Autos & Auto Parts Harald Hendrikse & team BofA–Merrill Lynch
second team Arndt Ellinghorst & team Credit Suisse Credit Suisse
third team Adam Jonas & team Morgan Stanley Morgan Stanley
runner-up John Lawson & team Citi Citi
Beverages
Nico Lambrechts & team BofA–Merrill Lynch
second team Trevor Stirling & team Sanford C. Bernstein
third team Alexandra Oldroyd & team Morgan Stanley
runners-up Philip Morrisey & team Citi; Michael Bleakley, Anthony Bucalo & team Credit Suisse; Simon Hales, Andrew Holland & team Dresdner Kleinwort; Michael Gibbs J.P. Morgan; Melissa Earlam & team UBS
Food Producers
Charles Mills & team Credit Suisse
second team Andrew Wood & team Sanford C. Bernstein
third team Alan Erskine UBS
runners-up Nicolas Sochovsky & team BofA–Merrill Lynch; Michael Steib, Daniel Wakerly & team Morgan Stanley
Household & Personal Care Products
Eva Quiroga UBS
second team Harold Thompson Deutsche
third team Andrew Wood & team Sanford C. Bernstein
runner-up Nicolas Sochovsky & team BofA–Merrill Lynch
Leisure & Hotels
Jamie Rollo & team Morgan Stanley
second team Simon Champion & team Deutsche
third team Leslie Zarka & team Citi
runners-up Ian Rennardson & team BofA–Merrill Lynch; James Ainley & team J.P. Morgan
In first place for a fifth year running is the Morgan Stanley foursome directed by Jamie Rollo , 36. Praised by clients for their "sound global view" and "uncanny foresight," the researchers told investors to buy France’s Accor in October, at €31.67, owing to the hotel operator’s strong balance sheet and attractive valuation. By the end of December, the stock had jumped to €35.11, a gain of 10.9 percent that beat the sector’s by 7.3 percentage points. In second place for a third straight year is the now–seven-strong Deutsche Bank squad led by Simon Champion , who is hailed by one backer as "an independent thinker." In September the team downgraded cruise operator Carnival to sell, at £17.24, calling the company’s focus on asset acquisition misguided. The stock had sunk 21.4 percent, to £13.55, by early November, and the group upgraded it to neutral. It finished the year at £15.09. The now–three-member Citi team overseen by Paris-based Leslie Zarka , which repeats in third place, impresses investors with its "exceptional insight" and "exceptional grasp on the sector." Throughout 2008 the team reiterated its long-standing buy recommendation on U.K.-based catering-services provider Compass Group, on strong growth prospects. The stock gained 11.5 percent last year.
Luxury Goods
Antoine Colonna & team BofA–Merrill Lynch
second team Melanie Flouquet & team J.P. Morgan
third team Yasuhiro Yamaguchi UBS
For a sixth straight year, the top spot is claimed by the Banc of America Securities–Merrill Lynch quartet captained by Paris-based Antoine Colonna , 40. "The team is a bit like a luxury goods product — does everything you expect and a little bit more," cheers one buy-sider. The analysts made an early contrarian downgrade of Cie. Financière Richemont to neutral way back in January 2007 and have highlighted the call repeatedly since, warning that the Swiss jeweler would be adversely affected by a consumer spending slowdown. The stock dropped 50.6 percent last year. The two-member J.P. Morgan Securities team led by Melanie Flouquet , in second place for a third consecutive year, provides "good company access, detailed models and constant availability," according to one investor. In October the pair informed investors that "the sector is set for a deceleration" in the second half of 2008. They were right. The sector, which slid 21.3 percent in the first half of 2008, tumbled 31.0 percent in the second half. Yasuhiro Yamaguchi repeats in third place. The UBS analyst, who works solo, "made great contrarian calls, well ahead of the market," says one client. Case in point: Yamaguchi downgraded U.K.-based fashion retailer Burberry Group to sell last February, at 440.00p, citing margin pressures. By year-end the stock had unraveled 49.6 percent, to 221.75p.
Pan-European Small- & Midcapitalization Stocks
Pedro Baptista & team UBS
second team Flavio Cereda & team BofA–Merrill Lynch
third team Carole Rozen & team CA Cheuvreux
runner-up Eduardo Lecubarri & team J.P. Morgan
Extensive coverage combined with a rigorous fundamental research approach," according to one fund manager, helps keep the now–23-member UBS troupe on top for a fifth consecutive year. Led by Porto, Portugal–based Pedro Baptista , 40, the team added coverage of about 50 stocks in the past year, for a total of 600. Successful calls included a January 2008 sell recommendation on Spain’s NH Hoteles, at €11.82, on concerns about falling occupancy rates. The share price had plunged to €3.69 by year-end, a loss of 68.8 percent that trailed the small-caps subsector’s by 20.3 percentage points. Unranked since 2004, the seven-strong Banc of America Securities–Merrill Lynch team, now under the direction of Flavio Cereda , finishes in second place. The team, which tracks 60 stocks, upgraded French digital-security-services provider Gemalto to buy in June, at €23.45, on strong growth prospects. The share price had soared 27.2 percent by late August, to €29.83, at which point the team stopped publishing formal ratings because the company established a banking relationship with Merrill. Praised by one satisfied client for its "locally based, broad coverage," with 20 analysts in nine cities, the Crédit Agricole Cheuvreux squad piloted by Paris-based Carole Rozen advances from runner-up to third. Attractive valuations prompted the team to issue buy recommendations in February on a pair of railway equipment manufacturers: France’s Faiveley, at €32.70, and Italy’s Ansaldo STS, at €8.62. By year-end the stocks had steamed ahead 47.1 and 16.2 percent, respectively, to €48.09 and €10.02.
Retailing/Food & Drug Chains
Jaime Vazquez & team J.P. Morgan
second team James Anstead & team Citi
third team Andrew Kasoulis & team Credit Suisse
The three-member J.P. Morgan Securities team climbs one notch to claim first place for the first time since 2000. Under the direction of Jaime Vazquez , the analysts "dig deep and uncover all kinds of useful information," asserts one portfolio manager. In August they urged investors to buy Netherlands-based supermarket operator Royal Ahold, at €8.34, saying the company’s repositioning of its U.S. operations would result in a healthier bottom line. By the end of the year, Ahold’s shares had risen to €8.79, gaining 5.4 percent at a time when the sector lost 8.8 percent. Vazquez, 39, who earned a bachelor’s degree in economics at Universidad Pontificia Comillas de Madrid in 1992, worked as an analyst at Cazenove and Salomon Smith Barney before joining J.P. Morgan in 2003. After three years on top, the two-member Citi team, now steered solely by James Anstead following the July departure of David McCarthy, slips to second place. Praised for research that "goes far beyond commenting on quarterly results," according to one client, the team downgraded Belgium-based Colruyt to sell in October, deeming the stock fully valued at €171.50. Through December the supermarket operator’s shares tumbled 10.3 percent, to €153.75. In third place for a third straight year is the Credit Suisse trio led by Andrew Kasoulis . The team upgraded U.K.-based Wm. Morrison Supermarkets to outperform in May, saying the retailer’s strong balance sheet left it better positioned to weather a market downturn than its rivals. By December 31 the stock had outperformed the sector by 17.4 percentage points.
Retailing/General
Simon Irwin & team J.P. Morgan
second team Richard Edwards & team Citi
third team Rodney Whitehead & team Deutsche
runners-up Luca Solca & team Sanford C. Bernstein; Anthony Shiret & team Credit Suisse; Andrew Hughes & team UBS
Catapulting from runner-up to first place is the J.P. Morgan Securities duo led by Simon Irwin , 44. The analysts "are very good at detailed thematic research and communicate their research very well," says one buy-side enthusiast. In January 2008 the analysts downgraded U.K. clothing retailer Marks & Spencer Group to sell, at 408.50p, anticipating a slowdown in consumer spending. The stock had plunged 48.5 percent, to 210.25p, by early October, and the team upgraded it to hold, on valuation. M&S shares had inched up 2.1 percent by year-end, to 214.75p. Irwin, who earned bachelor’s degrees in law and history at the University of Exeter in 1995,worked as a retail analyst at Goldman Sachs International in London before joining J.P. Morgan in July 2007. The two-man Citi team, now directed solely by Richard Edwards following the May departure of Bruce Hubbard, climbs one rung to second place. Praised by one investor for their "valuable insights," the analysts downgraded DSG International to sell in June, at 57.75p, citing high debt levels and dwindling sales at the U.K.-based electronics retailer. The stock nosedived 69.7 percent, to 17.50p, through December. After two years in second place, the Deutsche Bank foursome guided by Rodney Whitehead slips to third, but it continues to provide research that is "thoughtful and often contrarian," according to one money manager. In May the team reiterated its buy recommendation on Kingfisher, at 137.30p, calling the U.K.-based chain of home improvement stores a great turnaround story, thanks to a new management team. By year-end the stock had held its ground against a 23.7 percent sector plunge, ending the year at 135.00p.
Tobacco
Adam Spielman Citi
second team Erik Bloomquist & team J.P. Morgan
third team Jonathan Leinster UBS
Citi’s Adam Spielman , who captures the crown for a third consecutive year, "produces very good models that are very easy to use, and his broad knowledge of the sector makes him a reference point," avows one investor. The 42-year-old analyst, who works solo, reiterated his buy recommendation on British American Tobacco in March, at £18.95, citing the U.K.-based cigarette manufacturer’s cost-cutting initiatives and growth prospects. By year-end the share price had slipped to £18.00, a decline of 5.0 percent that outperformed the sector’s loss by 3.9 percentage points, and Spielman says the stock remains a viable long-term opportunity. Erik Bloomquist guides the J.P. Morgan Securities trio from runner-up to second place. The analysts, who "focus on fundamentals rather than market noise," according to one client, highlighted their sell recommendation on Swedish Match in January 2008. Shares of the Stockholm-based snuff manufacturer were overvalued at 159.10 Swedish kronor, they reasoned, because the price was based on rumors of a takeover by U.S.-based cigarette maker Altria Group that was unlikely to happen — and it hasn’t. Swedish Match shares ended the year down 29.8 percent, at Skr111.75. Although he drops one rung to third place, solo analyst Jonathan Leinster continues to impress investors with his "rigorous fundamental approach and in-depth knowledge of companies covered," in the words of one satisfied buy-sider. The UBS researcher upgraded Imperial Tobacco Group to neutral in August, saying a recent sell-off had left shares of the U.K.-based cigarette manufacturer reasonably valued at £19.55. The stock had dipped to £18.50 by year-end, but Leinster remains bullish.
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