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WORLD’S TOP ANALYSTS SPECIAL REPORT | Friday May 14 2010

www.ft.com/top­analysts­2010 | twitter.com/ftreports

Things are looking : traders at the New York Stock Exchange earlier this week, as stocks surged in response to a €750bn package to tackle the eurozone’s debt problems Getty Taking stock in tough times

Leading equity analysts in their third year, recognise the – how accurate their forecasts of Unlike some rankings of ana- similar story, with the Eurofirst achievements of analysts who company earnings announce- lysts, which judge the brokers on 300 index ending up more than 25 across the world can pat were best in their sectors around ments have been, compared with subjective criteria, such as fund per cent on the year, bouncing themselves on the back the world in the calendar year those of their peers. managers’ perceptions of their back from nadirs reached in 2009. The awards for US winners There are also awards in each value, the StarMine figures are March. after a challenging year, were presented at a dinner held region for the top overall stock derived from an objective compu- It was a year, therefore, in writes Martin Dickson last night at the New York Stock pickers and earnings estimators, tation of precisely how well indi- which getting macro-economic Exchange. irrespective of their sectors. viduals have performed relative to assumptions right may have been t is particularly hard to be StarMine, part of Thomson Reu- The awards are rounded out industry benchmarks. almost as important as detailed successful as an equity ana- ters, is a research analytics com- with prizes for the top broking So what trends emerge from the analysis of the merits and weak- lyst in times of grave eco- pany that has pioneered the quan- houses in each region, ranked by 2010 awards? The first is the sheer nesses of individual companies. nomic, political and financial titative measurement of research the number of individual awards difficulty of picking winning and For example, a belief that Iuncertainty, such as the world performance and employs a meth- each firm has racked up. losing stocks when the environ- was going to ride out the eco- has witnessed over the past year odology respected and widely There are separate awards for ment in which industries are nomic storm relatively well will or two. used by investment banks and the “most productive” broking operating was so volatile, and so have helped propel some metals So the individual stock pickers fund managers. houses. This category, introduced subject to political decisions by and mining analysts up the and earnings estimators – and the The awards cover three regions in 2009, is meant to allow some governments intervening in mar- tables. broking houses – that have – the US, and Asia – and smaller boutiques or regional bro- kets in a manner unprecedented In a year of such extreme vola- emerged on top in the 2010 FT/ are given to individual analysts in king houses, which do not have as in recent times. tility, analysts who had strong StarMine Awards for the world’s two categories: “stock picking” – many analysts as their big coun- In the US, for example, the S&P sell recommendations on some leading analysts have particular how their “buy” and “sell” recom- terparts, to compete more equally. 500 index, which had fallen 39 per stocks, as well as buy recommen- reason to congratulate them- mendations on particular compa- It divides the number of awards cent in 2008, rose 24 per cent in dations on others, are likely to selves. nies have performed relative to that each firm has won by the 2009, ending 65 per cent above its The FT/StarMine Awards, others; and “earnings estimation” number of analysts it employs. March low. In Europe it was a Continued on Page 3 2 FINANCIAL TIMES FRIDAY MAY 14 2010 FINANCIAL TIMES FRIDAY MAY 14 2010 3 World’s Top Analysts World’s Top Analysts

In This Issue Top 10 Stock Pickers – Asia Rank Analyst Broker Industry Primary Coverage Industries Taking Excess In­depth Return (%) stock in 1 Lai, Bertram CIMB Securities 31.6 Machinery & Materials; Telecommunications; Computers & Communications Equipment 2 Pow, David UBS 28.1 Utilities 3 Yuan, Jason UOB Kay Hian 21.8 Consumer Goods & Services; , Household tough knowledge & Personal Products 4 Santoso, Ben DBS Vickers 19.9 Food, Household & Personal Products 5 Cleary, Matt 18.1 Semiconductors; Electronic Equipment times Securities Volatility and debt pose stiff test 6 Chua, Julian1 Citi Investment 16.6 Banks; Financial Services; Media EUROPE A highly volatile period of huge Research Continued from Page 1 economic and financial uncertainty made helps pick 7 Ramachandran, Anand Citi Investment 16.37 Telecommunications have done well. For exam- analyst stock picks particularly tough, Research 8 Qiu, Helena and Tsang, SBI E2- 16.36 Healthcare ple, Gabe Moreen of Bank of writes Robert Budden Pages 4­5 Kennedy Securities America Merrill Lynch, the 9 Lin, Ben2 Nomura 15.6 Insurance year’s top US stock picker, 10 Li, Victoria 14.9 Machinery & Materials had buy recommendations Taking a ‘bearish winners on several high performing contrarian view’ energy companies, but also sell calls on a significant PROFILE Roberta Ciaccia Top 10 Earnings Estimators – Asia number. of Exane BNP Paribas Asia ASIA KEY POINTS Rank Analyst Broker Primary Coverage Industries In Europe, Roberta Ciac- aims to ‘think out of cia, of Exane BNP Paribas, Analysts went the ● 1,070 stock pickers and 1 Yun, Seok Credit Suisse Insurance second in the regional the box to examine 2 Esson, Christopher Credit Suisse Banks; Insurance things that may not be extra mile to spot 1,099 estimators qualified in stock-picking rankings, had at least one awards category 3 Hong, Sung Su NH Investment & Securities Consumer Goods & Services bearish calls on lottery obvious at first sight’. big trends, writes by covering a sufficient 4 Perera, Chehan KAF Seagroatt & Campbell Banks operators in Greece and Pages 4­5 Robin Kwong number of stocks. 5 Lau, Pierre Citi Investment Research Utilities; Machinery & Materials , correctly predicting ● Stock pickers on average 6 Park, Ally Citi Investment Research Consumer Goods & Services; Food, Household & that cash-strapped govern- underperformed their Personal Products ments would see them as ast year was one of industry benchmarks by 7 Yoon, Sarah Woori Consumer Goods & Services; Food, Household & fat revenue-raising targets. sharp changes for 0.19 per cent. Personal Products; Machinery & Materials; Media Top-down attitudes by Asian stock mar- ● Stock pickers added the 8 Kong, Robert Citi Investment Research Banks; Transportation broking house manage- kets. While overall most value in the 9 Sim, Wei Macquarie Research Equities Transportation ments may also have played Lthey enjoyed their best year Construction and a role in the results. For 10 Lee, Jae-won Tong Yang Securities Machinery & Materials; Utilities since 2003 on the back of Engineering industry with an example, Bank of America 1Now at Nomura. 2Now at Morgan Stanley the global economic recov- Industry Excess Return of Source: StarMine, a Thomson company Merrill Lynch, which has ery, the first few months of 5.2 per cent. an unusually high ratio of the year were marked by a ● 83 brokers had at least “underperform” calls on sharp fall in stock prices, as one analyst who qualified for stocks, did very well in the Steering through peaks and troughs anxiety over the extent of a stock­picking award. Asia’s top stock picker Bertram Lai of CIMB Securities stock-picking category in US In volatile markets, spotting potential the US financial crisis ● The Asia awards covered 2010, coming first in the fallers as well as risers – and taking leaps of gripped investors. the following countries: Bertram Lai, the top stock picker for Asia in in value and outperformed industry peers by overall tables in all three For the region’s best ana- China, , South this year’s FT/StarMine Awards, made what 1,174 per cent. regions, albeit tied in faith, too – are the keys to success for lysts, picking the winners Korea, Malaysia, Singapore he called a “pretty bloody­minded” decision Mr Lai was the only analyst covering Europe and Asia. analysts, writes Masa Serdarevic Pages 6­7 and losers during this roll- and Taiwan back in 2005. Skyworth as it rebounded to become one of William Herkelrath, sell- er-coaster ride required in- Mr Lai, head of Hong Kong and China China’s top TV brands. Now, there are 10 side specialist at Thomson depth knowledge of the research for CIMB Securities, had been analysts covering the company, according to Reuters, notes that “glo- Analyst of the year management strategy of the covering a little known Chinese TV maker Bloomberg. bally, 23 per cent of BofA Richard Repetto companies they covered HK$0.59 to HK$7.98 and out- with five, and Credit Suisse China Gas and Xinao Gas – or ‘risk aversion’,” says Mr It’s a topsy­turvy world: called Skyworth Digital Holdings. Skyworth Mr Lai says the level of access and Merrill Lynch’s universe is and figuring out how myr- performed its industry came second with three as both more than doubled Lin, who now heads Mor- a roller­coaster at the was doing well – until Hong Kong’s anti­ understanding he had from covering the currently set to ‘underper- Getting the big picture right, iad factors – from changing peers by a remarkable 1,174 gongs. After last year’s Asia their share prices – helped gan Stanley’s Asia insur- Universal Studios theme corruption agency prosecuted Huang stock for five years was crucial to being able form’, which is striking in experience of previous macroeconomic conditions per cent while he kept a awards were dominated by propel him to the number ance research team. park in Singapore Reuters Hongsheng, its former chairman, in late to identify it as a likely winner when Chinese an environment in which downturns and strong to government interven- “buy” call on it. big global investment two spot in the stock pick- Anand Ramachandran, 2004 and Skyworth’s Hong Kong­listed consumers decided to trade in their old, only 10 per cent of recom- teamwork have all played tions – would all come Mr Lai says his confi- banks, this year saw a ing awards. deputy head of research at resilience, Mr Santoso also shares were suspended indefinitely. bulky CRT televisions for sleek flat­screen mendations on the Street as their part in the award to together. dence in Skyworth came number of smaller broker- Mr Pow says that, once he Citi Investment Research had to take into account a In an unusual move, Mr Lai decided he TVs en masse last year. a whole are bearish”. To do that, Asia’s top from five years’ of experi- ages with analysts in the had formulated that thesis, and head of its Asian tele- wide array of factors – such would continue coverage of Skyworth “even A more important reason, says Mr Lai, Goldman Sachs, which the Sandler O’Neill stock pickers and earnings ence covering the stock, top 10, including NH Invest- the big challenge was stick- communications research, as the “supply side impact though there was no money to be made who joined CIMB from Lehman Brothers, is led the overall US broker- analyst Page 7 estimators put on their and his conviction that they ment & Securities, UOB ing to his convictions in a made his mark by making of La Niña [an ocean- from it . . . got clients into it and I couldn’t that being at a smaller brokerage gives him age rankings, with 23 journalist shoes, left their were among the best Chi- Kay Hian and SBI E2-Capi- volatile market. This was the right calls – initially a atmosphere phenomenon just abandon them. They would want to a lot more freedom to cover what he awards, got 15 from earn- offices and spoke to regula- nese TV makers at adapting tal Securities. the case when the market “sell” that he later that is the counterpart of El know what happened should the company wanted. ings accuracy, which might More on FT.com tors, economists and execu- foreign technology to the Overall, including all the was in retreat and “sud- upgraded to a “buy” – dur- Niño] on soya bean and come back [to trading],” he says. “The problem, I think, with much of sell­ partly reflect a top-down tives to get the full picture. domestic market. awards in industry seg- denly the stock price was ing the taking private of palm oil prices, which also “Also, I couldn’t see how I could have side research is that there is a lot of sensitivity to earnings revi- There is expanded coverage of this year’s World’s Bertram Lai, head of To arrive at this conclu- ments (see table at falling apart on the back of Hutchison Telecommunica- pointed to a price recov- been that wrong about the company,” he turnover, and [the view is that] if you’re not sions at that house. Top Analysts on the web. The rankings data Hong Kong and China sion, he had also visited a www.FT.com/top-analysts- no new news”, but it was tions International in Hong ery,” he says. adds. generating revenue for the company, then There is also a trend in include, for each continent, tables of the top research for CIMB Securi- joint-venture TV assembly 2010), the situation was Kong. Mr Ramachandran Looking ahead to this His perseverance there is no point in covering that stock,” he the US for the awards to be three analysts in business sectors ranging from ties and this year’s top plant between Skyworth reversed, with Credit Suisse was Asia’s best telecoms year, Mr Lai at CIMB says paid off, as says. “At CIMB, I have a lot more latitude distributed more broadly aerospace to wireless telecoms. There are pen stock picker, recalls going and Korea’s LG Display, winning 11 awards and Citi ‘You’ve got to . . . stock picker and seventh he is “actually fairly nega- Skyworth to do something different, and there is a among brokers. Mr Her- portraits of the analysts, too, and – to come – on roadshows with the top during which “I was able to Investment Research nine. have a very good overall last year. tive about the tech indus- became his lot less pressure on you to show your kelrath notes that in 2008, video interviews by Reuters Insider from last executives of Skyworth, sneak into the LGD plant Mr Lai says one of the “You’ve got to know the try . . . I think it is a very most lucrative numbers in terms of revenues.” 47 per cent of all awards night’s awards dinner at the New York Stock Techtronics and Comba by pretending to be a Sky- advantages of working at a feel for what the numbers, have a very good valid assumption that the call last year. were won by the 10 firms Exchange. And there is an article by StarMine’s Telecom, three of his best worth employee,” he says. smaller regional brokerage management feel for what the manage- government in China needs He kept an Robin Kwong winning the most trophies, Mary Morgan on the rankings’ methodology. picks last year. Skyworth, Credit Suisse’s Seok Yun, such as CIMB is that he ment is all about, and have to tighten [its policies], and ‘outperform’ but this year that is down in particular, rose from the top earnings estimator, was given much greater a very firm handle on what there is also the problem of to 36 per cent. www.FT.com/top­analysts­2010 is all about’ on says his success in pinning freedom in choosing what management and share- the ’s value ris- Skyworth The point is underlined Top Brokers – Asia down the earnings of stocks to cover. holders’ respective strate- ing.” from late by the fact that in 2010, for Korean insurance compa- UBS’s David Pow, who even more so when markets gies are,” he says. Instead, he has his eyes February to ‘I got clients into the first time, two regional Company Number of Awards Contributors 1 Credit Suisse 11 nies came partly from gain- covers utilities across the had recovered and the stock To do that, “you need to on a little-known software the end of the [Skyworth, a little­ brokers have been placed in 2 Citi Investment Research 9 ing an understanding of region, says he engaged in a prices of gas utilities began be very close to the compa- maker called King Dee, year, as the the top five US houses, Martin Dickson Steven Bird 3= BofA Merrill Lynch Global macroeconomic develop- “series of discussions with to shoot past their historic nies and have a very bot- which provides enterprise stock rocketed known Chinese TV alongside Wall Street Deputy Editor Designer Research 7 ments from Credit Suisse’s different sources, [and with] peaks, he says. tom-up approach,” he adds. resource planning software 1,253 per cent maker] and I couldn’t giants. Robert Budden Andy Mears 3= DBS Vickers 7 economists. other companies that were Ben Lin, the region’s top Ben Santoso of DBS Vick- to exporters in the Pearl Highlights of the award Deputy Markets Editor Picture Editor 3= Macquarie Research “Getting the right macro not listed or within my cov- insurance stock picker, says ers, Asia’s top stock picker River Delta region. just abandon them’ winners in each region are Equities 7 assumptions was the most erage, to get a more solid his team at Nomura last in food, household and per- Citi’s Mr Ramachandran Bertram Lai laid out in the articles on Robin Kwong 6 UBS 6 important factor... Last grounding for my thesis.” year “took a very disci- sonal products, says that says that, as the world CIMB Securities the following pages, but a Taipei Correspondent 7= Deutsche Bank Securities 5 For advertising details, year was a macro-driven This was that China’s plined approach in our last year had been preceded economy normalises and as great deal more information 7= Orient Securities 5 Masa Serdarevic contact: Hope Kaye 9= Goldman Sachs 4 year [and] CS has been one strong economic growth stock picking process” by the biggest price drop telecom markets become can be found online at Wall Street Equities tel +1 212 641 6548 of the believers” in a global and its growing emphasis because of the market vola- for commodities since the more mature and stable, www.ft.com/top-analysts- Reporter 9= RHB Research Institute 4 fax +1 212 641 6545 Source, StarMine, economic recovery, he says. on cleaner energy sources tility. Asian financial crisis. “you’ve got to be more crea- 2010, as well as details of Andrew Baxter e­mail [email protected] a company Overall, Citi Investment would benefit natural gas “We focused on picking While DBS’s economists tive and a lot more discern- the methodology that Senior Writer, FT Reports; or your usual Financial Research had the most companies. stocks that we believed had already expected a V-shape ing to come up with stock StarMine uses to reach its Commissioning Editor Times representative awards in the two Top Tens Mr Pow’s “buy” calls on been mispriced due to ‘fear’ recovery based on Asia’s recommendations.” results. 4 FINANCIAL TIMES FRIDAY MAY 14 2010 FINANCIAL TIMES FRIDAY MAY 14 2010 5 World’s Top Analysts World’s Top Analysts

Awards per head US out in front Most Productive Brokers* Company Number of Awards/Number of Analysts Brokerages in the US get www.ft.com/ Asia the most out of their top­analysts­2010). 1 Orient Securities 0.333 Volatility and debt analysts, judging by this In Europe, the most 2 BofA Merrill Lynch Global Research 0.259 table of the most productive productive broker is 3 Credit Suisse 0.256 brokers. Canaccord Adams, the Europe Dividing the number of capital markets division of 1 Canaccord Adams 0.3 awards won by the number Canada’s Canaccord 2 BofA Merrill Lynch Global Research 0.25 of analysts employed, the Financial. The Asian list is 3 MM Warburg/SES Research 0.22 fears pose challenges top three US brokerages are headed by Hong Kong­ US out in front, led by BB&T based Orient Securities, 1 BB&T Capital Markets 0.53 Capital Markets. The firm while BofA Merrill Lynch 2 Goldman Sachs 0.51 did not necessarily mean has no entries in the overall Global Research appears in 3 Morgan Keegan 0.45 Europe EUROPE KEY POINTS they were bankruptcy tar- US Top 10s but nine names both the Asian and ● 2,033 stock pickers and 2,252 estimators qualified in at gets “if they had strong in the firsts, seconds and European top three. *Firms must employ a minimum of 10 senior analysts to qualify for this Robert Budden on least one awards category by covering a sufficient number of cash flows”. thirds across industry award. Source: StarMine, a Thomson Reuters company how the continent’s stocks. So when, in October, he sectors (published online at Andrew Baxter ● Stock pickers on average outperformed their industry initiated coverage on heav- best analysts beat benchmarks by 2.8 per cent. ily indebted , their benchmarks ● Stock pickers added the most value in Biotechnology, with he began with an “outper- an Industry Excess Return of 10.1 per cent. form” rating – despite an ● 155 brokers had at least one analyst who qualified for a already strong run in the redicting the impact stock­picking award. company’s shares since that cash-strapped ● The Europe awards covered the following countries: Austria, March. Since then, the governments would Belgium. Denmark, Finland, , Germany, Greece, , shares have gone up 32 per have on certain Ireland, Italy, Liechtenstein, Luxembourg, , cent versus a fall of 14 per Pindustry sectors, appreciat- Norway, , Spain, Sweden, Switzerland and the UK cent in the European tele- ing the power of gearing in coms index, which has been an upturn, or simply calcu- dragged down by the likes lating that growth in China of OTE in Greece and Por- would surpass consensus picks particularly tough. In benchmark by 37.3 per cent tugal Telecom. expectations. the first two months of the with his best call an “out- Roberta Ciaccia, an ana- These are just some of the year, equities fell almost 20 perform” for the entire year lyst at Exane BNP Paribas broader themes spotted by per cent before bouncing on KCOM Group, a provider who covers European mid- the winning European ana- back with conviction from of communications solu- cap stocks, came second in lysts in StarMine’s 2010 their nadirs reached in tions to businesses and con- the StarMine stock-picking awards that helped them early March. sumers in the UK. Top 10 for Europe. But Ms Paper profits: despite a tough environment for stock pickers and earnings estimators, spotting the right trends brought success Alamy outperform their peers in In this tough environ- Despite a background as a Ciaccia, who mostly covers 2009, one of the most event- ment, Carl Murdock-Smith, management accountant in Italy and Greece, generated ator, was hit with “a big tax Some analysts’ strong recalls. “Rio Tinto was against his benchmark, ful and challenging years analyst at JPMorgan Caze- telecoms, having worked at her outperformance by on gaming that was totally stock picks were driven not never going to go belly-up. placing him ninth in the for investors nove, earned the title of top BT Group, the UK telecoms selecting companies that unexpected”, Ms Ciaccia just by close company anal- Based on reasonable long- StarMine ranking of - in recent history. stock picker in Europe. operator, he says he tries would perform poorly com- explains. ysis but also by taking a term commodity prices, the pean analysts and marking Over the calendar year Mr Murdock-Smith, who “to be holistic” and “not to pared to their peers. Such calls, including a global view on economic company was always going him out as the number one 2009, European stock mar- mainly covers telecoms hide behind the numbers”. Very early in 2009, Ms bearish stance on Italian recovery. to be able to manage its stock picker in the mining kets rose more than 25 per companies with a strong Last year was character- Ciaccia made negative calls fashion group Mariella For Damien Hackett, glo- debt.” and metals sector. cent as measured by the focus on the UK, describes ised by fears over compa- on the lottery operators in Burani, helped her outper- bal head of metals and min- Of course, 2009 was partly When it comes to 2010, Eurofirst 300 index. But this 2009 as “a year of massive nies with high debts. For Greece and Italy, fearing form her benchmark by 36.8 ing research at Canaccord characterised by a resur- the analysts are prepared masks a highly volatile recovery in markets where Mr Murdock-Smith, this that indebted governments per cent. Adams, 2009 was partly gent China and its contin- for another challenging period of huge economic people started looking at fear represented an oppor- could take steps against Santiago López Diaz of characterised by his view ued voracious appetite for year. But a bullish mood and financial uncertainty growth again”. tunity; just because compa- these companies to shore Credit Suisse, the third that China would continue commodities, helping propel prevails. which made analyst stock He outperformed his nies were heavily indebted up their finances. ranked StarMine analyst, its strong growth trajectory. the prices of a range of com- Mr Hackett is dismissive “The consensus view was generated outperformance “China was probably modities from iron ore to of fears of a bubble bursting that these [companies] had of 32.6 per cent, on calls on going to survive because of copper and crude oil and in in China: “Since the mid- high earnings stability,” banks. its central control,” he says. turn supporting the share 1990s, people have specu- Top 10 Stock Pickers – Europe she says. “But I thought His best pick was Spain’s “The country was probably prices of miners across the lated that China will over- Rank Analyst Broker Industry Primary Coverage Industries that cash-strapped govern- , which not going to be distracted globe. heat and they have been Excess ments would take action during his 10-month “out- from its longer-term goal of But what was a concern wrong ever since,” he says. Return either through higher taxa- perform/marketweight” industrialisation.” in unstable markets – Rio “Growth may slow, but it (%) 1 tion on earnings or through position gained 68 per cent This helped him take a Tinto’s debt burden – will still be markedly 1 Murdock-Smith, Carl Cazenove 37.3 Telecommunication Services; Media the introduction of higher versus the industry bench- bullish stance on miner Rio Analysts are became a driver of share higher than we have in the 2 Ciaccia, Roberta Exane BNP Paribas 36.8 Personal & ; Hotels & Leisure pay-outs for new licences.” mark of 32 per cent. And Tinto at a time when some prepared for price outperformance in the west.” 3 López Diaz, Santiago Credit Suisse 32.6 Banks She was right. Lottomat- throughout 2009, he took a analysts were advising upturn, as the company And Mr Murdock-Smith, 4 Fernández, David La Caixa 31.0 Banks another tricky 2 3 ica, Italy’s largest gaming bearish call on Banco de investors to sell because of was aided by its high level the 2010 winner, predicts 5 Soikkeli, Jarkko eQ Bank 30.3 Food & Household Products company, was hit with a Sabadell, another Spanish the company’s sizeable debt year in 2010, of gearing. “growth will come back”. 6 Celerier, Clément Natixis Securities 30.0 Chemicals charge for running its bank, which fell 15 per cent burden. This call was one of a The challenge, he says, is 7 Lunde, Frederik Carnegie Investment 28.0 Energy lucrative scratchcards busi- over the year, underper- “Rio Tinto was one stock but a bullish number that helped Mr “identifying when investors Bank ness and, in July last year, forming its benchmark by that made me look different Hackett, deliver outper- will start paying attention 8 Strand, Peder SEB Enskilda 27.2 IT Services; Technology Hardware, Software & mood prevails Internet Services; Telecommunication Services Opap, Greece’s lottery oper- 51 per cent. from a lot of people,” he formance of 26.99 per cent to the good news again.” 9 Hackett, Damien Canaccord Adams 26.99 Metals & Mining 10 Besson, Thomas BofA Merrill Lynch 26.97 Automobiles Global Research Taking a ‘bearish contrarian view’ Roberta Ciaccia of Exane BNP Paribas Top Brokers – Europe Company Number of Awards Roberta Ciaccia did not take a Exane constantly to seek to In addition, she was bearish on 1 BofA Merrill Lynch Global Top 10 Earnings Estimators – Europe Research 15 direct route to becoming an analyst. generate new ideas. Antichi Pellettieri, a maker of 2 Cazenove 11 Rank Analyst Broker Primary Coverage Industries After graduating in economics, she Over 2009 this led to her handbags and small leather goods, 3 UBS 10 started her career as a consultant taking a “bearish contrarian which over 2009 lost 72 per cent, 4= Credit Suisse 8 1 With, Henrik DnB NOR Markets Transportation; Energy at Bain & Co before moving into view”, with negative calls underperforming its benchmark by a 4= RBS 8 1 2 Dobbing, Andrew Cazenove Energy investor relations at Amga, a generating her strong sizeable 97 per cent. Ms Ciaccia felt 6= CA Cheuvreux 7 3 Gamez, Sergio BofA Merrill Lynch Global Banks regional utility in Italy. outperformance against that the company’s business model 6= Goldman Sachs 7 Research But, since 1999, she has worked benchmarks. and brand suffered from a very 8 Deutsche Bank Securities 6 4 Ramirez, Antonio Keefe, Bruyette & Woods Banks exclusively as an analyst – covering Ms Ciaccia bet on a share weak positioning against the overall 9= SG Securities 5 9= JP Morgan 5 5 Erskine, Alan UBS Food & Household Products mostly telecoms – at a number of price underperformance from – and also weak – consumer 9= Citi Inv. Research 5 6 Brauneiser, Rochus Kepler Capital Markets Metals & Mining banks including and Benetton, the fashion retailer, environment. 9= Oppenheim Research* 5 7 Kleibauer, Thilo M.M. Warburg/SES Research Non-Food Retail; Personal & Luxury Products; Kepler Equities. She joined Exane in 2009, believing that rivals And her advice for younger 9= Natixis Securities 5 Food & Staples Retail BNP Paribas two years ago and is H&M and Inditex – owner of analysts just starting out? 9= Morgan Stanley 5 8 Betts, Mike2 J.P. Morgan Construction & Materials now based in Milan, from where she Zara – were better “Have a good senior to learn from 9= ESN Partnership 5 9 Parry, Graham BofA Merrill Lynch Global Pharmaceuticals covers European mid­cap stocks but positioned. This was and do not be afraid to take non­ with a particular expertise in the a bet that paid off. consensual views,” even though *Oppenheim Research became Research Macquarie Research Equities 10 Heimbürger, Hans- CA Cheuvreux Machinery; Industrials; Transportation gaming sector. “you do get nervous when they are on April 1 2010. Joachim She says she tries “to think out Thinking out of going against you. Just don’t be of the box to examine things that non­consensual for the sake of it.” Source, StarMine, a 1Cazenove is now part of J.P. Morgan. 2Currently inactive. 3eQ Bank is now part of Swedbank Securities the box: Thomson Reuters company may not be obvious at first sight”, Source: StarMine, a Thomson Reuters company Roberta Ciaccia working with three internal teams at Robert Budden 6 FINANCIAL TIMES FRIDAY MAY 14 2010 FINANCIAL TIMES FRIDAY MAY 14 2010 7 World’s Top Analysts World’s Top Analysts Winners steer steady Getting the big picture course through right pays off

changing so fast. We were troughs and peaks Analyst of Year just trying to catch up and Richard Repetto be current.” In a big downturn, the most seemed certain only Experience of most important thing is to US US KEY POINTS that the outlook was very focus on the big picture ● 1,806 stock pickers and 1,819 estimators qualified in at least uncertain. downturns helped and get that right, he In volatile markets, one awards category by covering a sufficient number of “It took a leap of faith to the Sandler O’Neill argues. “Most stocks in a spotting potential stocks. make stock recommenda- sector generally move ● Stock pickers on average outperformed their industry tions while the world was analyst, writes together. The job then is to risers and fallers is benchmarks by 2.1 per cent. melting down,” laughs Masa Serdarevic differentiate between the the key to success ● Stock pickers added the most value in Oil, Gas & Gabe Moreen, remembering good and the bad ones, Consumable Fuels with an Industry Excess Return of 12.0 per the time. “One questions aiming to be the first to do for analysts, writes cent. one’s sanity.” A consistently outstanding so, and the most accurate.” Masa Serdarevic ● 182 brokers had at least one analyst who qualified for a The leap of faith paid off performance as the US Evidently, the efforts stock­picking award for Mr Moreen, an analyst equity markets have paid off for his clients. In at Bank of America Merrill surged, crashed and rallied addition to winning the Lynch, as his calls outper- again over the past decade lifetime achievement formed their benchmark has earned Richard Repetto award, Mr Repetto was he difficult task of The US markets entered by 26.4 per cent, ranking this year’s FT/StarMine this year also top-ranked picking stocks and 2009 still reeling from the him the top US stock picker award for excellence in in the earnings estimates estimating earnings collapse of Lehman Broth- in this year’s StarMine investment analysis. category for the diversified was made that ers, the Wall Street invest- awards. Mr Repetto, a former financial services sector Tmuch more demanding last ment bank, in September His most successful call helicopter pilot in the US and in second place for the year with the US equity 2008 and shocked by the last year was the year-long military and now a capital markets sector in markets staging one of their scope of the government’s “buy” rating on Targa principal and analyst at the US. sharpest turnrounds of intervention in the finan- Resources Partners, a pro- Sandler O’Neill, a boutique In fact, every year since recent times. cial system. Commentators vider of midstream natural Wall Street investment 2004 he has been ranked by Following a 39 per cent were arguing that the finan- gas services, that gained 264 bank, is delighted to win, StarMine as one of the top fall in 2008, the S&P 500 cial world had entered a per cent over the period and describing it as “a very index ended last year 24 per new era, a “new normal”. outperformed its bench- fulfilling and satisfying cent higher and 65 per cent When asked what this mark by 242 per cent. moment” in his career. ‘We have a great above its low in March. new era might look like, Similarly, his calls on But he is quick to team, with two very DCP Midstream and Mark- highlight the importance of West Energy outperformed his team’s hard work in experienced their benchmarks by 204 winning the award, which analysts working Top 10 Stock Pickers – US per cent and 160 per cent is the equity analyst’s Rank Analyst Broker Industry Primary Coverage Industries respectively. equivalent of the Oscar for on the models’ Excess Mr Moreen, who covers a lifetime’s achievement. Return gas utilities and master lim- “It’s not just me,” he (%) ited partnership (MLP) says. “We have a great three US earnings 1 Moreen, Gabe BofA Merrill Lynch 26.4 Oil, Gas & Consumable Fuels; Gas Utilities; stocks, says a combination team, with two very estimators or stock pickers Global Research Capital Markets of attractive underlying talented analysts working in one or both of his 2 Ward, Peter Barclays Capital 24.8 Oil, Gas & Consumable Fuels; Metals & Mining fundamentals, low exposure Through experience, you Extensive experience and of opportunity for growth in Hot metal: ‘We have long on the models. It’s really a sectors. In 2006, he was 3 Torres, Lauren HSBC 21.4 Beverages to commodities prices and Top Brokers – US learn not to repeat a lot of breadth of perspective are the sector, particularly had an above­consensus team effort to get the ranked the best earnings 4 Liebowitz, Gary 20.7 Aerospace & Defence relatively minor capital Company Number of Awards them,” says Mr Ward, a crucial, says Mr Harmin, when looking by region. bullish view on copper,’ numbers right.” estimator and stock picker Securities needs helped them weather 1 Goldman Sachs 23 metals and mining analyst whose team has covered the The consumer was actually says Peter Ward of Mr Repetto, who covers for the diversified financial 5 Ward, Michael Soleil – Ward 19.1 Auto Components; Specialty Retail; Automobiles 2= BofA Merrill Lynch Global the seizure in the capital at Barclays Capital, for- diversified natural gas sec- quite strong in some coun- Barclays Capital Bloomberg the diversified financial services sector. Transportation Research 15 markets. This persuaded merly at Lehman Brothers. tor since 1991. tries last year.” services and capital Before joining Sandler Research 2= Stifel Nicolaus 15 6 Roy, Richard Citi Investment 18.9 Oil, Gas & Consumable Fuels; Construction & him to recommend the 4= Citi Inv. Research 13 His most profitable call Mr Harmon says: “Over One of those countries markets sectors, has been O’Neill in 2003, Mr Repetto Research Engineering stocks to his clients in late 4= Credit Suisse 13 was a year-long “over- this period, we have seen was , where AmBev, a years in the telecommunica- analysing internet financial covered the internet 7 Harmon, Jim Barclays Capital 18.8 Gas Utilities 2008, even as the equity 4= Robert W. Baird 13 weight/positive” on Free- economic, energy price and beer and drinks group and tions industry before stocks since 1997. He financial services sector at 8 Twigg, Weston Pacifi c Crest 17.4 Semiconductors markets were tumbling. 7= Barclays Capital 12 port McMoRan Copper & regulatory cycles giving Pepsi distributor, holds a becoming an equities ana- thinks his experience of Putnam Lovell. Between Securities Although Mr Moreen’s 7= RBC Capital Markets 12 Gold, which outperformed what we believe to be a dominant market position. lyst. the dotcom crash gave him 1997 and 2000, he was at 9 Adkins, J. Marshall and Raymond James 17.36 Energy, Equipment & Services; Oil, Gas & three most successful indi- 7= UBS 12 its benchmark by 171 per broad backdrop to make “AmBev was in the right The accuracy of Piper Jaf- an advantage over many of Lehman Brothers, where 10 Raymond James 11 Rollyson, James Consumable Fuels vidual calls were all “buy” cent. valuation comparisons and market, had the right fray’s Bob Napoli in analys- his competitors, when the he established the firm’s 10 Blanton, Alexander Ingalls & Snyder 16.7 Machinery; Electronic Instruments recommendations, he also Source, StarMine, a “We have long had an relate them to cyclical brands and was managing ing financial stocks won markets fell sharply 18 research coverage of that had “sell” recommendations Thomson Reuters company above-consensus bullish events.” costs effectively. We saw a him three top spots this months ago. sector. on a significant number of view on copper,” he says. His most successful call good opportunity in terms year – the number one He says: “I think I was His career has not been stocks in his ratings distri- “We felt there was far too last year was a year-long of relative valuation,” Ms stock picker and earnings fortunate to have seen two exclusively in finance. Top 10 Earnings Estimators – US bution. much of a sceptical outlook “underweight/neutral” rec- Torres says. She had a year- estimator in consumer big downturns during my Before graduate school, Mr Rank Analyst Broker Primary Coverage Industries With the markets rallying ing awards in the US this for copper discounted in the ommendation on Piedemont long “overweight” rating on finance, as well as the career. It helped us stay Repetto worked in Mobil as much as they did last year than analysts from share price.” Natural Gas, which under- the stock, which outper- number one stock picker in ahead of the game last Oil’s sales and marketing 1 Leopold, Simon Morgan Keegan Communications Equipment; Construction & year, it is perhaps a little any other broker, while Happily for his clients, performed its peers by 42 formed its benchmark by diversified commercial serv- year.” division. Engineering counterintuitive to see this, having a higher proportion copper was one of the year’s per cent. 109 per cent. ices. The experience He holds a BSc in 2 Salinsky, Mike RBC Capital Markets REITs notes William Herkelrath, of “underperform” recom- best performing commodi- Given that the Top 10 The highest ranked ana- “This is remarkable, may have helped, general engineering 3 West, James Barclays Capital Energy Equipment & Services director of research proposi- mendations than any other ties, with its price more stock pickers list is domi- lyst from a small brokerage given the sheer number of but there was from the US 4 Dietert, Jeff Simmons & Company Oil, Gas & Consumable Fuels; Independent Power tion at Thomson Reuters bulge-bracket broker. than doubling, and Free- nated by analysts covering was Michael Ward of analysts that compete in plenty of hard Military Academy Producers whose subsidiary StarMine Peter Ward, who took sec- port’s stock price soaring commodities-related stocks, Soleil-Ward Transportation this space and the overall work involved as at West Point, and 5 Marshall, Brian Broadpoint Gleacher Computers & Peripherals; Communications compiles the rankings. ond place in StarMine’s 229 per cent higher. Lauren Torres’ third place Research, who covers auto interest level that the well. As the an MBA in finance Equipment But, he says: “You overall stock-picker rank- Barclays Capital has the particularly stands out. and auto component stocks. finance space tends to com- markets troughed from the Wharton 6 Gunderson, Thomas Piper Jaffray Healthcare Equipment couldn’t win the award by ings and was its number distinction of being the only ‘It took a leap of Covering the global bever- He came fifth overall, hav- mand in the market,” says and peaked in School of the 7 Sprague, Jeffrey1 Citi Investment Research Electrical Equipment; Industrial Conglomerates; just being indiscriminately one stock picker in the met- broker with more than one faith to make stock age sector at HSBC, last ing outperformed his bench- Mr Herkelrath. 2008 and last year, University of Aerospace & Defence; Machinery bullish last year. You had als and mining sector, says top-10 rated stock picker. year she outperformed her mark by 19.1 per cent. Lasan Johong at RBC he and his team Pennsylvania. 8 Fassler, Matthew Goldman Sachs Specialty Retail to differentiate, have a mix his 16 years in equity Jim Harmon, who has recommendations benchmark by 21.4 per cent Simon Leopold, who Capital Markets also stood came in to work 9 Sokol, Ariel Wedbush Morgan Securities Consumer Services and find names that would research were crucial to covered energy stocks for and was number one covers telecommunications out for his dominance in at weekends to Ahead of while the world was the game: 10 Miller, Mark William Blair & Company Food & Staples Retailing; Multiline Retail; Oil, Gas go down as well as up.” outperforming his bench- almost 20 years and was ranked stock picker in the equipment stocks at Mor- power pro- update their & Consumable Fuels; Specialty Retail A similar logic is evident mark by 24.8 per cent. also formerly at Lehman, melting down’ beverage sector in the US. gan Keegan, was the high- ducers and energy traders models. Richard Repetto 1Now at Vertical Research Partners. at the broker-level. Bank of “Prediction is a very won seventh place and was Gabe Moreen, Ms Torres, who has cov- est rated earnings estimator sector, coming first in the “The Source: StarMine, a Thomson Reuters company America Merrill Lynch ana- humbling occupation and the top rated stock picker BofA Merrill Lynch ered the sector since 2002, overall in the US, as well as earnings accuracy and numbers lysts won more stock pick- everyone makes mistakes. in the gas utilities sector. says: “I think there is a lot in his sector. He spent 12 stock picking categories. were