Gregory Gordon
ISI Group
First-place appearances: 0

Total appearances: 8

Analyst debut: 2005

A runner-up last year, ISI Group’s Gregory Gordon rises to third place. “He has been spot-on calling the overall direction of the group over the past year, which is a lost art on the sell side,” applauds one investor. Going forward, the researcher is advising clients to expect the interest-rate-sensitive regulated utilities to take a valuation hit over the next year or two, since a gradually improving economy heightens the possibility of higher future interest rates. As a result, the companies he prefers have either “some unique aspect to their business that’s growing at a really high rate or something that’s at a really big discount because it’s perceived as broken.” An example of the latter is American Electric Power Co. The Columbus, Ohio–based utility, which trades at more than a 10 percent discount to its peers on a price-earnings-multiple basis, has failed to deliver consistent earnings growth through two C-suite regimes, he explains. “There’s a new management team that has a business plan that will allow them to grow at more or less an industry-average rate.” On the power side, which is suffering from excess supply and low prices, he favors Houston- and Princeton, New Jersey–based NRG Energy. The company is able “to prosper in the face of adversity,” he says, for three reasons: a concentration of assets in Texas, one of the few markets with tight demand and supply; its 2009 purchase of an electricity-marketing business with customers, mostly in Texas, that are generating significant cash flow; and cost cuts and synergies stemming from its acquisition last year of a distressed generating company. — Carolyn Koo