Barron's Saturday summary: Positive on JCP, WMT, MDT, CHKP/FTNT/PANW
Cover story: Profile of AQR Capital Management, a distinctive investment manager with $141B in assets that seeks to translate academic insights about finance and the marketssuch as the appeal of value and momentum investing into winning quantitative strategies for institutional and retail buyers; Nearly all the firms liquid-alt mutual funds are in the black since late July, including the $11B AQMIX.
Tech Trader: The traditional SIM card used in phones and other devices may soon be replaced by an embedded version called an eSIM, which can be re-programmed, allowing users to easily switch among carriers; manufacturers include Gemalto and Giesecke & Devrient.
Trader: Jeffrey Kleintop, chief global investment strategist at SCHW, says the economic data might not be enough to influence Fed chair Janet Yellen or change the central banks recent signals that rates might be temporarily on hold; Cautious on LVS, IP, WDC, AES, EMR: With utility and consumer stocks growing more expensive as investors seek safety, these high-yielding stocks may offer a cheaper approach to defense; Positive JCP: In a contrarian stance, Bernie McGinn of McGinn Investment Management likes the retailer, which is turning around under chief Marvin Ellison and regaining market share.
Interview: Doug Ramsey, chief investment officer of Leuthold Group, says the odds of a recession during the next 12 months are about 40%, much higher than the consensus view (picks: ACN, RE, MA, TRV, AMGN, UNH, CAH, CVS, NOC, DAL, AAL).
Features:
1) Positive on WMT: Retailers muscular efforts to reignite growth could bear fruit in the next two years, rescuing the stock from the bargain bin; company is increasing pay, enhancing the customer experience, and bolstering its e-commerce side;
2) Positive on MDT: Medical device maker carries the statistical traits of a safe-haven stock, but with better growth potential and a better valuation, and shares could rise 20% during the next year;
3) Positive on CHKP, FTNT, PANW: The recent pullback in cybersecurity stocks is a good opportunity for investors to get in the door at three companies with solid long-term outlooks.
Small Caps: Positive on ATRO: Shares of aerospace-parts maker are down for a number of reasons, including the delay of a major order from one of its largest customers, but the steep drop is a buying opportunity.
Follow-Up: Cautious on SO, ED, DUK, AEP, D, PCG, NEE, EIX, XLU: Utility shares are upthe sector has been the second-best-performing in the S&P 500 this yearand are no longer a bargain, though bulls say they offer nice yields at a time of ultralow interest rates.
European Trader: Amid uncertainty about the U.K.s continuing membership in the European Union, British markets are likely to remain choppy for several months, but there are still opportunities for investors (Positive on UL, ARMH).
Asian Trader: Positive on LG Household Healthcare: Korean company is the rising star in the thriving Chinese skin-care market, which is set to defy anything but the most severe economic slowdown.
Emerging Markets: A number of prominent investment managers suggest buying emerging market debt despite some concerns, with countries such as Mexico and Indonesia offering bargains.
Commodities: The sharp price swings buffeting the oil market are likely to continue until excessive supply eases in the second half of the year.
Streetwise: Shares of banks are cheap because of their exposure to falling energy companies and other concerns, but they arent a bargain; investors should instead seek bank bonds and preferred stocks that pay large dividends (Positive on PFF).-
