TradeTheNews.com Barrons Saturday summary: positive on EMR and GWR
Cover story: The stance of Donald Trump and some other Republican presidential candidates on China is wrong; If Trump were elected and imposed tariffs, he would risk a protectionist war similar to the one that led to the Great Depression; Contrary to Trump's statements, the renmimbi is fundamentally overvalued, not undervalued.
1) Positive on EMR: Company's move to spin off its network-power unit and divest some of its industrial-automation business will end up cutting sales but significantly boosting profitability;
2) Positive on NVDA, BBY, CTXS, TXN, DO, MSFT, CBG: Seven companies had big upside surprises in their latest quarterly reports and likely will see better days ahead, though investors should do more research before buying;
3) Positive on GWR: Small railroad stands to benefit if CP and NFKS merger, since they would likely have to divest some of their routes to meet antitrust requirements.
Tech Trader: Cautious on Match Group: Dating site being spun off from IACI will face questions about the sustainability of its business model and growing competition from new online rivals.
Trader: While many investors expected an end-of-year market flourish, says Terry Sandven of U.S. Wealth Bank Management, "the Santa rally actually happened in October"; Positive on CRC, MUSA, PSXP, PSX, MPC: Refinery spinoffs have been winners despite lower oil prices, partly because they benefit from lower feedstock costs and have been better able to showcase their value; Cautious on BHI: Shares could gain about 27% if a merger with HAL is approved, but "there is too much uncertainty here to take that bet."
ETF Special Report: Marco Cortazzo of Macro Consulting Group, Richard Bernstein of Richard Bernstein Advisors, Bill Greiner of Mariner Wealth Advisors, and Bob Smith of Sage Advisory Services share their insights into bond ETFs (Positive on HYG, PFF, CSJ, HYD, ISTB, SUB, SMMU, BSCI, IBMG, IBCC).
Profile: Sandy Rufenacht, head of Aquila Three Peaks Capital Management, seeks to determine how much free cash flow a company can generate 12 months ahead (top ten holdings: SCI, AMSG, CCK, SLGN, NLSN, PF, FIS, SEE, ARMK, LVLT).
Interview: Jim Rogers, international investor, says he has slowed down his investment activity, and says he sees limited opportunities in many markets and thinks mounting worldwide debt and too much easy money will lead to a global bear market.
Follow-Up: Positive on WY: Merger with PCL will create the country's largest private landowner, positioning the timber giant for long-term growth as the housing market improves; Positive on RELY: Recent drop in share price of aluminum recycler and acquisition-oriented firm has seen a drop in its share price, creating a good entry point for investors; Cautious on SUNE: Following another quarter of losses, company's "baroque business strategy" seems harder to justify, and shares could fall from $5 to $2.
European Trader: Positive on Bayer: German life-science company "is reorganizing and retrenching" and has a strong pipeline of drugs that are likely to boost margins and earnings.
Asian Trader: Positive on BIDU: Investors aren't giving the Chinese Internet search giant enough credit for its efforts to build an "online-to-offline" service, which promises to disrupt sectors such as travel agencies and restaurants.
Emerging Markets: Frontier markets such as Vietnam and Pakistan offer potential for investors, with smaller companies especially worthy of attention.
Commodities: Raw-sugar futures have risen by almost 50% since late August, and could keep going up amid continuing erratic weather in Brazil.
CEO Spotlight: NDAQ chief executive Bob Greifeld presides over "an increasingly high-tech company, one that has been transformed under his watch" with 25 markets across the world for stocks, derivatives, currencies, equities, commodities, and private companies.
Streetwise: If industrials were truly in a recession, profits should be declining, but they aren't; Among chief executives who have been in top positions in at least two other companies and who beat the S&P 500 and its peers during those tenures are LMCA's John Malone, TSLA's Elon Musk, DD's Ed Breen, and TPX's Scott Thompson.