< The 2015 All-Europe Research Team
Jonathan Hocking & team
Morgan Stanley
First-place appearances: 0
Total appearances: 27
Team debut: 1989
Maintaining the No. 2 spot on this lineup that they first earned in 2013, Jonathan Hocking and his Morgan Stanley squad are “particularly strong in global insurance,” remarks one fund manager. Especially valuable, this admirer adds, is the research on British multinational Prudential and Hong Kong–based provider AIA Group that Hocking does with his colleague Bin (Ben) Lin — who reports on China’s insurers and directs coverage of the Asia-wide sector from Hong Kong. “Ben and Jon do very good work together on Pru and AIA, which are listed in different regions but [have] overlapping businesses.” Morgan Stanley’s Europe team members work out of London and Mumbai, reporting on 33 regional insurance companies. They are upbeat about their sector, which outperformed the broader market by 7.1 percentage points during the 12 months through January, rising 15.1 percent. That trend should continue throughout this year, “given the attractive dividend yield and the potential for more capital management, as we approach the implementation date of Solvency II [Directive],” explains Hocking, 41. (The European Union’s codification of insurance standards is scheduled to take effect at the beginning of next year.) At the company-specific level, the researchers are positive on Prudential going into 2015. “We continue to think the group has one of the strongest franchises in global insurance, will grow free cash rapidly and is attractively valued,” says Hocking, 41. Their target price for the stock is 1,736p, which represents a 7.2 percent premium to its trading value at the end of January.