second team Paul Cheng Barclays
third team Arjun Narayana Murti Goldman Sachs
Neil McMahon takes the top spot for a second straight year — and for the third time in four years. The Sanford C. Bernstein analyst, who is based in London, “either has an army of associates over there, or he can write faster than I can read — either way, it’s an impressive effort,” says one U.S. money manager. McMahon, 40, downgraded Exxon Mobil Corp. in February, at $71.94, telling clients that lower oil prices would weaken profits at the Irving, Texas–based petroleum distributor. The stock price had sputtered to $69.15 by late August, a decline of 3.9 percent that underperformed the sector by 13.2 percentage points. Also lauded: McMahon’s unique analytic tools, including one that uses time-lapse satellite imagery to track crude-oil ship movements. “His reports are keepers,” says one admirer.
Paul Cheng of Barclays Capital leapfrogs from runner-up to second place. Since way back in May 2007, Cheng has been predicting that integrated oil producers such as Chevron Corp. of San Ramon, California, would perform better than U.S.-based global refiners, saying the latter group would be plagued by a down cycle at least through next year. Chevron outpaced the sector by 6.2 percentage points in the 12 months through August. “He saw the dark age coming before anyone else on the sell side,” recalls one money manager.
Arjun Narayana Murti of Goldman Sachs “understands what will move the stocks better than most of his peers,” stresses one client. Murti, who falls one notch to No. 3, urged investors to buy the ADRs of Petróleo Brasileiro in January, at $24.22, on rising production at the Brazil-based oil producer. In April, after the ADRs had risen 36.2 percent, to $32.99, he downgraded them to hold, on valuation. They closed August 31 at $39.64.
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