Sunday, March 6, 2016

Barron's weekend

Barron's weekend: cover story picks Clinton over Trump as better for the economy; positive on MLM, STCK, MYL; cautious on DB 

Cover story: After looking at the positions of Hillary Clinton and Donald Trump on taxes, spending, trade, and other issues, Barron's concludes that Clinton, "the strong favorite to win the Democratic nomination, seems better suited to help the markets than the Republican front-runner, Donald Trump."

1) Positive on MLM: Earnings at the miner of rock, sand, and gravel could double this year as government infrastructure budgets grow and residential and commercial building increases; shares have a possible 35% upside; 
2) Cautious on DB: Bank has faced global sanctions for various misdeeds over the past years, and could soon lose the right to run U.S. retirement funds if a Labor Department ruling goes against it; 
3) Positive on MYL: Shares of drugmaker are down after it rejected a bid from from TEVA and embarked on a deal for Meda, but the current valuation seems to price in more problems than the company has, and the stock could rise by 30%; 
4) Positive on STCK: Shares of nation's second-largest lumber and building-materials distributor have taken a hit because of investor sentiment about the housing recovery, but they appear undervalued and could gain 20%.

Tech Trader: Cautious on GOOGL: The transition to having more self-driving cars on the road will be messy, and for a long period of time they may be segregated in separate lanes; Insurers and regulators must deal with liability issues, and there will be a debate about who owns the data the cars generate. 

Trader: For a sustained rebound, says Michael Mullaney of Fiduciary Trust, investors need to see positive earnings estimate revisions; Cautious on DNKN: With same-store sales comparisons worsening and traffic down, shares could fall 20% to around $37 from about $48; The SEC should approve IEX Group's application to be an exchange, and not try to predict the outcome of its experiment to force market makers to honor their quotes. 

Advisor Rankings: Barron's annual list of the top financial advisors by state, with profiles of the top advisors in each state. Profile: Andrew Foster, manager of the Seafarer Overseas Growth & Income fund (top 10 holdings: Bank Pekao, INFY, Hang Lung Properties, Sanlam, BBD, Samsung Electronics, Singapore Telecom, Astra International, Texwinca Holdings, Grupo Financiero Banorte). 

Interview: Amid Wadhwaney of Moerus Capital, a hedge fund that will open this summer, talks about undervalued stocks (picks: Sino Land, GTE, Global Logistics Properties, Major Drilling). 

Follow-Up: Positive on BRKA: Berkshire Hathaway "remains a solid choice for conservative investors because of the company's ample earnings power, steadily rising book value, and reasonable valuation." 

European Trader: "European stocks-bank shares in particular-could continue to rebound as long as central bankers don't pull any surprises this week"; Positive on Capita: Shares of London-based advisory, administration, and transaction services could gain 20% in the next 12 months. 

Asian Trader: Western consumer brands seeking to expand in India could take a hit from the growing trend of Indian consumers buying natural products using ingredients from the ayurveda tradition (+/- CL, Nestle). 

Emerging Markets: "For emerging market equities, the worst may be over as central banks go all-out to boost global growth"; BAC's Ajay Singh Kapur and Ritesh Samadhiya favor cyclical stocks, and suggest selling defensive staples such as healthcare, utilities, and telecoms. 

Commodities: Erratic weather patterns around the world are affecting coffee production, which is concentrated in a small number of countries, including Colombia, Vietnam, and parts of Brazil. 

Streetwise: Cautious on WLL: C analyst Jeanine Wai says company would need to sell $3.5B in new shares, more than twice its current market value, to bring its debt "below the dividing line separating good balance sheets from the bad."