Saturday, April 28, 2018

Barrons weekend summary

Barrons weekend summary: positive feature on DIS 
Cover story: Value stocks have languished for seven of the past 11 years, but the strategy isn’t dead: There are signs the market will soon turn in favor of value stocks, active management is becoming more important, and some classic measures of value aren’t working, which could lead to a broadly different definition of value. 

Features: 1) Positive on DIS: NFLX could surpass DIS in market value, and Barron’s is no longer bearish on the streaming giant, but Disney could be the better long-term bet because of its diversified business model; 2) Barron’s “Top 100 Hedge Funds” list is topped by MMCAP, Knight Vinke Institutional Partners, EQMC Development Capital—Class A, Pelham Long/Short Small Cap Ltd Class A USD, and Quantitative Tactical Aggressive LLC; 3) Cash is making a comeback as rising interest rates punish bonds and cause volatility in stocks, and yields on money-market funds and other cash sanctuaries are at nearly two percent; 4) A list created by Strategas of the companies that get the most out of their Washington lobbying efforts has outperformed the S&P 500 for nearly a decade by an average of five percentage points. 

Tech Trader: Computer chips are a tremendous source of leverage for the U.S., especially given China’s poorly developed semiconductor sector; A possible Trump administration ban on the sale of chips to China could have wide ramifications, and force China to redouble efforts to build a home-grown industry. 

Trader: The bull market isn’t over, says Jason Pride, chief investment office of Glenmede’s private client group, but it has reached a late cycle that makes every risk seem bigger than it might be; Cautious on CMG: Shares are up at the troubled food chain, which has made changes such as improving its digital ordering platform, but investors should be skeptical of buying the rebound; Negative on NETE: There’s little good news about the unprofitable processor of online payments, whose financial condition remains dire despite buzz about its blockchain technology and celebrity backers. 

Interview: Ilya Zaides and Ike Kier of KG Investments Fund study companies for years before investing and keep their number of investments low, with at most 20 names (picks: DIS, MA, V, TWX). 

European Trader: Positive on Ensco: To benefit from a surge in crude prices if Donald Trump imposes Iran sanctions, investors should consider the U.K. oil-drilling firm, which is highly levered to crude futures prices. 

Emerging Markets: China’s petro-yuan, which was established to end the dollar dominance of the $2T annual oil trade, is off to a slow start and unlikely to supplant the dollar anytime soon. 

Commodities: “Cocoa has climbed by nearly 50% this year, making it the best-performing commodity, but there might not be enough fuel left to power its price much higher.” 

Streetwise: If public pension funds used the most conservative return rate, total state and locally administered pension liabilities could be more than $6T, says Christopher Burnham of the Institute for Pension Fund Integrity.