second team Pankaj Patel Credit Suisse
third team François Trahan ISI
Michael Goldstein claims the top prize for a third straight year. The 54-year-old Empirical Research analyst, who is also No. 2 in Portfolio Strategy, “always manages to stay ahead of the curve,” marvels one backer. Goldstein told clients in August 2008 that global cyclicals such as metals and energy, which had been fueling stock market momentum, had gotten ahead of themselves and were poised to collapse. He predicted they would underperform the broad market through the end of the year, and he was right. By December 31 metals and energy stocks had trailed the broad market by 29.4 and 4.1 percentage points, respectively. In January he reversed course with a valuation-driven long-term buy recommendation on the sectors.
Advancing from third place to second is Pankaj Patel of Credit Suisse; he’s also No. 3 in Small Companies. “His tools and models are accessible to the reader and very intuitive,” says one advocate. In December, Patel created a basket of 22 stocks chosen according to the principles of legendary investor Warren Buffett, who topped Forbes’s list of the world’s richest people last year. Criteria included a return on equity greater than 15 percent and a debt-to-equity ratio of less than 50 percent. By late August, Patel’s basket of stocks had outperformed the broad market by 12 percentage points.
ISI Group’s François Trahan advances from runner-up to third; he is also No. 1 in Portfolio Strategy. Drawing on data going back to 1985, Trahan told investors in March that signals pointed to the beginning of a bull market, and he identified stocks in each sector likely to outperform. Among the winners he highlighted were New York–based cosmetics manufacturer Avon Products and clothing retailer Gap of San Francisco, which led their respective sectors by 46.5 and 20.9 percentage points, through August.
Click here to see the All-America Research Team rankings.
