2015 All-America Research Team: Homebuilders & Building Products, No. 1: Stephen East

Stephen East

Evercore ISI

First-Place Appearances: 2

Total Appearances: 4

Analyst Debut: 2012

Headlining this list for a second consecutive year, St. Louis–based Evercore ISI researcherStephen East“has an incredible work ethic, consistently scouring local home markets for trending data and other insights,” remarks one money manager. Indeed, echoes another admirer: “Steve’s biggest strength lies in his knowledge of local housing markets. No one has a better pulse on what’s happening on the ground.” East, 52, reports on 15 companies operating in the U.S. homebuilding industries. Among the additions to his coverage universe last year was Mohawk Industries, a flooring manufacturer headquartered in Calhoun, Georgia, that he began formally tracking again in January. (He monitored the name at his previous firm, Ticonderoga Securities, before moving to ISI Group in February 2012.) Mohawk’s elevated organic growth and profit margins, in large part, earned it a buy rating, and by the middle of last month, the stock had soared 43 percent, to $202.19. During the same period, the S&P 500 posted a 9.4 percent advance. East’s long-held buy position on Miami-headquartered Lennar Corp. also has proved profitable. Favored in part thanks to the single-family homebuilder’s strong order flow and pricing strength, the stock leaped 25.5 percent over the 12 months through mid-September, closing at $51.75 and beating the broad market by 28.1 percentage points. Looking ahead, the analyst is especially optimistic about the prospects for D.R. Horton of Forth Worth, Texas, because his proprietary field research shows healthy demand growth for the entry-level homes developer. As of the middle of last month, the stock was 4.4 percent shy of his $33 target price for the builder. East “has timely views, keeps good relationships with divisional managements and quickly recaps earnings calls,” another backer sums up.