RANKING THE ANALYSTS: Emlyn Flint retains his top position
Judges are impressed by the young analysts’ reports and the hard work they put into compiling them
Judges from CFA Society SA have found it difficult to pick between winners given the high standard of entries in the Young Analyst awards, but the one constant is Emlyn Flint.
The analyst from Peregrine Securities wins the award in the nonequities category for the third consecutive year, setting an early record in the four-year-old awards that will take some beating. Flint wins the award in the nonequities sector for his paper, Regime-Based Tactical Allocation for Equity Factors and Balanced Portfolios. The paper considers four alternative methods for identifying market regimes: macroeconomic variables, fundamental valuation metrics, technical market indicators and statistical regime-switching models.
Mbongeni Mtimkulu of Legae Securities is the runner-up in the nonequities category with Odwa Sihlobo (Prescient Securities) third.
Warwick Bam of Avior Capital Markets is the winner in the equities category for his paper on Discovery Ltd: The Shared Value of New Business, with Musa Malwandla of Standard Bank/SBG Securities the runner-up for his paper on Liberty Holdings, and Renaissance Capital’s Kabelo Moshesha third for a report on ArcelorMittal SA.
Judges score the papers without knowing who the authors are. Jenny Henry, who co-ordinated the judging this year on behalf of the CFA Society of SA, says: "The level of the reports was impressive, reflecting both the young analysts’ hard work as well as the deep support provided by the stockbroking houses themselves. The reports in general were very thorough and I was happy to see a broad spectrum of coverage, across industrials, resources, financials, quants and thematic; as well as the proficiency of valuation techniques."
The top analysts, she says, displayed immense understanding of the various components of the companies chosen. "These analysts went out of their way to explain various drivers and catalysts of both the industries and the companies. They were also specific in understanding the drivers of each company’s divisions and were able to translate these into meaningful valuations. Top analysts also spent time reflecting on quality factors of a company such as the quality of management.
"Towards the end it was difficult to pick the winning reports."
Fellow judge Rosanne Howarth was equally impressed. She says SA’s young analysts would do well to follow the industry trend of paying a lot more attention to environmental, social and governance (ESG) factors. "We need to look in more depth at qualitative factors like the independence and diversity of management and board members, and governance and sustainability of business practices. It is becoming important to comment on the broader impact that a business has — on society and on the environment."
Flint has been with Peregrine Securities for seven years. He says winning the award has had a positive impact for him and for Peregrine. "Both with clients I know well as well as those that I haven’t engaged with much before, there’s definitely a difference in their reception. It’s therefore been positive both for me and Peregrine."
He says it is particularly rewarding to be recognised by a panel of judges who are well-known in the investment field and are assessing the work on an anonymous basis.
Flint feels the award is also contributing positively to the quantitative research space in SA. "It gives young analysts the opportunity to lead-author a piece of quant-based research that is focused on practical application. And while the quant space is arguably a lot more niched than fundamental research, it has wide application within the full investment process. Furthermore, ideas and processes that are used across the world are generally also applicable in SA, and this award will hopefully lead to more SA-based quant research being done."
He says a lot of the quant work is done by a handful of recognised names and specialised qualifications are required, so it can be a difficult field to break into.
The award is open to analysts under 30 and this is the last year that Flint qualifies.
The judges are: Jennifer Henry; Aadil Omar; Dahn Webb; Hugh Hacking; Dowelani Musimuni; and Rosanne Howarth.
Read the full report here.