2015 All-Latin America Research Team: Technology, Media & Telecommunications, No. 3: Michel Morin & team

<The 2015 Latin America Research Team Michel Morin & teamMorgan StanleyFirst-place appearances: 2

Total appearances: 18

Team debut: 1995

Although Morgan Stanley’s troupe falls one position to No. 3, leaderMichel Morin“provides honest, unbiased analysis, independent of his firm’s banking interests — and is one of the more contrarian analysts on the Street,” one fund manager insists. The 45-year-old researcher and his associates hold an attractive view of the technology subsector and a cautious stance on the telecommunications space. “In technology we like the long-term growth outlook as well as the attractive nature of recurring-revenue and asset-light business models,” explains Morin, who works out of New York. “In telecoms the current situation and outlook vary greatly by country. But generally speaking, it is an industry where companies often struggle to earn returns above their costs of capital. Investors always need to be very selective.” Indeed, only one name in that industry wins the analysts’ positive endorsement, Empresa Nacional de Telecomunicaciones — and they are bullish, assigning Chile’s largest provider an overweight rating. “The company has made significant investments to expand into Peru in recent years,” he notes. “Earnings declined sharply in 2013–’14 and will remain depressed in 2015, but the company is executing very well and gaining market share. We see this producing a strong recovery in earnings beginning in 2016.” Their 12-month price objective for Entel Chile is 8,100 pesos, which implies a 16.9 percent upside to their value in mid-July. However, Morin sounds a note of caution. “Entel shares are attractively valued in our view,” he says, “but the investments to expand operations in Peru will continue to depress earnings and dividends near term.”