Aurinia Pharmaceuticals (AUPH) is a clinical stage biopharmaceutical company focused on developing a...
Leadership: 5 CEOs with Vision
07/17/2015 9:00 am EST
In this high-tech, data-driven world, it’s easy to forget that firms are run by people and that strong leadership can be a better leading indicator than any financial measure, asserts Richard Stavros, editor of Global Income Edge.
What investors look for are a CEO’s grasp of the company’s challenges, vision, knowledge of the industry, and focus on its operations, the study found.
With this in mind, we reviewed the performance of our portfolio holdings and are profiling five CEOs of companies that delivered the best performance over the last year.
Master and Commander
Vittorio Colao, the CEO of UK-based Vodafone (VOD), has the type of experience and education pedigree you would expect of an executive that manages one of the world’s largest telecom companies.
But what probably has made him a great CEO was the unlikely pairing of a top business education with a military-style upbringing that gave him the vision and the discipline to succeed.
He got his early start at investment bank Morgan Stanley in London and has worked at renowned consultancy McKinsey & Co. in the media and telecom group, where he became a partner. He holds an MBA from Harvard.
Since becoming CEO of Vodafone, Colao has led a series of impressive mergers and acquisitions, such as the $1.7 billion purchase of British multinational telecom Cable & Wireless and the $130 billion sale of its stake in Verizon Wireless.
He was also behind the firm’s push into emerging markets and he made Vodafone a fierce competitor in established markets in Europe. Buy VOD up to $39.
Some still think of AT&T as the old, stodgy monopoly with the black, fixed-line phones that was broken up in the 1980s.
But listen to Randall Stephenson, CEO of AT&T (T), and you instantly recognize that the firm has become a vibrant, 21st-century player.
Stephenson, and his predecessor who handpicked him, Ed Whitacre, are credited with having the vision that wireless and broadband were the next big things.
Stephenson’s vision manifested itself in recent deals, such as the acquisition of DirecTV, which would make the firm one of the largest pay-tv providers and give the company a stake in 11 Latin American countries.
And with the acquisition of Iusacell, and plans to acquire Nextel Mexico, the company stands to expand its mobile services to millions more. Buy up to $38.
Building a Better World
Sustainability isn’t just a buzzword for Paul Polman, CEO of Unilever (UL). His aim has been to double the size of the business while halving its environmental impact by 2020.
Since he took over in 2008, he has revived the performance of the firm with household products such as Dove soap, Lipton iced tea, and Ben & Jerry’s ice cream.
In the last year, the firm has achieved a 10.7% profit margin, while reducing waste by 66% per ton of production. By the end of 2013, the firm sourced 48% of raw agricultural materials from renewable sources, up from 10% four years ago, according to the company.
Polman has argued that running a business sustainably is vital for long-term growth in emerging markets and it also reduces risk and costs. Buy UL up to $45.
It would seem that infrastructure development is a low-key business and James Hooke, the CEO of Macquarie Infrastructure (MIC), is a low-key leader that stays out of the public eye.
Hooke, who joined Macquarie in 2007, has a track record of managing two unlisted infrastructure funds responsible for investing and managing about $5.5 billion across a range of North American infrastructure businesses.
Macquarie’s businesses consist of one of the largest bulk liquid terminals businesses in the US, an airport services business, gas processing and distribution, and a portfolio of power and energy investments, including five solar and two wind power facilities.
Because Macquarie provides vital services and has long-term contracts, its revenues are stable and insulated from the volatility that comes with an economic downturn. Buy MIC up to $90.
You cannot overstate the key role played by Peter Kraus in turning around AllianceBernstein (AB). Kraus is a former Goldman Sachs banker who later co-headed the firm’s asset management group.
The chairman and CEO took over at AllianceBernstein in 2008 and immediately began improving performance at this asset management firm.
About 80% of the company’s bond funds outperformed their peers on a three-year basis and about 70% of its stock offerings show superior performance.
Kraus also set out to widen the firm’s investment menu, picking up smaller investment companies with complementary businesses.
The company also stands out from its peers thanks to its global diversification: although based in New York City, the company has operations in 22 countries.
On top of that, more than half of its assets are invested outside of the United States and about a third of the money it manages comes from clients overseas. Buy AllianceBernstein under $30.
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