NEW YORK (MONEY Magazine) - Sallie Krawcheck sits in a sparse corner office in a gray, glass-clad skyscraper in midtown Manhattan. There was a time, not long ago, when the building's elevators were routinely packed with employees and clients heading to accounting giant Arthur Andersen, which was located directly below the less frequented research firm, Bernstein. But these days, Andersen's floors are eerily silent.

Instead, according to one tenant who shares the same elevator bank, "everyone's headed to Sanford Bernstein." It's easy to see why. At a time when analyst conflict of interest is in the spotlight and corporate scandal is at an all-time high, business at Bernstein couldn't be better.

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That's because, unlike such competitors as Merrill Lynch and J.P. Morgan Chase, Bernstein has no investment banking arm and therefore can't be accused of trying to influence analyst coverage to attract or retain investment banking clients. Instead, it is a pure research firm. "We're opening accounts we couldn't open before," says Krawcheck, whose firm's revenue rose 25 percent last year.

The 37-year-old Krawcheck, a funny and charming native of Charleston, S.C., insists that there's more to investing than doing in-depth, honest research. Investors need to be unflappable and willing to lean into the wind.

"It's hard when you make a negative call," she says. "Clients and companies call you and say you're dumb and your analyst's an idiot. But in almost every case, the more they protest, the more our analysts turn out to be right."

What are investors up against in the year ahead? Krawcheck doesn't make market predictions. But the former financial services analyst does anticipate more regulation of banks and brokerages, which she expects to lead to more accurate analysis for investors.

For stock picks, Krawcheck defers to her team of analysts. Analyst John Dowd likes oil service companies, which provide equipment to cash-rich oil and gas exploration firms. Where's all that cash going to go? To rent jack-ups, the immense drilling rigs used in shallow bodies of water. As a pure play in the jack-up business, Ensco International stands to benefit the most, Dowd says. Shares, at less than $27, could rise to between $31 and $40 in the next year, he predicts.

Stocks to watch: Krawcheck       Ensco Intl. Universal Health Services HCA, Inc. St. Paul Cos. American International Group

Health-care analyst Ellen Wilson suggests putting money into hospital stocks, particularly Universal Health Services and HCA. Both dominate their markets and operate hospitals in areas like Las Vegas with aging and higher-growth populations.

Finally, analyst Todd Bault thinks non-life commercial insurers are going to pop, fueled by increased pricing. Standouts? Last year, St. Paul Cos. hired ex-Travelers chief Jay Fishman as CEO, and he's instituted an ambitious restructuring. Bault says the move will start to pay off in a year, when the stock, now at less than $31, will reach at least $40.

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He also likes insurer American International Group, which has been pummeled for its diversification. AIG usually trades at a 20 percent premium to the S&P but now is on par with the index. A company that's tops at managing risk, it is triple-A rated, consistently produces 15 percent earnings growth and is clearly a buy at today's $63 price tag, says Bault.