Barron's Saturday summary: positive on YHOO, BEAV
Cover story: Participants at the Barron's 2016 Roundtable "see more stock market turmoil, junk-bond mayhem, and global strife in the year ahead"; Oscar Schafer of Rivulet Capital likes EVTC, CPN, COMM, NICE; Brian Rogers of T. Rowe Price likes AXP, CMCSA, ETN, M, OXY, QCOM.
Feature:
1) Positive on YHOO: Company faces increasing pressure to unload its core Internet business, which would likely also lead to a sale of its stakes in BABA and Yahoo! Japan, netting shareholders a potential 35% gain, or about $40 a share;
2) Positive on BEAV: If aerospace company's growth picks up steam, shares-which have dropped from a high in 2014-could see 30% upside, and even more if it becomes a takeover target;
3) Barron's looks back on its bullish stock recommendations for 2015, noting shares of the 146 companies it wrote about fell 2.4% against a 1.8% drop for the benchmarks, while bearish picks fell 18% on average;
4) As world leaders gather for the World Economic Forum in Davos this week, "a new industrial revolution is the theme for debate...but there will be plenty of talk about turmoil in emerging markets and geopolitical issues too."
Tech Trader: Cautious on AAPL, Samsung: The smartphone sector is doing worse than the PC sector, with shares of both big players down, but suppliers such as SWKS, QRVO, and ADI are feeling even more pain; Cautious on GPRO: Camera maker relies on a single product and has yet to prove that it will have staying power; Brian Schwartz of Oppenheimer & Co. thinks CRM, ELLI, INST, and WDAY are likely to survive what could be major turmoil in the cloud-computing sector.
Trader: David Kelly of JPM Asset Management thinks that the current market turmoil will last another two weeks, and says investors shouldn't succumb to emotional reactions during the swings; Wall Street strategists Stephen Auth of Federated Investors and David Kostin of GS have shifted to a significantly less bullish viewpoint of the market following two bad trading weeks; Cautious on QLIK: Software developer has a solid niche in a growing business, but sales have slowed significantly and its valuation is still extremely high.
Profile: Clare Hart, portfolio manager, JPMorgan Equity Income fund looks for sustainable growth and strategy, and will exit a holding if gains were achieved by diverting from management's outlined game plan (top 10 holdings: WFC, XOM, JNJ, AAPL, PNC, OXY, CME, PFE, TRV, MO).
Small Caps: Cautious on CFX: Shares of pump and welding-products maker have tanked, but assuming oil prices don't stay at $30 forever, the stock looks like a bargain. Penta: A survey by Fidelity Investments of its high-net-worth clients found that impact investing, which attempts to generate market-rate returns while advancing social or environmental goals, is "a surprisingly big deal."
European Trader: Positive on SHPG: Most of the concerns about pharma company's acquisition of BXLT seem to have been dispelled, and investors seem confident it can complete the transaction and boost value.
Asian Trader: If China's reform efforts were effective, the country could get back on track, but local politicians are likely to drag their feet when it comes to change. Emerging Markets: Saudi Arabia doesn't offer much potential for investors, and though the government loosened foreign-ownership restrictions for institutional investors last year, retail choices remain limited.
Commodities: "Investors in agricultural commodities will continue to feel the pain of weak prices this year" amid strong global supplies, a strong dollar, and weakness in the currencies of producing and exporting countries.
Streetwise: The market is a lot cheaper than it was a few months ago, and that means value can be found, especially at cash-rich companies.
