Thursday, April 9th, 2009
NEW YORK (Dow Jones)—Consumer Edge, the new research boutique firm founded by former Morgan Stanley analyst Bill Pecoriello, next week will launch coverage of consumer stocks like Procter & Gamble Co. (PG), Kraft Foods Inc. (KFT) and PepsiCo. (PEP).
Pecoriello will be the lead analyst for the household products and beverages industry while former Merrill Lynch analyst Eric Serotta will be the lead analyst on food names.
The firm plans to focus on a small group of institutional investors, and Pecoriello says his firm is investing heavily in developing its own indepth data gathering and store checks. Equity analysts and investors use such data as an indicator of how the branded consumer players are actually performing in different types of stores or “channels.” The new firm will have six research professionals including the two lead analysts.
Pecoriello left Morgan Stanley in January to start his own firm. He held off on officially launching the new firm for a few months due to agreements with Morgan Stanley, he said.
Several well-known analysts have recently left bigger firms to start boutiques. Notable examples include superstar banking analyst Meredith Whitney, who left Oppenheimer & Co. recently to launch her own financial-services research firm. Several veterans of Bear Stearns & Co. have launched their own boutiques.
To be sure, the new boutiques are running the risk of launching at a time of great turmoil in financial markets and uncertainity within the investment community. But Pecoriello said there is the potential for “new business models” to emerge from the crisis. “Boutiques are filling the void as Wall Street is searching for its new business model,” he says.
(Ed Welsh contributed to this article)
-Anjali Cordeiro; Dow Jones Newswires
Copyright © 2009 Dow Jones & Company, Inc.
