Basic Materials – Chemicals: First

Investors credit J.P. Morgan’s Jeffrey Zekauskas, who leads the lineup for a second consecutive year, with providing “grounded, unemotional assessments” and asking “insightful questions of management.” The 58-year-old analyst upgraded Monsanto Co., a St. Louis–based seed and pesticide supplier, from neutral to overweight in October 2011, at $65.49, largely on high seed demand and its new pest-control products. The stock soared 33 percent, to $87.11, and beat the sector by 6.3 percentage points, through August. In November he raised Ashland, a specialty-chemicals producer headquartered in Covington, Kentucky, from neutral to overweight, dubbing the shares a bargain after disappointing quarterly earnings drove the price down to $49.41. By late August the stock had jumped 49 percent, to $73.63. During the same period the sector rose 15.2 percent. Zekauskas, who follows 36 stocks, is recommending Mosaic Co., partly on the Plymouth, Minnesota–based fertilizer provider’s share-repurchase program. “Jeff thinks like his clients,” observes one buy-sider. “He wants to be right with minimal risk.”