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The 2014 All-America Research Team: Integrated Oil, No. 1: Douglas Leggate

< The 2014 All-America Research TeamDouglas LeggateBank of America
Merrill LynchFirst-Place Appearances: 1

Total Appearances: 7

Analyst Debut: 2006

Rising from No. 2 to claim his first top finish on this roster is Douglas Leggate of Bank of America Merrill Lynch, who “does a good job in summarizing quarterly results, with an emphasis on some of the underlying stock performance drivers that are below-headline results,” according to one money manager. The long-term outlook for commodities prices is favorable, although short-term factors that tend to exacerbate volatility — namely, geopolitics and seasonality in refining — “drive us to a stock-specific focus on the sector,” asserts the 48-year-old analyst. In particular, he favors companies whose leadership teams demonstrate a willingness to unlock value, especially “through underappreciated asset sales and return of capital to shareholders,” Leggate explains. Consequently, he touts independent producers Hess Corp., which is based in New York, and Houston’s Occidental Petroleum Corp., as they have done the most in this regard. Although Anadarko Petroleum Corp., which he also urges investors to buy, is at the beginning of the process, he believes that the Woodlands, Texas–based provider has “a lot of embedded value in things that don’t currently generate cash flow. So when you adjust for those, it screens as one of the most attractive stocks in the sector,” he adds. “But the only way to really release that value is for management to take the necessary steps to monetize the assets — and that’s the process they’re in right now.” Leggate, who works out of Houston and also merits a runner-up position this year for his coverage of Oil & Gas Exploration & Production names, joined Bank of America Merrill Lynch in 2009 from Howard Weill, where he also covered integrated oil companies, as he previously had done at Citi and HSBC James Capel. Before joining the buy side, Leggate worked as an engineer at Chevron Corp. in both London and offshore Scotland in the North Sea. He earned a bachelor’s degree in mechanical engineering from Scotland’s University of Strathclyde and an MBA from the University of Warwick in England. The researcher “is not afraid of recommendations that are contrary to popular opinion,” remarks another advocate.

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