Barrons Saturday summary: Positive cover story on MSFT; positive on SNA, MON, and asset management stocks
Cover story: Positive on MSFT: Under chief executive Satya Nadella, Microsoft's vast scale has become an asset rather than a liability, and the company is competing strongly with AMZN in the cloud and building new hardware that rivals AAPL's; Nadella "has captured Bill Gates' innovative style and the growth that often eluded Steve Ballmer," a formula that promises more upside.
1) Positive on BLK, IVZ, BEN, TROW: Asset managers' shares are down, but investors "are overlooking the industry's favorable characteristics, including modest capital requirements, high profit margins, and strong cash returns to shareholders";
2) Positive on SNA: Shares are up 25% this year, and "strong revenue growth, margin gains, and double-digit earnings increases will provide further fuel for the stock";
3) Positive on MON: Company's dwindling premium presents a good opportunity for investors, and fast growth in new areas could double earnings within three years.
Tech Trader: Though Barron's correctly predicted that investors would reap gains from so-called FANG (FB, AMZN, NFLX, GOOGL) companies in 2015, older tech players such as WDC, STX, EMC, and NTAP didn't fare as well, partly because of fallout in the PC market.
Trader: Weak oil prices and slowing global growth remain major concerns for investors, says Cameron Hinds of Wells Fargo Private Bank, and volatility might increase over the near term for other technical reasons; Four factors dogged stocks this year: lower commodity prices, a strong dollar, soft economic growth and currency devaluation in China; and the Fed's interest-rate hike; Unlike in 2014, the Trader's picks underperformed the market in 2015.
Interview: David Levy, chairman of the Jerome Levy Forecasting Center, says that although the U.S. economy is in good shape, it's not strong enough to fend off weakening fundamentals elsewhere, especially emerging markets.
Profile: Sonu Kaira, portfolio manager, Fidelity Blue Chip Growth fund, keeps 20% of his holdings in small and midsize companies that could see double-digit earnings growth (top 10 holdings: AAPL, GOOGL, AMZN, FB, GOOG, GILD, CRM, HD, V, AGN).
Small Caps: Positive on PTEN: Driller is a standout in the troubled oil sector because of its defensive qualities, including financial strength and a fleet of modern, top-notch equipment that limit potential downside.
European Trader: European stocks are finishing the year with solid gains, and the region is on firmer footing than it was 12 months ago.
Asian Trader: Asia's weak performance in 2015 stems from a retreat by global investors "who couldn't envision strong corporate returns in most of the region and worried that emerging market countries with dollar-decimated debt would be hurt."
Emerging Markets: Emerging markets took a hit this year from the decline in oil and commodities prices and weakening Chinese demand, and countries' domestic policy often did more damage than worry about the Fed.
Commodities Corner: "The strength of the dollar will give no reprieve next year to already pummeled commodities markets."
Streetwise: VRX was the ultimate "myth-versus-market" company in 2015, and disproved hedge-fund manager Bill Ackman's claim that it would be the next Berkshire Hathaway.