Saturday, January 23, 2016

Barrons Saturday summary: Positive on IP and NWL
Cover story: Barron's Roundtable Part 2 has picks from Abby Joseph Cohen (PHG, ABBV, MYL, SIG, LOW, Bharti Airtel, Ocado Group), Felix Zulauf (Buy: CME 90 Day Eurodollar Future, U.S. dollar/short offshore Chinese yuan, U.S. dollar/short Korean won, U.S. dollar/short Taiwan dollar; Short: EEM, CME S&P 500 Index Future, IBEX 35 Index Future, EWS, German Stock Future Index, Euro STOXX 50 Future), Mario Gabelli (MSG, GFF, GPC, MIICF, CBS, DISCA), and Jeffrey Gundlach (Buy: HTR, NLY, Puerto Rico GO Bonds, BWX, INP; Short: EEM).

1) Positive on IP: Company, which counts AMZN among its customers, is seeing its business grow; the shares discount a lot of bad news, its free cash flow leads that of rivals, and it recently raised its dividend;
2) Positive on NWL: Shares are down on news of the Jarden acquisition, but look like a good deal at their current price because the company is shedding underperforming divisions, streamlining the back office, and investing in key brands;
3) An overview of the World Economic Forum, where climate change, sustainable development goals, and the collapsing Chinese stock market were key topics of discussion;
4) Interview with MacroMavens founder Stephanie Pomboy, who has been bearish on stocks since 2010 because she thinks the market is ahead of fundamentals amid weak consumer spending.

Tech Trader: "The tech world appears to be going through the bursting of another bubble, but the outcome should be positive for investors in publicly traded companies overall, unlike the implosion of the dot-coms in 2001"; The collapse of some young venture-backed companies could affect the demand for networking gear (Cautious on EMC, HPE, CSCO).

Trader: Last week's recovery was a relief rally from much oversold levels, says Adam Sarhan of Sarhan Capital; For energy sector investors, bonds may be a better bet than stocks, because if oil stays where it is or drops further, bonds bring fewer risks; "As fourth-quarter earnings reports come out, investors should look for pension accounting changes that will artificially flatter earnings by tens of millions of dollars or more in 2016 at some firms."

Small Caps: Positive on HMHC: Leading provider of textbooks and digital education tools in the U.S. is poised to benefit from the trend toward increased digital learning aids, and with shares down, the share price is attractive and likely to see a rebound.

Follow-Up: Cautious on KMI: The sharp decline in the energy-pipeline operator's shares could be over, and at the current price Barron's is no longer bearish; Negative on CMG: More bad news at restaurant chain seems likely, "and any more hiccups could drive the shares, still pricey at 36 times projected 2016 earnings, down another 20%."

European Investor: Positive on SNY: French pharma giant is set to deliver 18 new products by 2020, and could be a good investment at a time when European equities are suffering badly from various global problems.

Asian Investor: Cautious on CNOOC, Sinopec, PetroChina: If oil stays under $30, investors will likely see large asset write-downs and dividend cuts at China's Big Three energy companies, for which the worst is not over.

Emerging Markets: Positive on Embraer, Tencent: Amid ongoing trouble in emerging markets, the long-term prospects for the Brazilian plane maker and the Chinese mobile giant look strong.

Commodities: Despite a two-year drop in value, iron ore's rough patch will likely extend into 2016 as big miners churn out record volumes despite lower demand in China.

Streetwise: Dividend-paying stocks may not be as safe as they look, because the earnings necessary to pay for them may be harder to come by this year; Iman Brinvanou of TCW likes dividend payers KO, MO, and PEP because their risk/reward ratio is still favorable.