second team Scott Davis Morgan Stanley
third team John Inch BofA Merrill Lynch
By capturing top honors for a tenth consecutive year, Citi’s Jeffrey Sprague reaches an All-America Research Team milestone: No currently ranked equity analyst has enjoyed a longer run at No. 1. (Ed Hyman remains the grand champion, with 30 years on top in Economics.) Dubbed “the dean of the sell side” by one money manager, the Stamford, Connecticut–based analyst upgraded Tyco International from hold to buy in March, calling shares of the Switzerland-based multinational, safety-products manufacturer “alarmingly cheap” at $20.05. Through August the stock surged 58.1 percent, to $31.69, and outperformed the sector by 23.5 percentage points. Sprague, 48, “has deep, deep knowledge and is an original, independent thinker,” insists one longtime client.
After four years in the runner-up position, Scott Davis of Morgan Stanley jumps to No. 2. Hailed for “nailing the cycle,” as one investor puts it, Davis downgraded the group from equal weight to underweight in April 2008, judging valuations to be too high and earnings estimates overly optimistic. Through his July 2009 upgrade back to equal weight, largely on valuation, the Standard & Poor’s 500 industrial conglomerates index dropped 60.5 percent; by August 31 it had rallied by 17.9 percent. “Scott is the ascendant power in this space,” extols one supporter.
John Inch of BofA Merrill, who spent the past two years at No. 2, drops to No. 3. Loyalists celebrate his bullish stance on Tyco, first recommended in February 2008, at $40.60, and highlighted repeatedly since, even when the share price fell below $18, in March 2009. Although Tyco’s stock has fallen 21.9 percent since Inch’s recommendation, it still outperformed the sector by 12.7 percentage points, through August 2009. “He’s insightful and bright but had a tough year stock picking,” observes one backer.
Click here to see the All-America Research Team rankings.
