Industry Sectors: Tobacco

Adam SpielmanCiti

second teamDavid Hayes & teamNomura

third teamJonathan LeinsterUBS

Citi’s Adam Spielman is in the No. 1 position for a fourth consecutive year, thanks in part to what one client calls “impressive” research that looks in “detail at volume and profit breakdown.” Last year the 43-year-old researcher was bullish on the sector, which advanced 11.1 percent in 2009, and in April he highlighted buy recommendations on U.K.-based British American Tobacco and Imperial Tobacco Group, based on positive earnings outlooks and compelling valuations. The stocks lit up gains of 51.9 and 26.4 percent, respectively, through December. David Hayes, who guides the Nomura trio into second place (and also leads the No. 3 team in Food Producers), is “the foremost tobacco guru in the market,” declares one money manager. Another fan says Hayes “has been exceptional with his broader tobacco thesis and fabulous with his stock-specific calls.” One example of the latter: Swedish Match, recommended throughout 2009 on the belief that the Stockholm-based distributor of chewing tobacco and other products would benefit from rising interest in smokeless tobacco in the U.S. The stock surged 45.2 percent last year. Solo analyst Jonathan Leinster repeats in third place. The UBS analyst recommended BAT in February 2009, at an adjusted price of 727.83p, citing the company’s strong international growth prospects. The stock had exploded to 2,016.50p — a head-spinning 177.1 percent gain — by the end of the year. Leinster is a “highly knowledgeable analyst who is often spot-on in his opinions at very short notice and makes good stock calls in general,” marvels one investor.

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