Saturday, March 4, 2017

Barrons weekend summary

Barrons weekend summary: positive on RRC, XRX; cautious on SNAP 
Cover story: As Donald Trump tries to keep manufacturing jobs in the U.S., many companies that remain will use robots in an effort to lower labor costs; "For long-term investors, robots could be one key to securing healthy corporate profit growth, and stock returns, even as wages rise"; Investors should look at Fanuc, ROK, ABB, Yaskawa Electric, and ROBO. 

1) Positive on RRC: Leading U.S. gas producer appears undervalued, and its ability to drill profitable wells, even at current prices, gives it staying power and makes it an "option" on higher gas prices; 
2) Cautious on SNAP: Even assuming the startup sees strong growth, it's hard to justify more than half the current stock price, and the company is more likely to resemble TWTR than FB; 
3) Positive on XRX: Now that it has spun off business-processing units such as CNDT, Xerox and its investors have the opportunity to realize substantial long-term gains under new chief executive Jeff Jacobson.

Tech Trader: At the Mobile World Congress the key topic was the advent of 5G technology, which is less about making phones faster than about connecting a wide range of devices to the Web; NOK, ERIC, CIEN, and JNPR stand to benefit from the trend.

 Trader: "Merrill Lynch's Sell Side Indicator, a measure of Wall Street's bullishness, still sits in neutral territory despite hitting its highest level in 16 months"; Positive on PHM: Shares have lagged the market for the past four years and are nearing the top of their long-term range, but expectations of stronger growth and margins could carry them further; Cautious on SIG: Jeweler's valuation may be the one good thing it has going for it as it faces several challenges, including allegations it underpaid female workers. 

Profile: Brian Kessens, manager of the Tortoise MLP & Pipeline fund, is upbeat about the prospects for pipelines, storage facilities, and other midstream energy outfits (top 10 holdings: KMI, WMB, TRP, LNG, SE, ENG, OKE, PAGP, TRGP, Inter Pipeline). 

Interview: Mark Boyar, founder of Boyar Asset Management, is an "eclectic value investor" who looks for strong businesses that aren't in favor (picks: MSG, MSGN, QVCA, TRCO). 

Advisor Rankings: Barron's list of the top 1,200 financial advisors by state looks at assets under management, revenue produced for their firms, regulatory record, quality of practice, and philanthropic efforts. 

Follow-Up: Cautious on MLM: The miner's prospects remain strong, but the excitement is already priced into the shares, and investors may want to take profits; Cautious on AFSI: Questions Barron's raised earlier about the company's accounting and reserve levels remain, and there could be more bad news when it files its 10-K report for 2016. 

European Trader: Positive on AZN: This could be the year the company starts to deliver on a promise made in 2014 that it would fare better alone than by accepting PFE's takeover bid. 

Asian Trader: The Indian economy grew by 7% in the December quarter despite the government's ban of the use of large rupee bills, but Capital Economics doesn't see India's economy surpassing China's. 

Emerging Markets: In a recent report, Jim Barrineau of Schroders Investment Management claimed EMB and PCY haven't properly tracked their benchmark indexes and aren't proxies for the diversity of developing market debt. 

Commodities: Aluminum prices are up this year on expected boosts in China's smelting industry, but without more evidence that production is decreasing, investors may find prices falling. 

Streetwise: Reducing the U.S. corporate tax rate, which Donald Trump is unlikely to do if he wants to increase infrastructure spending, would hurt some companies, particularly those with high interest rates.