Cover story: The growing wave of share buybacks is a good reason for investors to be in stocks at this time; Buybacks offer investors an effective yield of about 3%, which when combined with the 1.9% current dividend yield, provides nearly 5%—which holds up well against alternatives.
Feature: 1) Positive on KR: Despite AMZN’s move into the grocery sector, Kroger has gained market share in recent years, and remains a top-three player in almost all its market; Consumers tend to prefer a supermarket to other formats, such as grocery delivery; 2) More oil-price increases could be on the horizon as additional Trump administration sanctions on Iran curtail its ability to supply markets, while problems in Venezuela could mean further cuts in production there; 3) Positive on T, XOM, PG, KMB, KO, ED, CAH, LEG, CVX, TGT, FRT, PEP: These 12 stocks have dividend yields of at least 3.3%, well above the S&P 500 average of about 2%, and because many have been beaten down, some could be attractive value plays; 3) Story looks at hedge fund manager Whitney Tilson’s Kase Learning, an educational company that teaches people who to be better investors; 4) Positive on ANET: Company is entering CSCO’s dominant franchise: switches that connect computers on corporate networks, and its success or failure could determine whether its pricey shares continue to rise.
Tech Trader: Positive on ANET, Innovium: The startups are set to disrupt the dominance of CSCO and AVGO in networking equipment and the chips that power them; As more corporations connect to cloud-computing data centers, they will look to move past decades-old technologies, benefiting Arista and Innovium.
Trader: Volatility is dormant, not dead, says Andrew Slimmon of Morgan Stanley Investment Management, and there is a good chance the S&P 500 will finish roughly flat after seeing large gains; Amid the growth of computer-generated trading, investors are almost guaranteed to see a short-term response to a “death cross” when one finally occurs; Cautious on SEAS: With 12 parks in the U.S., the company has a “fundamentally attractive set of assets,” but has yet to get past bad publicity related to allegations of poor treatment of whales.
Profile: Jason Brady is manager of the Thornburg Limited Term Income fund, which is structured as a laddered portfolio, holds bonds to maturity, and reinvests them back into the portfolio (top 10 sectors: corporate bonds, asset-backed securities, Treasuries, collateralized mortgage obligations, cash and equivalents, commercial MBS, government agency, municipal bonds, mortgage pass through, foreign treasuries).
Interview: Chuck Clough and Vince Lorusso of the Clough Global Long/Short fund, “an old fashioned fundamental research asset manager with a global perspective,” make the case for shorting tech and buying India.
Follow-Up: California’s rule that developers must install solar panels on new residential buildings won’t do much for manufacturers, many of which are overseas, but will boost the installation and development industry.
European Trader: Investors worried about the performance of major European and American stock benchmarks should consider a broad bet on U.K. stocks, say Bank of America Merrill Lynch strategists ( Positive on BP, BBL, FKU, HEWU).
Emerging Markets: Investors in China will soon be able move past tech giants BABA, Tencent Holdings, and BIDU as half-a-dozen multibillion-dollar IPOs from the country’s tech sector launch this year—but rewards won’t come without risk.
Commodities: Lumber prices have risen by more than 300% this year to reach their highest level on record amid tight supplies, but analysts say the trend isn’t likely to last, and a 50% drop could be on the horizon.
Streetwise: Recent revelations about corporate payments to Donald Trump’s personal attorney, Steven Cohen, underscore that current campaign-finance disclosure laws aren’t enough to ensure good behavior.
