Saturday, March 12, 2016

Barron's weekend: positive on ASH, IR, KORS 

Cover story: Growth stocks, especially the so-called FANG group (FB, AMZN, NFLX, GOOGL) have led the broad market, but in recent months they've grown too rich for many investors, while value stocks are becoming too cheap to ignore; Story looks at 16 ways to play value's resurgence (C, GS, TWX, DISCA, MU, INTC, BA, CMI, AMGN, PFE, F, GM, IWD, IWN, AWSHX, TRVLX). 

1) Positive on IR: Company "remains undervalued relative to the broad stock market and other industrials, especially considering how well its profits have held up amid a recent weak patch for the group"; 
2) Positive on KORS: Company is expanding its product lines and closely monitoring inventory; it also plans to expand in footwear and menswear and boost its presence in Asia and Europe; shares could rally 30% in the next year; 
3) Positive on ASH: Shares of motor oil and specialty chemical maker have fallen from last May's 52-week high and now look cheap, especially because of the upcoming Valvoline spinoff, which should benefit investors. 

Tech Trader: Many people on Wall Street have realized that it will be increasingly difficult for the PC sector to grow, while others remain in denial that it's a dying category; Only challengers such as AAPL and other companies that bring novel approaches to the business are likely to thrive. 

Trader: Some investors wonder if the ECB's stimulus will work amid fears that chief Mario Draghi has "thrown in the kitchen sink" and that there are few options left for boosting Europe's economy; Cautious on Z: The market is ignoring a number of factors that could send shares down, such as growing losses and the fact that the company can't make a net profit with 70% market share; Positive on ADT, ALR, ARG, CVC, RAD, TUMI: The shares prices of these acquisition targets are significantly lower their deal prices, offering investors an attractive annualized yield. 

ETF Special Report: Experts discuss the latest trends in exchange-traded funds and explain what investors need to know about "smart beta"; Picks: Larry Whistler of Nottingham Advisors (USMV, EEMV, PXF), Michael Yoshikami of Destination Wealth Management (SDY, VUG, VTV). 

Profile: Phil Davidson, portfolio manager, American Century Equity Income (top 10 holdings: Bank of American conv, Wells Fargo conv, XOM, PG, SYY, SLB, JNJ, PFE, WMT, Microchip Technology conv). 

Small Caps: Positive on HYH: Shares of surgical and infection products appear poised to double in three years as the company expands its product line through acquisitions. 

Follow-Up: Cautious on BABA: Chief Jack Ma's transfer of Alipay ownership to Ant under flimsy pretexts continues to raise issues for investors, and the company's shares could eventually become toxic; Positive on Samsonite: Luggage giant's acquisition of TUMI "offers a lot of opportunities to boost margins, revenue, and profit in the next few years." 

European Trader: The stimulus efforts announced by European Central Bank head Mario Draghi could be good news for bank stocks, and the decision to purchase corporate bonds could lead to a rally; Companies such as ISS, SAP, and Linde are potential beneficiaries. 

Asian Trader: Iron-ore prices, now nearly $58 per dry ton, could fall to the low $30s or high $20s by the end of the year and remain there until 2017 (Cautious on RIO, BHP, Vale, Fortescue). 

Emerging Markets: "Colombia is suffering from stagflation, but you wouldn't know it from the performance of the local stock market." 

Commodities; Gold isn't likely to keep going up at its current pace, says Julian Jessop of Capital Economics, and those who believe industrial metals will improve should buy silver. 

Streetwise: Mutual funds aren't happy with the SEC's proposal to force them to keep more cash on hand to meet redemptions, which is difficult because many funds are having a tough enough time beating their benchmarks.