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The 2014 All-America Research Team: Electrical Equipment & Multi-Industry, No. 1: Scott Davis

< The 2014 All-America Research TeamScott DavisBarclaysFirst-Place Appearances: 4

Total Appearances: 10

Analyst Debut: 2005

It’s three in a row at the top of this lineup and fourth No. 1 since 2010 for Barclays’s Scott Davis, who retains client loyalty because he “speaks his mind and identifies the elephant in the room,” as one advocate puts it. Another adherent deems Davis “a prolific stock picker.” The analyst, 46, reports on 26 names, and investors cheer his steadfast support of Tyco International. The Swiss security services conglomerate has been enjoying outsize operating-margin expansion and strong returns on invested capital, notes Davis, who has dubbed Tyco worthy of overweighting since September 2012, when its New York Stock Exchange–listed shares were trading at a split-adjusted $26.51. By the middle of last month, they had jumped to $44.22, gaining 32.7 percent over the trailing 12 months alone and outdistancing their peers by 28.8 percentage points over that period. A name he has more recently favored is Rexnord Corp., a Milwaukee-based small-cap manufacturer of industrial components. Citing the company’s improving balance sheet and M&A potential, the researcher upgraded Rexnord from equal weight to overweight in June. Sure enough, by mid-September the stock had climbed 13.6 percent, to $29.15, against the sector’s decline of 4.9 percent. It remains a top pick, earning a price target of $37. Portfolio managers also praise Davis for his fireside chats with top CEOs and CFOs during the Barclays Industrial Select Conference that convenes every February in Miami. “We not only got to ask questions, but last year he polled the audience to gauge market interest in the different stocks,” reports one buy-side participant.

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