Morgan Stanley, Maxim Group Are No. 1 Stock Pickers
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Morgan Stanley, Maxim Group Are No. 1 Stock Pickers


London’s TIM Group says these research salespeople excel at alpha capture in the North American market.

The latter half of last year was a notoriously turbulent time for U.S. stocks. On August 24, for example, the Dow Jones Industrial Average plunged nearly 1,100 points in the first 5 minutes of trading, the largest intraday drop in the nearly 120-year history of the index. Concerns over what action the U.S. Federal Reserve Board might or might not take, that China’s economy was about to crash and that commodities prices would continue to plummet helped fuel the volatility.

Despite all the ups and downs, however, the market ended the year not far from where it began, with the S&P 500 index logging a loss of less than 1 percent.

It’s at times like these that equity research salespeople can prove most effective, by coming up with ways for money managers to take advantage of the turmoil and identifying opportunities that others have overlooked. Among bulge-bracket firms covering the North American market, no sales team did a better job in 2015 than the one at Morgan Stanley, which tops TIM Group’s list of the region’s top performers for a second straight year. The group generated nearly 4,300 trading ideas with an average return of 1.56 percent. J.P. Morgan’s equity sales force, whose 954 recommendations advanced 1.24 percent on average, lands in second place. At No. 3 is Credit Suisse, with just over 2,300 ideas that gained 0.62 percent.

Maxim Group is No. 1 among regional midtier and boutique brokerages, followed by Cowen and Co. in second place and then Wells Fargo Securities.

TIM Group recognizes only the top three among large firms; however, it ranks the ten best performers among the smaller brokerages. Here is the full list, with average returns included parenthetically.

• Maxim Group (2.67 percent)

• Cowen and Co. (2.57 percent)

• Wells Fargo Securities (2.39 percent)

• Dougherty & Co. (2.15 percent)*

• Wunderlich Securities (2.17 percent)

• JMP Securities (1.45 percent)

• Sidoti & Co. (1.38 percent)

• Stifel (1.11 percent)

• CLSA (1.01 percent)

• RBC Capital (0.90 percent)

Morgan Stanley lays claim to eight of the ten top-performing individuals among North American equity salespeople; UBS is home to the other two.

Paul Daniel, Morgan Stanley (4.73 percent)

John Proven, UBS (4.57 percent)

Amy Wood, Morgan Stanley (4.15 percent)

Mark Van Der Pluym, Morgan Stanley (3.30 percent)

Thomas Wigg, Morgan Stanley (2.73 percent)*

Robert Leask, Morgan Stanley (2.76 percent)

Azhar Richmond, Morgan Stanley (2.51 percent)*

Brian Wein, UBS (2.78 percent)

Melissa Scott, Morgan Stanley (2.52 percent)

Ashton Curtis, Morgan Stanley (2.00 percent)

And the winners among the midtier and boutique brokerages:

Werner Moldrem, Clarksons Platou Securities (6.46 percent)

Ryan Quade, Feltl and Co. (5.70 percent)*

Robert Prather, Vision Research (5.26 percent)*

Matthew Sheehan, Scotia Capital (6.04 percent)

Jason Dobis, Dougherty & Co. (4.41 percent)*

Simen Lunder, Clarksons Platou Securities (4.61 percent)*

Beau Volley, Wells Fargo Securities (5.68 percent)

Ryan Haney, Wells Fargo Securities (5.00 percent)

Michael Fenton, Maxim Group (4.77 percent)

Christopher Theordor, Sidoti & Co. (3.79 percent)

* Outperforms salespeople ranked lower owing to having provided a higher number of profitable calls and/or those of a longer duration.

TIM Group operates the world’s largest network connecting institutional investors with brokerages’ trading ideas. Last year nearly 275 sell-side firms submitted more than 235,000 recommendations that were transmitted to some 340 hedge funds and traditional money management firms globally. Tracking the performance of each call is imperative for the London-­based company to be able to link salespeople with proven track records to funds looking to invest in the areas that interest them most, according to William Herkelrath, New York–based head of business development.

Contributors are evaluated on the basis of idea performance, volume and consistency, among other factors, and rankings are compiled for each market that TIM Group serves: Asia, Australia and New Zealand, Europe, Japan and North America.

At Morgan Stanley, 22 equity salespeople met TIM Group’s eligibility criteria. “We focus on delivering the most relevant and actionable ideas to our clients in a manner that leverages the knowledge and perspective that each salesperson has on each particular client,” explains Nick Savone, who directs the firm’s U.S. equity research sales operations. “Our process starts with our research product, and from there we utilize the unique range of resources from across the firm to keep our salespeople armed with a deep understanding of stocks and overall markets.”

Morgan Stanley has more than 300 analysts worldwide who publish research on over 3,500 stocks. “This provides a powerful platform to service clients with differentiated ideas and content,” Savone notes.

The best recommendations incorporate fundamental analysis as well as a macro perspective from economists and strategists, he adds. “For example, in 2015 our economics team was bullish on the U.S. consumer and our U.S. equity strategy team led by Adam Parker was overweight the consumer discretionary sector,” says Savone, who works out of New York. “As a result, many of our top ideas skewed toward consumer-­oriented stocks, including Constellation Brands, Skechers and Amazon.”

Shares of Victor, New York’s Constellation Brands, a beer and wine distributor, soared 46.2 percent last year; Manhattan Beach, California, footwear manufacturer Skechers U.S.A., 64 percent; and Seattle-based online retailer, more than 117.8 percent.

“Our goal is to have salespeople partner with clients to truly understand the goals of their businesses, enabling them to provide targeted content,” Savone explains. “Each client has different needs, whether it be frequent idea generation or longer-term thematic ideas. Creating an environment of accountability is also important.”

His colleague Paul Daniel is the top performer among salespeople at bulge-bracket firms, with 70 ideas that generated an average return of 4.73 percent. Following closely behind is UBS’s John Proven, with 63 recommendations that gained 4.57 percent, on average.

“The highest-conviction ideas are ones where a misperception exists in the market around business fundamentals,” Proven says, “and where we have a differentiated view backed by UBS proprietary research.”

Case in point: Mountain View, California’s Alphabet, parent company of search engine behemoth Google. “We were bullish Alphabet throughout 2015, and the stock returned 44.5 percent,” the New York–based salesman reports. “Alphabet continues to climb a ‘wall of worry’ on concerns around long-term profitability and margins; disruptive technology; and the convergence of online advertising, e-commerce, social media and mobile. We continue to like Alphabet as the company increases its disclosure around key investments; returns cash to shareholders; and takes market share due to its scale advantages, highly valuable online properties and intellectual capital.”

Also recommended: McDonald’s Corp. “Early on we identified new CEO [Stephen] Easterbrook as a significant change agent, given his experience and success in turning around the McDonald’s U.K. business, and highlighted a number of key areas of opportunity to fix the business,” Proven recalls. “The company embarked on all-day breakfast in 2015, which drove a return to positive comps. We continue to like McDonald’s as we believe the company is in the midst of a multiyear turnaround, while investors are concerned that successes will be short-lived.”

The Oak Brook, Illinois–based fast food giant’s stock bolted 30.4 percent last year.

Proven, who holds a bachelor’s degree in finance from Indiana University, joined UBS in 2009. He spent several years in equity research covering consumer stocks before moving onto the sales team.

TIM Group compiles separate rankings for bulge-bracket and boutiques. “Our buy-side customers balance their broker lists to receive ideas from both large and small firms, as they perceive the strengths of each to be slightly different,” explains Robert Schuessler, director of analytics. “But they are less likely to be familiar with smaller houses and so often rely on us to provide introductions and popularize the success of individuals and firms within that segment.”

Many investors will undoubtedly want to meet Werner Moldrem of Clarkson Platou Securities, who is No. 1 among salespeople at midtier and boutique brokerages. He came up with 117 recommendations last year that earned an average return of 6.46 percent.

“As I work at a specialized investment bank focusing on energy and shipping, I feel my strength is my deep knowledge of these sectors,” Moldrem says. “Our internal research and information flow is my largest inspiration for ideas.”

He credits much of his success last year with being ahead of the curve in oil services. “We understood that many of the companies in the sector with high leverage were going to have a big issue refinancing debt maturities going forward,” he relates. Therefore he advocated shorting such names as Gulfmark Offshore of Houston, ­Bermuda–based Seadrill and Tidewater of New Orleans. Those stocks plunged 80.9 percent, 71.6 percent and 77.2 percent in 2015.

“Clients became comfortable on the trade even though volatility was high,” the Oslo-based salesman recalls.

Moldrem studied finance in Brisbane, Australia, and Bergen, Norway, before joining RS Platou in 2008. U.K. rival Clarkson acquired the firm last year for £281.2 million ($441 million).

“What I enjoy most about my job is that every day is different and that I’m privileged to work with some of the smartest people out there,” Moldrem says. “They’re always keeping me on my toes, as the competition is high.”

Details on TIM Group winners in other regions and in previous years can be found online at

Morgan Stanley also tops Institutional Investor’s newly expanded All-America Trading Team roster. Click here to view complete survey results.


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