Volume 75
Number 1

Why do Voles Fall in Love?

The Once and Future Mummy Museum

Got bluemilk?

Pop Culture

















































It is not unusual for Conway to stroll the beverage aisles around midnight in a twenty-four-hour Michigan supermarket or to stake out a Tokyo soda vending machine.




Pop Culture

Andrew Conway ’92MBA is a leading analyst of the soft drink market

Andrew Conway's carefully considered and highly accurate calls on the soft drink, beer, and spirits industries have earned him a stellar reputation.


ONE DAY IN December 1997 ANDREW CONWAY ’92MBA sent a buzz through the financial world. Citing the dollar’s growing strength against other currencies, the beverage industry analyst for Morgan Stanley, Dean Witter, Discover & Company trimmed his 1998 basic earnings estimates for The Coca-Cola Company from $1.70 to $1.63 a share. A subtle move, but its effects immediately resonated around the globe. Reporters from the Wall Street Journal, the New York Times, a host of news wire services, and Forbes magazine called for his comment.

When Conway talks, people listen—and with good reason. His carefully considered and highly accurate calls on the soft drink, beer, and spirits industries have earned him a stellar reputation. When other analysts expressed doubt in PepsiCo’s inconsistent earnings and profit growth, Conway gave the company a vote of confidence and correctly predicted that it would spin off its restaurant holdings to become solely a snack and beverage business with solid earnings.

In 1996, after he made Coca-Cola Enterprises his top pick, the stock vaulted 80 percent in a year. Such astute calls have led market observers to raise their glasses to Conway’s expertise. The Wall Street Journal declared him an "All-Star" in its annual survey of top securities analysts, and Institutional Investor magazine has repeatedly ranked him first in the beverage category in its All-America Research Team poll.

Innate ability and curiosity, honed by training, discipline, and experience, have placed this bespectacled native New Yorker at the top of his game. At age eight, Conway was given his first share of Exxon stock. He attended his first company annual meeting—at Dow Jones—in the seventh grade. By the time he reached Lehigh University as a finance major, Conway recalls, "I knew I’d head toward Wall Street in some capacity."

Graduating from Lehigh in 1987, Conway stepped easily onto the Street. He joined the financial training program at Drexel Burnham Lambert, rotating through the firm’s accounting, trading, and financial areas. He also worked in Drexel’s capital markets trading analysis group, which monitored the daily profit and loss for the firm’s worldwide trading activities.

"It was my first opportunity to get a glimpse of what securities analysts really do," Conway says.

"I was intrigued by the interaction with clients and company executives, worrying about an industry’s performance, understanding the structure of an industry. I also got to experience the 1987 stock market crash as an accountant. There were many late nights of writing journal entries, trying to assess the trading impact on Drexel’s financials."

When the firm collapsed in early 1990, Conway had already been accepted to Goizueta Business School and was preparing to move to Atlanta. "Having interviewed at a number of schools in the Northeast and some in the South, I felt there was an understated approach to Emory," he says.

"I was attracted to the quality of the professors, the small classes, and the close-knit and personal atmosphere."


After his first year at Goizueta, Conway interned in the fountain finance group of The Coca-Cola Company. The experience was pivotal in several ways.

"It helped guide me into an industry specialty," he says. "But I also learned that culture plays a very important role in a corporation. Coca-Cola’s culture is hard driven and goal oriented, one that pays a premium for planning and loyalty and rewards people for successfully executing strategy. I really have an appreciation for the role the planning process plays in meeting operating budget plans and profit objectives."

In his second year in the MBA program, Conway met a Salomon Brothers representative at an MBA Consortium recruiting event. He parlayed that contact into an interview. When he joined Salomon Brothers as a beverage analyst after earning his MBA in 1992, Conway immediately drew on his industry-insider’s insight. "The internship gave me many contacts within the corporation, and it has helped me project the earnings growth rate of Coca-Cola and Pepsi-Cola. I have a greater feel for what is achievable. I can be more discerning."

It was that discernment that rapidly swept him to the top of his profession. When Morgan Stanley lured him away from Salomon Brothers four years later, many investors already considered him the best beverage analyst in the trade. Over the years, the Wall Street Journal and New York Times have frequently called on his expertise to sort out the complex maneuverings of the two rival beverage giants. Business magazines have cited him on the personalities and influence of industry executives. CNN has asked him to assess a federal probe of the sales and marketing practices of a major brewery.

Conway plays down his role as media pundit, however. "The most important thing as an analyst is that I put my money management and mutual fund customers first," he says. "I tend to speak to the press at the end of the day when there is a significant industry event, because the full day is really for the customers."

Conway’s customers—largely institutional investors such as Fidelity Investments, the College Retirement Equities Fund, and Capital Research—get their money’s worth. Called by one investor "one of the hardest-working guys on the Street," Conway puts in long hours at Morgan Stanley’s shimmering headquarters in Times Square. He is intent on his goal of determining which stocks in his industry will outperform Standard and Poor’s 500-stock benchmark index, and the result is calls—like those on Coca-Cola Enterprises’ growth and PepsiCo’s restaurant spinoff—that seem almost prescient.

Conway’s reports, Institutional Investor says, are "the most thorough in the group" of Wall Street’s beverage analysts. During his frequent travels to meet with clients, he scrutinizes the market at street level. It is not unusual for him to stroll the beverage aisles around midnight in a twenty-four-hour Michigan supermarket or to stake out a Tokyo soda vending machine. "You can discern a great deal from heading out into the marketplace," he says. "Looking at price points and brand positioning, talking to a store manager, seeing how nimble a bottler can be on local pricing initiatives, who has the end-aisle display—it gives you tremendous color."

Some admirers say the real key to Conway’s accuracy is the depth of his research. He pores over companies’ financial data. He also maintains a variety of industry contacts, from bottlers and wholesalers to CEOs. He met with Roberto C. Goizueta, chair of the board and chief executive of The Coca-Cola Company, only a week before Goizueta entered Emory University Hospital for treatment of the lung cancer that took his life six weeks later. (Goizueta, whose letters to Wall Street’s most influential analysts were legendary, once mailed Conway a year-old newspaper article containing Conway’s own prediction that Coca-Cola stock would close out 1995 at sixty-two. When the stock hit seventy-five at year’s end, Goizueta wrote, "Dear Andrew, So much for predictions!")

Conway also speaks regularly with other industry executives, such as Randy Baker, CFO of Anheuser Busch, and Mike White, CFO of Pepsi. "Those are unique opportunities to gauge how they see their business and trends," he says. "It’s so important to glean from every single reference point something new, something different."

Those contacts give Conway a sense of some of the intangibles that affect stock price performance. "How does Pepsi’s culture differ from Coke’s? How does Anheuser Busch’s culture differ from Miller Beer’s?" he says. "All that comes from speaking with the sources, understanding what the strategies are, what the mindset is, who has the depth of management. Those issues are not always measurable, but their influences are profound. Pepsi’s culture today is much different than it was just two years ago with the restaurants. Companies go through many different cycles, and recognizing whether the cultural change is positive or a detriment plays a key role."

Goizueta Business School Assistant Professor of Finance Paul J. A. Irvine, whose research addresses the impact of securities analysts on the market, attributes Conway’s success to his precision and his courage to make calls that sometimes go against the mainstream.

"He knows his industry extremely well, he is careful, and he has a good eye for value," Irvine says. "When you take those things and combine them with his faith in his own analysis, [you have a very influential analyst]. Andy has a lot of clients who believe in him, and when they act on his suggestions, stock prices will move around."

Conway, who was named a managing director for Morgan Stanley in January 1999, agrees that the pursuit of accuracy fuels his work. "I can’t for one day take for granted the responsibility I have to ensure that the information I give my clients is as accurate and as thoughtful and as insightful as it can be," he says. "There’s not one percent, not one ounce of information that can be wrong. To the best of my ability, I have to be as knowledgeable on a topic as possible, and that is a large responsibility.

"So I really relish the opportunity to learn corporate strategy, to interact with my institutional customers and corporate managements. I feel very fortunate to follow a group of very powerful, well-financed, and well-managed companies. . . . I love what I’m doing, and I can’t forget Goizueta Business School’s influence on the career path I’ve chosen."

This article originally appeared in Goizueta Magazine.


©1999 Emory University