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Several Indian Americans amongst Wall Street's top analysts

Ela Dutt
India Abroad Correspondent in Washington

A few Indian American analysts made it to The Wall Street Journal's Best-of-the-Street Analysts appearing in the June 26 edition.

After many Wall Street analysts took a beating last year touting stocks that tumbled when the Internet bubble burst, this year's winners -- 433 men and women from 82 securities firms - had a tough test to get through.

Selected from more than 4,000 analysts at about 220 firms on the basis of their stock recommendations and earnings forecasts for 2000, the survey covers analysts in 50 industry groups. Within each industry, the list differentiates between the five best stock pickers and the five best earnings forecasters.

Indian American analysts scored in a variety of industries.

Arvind Sanger of Deutsche Banc Alex Brown, part of Germany's Deutsche Bank AG, is the No. 1 stock picker in 'oil equipment and services' according to the Journal.

Sanger says his success, with a performance score of 371.5, is the result of mapping the stages of the oil recovery dating back to May 1999.

"We look at it as a dynamic cycle," 40-year-old Sanger told WSJ. He has been in the oilfield equipment and services sector for 14 years. This is his fourth year in The Wall Street Journal's annual survey. He was with Donaldson, Lufkin & Jenrette much of year 2000, but quit when it merged into Credit Suisse First Boston.

"Sanger tried to pick companies that were positioned best for rapid recovery," the Journal points out, beginning with land-drilling firms, such as Grey Wolf Inc, which gave him a total return of nearly 181 per cent and later focusing on some offshore-drilling companies like Diamond Offshore Drilling Inc. and Pride International Inc.

Niche equipment makers and offshore-rig companies are his strong buy recommendations now, and his best choice for next year is Texas drill-pipe maker Grant Prideco Inc. Sanger says the external demand for drill pipe is "growing like crazy."

Vivek Khanna of UBS Warburg in New York was ranked 3rd among the best stock pickers in the Advanced Industrial Equipment sector. A first-time Best of the Street winner, 37-year-old Khanna, is a Delhi University graduate with a business degree from College of William & Mary in Williamsburg, Virginia.

Khanna's top year-2000 pick was Waters Corp based in Milford, Mass., which gave a total return of 126 per cent last year when he was recommending it as a 'buy'.

His other good pick PerkinElmer Inc, another Massachusetts company which provides products and systems to the telecom, pharmaceutical, chemical and semiconductor industries, had a 101 per cent return.

The Journal notes that Khanna is strongly recommending Thermo Electron Corp, an instruments maker in Waltham, Mass., this year.

In the Banks and S&Ls sector, Vivek Juneja of J P Morgan/Chase ranks 5th as stock picker with a performance score of 244.7 compared to the top scorer in this category, Thomas Theurkauf of Keefe Bruyette and Woods, at 410.3.

The Journal ranks P J Juvekar of Salomon Smith Barney 4th in earnings forecasting with an accuracy score of .85 in the chemical industries sector.

Sudeep Balain of J P Morgan/Chase came in 2nd in terms of earnings forecasting with a .69 accuracy score in the semiconductors sector.

Among telecommunications carriers analysts, Vik Grover of Kaufman Bros, ranked 3rd in earnings forecasting with an accuracy score of 0.85.

The Best of the Street list claims to include those who can give the best advice whether one is an institutional or individual investor.

"You want to hear from people who have really studied companies, know their managers, understand their strategies, products and services -- people who can help you make money even in the face of difficult market conditions," the WSJ emphasises.

The aim of this list is to help investors find these kinds of analysts.

The typical stock pickers in 20 of the survey's 50 industry groups posted negative performance scores, the Journal notes, so that anyone following their advice would surely have lost money last year.

"But of the 243 analysts who won the survey's 250 stock-picking awards, only 31 posted negative performance scores. And even these helped investors lose less than the typical analyst in their industries," the Journal claims.

Performance scores are calculated using a formula that weights the investment return of each stock by the strength of the analyst's recommendation.

The list says its claim to fame is best signified in the ravaged Internet category where the performance score of the 72 stock pickers evaluated by Thomson Financial/First Call was a negative-260.

Investors who bought what these analysts recommended would have been big losers.

"But investors who followed the advice of the top four Best on the Street Internet analysts -- paying attention to such nuances as distinctions between "strong buys" and ordinary "buys" -- would have made money," according to the Journal.

One stock these four recommended was Check Point Software Technologies Ltd, an Israeli Internet security software provider whose shares rose approximately 169 per cent.

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