarks for stock picking in all industries she had coverage in 2006. A second strong selection that helped her do that was FPL Group (nyse: FPL - news - people ). The Florida utility and merchant generator jumped 26% during the seven months in 2006 Bromberg held a "buy" on the stock.
Atlantic Equities' Christopher Hickey
Industry: Software
His calls on BEA Systems (nasdaq: BEAS ) exemplified his best work in 2006. Starting the year with an "overweight" rating, BEA stock rose 38% before his April 2006 downgrade to "neutral," after which price gains slowed to 18% during a turbulent six months. Following another demotion of BEA in October by Hickey, its shares slid 18% during the remainder of the year.
Another smart call: Last June Hickey went bullish on Adobe Systems (nasdaq: ADBE ). That pick would have rewarded investors with a 43% gain by the end of the year.
Morgan Stanley's Jennifer Pinnick
Industry: Real Estate Management & Development; Consumer Services
Pinnick's prescient "overweight" ratings on brokerages CB Richard Ellis (nyse: CBG - news - people ) and Trammell Crow (nyse: TCC - news - people ) for parts of last year helped vault her into the top 10 list for all analysts making buy-sell recommendations. Investors who followed Pinnick's timing saw gains of 40% on CB Richard Ellis and 90% on Trammell Crow.
CB Richard Ellis acquired Trammell Crow last December, and now Richard Ellis is Pinnick's No. 1 pick. She says CBRE's cost savings from the merger are being underestimated by the market, and she expects robust growth in the next year. She thinks that the stock could rise 25% over its current price.
ThinkEquity Partners' Audrey Snell
Industry: Commercial Banks, Diversified Financial Services, Consumer Finance
Snell's best pick in 2006 was First Marblehead (nyse: FMD - news - people ) with a "buy" in July. From then until the end of the year, shares of the Boston, Mass., provider of outsourcing services for private educational lending gained 72%.
Stanford Group's Erik R. Olbeter
Industry: IT Services; Aerospace & Defense
Bearish analysis
For eight months in 2006, he cautioned against shares of Dynamics Research (nasdaq: DRCO ), an Andover, Mass., company that does engineering work for defense and intelligence customers. The stock dropped 44% during that period.
Last August, he put a buy rating on DynCorp International (nyse: NCP - news - people ), at $10. By the end of the year, shares of the company, which provides governments with services ranging from narcotics eradication to vehicle maintenance, had climbed to $16.
CIBC World Markets' Daniel Gelbtuch
Industry: Semiconductors, Computers & Peripherals
At $5.05, he got in early on the price run of memory manufacturer STEC (nasdaq: STEC ) (formerly called SimpleTech). STEC showed investors a 151% gain by year's end, making it Gelbtuch's most lucrative call. On the bearish side, Gelbtuch's full-year "underperform" on Pixelworks (nasdaq: PXLW - news - people ) saved investors from the stock's 55% slide.
"A lot of controversy and misunderstanding is what I like to find," quips Gelbtuch when asked what he looks for when picking stocks.
Citigroup's Jason Bazinet
Industry: Media
One of the media stocks that Bazinet likes is Time Warner (nyse: TWX ). He's excited about the new business strategy at its AOL division of no longer charging dial-up customers for access to their content. He thinks that the company will be able to emulate the business models of Yahoo! (nasdaq: YHOO) and Google (nasdaq: GOOG) and pull in greater revenues from selling advertising on the site.
Bazinet expects operating income, or earnings before interest, taxes, depreciation and amortization (EBITDA), at AOL to remain at $2 billion after the change in strategy for AOL. But he thinks that investors will value the AOL business at a higher multiple to EBITDA, raising the value of AOL to $24 billion by 2009, from about $13 billion.
Goldman Sachs' Laura Conigliaro
Industry: Computers & Peripherals
In 2006, she earned at least four (maximum of five) stars from StarMine for earnings accuracy on almost every stock she covered.
Conigliaro works with two analysts at Goldman Sachs: David Bailey and Min Park. The group utilizes bottom-up quantitative models and performs extensive channel checks to arrive at earnings estimates. They also employ a number of different valuation metrics, depending on whether they classify a company as mature, growth or turnaround. Among the fundamentals her group uses are earnings and sales multiples, and the enterprise multiple. To calculate enterprise multiple, divide enterprise value (market value plus debt, minus cash) by earnings before interest, taxes, depreciation and amortization.
Petrie Parkman's Waqar Syed
Industry: Energy Equipment & Services
Syed looks for strong fundamentals including earnings locked into contracts and free cash flow (operating cash flow less maintenance and growth capital expenditures, minus expected dividend and debt repayment).
FTN Midwest's Jeff Davis
Industry: Commercial Banks, Thrifts & Mortgage Finance
FTN Midwest's Jeff Davis is the top earnings estimator for commercial banks and fifth-best among all analysts at estimating earnings.
Increasing credit costs and slowing deposit growth are putting pressure on net interest margins. Davis expects the stocks in his industry, as a group, to underperform the overall stock market. Davis currently has only one buy rating, on First Charter (nasdaq: FCTR)
Raymond James' James Parker
Industry: Airlines
For Parker, predicting earnings involves more than spending hours scrutinizing spreadsheets--though such analysis is also part of his job. In addition to the standard financial and industry-specific metrics, Parker thoroughly researches companies by developing management contacts and making countless calls to sources across the airlines value chain. His team reaches out to aircraft manufacturers, travel companies, airports and many other secondary sources.
Stifel Nicolaus' Christopher King
Industry: Diversified Telecommunication Services, Wireless Telecommunications Services
King says his success is due in large part to his discipline in picking stocks. "I try not to chase stocks that run a little bit, particularly in the U.S. telecom sector, where we generally view the sector as mature. There, we look for stocks that have fallen out of favor and try to determine if we can make a compelling argument that investor sentiment will change," he says.
One of his top picks is NII Holdings (nasdaq: NIHD ), formerly Nextel International, which focuses on the Latin American markets of Mexico, Brazil, Argentina and Peru. Long before it even hit the radar screens of many of his peers, King was covering the Reston, Va., company. Since King initiated a "buy" rating on the stock in December 2004, NII has gained 247%.
King is so infatuated with the Latin American story that he regularly trolls 15 to 20 Latin American news and regulatory sites each day. If he's not in his Baltimore office, there's a good chance you'll find him strolling the streets of Brazil and Mexico, where he conducts due diligence at least four times a year. He sees the most promise in these two countries--combined, they comprise more than 50% of Latin America's total wireless revenues.
"It's a region in the world that analysts don't visit a lot, so there's a lack of information and we can differentiate ourselves better there," King says. Because Latin American companies tend to be more closed off to the Street, careful channel checks pay off in this region.
Sources
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_jr_0501fritzsche.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_pm_0501jaegers.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_jr_0501hickey.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_sr_0501bazinet.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_gm_0501conigliaro.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_pm_0501syed.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_bz_0501davis.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_er_0501parkerhorne.html
http://www.forbes.com/2007/04/29/starmine-stocks-analysts-pf-ii-pf_07topanalysts-cz_er_0501king.html
http://www.forbes.com/2007/05/01/best-brokers-analysts-pf-07topanalysts-cz-sk_0501starmine_land.html
http://excellence.thomsonreuters.com/award/starmine (This site has all the details of top sell side analysts for various years)
Top Sell-Side Security Analysts and Special Methods - 2005
Top Sell-Side Security Analysts and Special Methods - 2006
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