Sunday, June 4, 2017

Barrons weekend summary

Barrons weekend summary: positive on TWX, ACN 
Cover story: Consumers should be spending amid low unemployment and a strong stock market, but a massive credit expansion may have taken them as far as they can go; Uncertainty about tax cuts and regulatory reform also come into play in the current climate.

1) Starting on June 9, firms must comply with the new fiduciary rule, as well as provisions concerning conflicts of interest and impartial conduct; 
2) Positive on Atlantia, BAC, BDX, CME, JNJ, Royal Dutch Shell: These six companies could thrive in an inflationary environment because of their pricing power and/or interest-rate sensitivity; 
3) Positive on GOOGL, AAPL, AMZN, Berkshire Hathaway, MSFT: Companies top Barron’s 2017 ranking of America’s most respected companies based on a poll of money managers; JNJ, No. 1 on the list last year, fell to No. 7 this year; 
4) Positive on TWX: Media giant’s shares could return 20% this year, buoyed by the success of movies such as “Wonder Woman” and divisions such as HBO and Turner; 
5) Positive on ACN: Doubts about the technology consultant’s prospects have grown recently, but investors may be misreading the changing nature of its global opportunities. 

Tech Trader: Positive on NVDA, AMD, INTC, CEVA, CDNS: Companies stand to benefit from growing demand for artificial intelligence, though some experts say the hype about AI is overblown; It’s “a very general term for a still-evolving collection of technologies, and no one knows exactly where it’s going,” says Tiernan Ray. 

Trader: The market’s rally is quiet broad, says Doug Ramsey of Leuthold Group, despite concerns too many recent gains have come from giants such as AAPL and AMZN; There’s no doubt that economic data are worrisome, says Barron’s, “but we’d be far more concerned if economically sensitive stocks were underperforming overseas”; Positive on ESV, DO, RIG: Offshore drillers have taken a hit lately, but it’s time for investors to get back into the sector, which has probably hit bottom. 

Interview: Jason Trennert and Daniel Clifton of Strategas Research, which predicted Donald Trump’s election victory, talk about market opportunities for the second half of 2017. 

Profile: Jonas Krumplys, co-manager of the Ivy Emerging Markets Equity fund, which holds 50 to 80 stocks and averaged an annual return of 5.3% during the past three years (top five holdings: Samsung Electronics, Tencent Holdings, BABA, Sberbank of Russia, TSM). Advisor Rankings: Barron’s list of the top 100 women advisors is topped by Karen McDonald and Colleen O’Callaghan of Morgan Stanley Private Wealth Management, Kimberly Orth of Ameriprise Financial, Valerie Newell of RiverPoint Capital Management, and Stephanie Stiefel of Neuberger Berman. 

Follow-Up: Cautious on ESRX: Company’s lawsuit against Kaleo Pharma and the potential loss of a contract with ANTM continue to concern investors, keeping the share price down; Positive on GT: “The tire maker has an opportunity to transform itself into an asset-light supplier for future autonomous fleets.” 

European Trader: Positive on International Consolidated Airlines Group: British Airways is struggling to contain the fallout from a computer outage, which raised questions about its strategy, but a range of positives at the parent company make it a good time to buy shares. 

Asian Trader: Cautious on China Evergrande: A recent rally has been painful for shorts, but they could have the last laugh because of the company’s bloated balance sheet and high valuation. 

Emerging Markets: For India to continue growing, the World Bank recommends it add more regular, salaried jobs for women and provide more incentives for female entrepreneurs. 

Commodities: Natural gas faces more threats as fracking into shale and other new technologies have unleashed a record amount of gas onto the market, and a slowdown is likely to endure. 

Streetwise: “Banks may have had a mediocre trading quarter, but other trends are favorable, including widening net interest margins, loan growth, and regulatory relief.”