Saturday, May 14, 2016

Barrons weekend

Barrons weekend: positive cover story on REGN; positive on ETN and Alleghany (Y) 
Cover story: REGN looks attractively priced, given its growth potential, and as it reaches a few key milestones over the next year, shares could rebound to $500, for a gain of more than 30%, making it one of the best plays in biotech; In addition to its drug pipeline, Regeneron has spent decades developing tools and technologies that remove bottlenecks from the drug discovery process. 

1) Positive on ETN: Chief executive Alexander Cutler will retire this month, but will continue to work with the Campaign to Fix the Debt and the Business Roundtable to advocate for reforming the tax code and balancing the U.S. budget; 
2) Positive on Y: Alleghany doesn't hold earnings calls and receives scant coverage from analysts, but its book value has grown consistently and shares have followed, which should attract investors.

Tech Trader: Tiernan Ray says that for now, the vaunted Internet of Things "is a jumble of electronic devices that don't really connect to anything. They're just dead ends" that are hampering the evolution of personal computing, partly because wearables and other devices don't have the mass appeal of the PC and the smartphone. 

Trader: Rick Seto of Flaherty & Crumrine says big banks could see a boost in June if the Fed blesses share buybacks and dividend increases; Positive on BBT: BB&T "is a boring but beautiful bank, whose shares still could give a double-digit total return, without the blue-sky assumptions about interest-rate hikes"; Positive on BAC, FRC, GS, JPM: With common-stock dividends reaching a seven-year high and interest rates at nearly zero, banks' preferred shares could give investors a boost. 

Profile: Susan Kempler, portfolio manager of the TIAA-CREF Growth & Income fund, takes a cautious approach, hunting for bargains and diligently timing winners, which sometimes results in trailing the market (top 10 holdings: AAPL, GOOG, MSFT, FB, HD, KO, GE, PEP, AMZN, PM). Interview: Ali Dibadj, household products and beverages analyst at Sanford C. Bernstein, says PG should be broken up (picks: PG, KO, PEP, EL; pans: CLX, CL). 

Small Caps: Positive on AXTA: Automotive refinishing company has an attractive business that's less cyclical than selling coatings for new cars, and under chief Charles Shaver it has reinvested for growth and to improve efficiency and productivity. 

1) Positive on JWN: Shares are down, but retailer is positioning itself for the changing industry with investments in e-commerce and off-price retailing, and could be the best long-term holding in the sector; M shares could also see a rebound; 
2) Positive on NXST: Shares of station owner are rising, and could be worth as much as $70 as cash flow grows in the next year; 
3) Positive on ODP: Shares of office-supply retailer now look cheap following the FTC's decision to scuttle its merger with SPLS; it can use a $250M pretax breakup fee to buy back depressed shares. 

European Trader: Positive on Ryanair: Carrier's stock has taken a hit because of concerns about rising fuel prices and a potential U.K. exit from the European Union, but the company is well managed and should be able to move past those issues. 

Asian Trader: Suofeiya Home Collection, Hangzhou Robam Appliances, Midea Group: Shenzhen-listed home appliances and furniture companies are poised for a boost from the growth of home sales in China, and are appealing ways for investors to play the trend. 

Emerging Markets: Low prices may be bad for emerging markets such as Russia and Brazil, but should be good for India and China, though the markets have largely ignored the fact. 

Commodities: Prices for platinum, palladium, and rhodium are up, and though the rally has slowed a bit, it should regain momentum during the second half. 

Streetwise: Among the ideas put forth at the SALT conference, Michael Bloomberg said the Republican Party is no longer the party of business, while Larry Summers said the U.S. is in some ways an emerging market.