Sunday, April 1, 2018

Barrons weekend summary

Barrons weekend summary: positive on refinery names; conditionally positive on CMCSA 
Cover story: Canada hopes to become the Silicon Valley of recreational marijuana, an experiment other countries are closely watching—but a weed glut there poses a risk, and at current valuations, marijuana stocks are too expensive (Cautious on Canopy Growth, Aurora Cannabis, Aphria, MedReleaf, Cronos Group). 

Features: 1) Technology stocks have become an increasingly dominant sector in the S&P 500, but that exposes investors to volatility when companies such as FB or other FANGs struggle; 2) Positive on Comcast: Many investors want the company to focus on its core businesses—cable TV, high-speed internet access, and NBCUniversal—and shelve its global ambitions, but the shares remain a bargain despite risks; 3) Positive on ANDV, MPC, PSX, VLO: “Gasoline sales seem to face a long-term threat from electric cars, but in the near term, the outlook for companies that turn crude into gasoline has rarely looked better.” 

Tech Trader: Artificial intelligence is about to become more pervasive as the computer circuitry that powers it grows more sophisticated; So-called intellectual property companies will thrive because they earn licensing fees from chip makers (Positive on NVDA, CEVA, INTC, SNPS, CDNS). 

Trader: Kate Warne, investment strategist at Edward Jones, remains bullish on the market, despite the fact the second quarter might be down and there are concerns about the tech sector; Positive on CCL, KHC, XOM, CI: Bernstein strategist Inigo Fraser-Jenkins screened for companies with the lowest debt-to-equity ratios in the S&P 500 and found attractively priced companies that could be an antidote to overindebted peers; If certain regulatory requirements—such as the Fed’s annual Comprehensive Capital Analysis and Review—are loosened, banks might increase their buybacks. 

Interview: Sir Michael Hintze, manager of London-based hedge-fund CQS, talks about the role of the imagination in successful investing and how investors should position themselves for a coming rise in interest rates. 

Profile: David Albrycht, manager of the Virtus Newfleet Multi-Sector Short Term Bond fund, focuses on nonagency mortgages and subprime auto loans, and is watching emerging markets (top 10 sectors: asset-backed securities, corporate high quality, non-agency residential MBS, bank loans, corporate high yield, emerging market high yield, mortgage-backed securities, non-agency commercial MBS, Yankee high quality, non-USD). 

Follow-Up: Cautious on TSLA: Some investors question whether the automaker can raise enough cash to keep going—but it should eventually improve Model 3 production and get past its current problems. 

European Trader: Cautious on DB: It’s probably premature to expect chief John Cryan to leave anytime soon, and also too soon to turn bullish on the bank’s shares. 

Emerging Markets: Cautious on Tencent Holdings, BABA: After two years of outperformance, there are strong arguments to be made for decoupling, because developing world economies are more stable than they used to be—but it’s a vain hope for now. 

Commodities: A surge in demand has ended the great commodity bear market that began in 2011, says Sal Gilbertie of Teucrium Trading, but concerns over a potential trade war are prompting mixed reactions from investors.