< The 2014 All-America Research Team
Total Appearances: 12
Analyst Debut: 2003ISI Group’s David Zion reclaims the top spot on this roster after five years in second place. The 45-year-old researcher provides “another angle on what makes an investment attractive,” one portfolio manager reports, by detailing the view behind performance numbers. “Whether there may be a cash flow problem at a company, for example, or if financials have a legitimate reason for large loan-loss allowances,” the investors notes, “he can tell you in a heartbeat if there are signs of strength or concern.” Zion is advising clients that so-called inversions — the practice whereby U.S. corporations relocate their headquarters, primarily via cross-border mergers with entities in lower-tax countries, to reduce their tax liabilities — will continue to be a key concern through 2015. “As more and more companies have packed up and left the U.S., or proposed to do so as in the case of Pfizer and Walgreen [Co.],” he notes, “the political noise has continued to grow louder and louder.” Indeed, the issue has become a political football, with congressional Democrats issuing proposals that would crack down on use of the strategy and the U.S. Treasury investigating whether it can constrain companies from decamping or otherwise render the activity less attractive. Zion forecasts that inversion could be a postelection catalyst for comprehensive tax reform, which would likely “make it harder to shift profits around the globe — including stripping profits from the U.S. — to low- or no-tax countries,” he says. Winners in such a scenario would be domestic companies in the consumer sectors that currently have high tax rates, he projects. Losers would include those multinational companies in the health care and technology spaces, for example, with low tax rates.