The 2014 All-Asia Research Team: Australia/New Zealand, No. 1: Andrew Kearnan & team
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The 2014 All-Asia Research Team: Australia/New Zealand, No. 1: Andrew Kearnan & team

Andrew Kearnan & team

Bank of America

Merrill Lynch

First-Place Appearances: 2

Total Appearances: 25

Team Debut: 1995

Bank of America Merrill Lynch marks its 25th appearance on this roster — the most in a single sector by any currently ranked firm — by recapturing first place after a year at No. 2. Andrew Kearnan, 46, directs his 40-strong troupe in covering some 190 companies in Australia and New Zealand from bases in Melbourne and Sydney. These analysts “tap into local chatter and correlate it well with macro issues to render top-notch judgments,” asserts one portfolio manager. Investors hail, in particular, their coverage of Aurizon Holdings, a Queensland-based freight railroad carrier. In June 2011, noting that the company was generating strong returns on invested capital and boasted global exposure that supported its independence from the stalled domestic economy, Kearnan and his team upgraded Aurizon from neutral to buy, at A$3.03. Despite pressure on the stock in the middle of 2012, they have stuck with their positive stance, and clients are happy they did. Over the 12 months through late April 2014, it soared 31.4 percent, to A$5.19, pacing Australia’s broad market by 48.9 percentage points. They continue to tout the shares, citing new cost-saving efficiencies, with a price objective of A$5.60. Also on their favored list is CSL, a Victoria-based vaccine producer that the researchers elevated from neutral to buy in July, at A$61.88, thanks largely to its double-digit revenue growth. By late April, CSL’s stock had climbed to A$67.94, and the analysts believe that a price of A$71.10 is justified. “They produce proactive coverage and consistently high-quality work,” another booster offers. Kearnan left the firm in late March, and Simon Garing — co-captain, with Chi Hung (Raymond) Ngai, of the No. 3 team in Property — has taken over this squad.


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