Neil McMahon
Neil McMahon Sanford C. Bernstein
SECOND TEAM
Arjun Narayana Murti Goldman Sachs
THIRD TEAM
Paul Sankey Deutsche
RUNNERS-UP
Paul Cheng Barclays ; Mark Flannery Credit Suisse
After spending last year in third place, Neil McMahon of Sanford C. Bernstein & Co. climbs back to the top. The London-based analyst “does really in-depth research on areas others don’t look at,” says one client, citing McMahon’s studies of time-lapse satellite images to monitor Saudi Arabian oil production. Declining demand prompted the 39-year-old analyst to downgrade Houston-based diversified giant ConocoPhillips to sell in September 2007. One year later its shares had fallen 9.4 percent, compared with a 2.5 percent loss for the sector. Arjun Narayana Murti of Goldman, Sachs & Co. rises from runner-up to second. “He was the first analyst to correctly predict that the oil price would go to $100 — everyone else thought he was crazy,” recalls one grateful investor. Known more for his commodities price calls than individual stock picks, Murti published a report in September 2007 predicting that the price of oil, then at $60 a barrel, would surge to $150 a barrel, and in March predicted it would rise to $200 a barrel. Oil prices peaked at $147.27 in July before starting to slide and hovered around $100 a barrel in late September, but Murti remains bullish. Paul Sankey, who advances from runner-up to third, is “frank and outspoken, with a cynic’s eye for ridiculousness,” according to one money manager. In January the Deutsche Bank Securities analyst steered investors toward midsize oil companies such as New York’s Hess Corp. and Los Angeles–based Occidental Petroleum Corp., on the belief that rising oil prices would have a greater impact on smaller companies. From Sankey’s upgrade through mid-September, the stocks had outperformed the sector by 9.9 and 6.4 percentage points, respectively.
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