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The 2014 Latin America Research Team: Technology, Media & Telecommunications, No. 2: Michel Morin & team

Michel Morin & team Morgan Stanley First-place appearances: 2

Total appearances: 17

Team debut: 1995

Morgan Stanley’s squad led by Michel Morin in New York slips from first place on this lineup to No. 2. The team initiated coverage on Mexican services provider América Móvil in September 2011 and maintained an underweight rating until the analysts upgraded the stock to equal weight in March 2013. The shares had trailed Latin America’s emerging markets by 33.2 percentage points over that period, falling 22 percent, to 11.60 Mexican pesos. “We have been concerned that the regulatory environment in Mexico was becoming more challenging and that competitors would gradually become stronger and better positioned to gain market share, producing a steady erosion in AMX profitability in its most important market,” Morin says. Indeed, in July, management announced it would sell assets in its home country to reduce its market share and regulatory burden ahead of changes set to take effect in August. Later that month, Morin and his colleagues downgraded the shares to sell, with the stock at 15.47 pesos, but they maintained their target price of 19 pesos. Overall, they are positive on the prospects for the region’s technology subsector, have a cautious view of telecoms names and maintain an in-line stance on media players. “In technology we like the long-term growth outlook as well as the attractive nature of recurring-revenue and asset-light business models,” he explains. “In telecoms the current situation and outlook for the sector vary greatly by country. But generally speaking, it is an industry where companies often struggle to earn a return above their cost of capital. Investors always need to be very selective.”


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