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Financial Institutions: Brokers & Asset Managers 2008

An unprecedented wave of bad news has swamped this sector over the past year, with firm after firm reporting multibillion-­dollar credit-­related ­losses stemming from the mortgage market collapse, the demise of Bear Stearns Cos. last spring and its government-­­backed take­over — at $10 a share — by JPMorgan Chase & Co. in May and, last month, the bankruptcy of Lehman Brothers Holdings and the subsequent sale of its investment banking unit to Barclays, the agreed sale of Merrill Lynch & Co. to Bank of America Corp. and the conversion of Goldman, Sachs & Co. and Morgan Stanley to bank holding companies.

Charles (Brad) Hintz

Charles (Brad) Hintz

Sanford C. Bernstein

SECOND TEAM

Glenn Schorr UBS

THIRD TEAM

Guy Moszkowski Merrill Lynch

An unprecedented wave of bad news has swamped this sector over the past year, with firm after firm reporting multibillion-­dollar credit-­related ­losses stemming from the mortgage market collapse, the demise of Bear Stearns Cos. last spring and its government-­­backed take­over — at $10 a share — by JPMorgan Chase & Co. in May and, last month, the bankruptcy of Lehman Brothers Holdings and the subsequent sale of its investment banking unit to Barclays, the agreed sale of Merrill Lynch & Co. to Bank of America Corp. and the conversion of Goldman, Sachs & Co. and Morgan Stanley to bank holding companies. No analyst has done a better job of keeping investors informed of developments than Charles (Brad) Hintz, who catapults to No. 1 after having spent the past five years in third place. Clients say the Sanford C. Bernstein & Co. analyst has “more in-depth knowledge of the brokerage industry than any of his peers” and provides “a detailed understanding of how the firms manage their capital positions.” Hintz, 58, made ­only one buy recommendation this year: San Francisco’s Charles Schwab Corp. “It got ­into the mortgage market too late to be at risk,” he explains. Hintz upgraded the stock in March, at $18.95, and by mid-­September the share price had surged to $23.97, a gain of 26.5 percent that outpaced the sector by 57.9 percentage points. Hintz, a former chief financial officer at Lehman Brothers and former treasurer at Morgan Stanley, joined Sanford C. Bernstein in 2001. He earned an MBA from the University of Pennsylvania’s Wharton School in 1978. Glenn Schorr holds steady in second place for a fifth straight year. The UBS analyst wins praise for his ability to “take complicated topics and distill them into clear take­aways,” in the words of one ­money man­ager. Schorr downgraded Merrill Lynch last October, at $64.00, on the belief that the New York–based bank had “outsize exposure” to subprime mortgages. Merrill’s share price had plunged 73.4 percent, to $17.05, by the time BofA agreed to buy the firm last month for $29 a share. After four years in first place, Guy Moszkowski falls to third, but the Merrill Lynch analyst continues to impress investors with his “historical perspective on the brokers” and “ability to gain substantial access to company management teams.” Moszkowski down­graded Lehman to neutral in August 2007, at $53.32, owing to subprime mortgage concerns; the stock was down to $3.65 when the firm declared ­bankruptcy.

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