Saturday, June 11, 2016

Barron's weekend summary

Barron's weekend summary: positive on WSM, MCK, LYB 

Cover story: Barron's 2016 Midyear Roundtable offers investment advice from Scott Black (DHI, WHR), Abby Joseph Cohen (Toto, SEE, NKE, SYK), Mario Gabelli (SNE, MIICF, SSP, CST, EPC, HRS, TXT), Jeffrey Gundlach (10-Year Treasury, GDX), William Priest (AGN, FIS, GOOGL), Brian Rogers (HRS), Oscar Schafer (COMM, ANIP, NOMD), Meryl Witmer (WYN), and Felix Zulauf (short U.S. dollar, long Argentine peso). 

1) Positive on WSM: Retailer's shares have fallen with the sector, but it has differentiated itself with a strong Internet operation, and can compete with AMZN because it controls its inventory, which is exclusive to its brand; 
2) Positive on MCK: Though bears say the drug wholesale is in secular decline, it has strong cash flow, significant bargaining power, new clients, and a strong position in specialty-drug wholesaling; shares could have 15% upside during the next year; 
3) Positive on LYB: A selloff creates a buying opportunity for bargain hunters, who could see the chemical maker's shares rebound and return more than 20%; 
4) Baruch Lev and Feng Gu say accounting hasn't kept pace with the growth of companies with intangible assets like research, which differ from tangible assets like property, and they call for changes to GAAP.

Tech Trader: The expanding constellation of Internet of Things devices has led to complexity that doesn't benefit consumers; it may be time for AAPL, GOOGL, and other players to cooperate on the creation of a set of industry standards that work for everybody. 

Trader: U.S. stocks' inability to break through previous highs isn't worrisome short-term, says Michael Shaoul of Marketfield Asset Management, but if the market isn't able to get through, it will become an issue; Fed futures continue to forecast the Fed's rate action, or lack thereof, accurately, but they will get it wrong someday; Barron's admits it should have paid closer attention when DWRE chief Thomas Ebling, who had mainly been selling company shares, established a 10b5-1 plan to acquire them on the open market before the CRM deal; Positive on FFIV: Even without an acquisition, shares of the company should continue to be rewarding. 

Profile: Ralph Bassett, co-manager of Aberdeen U.S. Small Cap Equity, says speaking with management is a crucial part of his stock-picking efforts. 

Follow-Up: Dell will likely go public again, at which point it will be clear how lucrative Michael Dell's leveraged buyout of the company was; the company's financial performance since the deal supports the idea that Dell and Silver Lake "stole the company"; Positive on HLF: Despite a few recent hurdles after its move to separate its properties into a REIT and spin off its time-share business, momentum is now in the company's' favor. 

European Trader: Following the European Central Bank's move into Europe's corporate credit markets, pushing returns even lower, there are still strategies investors can use to gain, especially in high-yield debt. 

Asian Trader: Five picks from Hong Kong-based brokerage firm CLSA (Positive on Macquarie Group, AIA Group, Samsung Electronics, Seven & i Holdings, and Tencent Holdings). 

Emerging Markets: Peru's next president, mostly likely former World Bank economist Pedro Pablo Kuczynski, will inherit the emerging world's hottest 2016 stock market. 

Commodities: "La Nina is likely to result in increased production of cocoa-the key ingredient in chocolate, across the globe-putting pressure on prices that have run up on an anticipated deficit this season." 

Streetwise: Positive on POT: Most investors don't consider fertilizer producer a quality company, but large potash producers are more disciplined than the market gives them credit for, and margins could recover.