A Top 40 List of ‘Winners’ Around World
Analysts at Morgan Stanley & Co. believe they have devised the ultimate global stock shopping list for the discriminating investor.
Morgan Stanley’s 175 economists, strategists and industry analysts culled the 1,650 companies they cover worldwide and came up with a list of 238 that have a “competitive edge in the global arena,” then trimmed that down to a raft of 40 companies that represent their “best ideas” for returns over the next 18 to 36 months.
The analysts said growth potential wasn’t being reflected in the current share price of the 40 “exceptional” companies.
The bank said companies with a long-term competitive advantage and global ambitions are expected to continue growing and “produce exceptional investment results.”
Morgan Stanley divided its top 40 list between 23 “obvious winners” that are well-known to analysts and investors, and the “not-so-obvious” companies that may have escaped notice.
The 23 “obvious” winners--15 American and only one Japanese--include Asea Brown Boveri, BHP Finance (USA) Inc., British Airways, Caterpillar and Cisco Systems.
Among the 17 “not-so-obvious” companies, Morgan Stanley included AES, Asia Pulp & Paper, Avon Products and Coca-Cola Enterprises.
Analyst Duncan Moore highlighted Hoechst in a meeting with journalists in London. The German chemical company is “committed to changing the corporate culture. If the company delivers on their strategy, it will become a globally successful pharmaceutical company,” Moore said.
Morgan Stanley included only a few companies from the developing world since most of these firms focus on supplying domestic markets.
The other well-known companies cited are British Petroleum, Citicorp. Coca-Cola, Walt Disney, DuPont, Eastman Kodak, Emerson Electric, General Electric, Intel, Johnson & Johnson, McDonald’s, Microsoft, Pfizer, Procter & Gamble, Samsung, Singapore Airlines, Sony and Unilever.
The lesser-known companies include Coca-Cola Enterprises, Dresser Industries, Hoechst, Mattel, Pohang Iron & Steel, Praxair, Samdvik, Sealed Air, SGS-Thomson, Shin-Etsu Chemical, Technip, Thomson and Tokyo Electron.
Higher Fees:
It’s no secret that mutual fund expenses have been creeping higher over the years. The introduction of 12b-1 marketing fees in the 1980s has been cited as one culprit. Another factor has been the explosive growth of new mutual funds, many of which are still too small to realize significant economies of scale.
But if that’s not enough, management fees themselves are rising, says Chicago fund research firm Morningstar. The firm says funds that debuted in 1995 or 1996 charge an average of 0.72% in yearly management fees, which go to pay the sponsoring fund group for its investment advisory oversight. That’s up from 0.5% on average for funds introduced 50 years ago.
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Contributing to this column were Bloomberg Business News and Russ Wiles, a financial columnist for the Arizona Republic.
