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Thomas Gallagher |
First TeamThomas Gallagher & team ISI Second Team Edward Garlich Jr. & team, Stanford Third Team Kim Wallace & team, Lehman Runner-Up Leslie Alperstein & team, Washington Analysis |
Thomas Gallagher leads International Strategy & Investment Group’s three-member team to first place for a fifth consecutive year. Clients praise a September 2006 report in which team member Andrew Laperriere predicted that subprime lenders would not only get into trouble, but also face a reckoning in Congress that would lead to a tighter lending environment. “He was the lone voice in the wilderness warning about the coming mortgage industry meltdown, and people were hostile to him,” recalls one supportive buy-sider. Gallagher is hailed as one of Washington’s best “Fed watchers,” accurately interpreting the Federal Reserve Board’s intentions as “dovish” ahead of its August meeting and unlikely to result in an interest rate hike. The team is also credited with its July 2006 prediction that control of the House of Representatives would shift to the Democrats in last November’s midterm elections, which it did. In second place is the 16-member Stanford Group team, led by Edward Garlich Jr. “They can tell you what’s happening on Capitol Hill, at the regulatory agencies, the Pentagon — you name it,” says one enthusiastic client. In December, Garlich and team alerted clients that the Department of Defense would shift billions in procurement funds from the vulnerable Humvee to the Mine-Resistant, Ambush-Protected, or MRAP, vehicle benefiting contractors like Armor Holdings (acquired by U.K. military transport manufacturer BAE Systems in August for $4.1 billion); in the first seven months of the year, the military purchased more than 5,000 MRAP vehicles at a cost of $2.5 billion. Also in December the team predicted Medicare would cut payments for asthma drug Xopenex, manufactured by Marlborough, Massachusetts–based pharmaceuticals outfit Sepracor, to equal reimbursement for generic albuterol, which it did in June. “They’re often the first ones to highlight an issue, and they’re not afraid to buck the consensus,” marvels one money manager. Kim Wallace and his three-member Lehman Brothers team repeat in third and win praise for knowing “what’s useful and worthwhile to the securities industry,” according to one investor. The team is credited with recognizing that industry opposition would derail bipartisan efforts in Congress to impose a 27.5 percent tariff on Chinese imports — known as the “Wal-Mart boomerang” — unless China revalued its currency. The legislation, first introduced in 2004, was finally abandoned in September 2006, when Republican Lindsay Graham of South Carolina and Democrat Charles Schumer of New York, the bill’s sponsors, agreed to allow Treasury secretary Henry Paulson Jr. time to work on a diplomatic solution to the currency valuation impasse. |
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Macro: Washington Research