The 2016 All-Europe Research Team: Metals & Mining, No. 1: Jason Fairclough & team

Jason Fairclough
& team

Bank of America
Merrill Lynch

First-Place Appearances: 6

Total Appearances: 22

Team Debut: 1992

Under the stewardship ofJason Fairclough, Bank of America Merrill Lynch’s European metals and mining group earns its fourth consecutive No. 1 finish, in part because “they demonstrate excellent independence — especially by taking short positions and being proved right,” declares one portfolio manager. In April the London- and Johannesburg-based researchers reiterated their underperform rating on Glencore. The Switzerland-based copper and coal mining giant — and world’s largest commodities trader — was overleveraged, they warned. Sure enough, in September management announced plans to reduce its net debt load by one third, to approximately $20 billion, by the end of 2016, through suspending dividend payments, selling assets and raising up to $2.5 billion in a new share issue. That’s when Fairclough, 44, and his crew boosted their rating to neutral. Glencore’s London-listed stock had by then plunged from 298.25p to 123.15p, for a loss of 58.7 percent that lagged regional metals and mining shares’ performance by 23.3 percentage points. As of mid-January it had tumbled 37.7 percent further, to 73.50p, compared with the European sector’s loss of 33.4 percent. Going forward, one name the six-person squad projects as a winner among the 34 companies under its coverage is leading copper refiner and smelter Aurubis. This is a name the analysts have favored for some time, and their optimism now is attributable to the German concern’s strong free-cash-flow generation and solid balance sheet. At €65, their price objective implies a 57 percent upside to Aurubis’s trading value in mid-January. “Their reasoning is reliably clear and concise,” a second backer declares. Still another admirer cheers the “good mix of ideas” Fairclough and his colleagues offer.