The 2013 All-America Research Team: Retailing/Hardlines, No. 1: Gregory Melich

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Gregory Melich
ISI Group

First-place appearances: 2

Total appearances: 3

Analyst debut: 2011

Capturing the top honors for a second year in a row is Gregory Melich of ISI Group. “Greg has outstanding detail on industry factors and their impact on companies under coverage,” according to one pleased money manager. “He draws excellent conclusions from market factors,” as well, the money manager contends. One such broader consideration the 43-year-old analyst has dedicated significant time to investigating is the impact of mobile commerce, also known as m-commerce, on the names in his sector portfolio. Melich has concluded that investors should prefer companies that cultivate allegiance among their customer bases, such as Issaquah, Washington–based retailer Costco Wholesale Corp. “The membership model builds loyalty, a critical edge in an m-commerce world,” Melich reasons. In addition, his proprietary research suggested that membership-fee increases would boost loyalty and renewal rates, which in turn would result in stronger-than-expected earnings, cash flow and share price. For these reasons, he upgraded Costco’s stock from neutral to buy in May 2012, at $75.87. By the end of August 2013, the shares had bounded ahead by 47.4 percent, to $111.87, and outdistanced the sector by 15.2 percentage points. — Katie Gilbert

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