Saturday, April 22, 2017

Barrons weekend summary

Barrons weekend summary: Positive on top US banks, JNJ, MGM, SRPT, SRG, ORLY; Cautious on ARNC, HOG, INFY 
Cover story: MORN has exerted an outsize influence on the mutual fund industry for 30 years, but under new chief executive Kunal Kapoor it will continue to undergo a transition with a move beyond data and research as passive investing grows more dominant. 

Tech Trader: Tiernan Ray talks about the growing trend among tech companies of delivering products in beta form, so that “the future is not delivered anymore so much as teased,” as with GOOGL’s Google Glass or FB’s recent announcement about augmented reality. 

Trader: The results of the French election could have a major effect on markets this week, says MS strategist Michael Wilson; Positive on JNJ: Company’s “revenue miss could be a buying opportunity now that its shares look more reasonably priced”; Positive on MGM: When the gaming giant reports earnings Thursday it won’t likely miss, and a drop in share price presents an opportunity for investors. 

1) Positive on BAC, C, GS, JPM, MS, WFC: Six major banks trade at a discount to the S&P 500 after a selloff sparked by economic and political concerns, but their profit outlook is improving and the shares look like buys; 
2) Positive on SRPT: Shares should appeal to investors because there’s a good chance company’s Duchenne muscular dystrophy drug, Exondys 51, will ramp up this year, making Sarepta an acquisition target; 
3) Positive on SRG: The REIT spun off from SHLD is signing on new tenants who pay substantially more than shuttered Sears stores, and it offers the opportunity for significant long-term growth; 
4) Positive on ORLY: Shares are down on an earnings miss and concerns about a move into auto parts by AMZN, but the company should be able to get past its problems, and cheap shares are a good long-term bet. 

Profile: David Brown of Hawk Ridge Fund monitors companies carefully for catalysts, such as a change in regulation or a division with unseen promise (long: AAN, EHTH, RACE, FOGO, Opera Software; short: CVGW). 

Interview: Paul Hickey and Justin Walters of Bespoke talk about their ten years in business and what they think about the bull market (picks: SOM, TRVG, ZTS; pans: BURL, P). 

Follow-Up: Cautious on ARNC: The ouster of chief Klaus Kleinfeld and an upcoming proxy fight make shares of sister company AA a better bet for now; Cautious HOG: Iconic motorcycle maker faces declining ridership and an aging consumer base, making shares a risky bet despite their recent uptick. 

European Trader: France’s presidential election is the most important European vote in years, more critical than the Brexit referendum, and it could dictate the future of the EU and the euro. 

Asian Trader: Cautious on INFY, Tata Consultancy Services: Donald Trump’s executive order on H-1B work visas is more bad news for struggling Indian infotech outsourcers. 

Emerging Markets: “Fixed-income investment in emerging markets has traditionally been dominated by sovereign Eurobonds, but yield-hungry investors are widening their horizons to corporate debt, with good results.” 

Commodities: Gold has regained strength after a drop, reflecting concerns about the U.S. economy and worries about the European elections. 

Streetwise: “An April survey of global money managers by Bank of America Merrill Lynch showed 83% of respondents consider U.S. stocks overvalued, the highest on record.”