The 2014 All-America Research Team: Consumer Finance, No. 1: Sanjay Sakhrani

< The 2014 All-America Research TeamSanjay SakhraniKeefe, Bruyette & WoodsFirst-Place Appearances: 3

Total Appearances: 4

Analyst Debut: 2011

For a third consecutive year, Sanjay Sakhrani of Keefe, Bruyette & Woods is the buy side’s favorite researcher covering U.S. consumer finance names. Indeed, “he is the model sell-side analyst,” in the opinion of one portfolio manager. Sakhrani, 39, paints a sanguine picture for his sector. An improving domestic economy means that “consumers might be amenable to taking on leverage, which should help growth for our companies,” he says, while government stimulation of economies overseas could result in international expansion that would also be a boon to the group. He expects economic performance to at least keep pace with current rates, if not accelerate, so his top picks are growth stories. One example is Alliance Data Systems Corp. of Plano, Texas. The company’s focus on marketing and loyalty in its private label credit card business — for such retailers as J. Crew Group, Pottery Barn and Victoria’s Secret — is resonating in the marketplace, the analyst says. Consumers carry this kind of card because they are loyal to a brand, and every time they make purchases, Alliance Data can capture transaction-level information to help merchants develop marketing strategies. Companies “are looking to get more sophisticated in their approach to win business,” he explains, “and I think Alliance Data Systems is a good facilitator of that.” He also prefers San Francisco–based Visa, forecasting that the payment systems giant will benefit as the 85 percent of the world’s transactions that are still conducted on paper become electronic.