Basic Materials: Chemicals - 2007

For the previous four years, Donald Carson finished No. 1 in Chemicals/Commodity.


Donald Carson

First TeamDonald Carson

Merrill Lynch

Second Team

Sergey Vasnetsov, Lehman

Third Team

P.J. Juvekar, Citi


Kevin McCarthy, BofA; Jeffrey Zekauskas, JPMorgan

For the previous four years, Donald Carson finished No. 1 in Chemicals/Commodity. This year the sector was merged with Chemicals/Specialty, and the 53-year-old Merrill Lynch analyst finishes atop the combined category. “His specialty is the agricultural space, where he has made several good stock calls,” explains one money manager. One such call was Carson’s October 2006 buy rating on Potash Corp. of Saskatchewan, a Canadian fertilizer producer, on the expectation of higher prices after a big Russian potash mine was flooded, decreasing the world supply. By mid-September the stock had more than doubled, from a split-adjusted $42.26 to $89.01. During the same period the MSCI U.S. chemicals index gained 19.2 percent. In second place is Sergey Vasnetsov, who was No. 2 for the previous three years in Chemicals/Commodity. Clients single out the Lehman Brothers analyst’s long-standing nod to Celanese Corp., a Dallas-based industrial-plastics maker. Vasnetsov first recommended the stock in March 2005, shortly after the company’s initial public offering, on the strength of management’s cost-cutting measures. In the 12 months ended mid-September, the shares soared 99.7 percent. “He has conviction,” declares one advocate. P.J. Juvekar, who was No. 3 last year in both chemicals categories, is third. The Citi analyst “sticks his neck out on trading calls in what is not a fundamentally sexy industry,” asserts one client, citing an April 2006 upgrade of Nalco Holding Co. to buy, at $17.65, largely on the Naperville, Illinois–based water-treatment supplier’s new business strategies. By May 2007, when Juvekar downgraded it to hold on valuation, the shares had bubbled up 53.1 percent.