John Hodulik UB
second team Simon Flannery Morgan Stanley
third team Michael McCormack J.P. Morgan
For publishing research that is “thoughtful and timely,” as one investor puts it, John Hodulik of UBS spends a third straight year in the winner’s circle. The 40-year-old analyst upgraded AT&T of Dallas and New York’s Verizon Communications from neutral to buy in March, telling clients the two companies were “somewhat insulated from the downturn in the wireless market.” The stocks had advanced 8.8 and 7.1 percent, respectively, by mid-June, and Hodulik downgraded both to neutral, saying the weak economy was putting pressure on fundamentals. The downgrades proved premature, however. The stocks continued to rise, gaining 7.6 and 6.0 percent, respectively, through August.
Simon Flannery of Morgan Stanley finishes in second place for a third consecutive year. “He thinks about stocks as if it were his own money at work,” says one appreciative portfolio manager. Flannery upgraded Denver’s Qwest Communications International to overweight in October 2008, at $1.99, on valuation and earnings growth. The stock had rung up an 80.4 percent gain by August 31, closing that day at $3.59, and outperformed the sector by an impressive 64.6 percentage points.
At No. 3 for a third year running is Michael McCormack of J.P. Morgan. “He had a great call downgrading TW Telecom, just before they lowered expectations,” cheers one buy-sider. McCormack downgraded the Littleton, Colorado–based company from buy to sell back in July 2008, at $14.74. The stock had plunged 54.7 percent by November, to $6.68, and the analyst upgraded it to neutral. By late August the share price had climbed back to $11.45.
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