Institutional Investor magazine today released its annual "All-America Research Team"--a who's who of the top-rated analysts. According to the institutional investors who participated in the survey, Niles, an analyst with BancBoston Robertson Stephens, landed a number of wins.
Niles was the only high-tech analyst to be included in the "who's the best" list. He was one of ten analysts named "the best" in stock picking, as well as in the "useful" and "timely calls" categories.
"I'm just a glorified weatherman. The question is whether I can predict the weather more accurately than the next guy and will it be useful to you," he said. "If I tell you it's raining when you're already out the door, then I'm not. But if I can tell you it'll rain the night before, I am."
Last February, Niles ran against the pack by predicting Dell would see a slowdown for the fourth quarter and lowered his price target to 80. Dell's stock, which had been trading around $100, dropped 10 points on the news. And it took another 10-point hit when Dell posted results for the quarter and noted a slowdown in sales.
Investors who participated in the survey applauded Niles for his calls--with one investor noting he hit Texas Instruments on the mark.
"Ultimately, I get paid for making people money," Niles said in an interview with CNET News.com. "So I try to make timely calls before anyone else. I try to stick my neck out. It's a hairy way to make your money, but it's one of the things I enjoy the most."
He added that it's more difficult to make against-the-pack calls in the tech sector, which tends to be volatile.
"If you're wrong on a call in other industries, the stock may move against 5 or 10 percent, but in tech it can be 25 to 30 percent," Niles said. "Generally, the penalty for being wrong is much more great for tech analysts."
Institutional Investor, which polled 725 of the largest institutional investors, asked the participants to rank the analysts based on their stock picking success, research reports, earnings estimates, knowledge of the industry, timely calls to investors, and responsiveness to clients.
"Investors were asked to vote on their top three picks for a particular sector and why they do or don't like those analysts," said contributing editor David Schutt.
Mary Meeker, an Internet analyst with Morgan Stanley Dean Witter, was the top-ranked analyst in the Internet category. But investors nonetheless weren't happy with her responsiveness to clients' phone calls.
"That's how it is with Internet analysts across the board," Schutt said. "The Internet has been such a hot sector, with so many deals being done, there are many other things that are demanding their time, so investors have been concerned about responsiveness with returning phone calls."
Here's how analysts fared in the tech sectors:
Meeker was the top analyst in the Internet and new media categories, capturing the title for a fourth consecutive year. Portfolio managers noted Meeker has a "good track record" on IPOs and is a market mover.
Jamie Kiggen of Donaldson Lufkin & Jenrette placed second for his skill at setting valuations and building financial models. Henry Blodget of Merrill Lynch ranked third--he captured investors' attention when he issued a $400 price target for Amazon and within weeks it shot from $240 a share to more than $500.
First place in the PC hardware category went to Richard Schutte of Goldman Sachs, who also is known for his financial models, as well as his predictions for Gateway and Dell. Michael Kwatinetz of Credit Suisse First Boston placed second and Donald Young with PaineWebber placed third.
Richard Sherlund, a Goldman Sachs analyst who tends to focus on Microsoft, received the top ranking among PC software analysts. Investors were impressed with his detailed analysis of every major product line, the magazine reported. Kwatinetz took second place and Meeker ranked third.
Analyst Mark Edelstone of Morgan Stanley Dean Witter placed first in the semiconductor category. He was praised for pinpointing when the industry would bottom in 1998 and picking "big winners." James Barlage of Lehman Brothers ranked second and Niles placed third.
William Rabin with J.P. Morgan received top honors in the data networking category for his straightforward investment advice and reports. He was followed by Paul Weinstein of Credit Suisse First Boston and Christopher DePuy of Morgan Stanley Dean Witter.
Computer services' top analyst was David Togut of Morgan Stanley Dean Witter, who was praised for his detailed analysis of a company's fundamentals. Stephen McClellan of Merrill Lynch and James Kissane of Bear Stearns filled out the list.
Telecom wireless equipment analyst Alex Cena of Salomon Smith Barney ranked first in this category. One investor praised Cena's industry knowledge and ability to gain access to a company's top executives. Marc Cabi of Credit Suisse First Boston was ranked second and Tim Luke of Lehman Brothers captured third.
(Dan Niles is a columnist for CNET News.com.)