< The 2014 All-Europe Research Team
In its best showing to date, Exane BNP Paribas rockets to first place after having been absent from this lineup since 2010. Working out of London, the trio is now shepherded by Luca Solca, who joined the firm in 2012 from Crédit Agricole Cheuvreux and most recently appeared in 2011 as leader of Sanford C. Bernstein’s top-ranked crew. The 50-year-old captain is “probably the only analyst who understands well the sector dynamics and the potential implications of big trends,” attests one Italian investor. And his group’s fundamental research is profitably “coupled with streetwise stock calls,” according to one portfolio manager in London. Solca and his Exane colleagues cover eight stocks and forecast moderate growth for the sector over the coming year. European luxury shares climbed 15.8 percent last year but lagged the broad market by 2.3 percentage points. Against this backdrop the researchers have devised a proprietary model to “identify the luxury companies that stand the best chance to generate growth and increase return on invested capital,” Solca reports. The six structural tests that make up this methodology include category diversification, ability to penetrate the middle class, and cash discipline and management style. “When we look at luxury companies through this lens,” he advises, “we conclude that hard luxury companies have the highest scores because they are structurally advantaged.” Examples of these stronger names include two Swiss jewelry and watch manufacturers, Cie. Financière Richemont and Swatch Group. |
