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Basic Materials: Chemicals - 2009

Zooming to first place after spending the past three years in third is P.J. Juvekar, 42.

P.J. Juvekar

P.J. Juvekar Citi

second team Kevin McCarthy BofA Merrill Lynch

third team Jeffrey Zekauskas J.P. Morgan

Zooming to first place after spending the past three years in third is P.J. Juvekar, 42. The ­Citi analyst impressed investors with his March upgrade of Lubrizol Corp., at $25.38, saying that falling oil prices would lead to higher margins at the Wickliffe, Ohio–based manufacturer of lubricant additives. In July, after the stock had skyrocketed 125 percent, to $57.10, and outpaced the MSCI chemicals index by 76 percentage points, Juvekar downgraded it to neutral, as some of the company’s raw-materials providers were initiating price hikes. The downgrade was premature, however; Lubrizol’s shares continued to rise, gaining a further 11.6 percent through August. “He knows his space backwards and forwards,” cheers one investor. Juvekar earned an MBA in chemical engineering at Carnegie Mellon University’s Tepper School of Business in 1996, then joined Sal­omon Brothers (which was acquired by ­Citi in 1998) as an environmental services analyst; he switched to covering chemicals in 1999.

Kevin ­McCarthy jumps from ­runner-up to second team. According to one portfolio manager, the BofA Merrill Lynch Research analyst “is an invaluable source of information — he provides helpful insights into what is happening in the space and why.” McCarthy reinstated coverage of Baton Rouge, Louisiana–based Albemarle Corp. with a buy recommendation in January, dubbing shares of the specialty chemicals manufacturer a bargain at $23.10. The stock soared 39.5 percent through August, to $32.23.

Clients credit Jeffrey Zekauskas, who rises one rung to third place, with being “readily accessible” and having “a thorough understanding of the chemicals sector.” The J.P. Morgan analyst upgraded Ashland, a diversified chemicals company headquartered in Covington, ­Kentucky, from neutral to overweight in April, at $10.33. Zekauskas believed the stock was trading at a depressed valuation because financial risks associated with its purchase of Wilmington, ­Delaware–based Hercules, a producer of water ­treatment chemicals, had been overstated. Ashland’s stock had vaulted 255.1 percent, to $36.68, by August 31.

Click here to see the All-America Research Teamrankings.

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