Saturday, August 13, 2016

Barron's weekend update

Barron's weekend update: positive on BKD 

Cover story: A Hillary Clinton win in the presidential race "would be easily digested by markets because of her mostly moderate instincts and predictable policy prescriptions"; U.S. multinationals such as GE, MON, and DE would likely benefit because Clinton has shown no signs of being a protectionist. 

1) Sectors including biotech, energy, and even defense stocks could benefit from a Donald Trump presidency, because he is calling for less regulation on a variety of industries; 
2) Positive on VOD, Deutsche Telekom, NVS, Nestle, NGG: Five European stocks have yields ranging from 2-5%, and could get a boost as European investors seek alternatives to ultralow, or negative, government bond yields; 
3) Positive on BKD: Company faces a number of issues, including a slowdown in new construction in senior housing, but shares already appear to reflect these concerns, and they could rise 30% or more. 

Tech Trader: Cautious on IBM: Tech company has contributed to the impression that it's failing in the cloud sector because it doesn't indicate what cloud revenue is new business; A lack of information from players such as MSFT and GOOGL about their cloud businesses has forced analysts to compile their own estimates. 

Trader: "The more stocks go up, the more those sitting on the sidelines will be forced to capitulate and join in," says Douglas Cote of Voya Investment Management; A rise in three names-MMM, IBM, and UNH-accounted for almost 50% of the Dow's 7% gain as of Thursday; Cautious on PAY: Company's valuation is near an all-time low, with the stock trading at big discounts to its own history, rivals, and the market; Positive on AMZN: Retailer is likely to benefit from back-to-school shopping-22% of respondents to a Civic Science poll say they'll do a quarter or more of their shopping online. 

Small Cap: Positive on SSP: Broadcaster faces slower-than-expected political spending this year, but a recent selloff looks like an opportunity, and long-term prospects are good. 

Follow-Up: Positive on CAT: An earnings recovery could take two more years to begin, but when it happens it should be strong, and patient investors should stick with the shares; Positive on BDX: Shares of medical-equipment maker could rise by 10% during the next 12 months following a string of strong revenue and earnings gains; Cautious on ECL: Shares are up 48% during the past three years, but with sluggish growth and some industry headwinds, it could be time for investors to take their profits. 

European Trader: Positive on FirstGroup: Shares of transport group have rebounded following a drop in the wake of the Brexit vote, and its profit picture shows signs of brightening. 

Asian Trader: Cautious on Idea Cellular: Indian consumers have embraced smartphones, but they shy away from high-priced data plans, a problem for the country's No. 3 carrier. 

Emerging Markets: With state-run deficits amounting to 10% of GDP for three years straight and failures by the central bank to prop up its currency, Egypt badly needs a bailout from the IMF. 

Commodities: Easing concerns about the global economy this year have halted the long slide in copper prices-though the support isn't likely to last. 

Streetwise: Profits in technology and healthcare continue to grow at double-digit rates, and it wouldn't take much outperformance for them to attract momentum investors, which would give them a boost.