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Institutional Investor's selection of the brokerage analysts who have done outstanding work during the past year ranks 343 researchers from 19 firms in 71 sectors.
Click here to view the leader's table.
Two years of investigations, disciplinary actions and internal crackdowns have drastically changed the life of Wall Street securities analysts. Before the bubble burst researchers celebrated their unprecedentedly high stature and compensation; now the dominant emotion inside most research departments is panic. Greed has given way to fear.
"People are scared," says a 13-year veteran sell-side researcher, who insisted that he and his firm not be identified. "That includes myself, my colleagues here, other analysts I know elsewhere on the Street. Even if you're completely honest, you're scared that everyone's watching and ready to pounce on every little thing you say or do, whether it's the regulators, the plaintiffs' lawyers, the press or even your own compliance people."
Fear can be a mixed blessing. On the positive side, the backlash against conflicts of interest -- which culminated in this year's $1.4 billion proposed settlement between regulators and ten firms accused of publishing overly bullish stock research to win investment banking business -- is prompting analysts to go back to basics, producing more rigorous, intellectually honest research. This work is helping investors make money and, just as important, avoid losing it. But there are negatives. Some investors are carping that analysts have become even more afraid to take controversial stances -- especially bullish ones -- for fear of running afoul of regulators.
"Research has gotten markedly better," says Peter Tuz, a portfolio manager at Chase Investment Counsel Corp., a Charlottesville, Virginia, fund management boutique overseeing about $2 billion....