Saturday, September 9, 2017

Barrons weekend summary

Barrons weekend summary: cautious cover story on NKE; positive feature on AABA, CG; cautious on VIAB 
Cover story: Shares of NKE have dropped 16% since the end of 2015 and could fall by another 10% as the company loses traction with customers amid a changing e-commerce landscape and a rebound in the U.S. market by Adidas. 

1) Positive on AABA: Shares of the former Yahoo!, whose 15% stake in BABA is valued at $65B, are a cheap way to play the Chinese e-commerce giant, and aren’t likely to suffer from liabilities related to data breaches at Yahoo; 
2) Positive on CG: A number of problems, including an ill-advised move into hedge funds, have left the private-equity giant’s shares looking cheap just as it launches a $100B fundraising effort that could boost fee-related earnings; 
3) Cautious on VIAB: Media giant is trying to reinvent itself, but the effort may not be enough to reverse a declining trend in which networks lose ground as consumers embrace new streaming paradigms; 
4) Story looks at six things people need to know about Social Security, which is far more complicated than it appears; 
5) Health savings accounts, “an oft-overlooked savings tool, can help with what will probably be the biggest cost in retirement—healthcare—and help people save on taxes now and later.” 

Tech Trader: Positive on AAPL: The next version of the Apple Watch could include a new technology called an embedded SIM that allows the device to access the Internet without being connected to a phone, leaving mobile phone providers out of the loop. 

Trader: The markets seem unfazed by global turmoil, and investors are looking forward to strong third quarter earnings, a case of good news being celebrated and bad news ignored; A market correction, were it to occur, would start with something small, such as a drop below the S&P 500’s 200-day moving average; Companies are increasingly snubbing activist investors, and some are greeting them with mockery—a major change in attitude from just a few years ago. 

Interview: Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco, “is enthusiastic about the prospects for cell-tower and data-center industries,” but cautious on most cellular plays (picks: AMT, CCI, GDS, DLR, EQIX, ATUS, CHTR, TMUS). 

Profile: Jeffrey Sherman manages DoubleLine Capital’s DoubleLine Shiller Enhanced CAPE fund, which gains additional returns via an actively managed fixed-income portfolio that serves as collateral for a strategy that uses total-return swaps to access the S&P 500. 

European Trader: For investors who think the run-up in FANG stocks appears overdone, European companies such as ASML Holding and SAP might fit the bill, while investors should avoid Nokia and ERIC because of their close ties to the telecom industry. 

Asian Trader: “Long seen as a laggard in an economically dynamic region, the Philippines has staged a comeback. Its economy is one of the fastest growing in Asia.” 

Emerging Markets: Positive on Ping An Insurance, Bank of China, Huatai Securities, China Construction: Analysts say taking positions in large, conservative institutions with diverse businesses is a good way to deal with the changes facing China’s banking industry. 

Commodities: “As the recovery for the energy market in the Gulf of Mexico takes hold, post-Hurricane Harvey, Irma, and other storms promise to fuel volatility for oil and keep gasoline prices high in the weeks ahead.” 

Streetwise: The Fed faces a difficult task, says Morgan Stanley’s Ellen Zentner, because if it does nothing in the current environment of low unemployment and easing financial conditions, it runs the risk of having to raise rates quickly later on.