< The 2014 All-Europe Research Team

Nicholas Nelson & team
UBS
First-place appearances: 4

Total appearances: 12

Team debut: 1992

Although Nicholas Nelson and his 39-member troupe at UBS in London tumble from first place to third, they maintain a loyal following for “always demonstrating a detailed knowledge of stocks and the broad industry,” in the words of one investor, who also praises the team’s “excellent responsiveness to requests.” The team has made significant changes over the past year: Nelson’s former co-leader, Alexander Hugh, departed for U.K. hedge fund TT International last spring; and the researchers have reduced their sector portfolio count by 50 and now track 220 U.K. stocks. Favorite names include Lloyds Banking Group because “solid fundamentals will likely translate into rising volumes and margins and falling costs and impairments,” Nelson says. This in turn should accelerate earnings-per-share growth for the London-based financial services firm. Nelson’s squad maintains a 12-month price target of 100 pence for the stock, which represents a 26.8 percent upside to its value at year-end 2013. The analysts also recommend buying global media and education company Pearson, which is headquartered in London. Its stock valuation is appealing on both structural and cyclical bases, they believe, and its estimated 2015 price-earnings ratio is attractive in comparison with that of crosstown rival Reed Elsevier. Trading at 1,341p in late December, Pearson’s shares could reach 1,500p by year’s end, they contend.

See also Nicholas Nelson's profile in the 2013 All-Europe Research Team and 2012 All-Europe Research Team.