Cover story: Barron’s list of the top-performing sustainable funds, of which 37% beat the S&P 500 during the past year, is topped by CGM Focus, Vanguard Capital Opportunity, MassMutal Select Equity Opportunities, Putnam Multi-Cap Core, and Pioneer Core Equity.
1) Positive on WMT: The company’s acquisition of Jet.com has boosted its e-commerce efforts and brought fresh thinking and innovators such as Jet founder Marc Lore, now Wal-Mart’s e-commerce chief;
2) Cautious on RH: The upscale furniture company’s shares are fully priced, but if it fails to keep growing amid competition from ETH, WSM’s West Elm, W, Houzz.com, and AMZN, the shares could lose a third of their value;
3) Cautious on CHL: Chinese telecom has the industry’s best balance sheet, with $60B of net cash, but while that’s a source of strength and a draw for investors, some worry Beijing may divert the money to other state-owned enterprises;
4) Positive on CTSH: Cognizant is increasingly moving into digital consulting and making other changes at the urging of activist investor Elliott Management; shares could rise another 15% as earnings growth reaccelerates;
5) Positive on MTCH: Online dating company’s shares are up because of the success of a new paid feature, Tinder Gold, which has made Tinder among the highest-grossing apps in the AAPL App Store.
Tech Trader: Positive on ATVI, EA, TTWO: Gaming companies have seen an increase in recurring spending from users, providing revenue streams for older games or new titles that don’t meet sales expectations—and the money flows straight to the bottom line.
Trader: Wellington Shields technical analyst Frank Gretz says bull markets generally see a “blowoff” move from at least one sector before they end, and recommends watching the FANGs and financials; COST continues to face challenges in a changing retail sector, and nobody knows how its new grocery deliver services will affect in-store traffic; One of the biggest conundrums of the recovery is why wages aren’t rising faster if the U.S. economy is at full employment.
Mutual Fund Quarterly: “More mutual funds that use social and environmental criteria are outperforming the market, and moving the style into the mainstream”; Interview with investor Jeremy Grantham, whose involvement in environmental causes is closely tied to his thinking on risk and opportunity in investing; Bond funds such as PAXHX, TSBRX, CONAX, CULAX, and GRNB may be better than stocks for investors looking to leverage ESG criteria in their portfolios; Funds that combine ESG and smart beta approaches will start to gain steam as more become available in the market; ESG funds are starting to use their size to change corporate behavior; All major fund categories except one had positive returns in the third quarter, with international stock funds outperforming U.S. counterparts; A list of the best and worst performers in the third quarter.
Follow-Up: Positive on GM: Story says the automaker “is well-placed to make self-driving, shared, battery-powered cars of the future”; investors should hang onto shares, which have more upside and a 3.4% dividend yield.
European Trader: Investors may want to be careful with Spanish stocks, because Catalonia—which accounts for 19% of Spain’s GDP—could succeed in its independence effort.
Asian Trader: The Indian stock market remains one Asia’s best performers this year, but some investors think it has moved too far, too fast—though this is probably not a long-term concern.
Emerging Market: The U.S. is in the late stages of a bull market and investors should seek out emerging market funds with handpicked stocks, says Ruchir Sharma of Morgan Stanley Investment Management.
Commodities: For the first time in 16 years, palladium has made the biggest gains in the commodity sector, but platinum should bypass it in price by the end of the year.
Streetwise: With the prospect of significant new federal gun legislation low, gun stocks appear to be more trading vehicles than long-term investments, and some—including RGR and AOBC—appear overpriced.