Saturday, April 16, 2016

Barrons weekend

Barrons weekend: positive on Ford, GM, INTC, SEE, AJRD; cautious on TSLA
Cover story: Though sales are booming for GM and F, shares are "in the breakdown lane"-perhaps because of worries about economic woes in China and rising levels of buyer incentives at rivals and subprime auto loans in the U.S.-but they offer generous dividends and a potential 25% upside during the next year.

1) Positive on F: Under chief executive Mark Fields, automaker "is embracing the future with a passion" with such efforts as its Ford Smart Mobility subsidiary that will study new business opportunities and revenue streams from tech initiatives;
2) Cautious on TSLA: With the launch of its Model 3, Tesla is "walking a fine line in becoming a mass-market auto maker," given the range of delays and other problems it has faced with its earlier models;
3) Positive on INTC: "There's a risk that Intel could trim its financial guidance for this year, but also a likelihood that by year's end, it will return to sustainable growth for the first time in seven years";
4) Positive on SEE: Chief executive Jerome Peribere led the company through a restructuring and rebranding campaign, and it has become "an innovative, savvy operator";
5) Positive on AJRD: Shares of jet-propulsion-system manufacturer are down after it lost a $100M account from United Launch Alliance, but it has other potential growth streams and shares are likely worth twice their current price.

Tech Trader: Positive on FB: Search giant joins a growing crowd of rivals, including MSFT, BIDU, AAPL, AMZN, and IBM, as it seeks to leverage machine learning, wherein computer systems observe human behavior and learn how to perform human-like functions.

Trader: Liz Ann Sonders, chief investment strategist at SCHW, says investors care more about figures that are better or worse than expected than about results that are absolutely good or bad; Cautious on AXP: Card company has the resources, ability, and determination to adapt to a changing market; doing so will take time-but the case for long-term upside is better than the case for downside; "When the sell-side analyst view on a stock is monolithic, whether bullish or bearish, it's typically dead wrong."

Advisor Rankings: Barron's list of the Top 100 Financial Advisors is topped by Andy Chase, Gregory Vaughan, Brian Pfeifler, and Lyon Polk of Morgan Stanley Private Wealth Management, and Mark Curtis of Graystone Consulting at No. 5; Costs related to the newly passed fiduciary rules are likely to be expensive for the industry, and could force smaller broker-dealers to merge; Joe Montgomery of Wells Fargo Advisors discusses why retail investors should care about the management of pension funds, foundations, and other large investment pools.

Profile: Michael Weilheimer, portfolio manager, Eaton Vance Income Fund of Boston, seeks to protect against downside while finding securities that offer upside even in volatile markets (top ten holdings: EV Cash Reserves Fund, Alphabet Holding, First Data, Laureate Education, Jaguar Holding II and Pharmaceutical Product Development, XPO Logistics, Alere Convertible, Reynolds Group Issuers, T-Mobile USA, MPH Acquisition Holding).

Interview: Kristian Heugh, portfolio manager, Morgan Stanley Global Opportunity fund, works out of Hong Kong to be closer to investment opportunities in Asia (picks: XRS, Tencent, Naspers, ViroMed, Medy-Tox, Calbee, Hermes International, Burberry, FB).

Follow-Up: Cautious on SRPT: Whether pharma company's shares go up or down could depend on an FDA advisory committee decision on April 25 related to its Duchenne muscular dystrophy drug, eteplirsen.

European Trader: Positive on Publicis Groupe: Advertising major lost ground following a scuttled tie-up with OMC, but "there are signs the French company is shaping up and its stock could rebound."

Asian Trader: Tokyo wants a weaker yen to spur exports and promote growth, but the Bank of Japan may have only one remedy: buy Japanese stocks to keep quantitative easing afloat and stimulate the Abenomics government-spending program.

Emerging Markets: Based on the latest International Monetary Fund update, "the worst may be over for many emerging-market countries, but investors need to watch where they step in trying to avoid the many risks remaining."

Commodities: Natural-gas futures "might look like a classic buy-low opportunity in a market about to rebalance, but it isn't-at least for now."

Streetwise: Positive on ALK: Carrier's deal for VA makes sense in the long run, says Wolfe Research analyst Hunter Keay, because it faces growing competition from larger rivals such as DAL.