Institutional Investor All American Research Team | Page 8
66/research & rankings THE FUTURIST THE CHARTIST CONTENTS INSIDE II OP
DE II OPENING CAPITAL THE 2012 ALL-AMERICA RESEARCH TEAM INVESTING RESEARCH & RANKINGS THE FUTURIST THE CHARTIST CONTEAM INVESTING
rates, their more defensive business model and their lack of
international and foreign currency exposure,” Fleishman
contends. However, with valuations near a 25 percent premium to the market — typically,
they’re at a 10 to 15 percent discount — “global macro conditions need to deteriorate
further” for the outperformance
to continue, he warns. Look for
utilities with “superior totalreturn potential,” he advises,
such as NV Energy of Las Vegas
and NextEra Energy of Juno
Beach, Florida, which he says
are likely to enjoy dividend
growth of 10 percent the next
few years. Fleishman “really
gets into the weeds of financial
statements, which is helpful for
those of us on the buy side who
aren’t as excited about accounting,” notes another ally. — C.K.
ing to rebuild the economy as
“people go out and hire rigs to
drill for gas and find it and
develop it, and it then goes to
the U.S. processing industry.”
Sankey argues that the refining
industry benefits because it’s at
“the leading edge of the U.S.
processing and manufacturing
renaissance.” Refining possesses
“a double advantage because it
benefits from the very cheap
crude we have now in the U.S.
and from cheap natural gas,
which comprises a large portion of operating costs,” he
adds. Current favorites include
HollyFrontier Corp., which is
headquartered in Dallas, and
Houston-based Phillips 66,
which “captures the entirety of
the U.S. unconventional
boom,” Sankey says.
— C.K.
ing of as much as $20 billion
next year) and estimated distribution yields, Maresca believes,
the sector could have a total
return of 12 to 13 percent in
2013. He is monitoring the
issues that drive new building
needs, such as exploration and
production company spending
plans and production forecasts
from developing oil and gas
plays. His stock recommendations include Houston-based
Plains All American Pipeline;
Tulsa, Oklahoma–based
Williams Partners; and
Pittsburgh’s Atlas Energy. “He
was early to the theme of distribution growth resulting from the
shale infrastructure build-out,”
applauds one investor. — C.K.
predicts, adding that with gas
prices at historic lows, gas-fired
plants are being run for longer
periods of time — and growth is
set to accelerate starting in 2014
as new facilities announced by
petrochemicals companies, the
largest industrial consumers of
natural gas, are constructed and
come on line. “We’re seeing the
petrochemicals industry come
back to the U.S.,” Barone says.
“You’re going to see a rebirth of
the steel industry and ultimately
— though it’s from a very, very
low base — you’re going to see
a lot more natural-gas vehicles.” His current recommendations include EQT Corp. of
Pittsburgh; National Fuel Gas
Co. of Williamsville, NewYork;
and Tulsa, Oklahoma–based
Williams Cos.
— C.K.
Business School before working in research at Wachovia
Securities and Credit Suisse,
among other firms; he joined ISI
in July 2011. Given low oil and
gas prices, companies are struggling to fund their budgets, he
says, and the “general view is the
winners will be ones that keep
their balance sheets in check and
fund their growth without having to borrow money or sell
equity.” Key issues to watch for
include financial and reserverelated write-downs, because
“fields that were once seen as
economic may have costs that
are higher than expected and/or
the reserves are not as prolific
on an economic basis at lower
prices,”Wolff adds.
— C.K.
INTEGRATED OIL
Paul Sankey
Deutsche Bank Securities
The buy side says:
“Paul’s global view results in
world-class research.”
O
n the first team for a second year in a row,
Deutsche Bank Securities’
Paul Sankey provides a “bigpicture view of the industry,
which incorporates both financial and political sensitivities,”
observes one advocate. Sankey,
45, hails the U.S. unconventional oil and gas transformation — focused on resources
such as shale — as a “dramatic
shift” that’s reversing 30 years of
falling production; it’s also help-
Stephen Maresca
Morgan Stanley
The buy side says:
“Steve has conviction in his
ideas and isn’t afraid to take
a contrarian stand.”
M
organ Stanley’s Stephen
Maresca is No. 1 for a
second straight year; he also
wins third place in Natural Gas.
The 37-year-old researcher is
positive on the sector, observing
that the oil and gas industry
dynamics are “supportive of a
visible secular growth story, as
increasing drilling volumes in
certain regions of the country
are requiring new infrastructure
to be constructed.” Between
distribution-growth payouts
(driven by development spend-
I N S T I T U T I O N A L I N V E S T O R . C O M • O C T O B E R 2 012
Ronald Barone
Ole Slorer
BANKS/MIDCAP
OIL SERVICES & EQUIPMENT
UBS
OIL & GAS EXPLORATION
& PRODUCTION
The buy side says:
“His experience through all
market cycles is invaluable.”
Jonathan Wolff
R
The buy side says:
“His forward-looking
thinking is extremely helpful
in portfolio positioning.”
onald Barone has spent
more than half his life on
the All-America Research
Team.The 69-year-old has
appeared 40 times in the 38
years since 1975. (In 1994 and
1997 he ranked in two sectors.)
This year he climbs one notch
to claim first place for an eighth
time. “The best days for this
industry now are ahead of it,”
the UBS analyst proclaims, citing rising consumption on the
back of increased unconventional supply from technological
advances in drilling. “Natural
gas is going to result in a rebirth
of the U.S. industrial base,” he
ISI Group
U
nranked in 2011, Jonathan
Wolff shoots straight in at
the top — his first such appearance and quite possibly his last:
Wolff left ISI Group in late July
to join NewYork–based asset
manager PointState Capital.The
39-year-old is “one of the best at
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