Sunday, July 10, 2016

Barrons weekend summary

Barrons weekend summary: positive on GS, STT, ANET, GHC, NTRS, BSX; Cautious on NFLX, SJM 
Cover story: The mutual fund industry faces increasing pressure to outperform, but as that grows more difficult investors are withdrawing moneya trend the industry calls flowmageddon; Traditional mutual funds still dominate the industry despite the growth of ETFs, but Vanguard is winning with both. 

Tech Trader: Cautious on NFLX: Now that streaming has gone mainstream, founder and CEO Reed Hastings needs a new strategy to maintain the companys momentum and must continue to produce better content than rivals; otherwise, shares could drop by 40% or more.

 Trader: Dennis DeBusschere of Evercore ISI says low yields on the 10-year U.S. Treasury are a money-flow, central-banking issue and not a sign the American economy is in trouble; A number of credit-card stocks fell on earnings news at SYF, but even after last weeks rally their multiples remain low historically and relative to the S&P 500, offering downside protection; A decline in the number of pubs in the U.K. may partly lie with smoking bans and tougher drunk-driving laws. 

Mutual Fund Quarterly: 
1) Jeffrey Gundlach of DoubleLine Capital discusses the effect of the Brexit vote on the stock and bond markets; 
2) Mutual funds posted gains during the second quarter and ended the period in the black, boosted by gains in categories such as value and precious metals; 
3) Positive on GS, STT, BLK, JPM, Franklin Templeton: Among firms that are making a push into the multifactor or smart beta ETF market, which though young is growing increasingly popular with investors; 
4) Because of todays extreme currency volatility, funds that hedge back into dollars are the best bet. 

1) Positive on ANET: Company is gaining market share in high-end network switches at the expense of CSCO, and has entered the router market; shares could climb 20% and Arista has an attractive valuation; 
2) Positive on GHC: Television and education company has undergone major changes in the past few years, and under new chief executive Tim OShaughnessy it should start to close the gap between its share price and its estimated asset value; 
3) Positive on NTRS: A recent string of deals have given the trust company more market share in a competitive sector, and fees in its wealth-management business are growing. 

Small Caps: Positive on FLWS: Companys acquisition of Harry & David extended its ability to cross-sell gifts of food and bouquets, which should boost revenue and growth. 

1) Positive on BSX: After seeing a 41% gain, shares of the medical device maker still seem reasonably priced, and the company could grow profits at a low double-digit rate for years to come; 
2) Cautious on SJM: Any benefits from lower coffee costs arent likely to continue, and with shares stretched valuation investors may want to take money off the table. 

European Trader: A sudden and violent sellof in U.K. property assets following the Brexit vote has created value for long-term investors. 

Asian Trader: An ongoing activist investor battle at China Vanke could ultimately be bad for the companys share price. 

Emerging Markets: Entrepreneurial healthcare, tech, and consumer-discretionary companies have grown in number since 2005, but are not proportionately reflected in the MSCI Emerging Market Index. 

Commodities: Gold is strong of late, but silver is outshining itand the Brexit vote makes both more appealing to investors. 

Streetwise: As with junk, the margin of safety for stocks might not be as big as it appears, and the Brexit will call any surge in corporate profits into question