Barrons weekend summary: positive on Macy's (M), ABT, PSH.NL
Cover story: Barron's 2016 list of the best fund families is topped by Natixis Global Asset Management, Pimco, State Street Bank & Trust, American Funds, and First Trust Advisors; Pimco is ranked No. 1 for U.S. equity and world equity, Lord Abbott is ranked No. 1 for mixed asset and taxable bond, and OppenheimerFunds is ranked No. 1 for tax-exempt bonds.
Features:
1) The managers of Barron's four top fund families-John Hailer of Natixis, Emmanuel Roman of Pimco, Nick Good of State Street, and Tim Armour of Capital Group-discuss the past year, and what lies ahead;
2) Positive on M: The retail sector remains troubled, but as the retailer downsizes its physical locations and ramps up the online side, shares could rise by 20-30%, and a sale would benefit investors;
3) Positive on ABT: Global healthcare giant faces challenges including currency headwinds and making its acquisition of St. Jude Medical boost growth, but shares are inexpensive, offering investors an opportunity;
4) Positive on Pershing Square Holdings, Third Point Offshore Investors: Closed-end funds offer individual investors a cheap way to invest with prominent hedge fund managers Bill Ackman and Daniel Loeb.
Tech Trader: Positive on LITE: Most analysts think the company's 3-D sensing system will be the next big thing for the AAPL iPhone, though similar technology has already been used by MSFT and INTC in devices other than smartphones; Other companies working on new technology for smartphones include FNSR, IIVI, VIAV, AMS, and Infineon Technologies.
Trader: Earnings growth in Europe could be faster than in the U.S. this year and next, says Ronan Carr of Merrill Lynch; "Much attention has been focused on the possibility of slashing the corporate tax rate, but those gains could be eroded by other Trump policies"; Cautious on ABX: A strong finish in 2016 bodes well for the company, which has slashed debt and cut costs by removing layers of management and sold unnecessary assets, though metals will continue to see volatility. Profile: Karen Bowie, manager of Nuveen Small Cap Value, seeks unsung or unnoticed companies with clear turnaround potential based on catalysts the market has missed (top 10 holdings: BANR, RNST, WBS, STL, NSR, CY, PLT, HTLF, PFBC).
Interview: Ken Siazon of Longleaf Partners Asia Pacific fund, runs a highly concentrated portfolio with extensive research backing its holdings (picks: Global Logistics Properties, New World Development, JIN, MPEL, Melco International Development).
Small Caps: Positive on IGT: Company's merger with Italian lottery-operator Gtech has proven successful, and more upside could lie ahead for the shares despite a recent uptick.
Follow-Up: Cautious on TWTR: Company continues to face problems, and its best hope is probably a sale, a situation that doesn't bode well for the upcoming IPO of Snap; Positive on KEY: While investors may want to consider taking profits in big bank stocks, they should hold their KeyCorp shares, which look fairly priced relative to earnings, which could grow by double-digits.
European Trader: Positive on Orkla: Norwegian consumer-goods company has been refocusing on higher-margin businesses, and could be a great turnaround play for investors.
Asian Trader: "Chinese real-estate developers may be the new value performers this year, judging by the furious rally at the Hong Kong exchange last week" (Positive on China Resources Land, Longfor Properties).
Emerging Markets: Positive on C: For investors seeking a hedge against emerging markets' volatility and some shelter from a strong dollar, the bank's shares appear to be a risk-averse way to tap into the sector's growth.
Commodities: "Beef prices may have taken a tumble last year, but now it looks like they aren't going anywhere but sideways," an opportunity for investors who sell options at levels above and below recent prices.
Streetwise: Letting the yuan float freely could eventually boost Chinese exports, stem capital flight, and increase inflation, says William Adams of PNC, but in the short term it could roil markets.
