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2015 All-America Research Team: Metals & Mining, No. 1: Timna Tanners

Bank of America Merrill Lynch’s Timna Tanners “is the epitome of dedication,” remarks one buy-side counterpart.

Timna Tanners
Bank of America
Merrill Lynch
First-Place Appearances: 3

Total Appearances: 6

Analyst Debut: 2009

Bank of America Merrill Lynch’s Timna Tanners “is the epitome of dedication,” remarks one buy-side counterpart. “It’s impressive how she continues to produce high-quality research despite the utter lack of long investment opportunities in the sector.” Earning her third consecutive top finish, Tanners, 42, keeps tabs on 21 U.S. metals and mining companies. “She’s not afraid to deviate from the consensus, leveraging a global network of channel checks to produce high-conviction calls,” observes one portfolio manager. For example, in March the analyst downgraded both New York–based aluminum giant Alcoa and coal miner Consol Energy of Canonsburg, Pennsylvania. First, citing pressure on earnings from declining prices for aluminum, she moved Alcoa from buy to neutral. By early September its stock had been driven down 37.2 percent, to $9.49, in line with the sector’s performance. At that point, Tanners turn positive, raising her rating to buy. Investors are discounting the value of acquisitions that management has recently pursued to increase the company’s exposure to strong demand in the aerospace industry, thereby reducing its sensitivity to aluminum price weakness, she believes. Regarding Consol, however, she remains pessimistic, maintaining an underperform rating since cutting her outlook from neutral a week after lowering Alcoa. Poor fundamentals in China and a strong dollar are creating oversupply that is in turn suppressing prices for U.S. coal and natural-gas providers, the researcher notes. Through mid-September, Consol tumbled 53.5 percent, to $13.02, lagging its peers by 25.9 percentage points. Going forward, Tanners prefers Steel Dynamics, anticipating a margins recovery and declining scrap prices, which would benefit its mini mills’ performance. Shares of the Fort Wayne, Indiana–based supplier to steel processors were trading at $17.89 in mid-September, and she projects a rise to $24.

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