< The 2015 All-Europe Research Team
Andrew Garthwaite & team
Credit Suisse
First-place appearances: 3
Total appearances: 31
Team debut: 1989
Leaping from runner-up to reclaim the No. 2 spot it most recently held in 2012 is the eight-person Credit Suisse squad steered by Andrew Garthwaite, one of the most honored analysts in the 30-year history of Institutional Investor’s All-Europe Research Team. Investors are too pessimistic regarding Europe, the researchers believe, given the weakening euro, falling oil prices and stabilizing bank balance sheets. Two regional sectors they recommend that clients prefer are telecommunications and employment agencies. Telecoms have a high free-cash-flow yield that is being distributed in dividends, the strategists advise. Moreover, “of all the sectors I look at globally, European telecoms have the best bottom-up story, in terms of consolidation, emerging pricing power, change in regulations and cost cutting,” explains Garthwaite, 52, who works out of London; his colleagues are in London and Mumbai. As for employment agencies, the strategists expect deregulation across European job markets to lead to a structural increase in temporary workers, particularly in Italy and Germany. “I think people are too negative on European growth, particularly the ability of corporates to spend. And I think you will get a bit more of a cyclical pickup in employment,” says the crew chief. “European employment agencies also have quite high exposure to the U.K., where wage growth is picking up. On top of this their valuations are abnormally attractive.”