TradeTheNews.com Barrons Saturday summary: positive on WHR; cautious on ESRX
Cover story: SRPT and BMRN are seeking regulatory approval for drugs that could slow the progression of Duchenne muscular dystrophy, which affects about 15,000 to 20,000 boys in the U.S. and in Europe, and tens of thousands more around the world; The stakes are high in a battle that involves innovation, a strong advocacy community, skeptical regulators, and a huge market opportunity for investors; A successful family of DMD drugs could bring in $3B-plus in annual U.S. sales, and a similar amount abroad.
1) Positive on WHR: Appliance maker's shares have been shaken by a strong dollar and troubles in Brazil's economy, but investors have likely overreacted in sending down the shares, and those who buy now are likely to profit handsomely;
2) Cautious on PG: Consumer goods giant "is at a crossroads" as it tries to retain market share amid growing competition and lower demand, and new chief executive David Taylor needs to take radical action, such as a breakup;
3) Profiles of the 16 women who have made the Barron's list of Top 100 Women Advisors for 10 years in a row;
4) Cautious on ESRX: Company hasn't been affected by the problems facing VRX and HZNP, but questions remain about its commitment to cost-containment, a potential risk factor in its stock price;
5) Positive on GOOGL, CELG, SCHW, EA: Four companies could double their earnings per share by the end of the decade with growth not based on gimmicks, and shares could gain 20%.
Tech Trader: Cautious on SQ: Company faces a number of challenges, not the least of which are competitive threats from rivals such as PYPL and AAPL; While the company has reinvented a marketplace that PAY pioneered, questions about how fast it will scale up and what the payoff will be should give investors pause for now.
Trader: The market will be spurred on for the rest of the year by underperforming money managers trying to catch up and boost their annual return by buying during a bullish season for equities, says Jeffrey Saut of Raymond James; Positive on M: Shares are down almost 50% from highs in July, but for investors with a long-term focus, they look cheap, and a double-digit return could be in store; Cautious on LNCE: Shares of snack company appear overvalued, and could drop significantly if the company misses expectations next year.
Small Caps: Positive on MPW: Shares of hospital REIT are down, but they could stage a rebound next year and the 8% dividend looks secure.
Profile: Shawn Driscoll, portfolio manager, T. Rowe Price New Era fund, has departed from the fund's history of being a pure play on commodities by adding names that could benefit from falling commodity prices (top 10 holdings: PXD, CXO, XOM, TOT, OXY, XEC, EOG, EQT, RPM, ARG).
Interview: Larry Jeddeloh of the Institutional Strategist estimates that the growth rate of China's GDP is at about a 3%, as opposed to the 7% claimed by authorities there, and that there isn't much economic justification for the Fed to raise rates.
European Trader: The recent terror attacks in Paris didn't cause the French stock market to fall, and aren't likely to derail government reforms or slow down the country's growth trajectory.
Asian Trader: With semiconductors China's biggest import after oil, state-backed Tsinghua Unigroup is looking for deals and is said to have $47B to spend during the next five years.
Emerging Markets: A year after President Obama normalized relations with Cuba, the country's lack of a stock market and Marxist-Socialist economic model are keeping investors sidelined for now.
Commodities: Gold is down on expectations of a Fed interest-rate hike, and the metal is "likely to remain pressured in the next year's first half."
Streetwise: International relations expert John Mearsheimer of the University of Chicago says the impact of the Paris attacks could negatively effect the great post-World War II European experiment in liberalism.