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Get a glimpse of the best investment picks from Australia's top-rated analysts, dealers

Find out which stocks reign supreme.

Asian Banking & Finance interviewed a handful of the top sectoral analysts rated by East Coles’s recent 2013 SMH AGE Equities Markets Research.

East Coles collected responses from 56 Australian and New Zealand fund managers representing 50% of funds under management to create league tables ranking analysts and dealers across 33 sectors.

This Research has been running for over 20 years and is heavily covered in the local media. Here's what the best analysts and dealers have to say:

ABF: Which stocks are the best investment picks for the next 1-2 years?

Sam Theodore, Gaming, UBS: Crown remains our top pick in the sector. The company is a large-part through their significant capex program on their Australian properties and it is close to finalising a new licence which will open up the lucrative NSW market to them. Crown is just under 50% of our valuation which is driven by MPEL (Macau casino group) which continues to see significant upside earnings risk from ongoing growth largely from the Chinese mass market customer. The Australian properties are currently trading at a FY14 EV/EBITDA of c7x - which given their monopolistic market positions underestimates underlying value in our view.

Andrew Goodsall, Healthcare, UBS: We like ResMed and CSL due to their underlying growth and leverage to a stronger US$.

Michael Conway, Account Manager, UBS: Resmed (RMD AU) researches, designs, manufactures and markets medical devices for the treatment of sleep apnea and medical ventilation. Resmed relies on technological advantage to secure market share via patient outcomes and helping distributors achieve financial outcomes. Key to the business is returning revenue – after the initial sale of device and mask for sleep apnea therapy, the patient needs to be serviced with between 2 and 4 masks pa. This is the high margin high growth portion of the business. Market penetration remains low at <25% of developed world and the incidence of sleep apnea continues to grow (linked to age and obesity) so

Resmed are unlikely to run out of patients in the next decade at current levels of growth. The business is somewhat layered with mid term growth coming from increased mask consumption and longer term growth likely to be sourced from medical ventilation.

Henderson (HGG AU) is a top 5 UK retail investment manager following acquisitions of New Star and Gartmore in the past 4 years. Henderson has delivered weak net fund flows through the past few years (integration of legacy books, product rationalisation, UK regulatory reform, weak equity markets and weak UK retail) despite improving performance.

However 1H13 delivered the first positive retail net flows in 2 years with the improvement broad-based across Europe, the US and UK, and only undermined by institutional mandate churn. We believe 2013 will show a continuation of improving retail trends seen in the 1H. If Henderson is able to continue building on its performance, and deliver the positive flow outcomes I anticipate, I believe Henderson should see a re-rating towards peers.

Paul Young, Diversified Metals & Mining & Other Metals and Mining, Deutsche Bank: My top pick is Rio Tinto. Rio is developing arguably the best mining project in the world, its iron ore expansion in the Pilbara. The company is undervalued vs. peers in our view and will generate superior free cash flow over the medium term.

Emily Behncke, Building Materials & Steel, Deutsche Bank: I think there is significant upside to Boral given its exposure to the Australian housing market recovery. Boral also has an exposure to the strongly recovering US housing market.

ABF: What do you think makes a top rated analyst successful?

Sam Theodore, Gaming, UBS: A mentor early in my career stressed to me ECINYA - exercise caution in your affairs. Our clients run huge responsibilities in terms of investing, quite often, large sums of people's retirement savings so presenting a balanced argument is always important to mitigate any identified risks. I also think as an analyst it is important to be well rounded as there are a range of skills required to successfully analyse company positions.

Andrew Goodsall, Healthcare, UBS: I don't think there is an actual template - each sector and analyst has their nuances which have to be matched with the quantitative, but ultimately that has to translate to successful stock picking over the longer term.

Michael Conway, Account Manager, UBS: Understand your client, their processes and their needs – and always put them first. As a dealer you need to have a good feel for the market, be organized and structured, and able to demonstrate a successful ideas track record.

Paul Young, Diversified Metals & Mining & Other Metals and Mining, Deutsche Bank: Some of the keys of being a successful mining analyst are to focus on medium term fundamentals and provide fundamental thought provoking research and industry structure analysis rather than short term trading ideas. Our job is to provide insights and analysis to our client base and challenge company strategy and capital allocation. We focus on cash flow and valuations rather than profits, and run industry trips to keep abreast of the key issues.

Emily Behncke, Building Materials & Steel, Deutsche Bank: I think a top rated analyst needs to be considered and flexible in their analysis. If the goal posts change, a good analyst is prepared to change their view if it no longer holds. Equally as important is listening carefully to clients' needs and make sure they are kept informed regularly.

Nick Coles, MD of East Coles, commented that each of these analysts had been “consistently highly rated over a number of years and that this in itself is no mean feat”. Nick suggested that the Australian market has always been “highly competitive with a great many highly skilled, highly trained, quality analysts, and has been considered over-broked for some time”. He also said “It is particularly impressive to see analysts rate No.1 across 2 separate, significant sectors, such as Emily and Paul have”.

UBS had the most number of No.1 rated analysts and dealers across all the sectors with 10 altogether, with Citi next with 5 top-rated performers. Deutsche and Macquarie won 4 sectors each.

In terms of the most Top 3 rated analysts and dealers, UBS had 21, Macquarie 16, Citi 10, Bank of America Merrill Lynch 9, JP Morgan 8, Deutsche 7 and Morgan Stanley 6.

Chris Williams, Head of Equity Research, Australasia at UBS offered some insight into their success: "It is extremely pleasing to be consistently recognised by our clients for our strong research and sales capabilities, which leverage UBS’s global reach and local knowledge. I believe our ongoing success can be attributed to the stability, experience and collaborative approach of our team and their deep client and industry relationships."

Contact East Coles for more information – www.eastcoles.com.au

Pictures from the Awards Night available on their Facebook page.

Here are the Top 3 Analysts and Dealers in each sector:

A/C MGT - RSRCH SALES
1 CONWAY, Mike UBS
2 SPENCER, John UBS
3 CLIFFORD, Ben Macquarie

BANKS
1 MOTT, Jonathan UBS
2 WILES, Richard Morgan Stanley
3 FREEMAN, James Deutsche

BUILDING MATERIALS
1 BEHNCKE, Emily Deutsche
2 CHAN, Ben Bank of America Merrill Lynch
3 PEROS, Andrew Credit Suisse

COMMODITIES
1 RICHARDSON, Peter Morgan Stanley
2 LENNON, Jim Macquarie
3 PRICE, Tom UBS

CONSTRUCTION AND ENGINEERING
1 ROBISON, Nicholas Morgan Stanley
2 THEODORE, Sam UBS
3 ROBINSON, Guy Citi

DATABASE
1 BALASUBRAMANIAN, Vyas UBS
2 DUFFY, Sheridan Macquarie
3 BLAGG, Stephen JP Morgan

DIVERSIFIED FINANCIAL SERVICES
1 PITTAWAY, Nigel Citi
2 WILLIAMS, Chris UBS
3 CHIDGEY, Kieren Deutsche

DIVERSIFIED METALS & MINING
1 YOUNG, Paul Deutsche
2 LAWCOCK, Glyn UBS
3 WOOD, Adrian Macquarie

ECONOMICS
1 HASLEM, Scott UBS
2 TOOHEY, Tim Goldman Sachs
3 BRENNAN, Paul Citi

ENERGY
1 GREENWOOD, Mark Citi
2 WOOD, Adrian Macquarie
3 SMITH, Luke CBA

ESG
1 PRIOR, Elaine Citi
2 HOLMES, Carolyn JP Morgan
3 MITCHELL, Deana Macquarie

FOOD & BEVERAGES
1 JACKSON, Stuart JP Morgan
2 DRING, Greg Macquarie
3 ERRINGTON, David Bank of America Merrill Lynch

GAMING
1 THEODORE, Sam UBS
2 ALEXANDER, Adam Goldman Sachs
3 BRYAN, Mark Bank of America Merrill Lynch

HEALTHCARE & BIOTECH
1 GOODSALL, Andrew UBS
2 PRIOR, Matthew Bank of America Merrill Lynch
3 HADASSIN, Saul Credit Suisse

INFRASTRUCTURE
1 HOLMES, Carolyn JP Morgan
2 MYLES, Ian Macquarie
3 KELLY, Scott Morgan Stanley

INSURANCE
1 COGHILL, James UBS
2 PITTAWAY, Nigel Citi
3 PARAMESWARAN, Siddharth JP Morgan

MEDIA
1 McLEOD, Andrew Morgan Stanley
2 EARY, Richard UBS
3 DIDDAMS, Justin Citi

OTHER METALS & MINING
1 YOUNG, Paul Deutsche
2 BATTERSHILL, Jonathan UBS
3 RYAN, Mitch Macquarie

PAPER PACKAGING & CHEMICALS
1 PURTELL, John Macquarie
2 WILSON, Mark Deutsche
3 LAZAR, Ramoun UBS

QUANTITATIVE
1 WINTER, Paul UBS
2 CONOMOS, John Macquarie
3 MORTON, Nick Citi

REAL ESTATE
1 CHECCHIN, Paul Macquarie
2 GARING, Simon Bank of America Merrill Lynch
3 RICHMOND, John Credit Suisse

RETAIL
1 WOOLFORD, Craig Citi
2 GILBERT, Ben UBS
3 COUSINS, Shaun JP Morgan

SALES TRADING & FACILITATION
1 LARCOMBE, Sean Citi
2 GALLAGHER, Justin CIMB
3 GOONAN, Anthony Morgan Stanley

SMALL AND MID CAPS
1 WACKETT, Andrew Macquarie
2 PARKER, Lachlan UBS
3 BRYAN, Mark Bank of America Merrill Lynch

SMALL AND MID CAPS DEALING
1 BARRY, Leo Bank of America Merrill Lynch
2 WILLS, Jenny CIMB
3 RYAN, Matt RBS Morgans

STEEL
1 BEHNCKE, Emily Deutsche
2 CHAN, Ben Bank of America Merrill Lynch
3 FARLOW, Liam Macquarie

STRATEGY
1 BRANWHITE, Tanya Macquarie
2 BRUNKER, Paul JP Morgan
3 KIRKWOOD, Joshua Bank of America Merrill Lynch

TELECOMMUNICATIONS
1 EARY, Richard UBS
2 LEVY, Andrew Macquarie
3 GUERRA, Christian Goldman Sachs

TRANSPORT
1 MITCHELL, Simon UBS
2 WILLIAMS, Mark CIMB
3 CROWE, Matt CBA

UTILITIES
1 ALLOTT, William CBA
2 STEED, Jason JP Morgan
3 LEITCH, David UBS 

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