Saturday, September 17, 2016

Barron's Weekend summary

Barron's Weekend summary: positive on CAA, HPE, LH 
Cover story: For the first time, the number of families with more than $5M in assets has surpassed one million, part of a trend in which every level of the wealth pyramid is expanding; Last year, there were 492 billionaires in the U.S., one hundred of which were created in the past five years alone. 

1) Positive on HPE: With chief Meg Whitman focusing on computer-infrastructure products such as servers for corporate clients, company should see increased cash flow, much of which will go to investors; 
2) Positive on LH: Company, whose tests are generally cheaper than those performed at hospitals, should benefit from a growing senior population and broader health insurance coverage through the ACA; 
3) Positive on CAA: Homebuilder is expanding in some of the country's fastest-growing regions, and shares, which have a lower P/E ratio than peers, could have 25% upside.

Tech Trader: The camera on AAPL's new iPhone 7 model is said to be able to match or beat professional gear costing thousands of dollars, but that's just one element in the rapidly changing photography sector; Investors can play the trend with CEVA and Foveon, a subsidiary of Japanese lens and camera maker Sigma. 

Trader: "A Fed hike Wednesday could be followed by a knee-jerk selloff below 2100 on the S&P 500," says Peter Kenny of Kenny & Co., but a relief rally is likely if there's no hike; Positive on CTSH: Company is a leading global player in infotech, consulting, and outsourcing, and with a potential 15% gain in shares as companies spend on digital infrastructure, investors should take a look; Positive on PII: Company continues to face issues, including recalls, but is installing the infrastructure to improve and monitor its products, and the stock could be a long-term winner. 

Profile: John Loffredo and Robert DiMella, co-managers, MainStay High Yield Municipal Bond fund, don't use leverage and take a cautious approach to non-rated securities (sector weightings: education, health, transportation, general obligation, industrial, tobacco, cash equivalents and other, water & sewer, advance refunded, housing, utilities, miscellaneous revenue). 

Interview: Jeff Rottinghaus, manager, T. Rowe Price U.S. Large-Cap Core fund, says he does a deep dive into companies he owns-and those he avoids-and thinks the market is fairly valued to overvalued. 

Barron's Penta: Barron's annual list of the top 40 wealth management firms is topped by Bank of America Global Wealth & Investment Management, Morgan Stanley Wealth Management, and J.P. Morgan Private Bank; Other Penta stories report on Biedermeier furniture, Cap Ferrat, suitmaker Hickey Freeman, in-demand aircraft, the new Maserati off-road vehicle, watchmaker Laurent Ferrier, undervalued housing markets, UBS head of U.S. wealth management Tom Narati, trends in philanthropy, how to cut accounting fees, how to build an education trust, trends in wine, and the boom in homemade brewing. 

Small Caps: Positive on PICO: Shares of the company, which holds a sizable amount of water rights in Nevada and Arizona, look deeply undervalued, and the company could be a takeover target. Follow-Up: Positive on NWL: Shares are up 35% to about $50 since Barron's recommended them in January, and they could rise to $60 as the company seeks fresh savings and pares its holdings; Cautious on MFIN: Company has cut dividends among ongoing trouble in the taxi industry, but at this point investors should hold on to shares, because yellow cabs are a long way from disappearing. 

European Trader: Positive on Total: Shares of French integrated energy company, which is keenly focused on profitability, could gain 20% in the next 12 months. 

Asian Trader: Positive on HSBC, China Construction Bank, Axis Bank: Three Asian-listed banks offer strong yields, growth prospects, or both, and despite a recent stock surge, they may have more room to grow. 

Emerging Markets: Positive on Cielo, Sberbank: James Donald, who runs Lazard's Emerging Markets Equity Portfolio, likes the Brazilian credit-card processor and Russia's largest bank. 

Commodities: Despite an active hurricane season in Florida, frozen concentrated orange juice futures are up and aren't likely to drop for some time. 

Streetwise: Though investors are calling on GILD to make a major deal, management has chosen to focus on smaller acquisitions, which is exactly what it should be doing, according to Hilarey Bhatt of Bhatt Innovation Capital.