The 2013 All-America Research Team: IT Hardware, No. 2: Kathryn Huberty

Morgan Stanley’s Kathryn Huberty, who climbs to second place after three years at No. 3, is “ahead of the curve on trends,” according to one advocate. Huberty covers 18 information technology hardware names and believes that “U.S. enterprise demand is improving,” she reports. “IT budget growth improved for the first time in a year in our June CIO survey. Our conversations with resellers and consultants suggest CIO mentality is shifting from cost-cutting to investing in revenue growth.” In the second quarter most technology names enjoyed increased domestic growth, the analyst adds, and the U.S. Bureau of Economic Analysis reported in June that U.S. IT capital expenditure grew faster than total business capex for the first time in three years. NetApp of Sunnyvale, California, and Miami Township, Ohio–based Teradata Corp. should be the biggest beneficiaries of this spending trend, thanks to their “nearly 50 percent revenue exposure to the U.S. enterprise and commercial markets,” she contends. In July, Huberty upgraded NetApp from equal weight to overweight for the first time in seven years, at $39.03, riding the recovery of enterprise IT expenditures and believing the data storage provider’s expected operating leverage was not reflected in consensus estimates. Six weeks later the shares had jumped 5.7 percent, to $41.54, leading the S&P 500 by 8.5 percentage points. Huberty, a second fan avers, is “thorough, responsive and good stock picker.” — Pam Baker