Saturday, April 8, 2017

Barrons weekend summary

Barrons weekend summary: Positive on STX and select energy names; cautious on GKOS 
Cover story: Roger Ferguson, chief executive of TIAA-CREF, has taken a number of steps to reinvent the company, including hiring Vijay Advani to run the asset-management side, which has been rebranded as Nuveen, and consolidating a variety of businesses. 

1) Positive on LNGG, Ultra Petroleum, SD, HK, MPO, GDPP: After emerging from bankruptcy, these energy companies reduced debt levels, have stronger balance sheets than many rivals, and are attracting interest from value-oriented investors; 
2) Cautious on GKOS: Medical device maker has had a strong run, but faces increased competition from NCS and AGN; shares carry a high valuation, and a minor setback could send them down 30%; 
3) The outlook for gold is stronger, with overproduction no longer an issue despite growing demand, especially in Asia; any whiff of stagflation could send the precious metal higher (Positive on GLD, GDX, GDXJ, ABX).

Tech Trader: Positive on STX: Chief Steve Luczo says investors misunderstand the company, one of three that make hard drives, and that it should be judged not by how many units its ships, but by the power and efficiency of each drive and their underlying technology. 

Trader: Not all investors are confident about the market's resilience, and it may be necessary to tamp down confidence in an economic acceleration in the near term; Maxim analyst Stephen Anderson says the availability of cheap debt and strong cash-flow generation at restaurants make chains such as DNKN good acquisition targets; "Bank stocks have suffered with the death of the Trump trade. But that doesn't mean it's time to bail on the group." 

Small Caps: Positive on JLL: Worries about the commercial real estate market have weighed on shares, but the stock already reflects pessimism and is trading at a substantial discount-shares could rise 40%. 

Mutual Fund Quarterly: 
1) Hersh Cohen of ClearBridge shares his top dividend picks, including MRK, SLB, IP, and PSX; 
2) A look at how to use smart beta strategies to build stronger bond indexes, a problematic area for investors; 
3) "Behavioral-finance fund managers capitalize on the errors investors routinely make," and some do it quite well, though not always at a low cost; 
4) During the first quarter, growth mutual funds beat top value funds amid a strong stock rally based on hopes of economic growth, while foreign funds had the best performance. 

Follow-Up: Positive on CELG: Trading at 17 times earnings, drug company is the rare case in its sector with rapid revenue growth, and shares could see a 12% gain, says Carter Gould of UBS; Cautious on AFSI: "The quality of the New York-based insurer's reserve practices remains questionable."

European Trader: Positive on Bayer, Novo Nordisk: U.S. investors can benefit from a valuation gap between the American and European markets that has created a price advantage for investors in the pharma giants. 

Asian Trader: Investors need to be more vigilant about China's big bank stocks, which have seen a rally despite having near-nonexistent earnings growth and shrinking net-interest margins. 

Emerging Markets: The Turkish market is likely to rally regardless of the outcome of a vote on 18 proposed constitutional amendments, because the result will put an end to uncertainty. 

Commodities: Outages at three of the world's largest copper mines have erased what was expected to be a surplus, prompting analysts to forecast higher prices. 

Streetwise: "Trillions from global central banks have already lifted stocks and bonds to giddy heights, but haven't animated the economy to quite the same extent."