CSL's healthy glow outshines market as top investment
VACCINE maker CSL has been rated the best-performing company by Australia's top fund managers and equity analysts.
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 latest 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 at 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 the company's 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 Commonwealth government more than two decades ago, has maintained its focus on patients even as its footprint moved from the local market to global, 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 is now capitalised at $27 billion. Its shares easily outperformed the S&P/ASX 200 Index, which is up 14.2 per cent over the same period.
But any success on the share market has been largely incidental, Mr Naylor said. "We very actively manage the economics of the company, but we don't rush around to get quarterly results," he said.
The East Coles survey, published exclusively in BusinessDay, is based on interviews with analysts across the nation's biggest institutional brokerages and some of the largest fund managers, which collectively oversee equity investments running into hundreds of billions of dollars. The interviews took place over the past two months.
It covers 21 categories, including shareholder value, risk management, 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 and its chief executive Ian Narev emerged as the only bank boss to make the top 10.
Even so, the dominance of the health care sector among top overall companies is notable given their relatively small size compared to resources and financial stocks. Among the strong health performers was bionic ear manufacturer Cochlear in tenth spot. Packaging group Amcor also polled highly across several categories, marking a substantial turnaround from mid-last decade when it was shunned by investors.
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 emerged with the best website.
However, junior gold miner Regis Resources rated in the top three across several categories, including best disclosure, top shareholder focus and clearest strategy.
Other top performers among chief executives include Greg Kilmister, of commercial laboratory specialist ALS, who was ranked second and third-ranked Robert Velletri of Monadelphous.
Other top chief executives were Terry Davis, of Coca-Cola Amatil, and Ramsay Health Care's Chris Rex, who were ranked fourth and fifth respectively.
2012 BMW EAST COLES
CORPORATE PERFORMANCE WINNERS
Ramsay Health Care
BEST CHIEF EXECUTIVE
CSL — Brian McNamee
ALS — Greg Kilmister
Monadelphous Group — Robert Velletri
MOST EFFECTIVE BOARD
COMPANIES WITH THE
BEST EARNINGS QUALITY
Ramsay Health Care
BEST GROWTH PROSPECTS
Ramsay Health Care
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free