Total appearances: 4
Team debut: 2011 Ricardo Cavanagh heads the Itaú BBA twosome that earns first place on this roster for a third year running; he also directs teams that win runner-up positions for their coverage of Chile and North Andean Countries. Stationed in Santiago, 46-year-old Cavanagh and his Buenos Aires–based associate produce research that one client lauds as “unparalleled,” adding that the team leader’s deep experience covering Argentina’s market in large part explains that peerless work. Cavanagh acknowledges that understanding the South American nation’s volatile political and economic climate is crucial in properly guiding equity investors on the country’s opportunities. “Top-down themes typically account for 60 to 70 percent of any call on Argentina,” he says. Since defaulting on its debt in 2001, the country has been significantly walled off from international capital markets, and its sovereign bond spreads have expanded to among the widest levels seen in emerging markets. But with an eye on the impending political changeover, Cavanagh says that could be set to change. “We are advising clients to be very conscious about timing of any investment in Argentina,” he reports. “We have a bullish view on Argentinian equities during the political cycle that will start in December 2015, when a new administration comes in.” Friendlier international markets are likely to attend the change of national leadership, Itaú’s researchers believe, and equity prices will benefit as a result. In particular, he adds, investors should watch stocks set to rise on the back of improvements in the banking and energy sectors. Two names whose prospects the analysts particularly like are Buenos Aires–based Inversiones y Representaciones Sociedad Anónima — a real estate developer that could take advantage of an improved credit environment to expand its already-formidable shopping mall footprint — and YPF, the Argentinian energy company best poised to benefit from rising oil and gas prices and early efforts to develop the country’s extensive shale gas reserves. “Argentina is a country with phenomenal potential that surprises with boom and bust periods in the span of a decade,” Cavanagh says. “We think the cycle just around the corner will be a boom.”
