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Industry Sectors: Insurance

Jumping from third place to capture top honors for the first time is the J.P. Morgan foursome directed by Duncan Russell.

Duncan Russell & team J.P. Morgan

second teamBrian Shea & team BofA Merrill Lynch

third teamWilliam Hawkins & team KBW

Jumping from third place to capture top honors for the first time is the J.P. Morgan foursome directed by Duncan Russell. The team, praised by one ­money manager for “outside-the-box thinking and punchy recommendations,” resumed coverage of Fortis in May with a buy rating, at €1.85, on the strength of the Benelux insurance giant’s financial position following the sale of its banking operations: Fortis had become “an insurance company with a pile of cash and some interesting call options,” the analysts wrote. (They had stopped tracking Fortis in November 2008, after the cash-­strapped com­pany was partially nationalized by the Dutch and Belgian governments.) The stock had zipped to €2.62 by year-end, a 41.6 percent gain that beat the sector by 22.3 percentage points. Russell, 31, who earned a bachelor’s degree in history from England’s Bristol University in 1999, was an analyst at Fox-Pitt Kelton Cochran Caronia Waller before joining J.P. Morgan in 2008.

After two years in first place, the four-­analyst BofA squad steered by Brian Shea slips to second. The analysts “took a more rational approach than some of their competitors who were pushing doomsday scenarios that just did not occur,” explains one impressed investor. The team issued a contrarian upgrade of Swiss Re from neutral to buy in May, at Sf32.70, on the Zurich-­based reinsurer’s improving earnings outlook. In September, after the stock had shot up 46.8 percent, to Sf48, the analysts downgraded it to neutral, on valuation. Since then it moved roughly in line with the sector’s 3.4 percent gain, through December.

Unranked last year, the six-strong Keefe, Bruyette & Woods team led by William Hawkins finishes third. One buy-side backer applauds the team’s “detailed, thorough and insightful work” on Prudential, with its “focus on capital, sales outlook and prospects in Asia.” The analysts reiterated their outperform rating on the U.K.-­based insurer in December 2008, at 291.77p, citing strong growth prospects. The stock catapulted 119.4 percent, to 640p, and beat the sector by an incredible 98.2 points, through December 2009.

To go back to the index page, click on the Best European Analysts of the Year: 2010 All-Europe Research Team.

To read the article, click on: Reversal of Fortunes: The 2010 All-Europe Research Team.

Click here to access the complete rankings of the 2010 All-Europe Research Team.

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