Saturday, April 15, 2017

Barrons weekend summary

Barrons weekend summary: Cover story features REGN, VRTX; positive on HBI, WAB 
Cover story: Drug-price increases are likely to ease because of market-based forces and government policy tweaks; Investors should focus on companies that are increasing revenue through new drugs and growing customer bases, such as REGN and VRTX, and not on serial price hikers such as ABBV, AMGN, and BIIB. 

1) Positive on HBI: Demand for undergarments remains strong, and as retail inventories stabilize and Hanes sees cost savings from debt reduction and acquisitions, shares could rise 25%; 
2) Positive on WAB: Company has completed about 50 acquisitions during the past decade, creating a diverse and less volatile business; shares could rise 20% in a year. 

Tech Trader: Some people on Wall Street think AAPL should buy DIS to create a tech and media powerhouse, but it's a terrible idea, says columnist Tiernan Ray, since the companies are pursuing vastly different missions. 

Trader: "The rally impetus from the so-called Trump trade seems depleted," and investors are worried the president will be unable to implement his economic policies; Positive in F: The stock's recent weakness reflects several concerns, but the automaker is sitting on a strong balance sheet, shares look cheap, and the company has a secure high dividend; Cautious on DAL: Carrier, considered the best-managed among top American rivals, could see its shares move higher if it can demonstrate earnings consistency and growth. 

Advisor Rankings: Top 100: Barron's list of the top 100 financial advisors is topped by Andy Chase, Gregory Vaughan, Lyon Polk, and Brian Pfeifler of Morgan Stanley Private Wealth Management and Mark Curtis of Graystone Consulting; Barron's list of the top consultants to institutional investors is led by Graystone, UBS International Consulting Group, and Sheridan Road Financial. 

Small Caps: Positive in Linamar (LNR.CA): Canadian company is well-positioned in a slowing auto market, and its engine and transmission components are poised to grow well above the market clip. 

Profile: Rob Lanphier and Karl Brewer of the William Blair

 Small-Mid Cap fund look for companies with a market value of $500M to $10B in sectors with double-digit weightings in the Russell 2500 Growth Index (top 10 holdings: CPRT, CSGP, LGND, SIX, TSCO, JCOM, MMS, BWXT, VEEV, BAH). 

Interview: Michael Hartner, investment strategist at Merrill Lynch, discusses the "Icarus trade"-the idea that stocks will return to normal after years of monetary policy. 

1) Positive in WFM: Shares could rise if grocer heeds advice from activist hedge fund Jana Partners to improve operations, shake up the board, and consider a sale; 
2) Cautious on P: Internet radio station is struggling to remake its streaming business, but the brand has value and the worst could be over for shares. 

European Trader: Investors want to know what strategies Akzo Nobel will employ to deliver more value as it faces increasing pressure to accept an acquisition bid from PPG. 

Asian Trader: China's next business and commercial hub, the city of Xiong'an in Hebei province, could attract up to $350B in investment in the coming years, says Morgan Stanley.

Emerging Markets: "Long term, South Africa has little to cheer about," with president Jacob Zuma the target of corruption probes and his party moving toward more populist polices that will foster economic stagnation. 

Commodities: Strong demand for cotton from abroad led to higher prices last year, but higher plantings this year should put downward pressure on them. 

Streetwise: The autopilot approach of passive investing may be fine for young people, but retirees who need to navigate turbulent markets may prefer a skilled advisor.