Bank stocks have done very well indeed during a banner year on Wall Street, but how have financial analysts who track banks done in predicting the earnings that underpin stock performance?
To find out who among the investment community's sell-side analysts are the best at forecasting earnings for banks, thrift institutions, and related companies, American Banker asked First Call Corp. to survey the quarterly earnings forecasts they have made so far this year.
The results of the study are published today in this second annual Wall Street Sharpshooters special supplement.
The top analysts are noted for each of the nation's 40 largest banking companies and 25 largest thrifts, as well as for the largest mortgage- related, government-sponsored, and specialty finance companies. And the survey names the winning analysts overall in each category - the aces of earnings prognostication.
To be sure, earnings forecasting is only one of the analysts' roles and only one of several ways to measure achievement. The ability to pinpoint winning stocks is another.
But earnings forecasting, the basis for stock picking, is a crucial function that occupies a good portion of analysts' time. And with good reason.
Virtually all important factors that affect bank stocks, including changes in interest rates, also influence earnings prospects. Rising or falling earnings expectations are a key factor to institutional investors selecting banks and other stocks for addition to (or subtraction from) their portfolios.
The winners in this year's sharpshooter competition include analysts who work in New York, on the West Coast, and at regional securities firms.
The best among money-center analysts was Joel W. Silverstein, a New York-based analyst with Deutsche Morgan Grenfell Inc., London.
The leader among regional bank analysts was Henry C. "Chip" Dickson of Smith Barney Inc., New York.
The star thrift industry analyst, for the second year in a row, was Steven Schroll of Piper Jaffray Inc., Minneapolis.
Michael R. Hughes, a San Francisco-based analyst at Merrill Lynch & Co., was tops in estimating results for government-sponsored enterprises.
The master forecaster of profits among finance companies was Joseph LaManna of William Blair & Co., Chicago.
The authority at gauging results for credit card companies was Susan L. Roth, a New York-based analyst who recently moved to Donaldson Lufkin & Jenrette Securities Corp. from Bear, Stearns & Co.
There were also many individual standouts.
For instance, Robert B. Albertson of Goldman, Sachs & Co., New York, led a field of 22 analysts in predicting results at Citicorp, which has the largest stock market capitalization among the nation's banking companies.
Caren Meyer of Montgomery Securities, San Francisco, had a best possible score and was tops among 13 analysts following H.F. Ahmanson & Co., the big West Coast thrift.
And John Mason, the veteran industry watcher in Atlanta for Interstate Johnson Lane, repeated as the leading prognosticator among 24 analysts of results at BankAmerica Corp.