< The 2016 All-Europe Research Team
Patrick Wellington & team
Morgan Stanley
First-place appearances: 1
Total appearances: 21
Team debut: 1995
Patrick Wellington shepherds his Morgan Stanley group to third place, down one notch since last year. “Media is the home of outperformance,” the 53-year-old coverage leader declares. “It outperformed in 2015 — again — and likely will do so once more in 2016.” He and his colleagues tend to hold long-term positions, he notes. For example, they have touted British broadcaster ITV for more than a year, encouraging investors to overweight the shares based on their “confidence in the robustness of U.K. TV advertising, both in cyclical terms and in the face of the structural threats to linear broadcast viewing,” Wellington says. Over the 12 months through mid-January, the stock advanced 20.6 percent, to 259.40p, compared with the regional sector’s loss of 11.6 percent and the European broad market’s decline of 12.4 percent. The team did, however, change course on Luxembourg’s SES during the past year. In April they lowered their rating on the satellite services provider from equal weight to underweight, citing a disruptive series of earnings-per-share downgrades, as well as “structural fears impacting its data business and the long-term outlook for the video operations,” he recalls. By the middle of last month, SES had tumbled 24.3 percent, to €24.31, lagging Europe’s media names overall by 8.5 percentage points and its wider market by 5.8 percentage points. In their tracking of 30 companies in this space, the London-based researchers deliver “objective analysis and unique insights,” one supporter attests.