Saturday, May 19, 2018

Barrons weekend summary

Barrons weekend summary: positive on consumer stocks PEP, KO and PG 
Cover story: Profile of Jack Bogle, founder of the Vanguard Group and inventor of the index fund; Bogle addresses criticisms that indexing has destabilized the market, suggests how the ETF might come to an end, and says that if the market faces a long bout of underperformance, the necessity of lower costs will increase. 

Features: 1) Profile of Donald Trump’s chief economic advisor, Larry Kudlow, who “may be the last great hope for those still trying to reconcile Trump’s policies with old-school conservative economic principles”; 2) Asset managers, proprietary trading firms, bitcoin miners, and retail investors are growing more comfortable with bitcoin, despite a recent price drop of 58% since December; 3) Positive on PEP, KO, PG: Consumer stocks make sense for income-hungry investors—with the potential for mid-single-digit earnings growth ahead and decent yields, ten percent one-year total returns are within reach. 

Tech Trader: ROKU is shifting from a hardware company to a graphical user interface for TV brands that don’t want to make their own software, becoming a home page for viewers and a portal for 6,000 channels; its shares are a bet on the future of TV. 

Trader: A good part of the recent improvements in the market, such as supercharged earnings growth, may already have been baked into the market high of January 26; Cautious on LOW: Company has trailed rival HD in important metrics such as same-store sales and profit margins, but is taking steps in the right direction, such as the addition of three new board members; Cautious on AVAV, KTOS: Drone makers face a range of challenges, including a whistleblower suit at AeroVironment and cash-flow problems at Kratos, and activist investor Ben Axler has criticized both companies. 

Profile: Andrew Mattock, lead manager of the Matthews China fund, who says China demands that investors be open to new ideas, and be nimble amid constant change in the country (top 10 holdings: BABA, Tencent, Agricultural Bank of China, China Construction Bank, China Life Insurance, Sino Biopharmaceutical, Ping An Insurance Group, China National Building Material, BIDU). 

Follow-Up: A deal between CBS and VIA seems remote, but CBS still holds significant value for shareholders, with NFL games and top-rated prime-time shows both popular by today’s TV standards. 

European Trader: Positive on William Hill, GVC Holdings, 888 Holdings: U.K. companies are a good way for investors to benefit from legalized sports betting, and all likely to see gains ahead. E

merging Market: The complicated and uncertain political situation in Malaysia, where events “are weird even by contemporary global standards,” makes investing in the country difficult. 

Commodities: “Prices for diesel fuel may revisit records within the next year or two affecting many markets, from refiners to transportation to agriculture.” 

Streetwise: Donald Trump deserves more credit than he gets for the strength of the U.S. economy, says Brett Arends, despite the erratic nature of his approach to governing.