2015 All-America Research Team: Consumer Finance, No. 1: Sanjay Sakhrani
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2015 All-America Research Team: Consumer Finance, No. 1: Sanjay Sakhrani

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A combination of astuteness and accuracy sets Sanjay Sakhrani apart, investors says, and helps propel the Keefe, Bruyette & Woods analyst to a fourth straight No. 1 showing.

< The 2015 All-America Research Team

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Sanjay Sakhrani

Keefe, Bruyette & Woods

First-Place Appearances: 4


Total Appearances: 5


Analyst Debut: 2011


A combination of astuteness and accuracy sets Sanjay Sakhrani apart, investors says, and helps propel the Keefe, Bruyette & Woods analyst to a fourth straight No. 1 showing. Specifically, one fund manager reports, ”he has been bullish on this sector for as long as I can remember, which has turned out to be the right call, as his stocks continue to do well.” Although U.S. consumer finance shares fell 15.2 percent during the 12 months through mid-September, lagging the broad market by 2.6 percentage points, Sakhrani maintains his positive stance. The group “should benefit on the back of potential consumer deleveraging, strong credit quality and the continued move of consumers making payments with electronic forms like cards,” the 40-year-old analyst explains explains. Accelerating domestic and global expansion could provide additional upside, he adds, because “despite the relative strength in the U.S., growth has been fairly tepid, and international macroeconomic weakness has been a headwind.” Favorite names in this space are New York–based American Express Co., the country’s leading credit card issuer; and Visa, the world’s largest payments system operator, which is headquartered in Foster City, California. Despite several recent setbacks for American Express (such as a reduction in earnings growth targets for 2015 and 2016), Sakhrani explains that “current valuation levels vastly discount the strong underlying fundamentals of a company that produces at least mid-single-digit top-line growth and low double-digit earnings, returns over 100 percent of earnings to shareholders and produces at least mid-20 percent returns on equity while arguably being overcapitalized.” He assigns the stock a price target of $95, which suggests a 25.1 percent premium to its value in mid-September. Visa, he says, “benefits from strong secular tailwinds, solid operating leverage potential and very strong capital management,” with long-term gains coming from a possible Visa Europe acquisition and a potential opening by China of its payments system. The shares traded at $69.79 in mid-September; Sakhrani believes that a price of $85 is justified.



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