CSL beats the board to win best company and chief
The biotech firm, which has posted market gains of more than 70 per cent this year, has been the most sought-after stock for investors, according to the annual East Coles survey of fund managers.
CSL performed strongly across more than two dozen categories that sharemarket professionals look for to help them make a decision about investing in a company. It also emerged with the top spot overall for best company and its chief executive, Brian McNamee, was rated the best chief executive.
Beverage group Coca-Cola Amatil was rated second in the best company category, followed by hospital operator Ramsay Health Care.
CSL's chief financial officer, Gordon Naylor, said the results reflected its long-term approach.
"The organisation is pretty focused on what it does, and has been over a long period of time," Mr Naylor said on Friday.
"At the end of the day, you need to understand what you do," he said.
CSL, which was privatised by the federal government more than two decades ago, had maintained its focus on patients even as its footprint moved from the local to the global market, Mr Naylor said.
"That ethos of technical excellence is still there. We understand the importance of our medicines for our patients. These are life-saving medicines, they're not discretionary products."
In terms of shareholder returns over the past year, CSL ranks among market leaders. Even faced with production in two of the highest currency economies of Australia and Switzerland, CSL reported its first $US1 billion profit, on $US4.6 billion of revenue. CSL shares easily outperformed the S&P/ASX200 index, which rose 14.2 per cent over the same period.
The East Coles survey, published exclusively in BusinessDay, is based on interviews with analysts from the biggest institutional brokerages and some of the largest fund managers. The interviews took place over the past two months. The survey covers 21 categories, including shareholder value, risk management and investor relations.
Coca-Cola Amatil's board, led by David Gonksi, took the top spot for most effective board.
Commonwealth Bank was the only banking stock to make the finalist of best companies. Its chief executive, Ian Narev, emerged as the only bank boss to make the top 10.
Still, banks rated highly across several categories, including best chief financial officer with Westpac veteran Phil Coffey taking the top spot. Other areas where banks dominated were best investor relations (Westpac) and best investor briefings (ANZ).
The big resource houses were notably absent, although BHP Billiton had the best website.
Goldminer Regis Resources was in the top three in several categories.
The full list can be found at smh.com.au/business
2012 BMW EAST COLES CORPORATE PERFORMANCE WINNERS
BEST COMPANY
CSL
Coca-Cola Amatil
Ramsay Health Care
BEST CHIEF EXECUTIVE
CSL — Brian McNamee
ALS — Greg Kilmister
Monadelphous Group — Robert Velletri
MOST EFFECTIVE BOARD
Coca-Cola Amatil
CSL
Seek
COMPANIES WITH THE BEST EARNINGS QUALITY
Coca-Cola Amatil
CSL
Ramsay Health Care
BEST GROWTH PROSPECTS
CSL
Regis Resources
Ramsay Health Care
Frequently Asked Questions about this Article…
CSL topped the annual East Coles survey of fund managers and analysts after strong showings across more than two dozen categories. The biotech firm posted market gains of more than 70% during the year, reported first-time US$1 billion profit on US$4.6 billion revenue, and scored highly on measures investors watch such as shareholder value, earnings quality and growth prospects.
Being named best company in the East Coles survey is a recognition by professional investors and analysts — based on interviews with major brokerages and fund managers — that CSL scores well across metrics like shareholder returns, risk management and investor relations. For everyday investors it’s an indicator of market confidence and strong company fundamentals, but it should be one of several factors considered when researching a stock.
CSL’s shares easily outperformed the S&P/ASX200 during the period covered by the article. CSL posted market gains of more than 70% that year, while the S&P/ASX200 rose about 14.2% over the same period.
CSL’s chief executive Brian McNamee was rated the best chief executive in the East Coles survey. The result reflected CSL’s overall performance and management strength, with company executives emphasising a long-term, patient-focused approach and technical excellence as key leadership traits.
Other top-ranked companies included Coca-Cola Amatil (rated second for best company and named most effective board), Ramsay Health Care (third in best company and noted for growth prospects), Commonwealth Bank (the only bank finalist among best companies), and Regis Resources (top three in several categories). Banks also featured prominently in categories such as best chief financial officer (Westpac’s Phil Coffey), best investor relations (Westpac) and best investor briefings (ANZ).
The East Coles survey covers 21 categories important to investors, including shareholder value, risk management, investor relations, earnings quality, board effectiveness and growth prospects. These categories matter because they reflect the areas analysts and fund managers use to assess company quality, governance and the potential for sustainable returns.
CSL’s chief financial officer Gordon Naylor said the survey results reflected the company’s long-term approach and focus. He highlighted that CSL has stayed focused on what it does, maintained an ethos of technical excellence, and serves patients with life-saving medicines that are not discretionary products — even as the company expanded from a local to a global footprint.
The survey listed Coca-Cola Amatil, CSL and Ramsay Health Care among the companies with the best earnings quality. For best growth prospects, CSL, Regis Resources and Ramsay Health Care were highlighted.
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