No. 1 Heather Wolf
Banc of America Securities-Merrill Lynch ResearchFinancial Services
Despite unprecedented volatility in the financial service industry, one bank analyst pulled ahead of her peers--regardless of industry specialization. According to Zacks Investment Research in Chicago, the top banks and thrifts analyst is also the best stock picker and earnings estimator overall, based on performance over the last three years.
Heather Wolf outperformed her colleagues by generating the most excess return of any analyst (excess return is defined as the difference between returns that an investor would have realized by following an analyst's advice and the industry's overall return over the same period). Wolf was on the Merrill Lynch side when that firm was acquired by Bank of America ( BAC - news - people ).
On Jan. 14, 2008, Wolf issued a "sell" rating on Huntington Bancshares ( HBAN - news - people ) when it traded at $12.33. Between then and March 31, 2009, the end of the period analyzed by Zacks, Huntington's stock lost 87% of its value, dropping to $1.66. Bank and thrift shares fell on average 49% over that period, earning Wolf an excess return of 38 percentage points on her call--the highest excess return of eight market-beating calls that Wolf made in the last three years.
Other prescient calls included sell ratings on Zions Bancorp on Aug. 23, 2007, and First Horizon National ( FHN - news - people ) on April 1, 2006. Both stocks dropped sharply over the following months; by the end of 2008, Zions shares had fallen 67% from when Wolf rated them "sell," and First Horizon was off 70%.
In such a tumultuous industry, though, mistakes are inevitable, and Wolf made several. She gave Wisconsin regional bank Marshall & Ilsley ( MI - news - people ) a "buy" rating on April 5, 2007, when its shares closed at $38.55. The day before Wolf changed Marshall & Ilsley's rating to "sell" on Jan. 23, 2008, its shares closed at $22.42, leaving Wolf with a 42% decline for that call.
Wolf has no "buy" rating outstanding on any company she covers. Of the six banks in her coverage universe, she rates five "underperform" and one "neutral."
No comments:
Post a Comment