< The 2016 All-Europe Research Team
Filip de Pauw & team
ING Financial Markets
First-place appearances: 2
Total appearances: 10
Team debut: 1998
At No. 2 on this list is ING Financial Markets’ group of 11 analysts, which vaults from runner-up under the direction of newcomer Filip de Pauw, 44. With ING since September 2006, he was a member of the research management team before becoming head of this Benelux crew at the end of 2014, taking over from Marco Gulpers, who now oversees the firm’s consumer and agricultural corporate finance efforts. De Pauw previously worked as an equity analyst and head of the derivatives department at Delta Lloyd Securities. He earned two master’s degrees, in applied economics and in finance, from Belgium’s Universiteit Gent and Universiteit Antwerpen, respectively. Covering 120 Benelux stocks from dual headquarters in Amsterdam and Brussels, his squad earns high marks from one U.K.-based fund manager for its "good market access and great conferences — and for bringing companies through London." Another investor hails it for "going deeper and providing in-depth research — especially in financials, construction, specialty chemicals and real estate." Two of the analysts’ preferred names, Belgium’s Bekaert and Solvay, operate in those industries. Fabricated-metal and hardware concern Bekaert is both undervalued and underappreciated, they believe. Although generally perceived as vulnerable because of its exposure to ongoing weakness in emerging markets, the company is "more of a mature-markets play," de Pauw contends. In addition, he notes, one-off charges prompted market participants to overlook the company’s strong underlying results in the first half of 2015 — recurring earnings before interest, taxes, depreciation and amortization jumped 21.7 percent year over year, to €219 million ($243 million), with margin improvement from 11.2 percent to 11.5 percent — resulting in low consensus estimates on profitability. Accordingly, at €34, the researchers’ price target for the stock implies a 24.8 percent upside to its value at the middle of last month. Solvay, which makes chemicals and plastics, wins their backing thanks to management’s ability to transform the company into a producer of advanced materials while working to overcome a "challenging environment of slow growth in emerging markets and low oil prices," reports de Pauw. This push is accelerating with its December acquisition of U.S.-based Cytec Industries, creating the world’s second-largest player in aerospace composite materials. ING’s team pegs the Solvay shares at €136; they closed in mid-January at €81.06.