Saturday, August 25, 2018

Barron’s weekend summary

Barron’s weekend summary: Cover story on the cloud in video gaming, positive for EA and ATVI 
Cover story: “The cloud is the future of videogaming, and it could arrive sooner than many players expect, with important implications for investors”; Companies such as EA and ATVI will benefit, while NVDA, MSFT, and SNE may face challenges because of the trend. 

Features: 1) Steve Perlman—whose OnLive streaming game service offering a flat-fee subscription model came online more than a decade ago—explains why the cloud gaming revolution has taken so long; 2) The Value Investors Club “is the rare medium where partners at hedge funds will anonymously discuss stocks with investors they know nothing about,” and where members with good ideas can make a name for themselves. 

Tech Trader: Cautious on NFLX: Investors should pay close attention to the stock as rivals DIS and T rush to emulate its Internet video business, especially because Netflix earnings are largely a creation of accounting practices. 

Trader: Doug Ramsey of Leuthold Group “points to the number of stocks making new lows in recent weeks as one worrisome trend,” though it shouldn’t make investors grow too bearish; The healthcare sector has faced problems, but is regaining its strength, and the rally may just be getting started—though there are still risks. 

Interview: Dan Chung, chief executive and chief investment officer at Fred Alger Management, argues that the forces that have lifted the market are far from spent (picks: MSFT, ROP, TNDM, Puma). 

Profile: Martin Schulz of the PNC International Equity fund and his team cover specific regions and let macroeconomic outlooks guide their initial investment decisions (top 10 holdings: Wirecard, Tencent Holdings, SNE, BABA, ASML, Ping An Insurance Group, HDB, Nidec, AIA Group, AEM). 

Follow-Up: 1) Positive on GSK: Shares of the pharma company are rebounding after years of poor performance, and investors believe it can replace one blockbuster asthma drug with another, while other drug studies show potential; 2) Cautious on LB: Barron’s suggests that the company can’t be fixed despite some positive steps—Victoria’s Secret discounts are failing to entice shoppers while Pink’s sales could drop by half. 

European Trader: Positive on Carlsberg: The Danish brewing giant “could fit the bill for long-term investors thirsting for an undervalued, but promising, consumer stock,” and it appears to be on track for better profitability. 

Emerging Markets: Positive on Tencent Holdings: Chinese online colossus has become the largest stock in emerging markets, and its recent drop presents a buying opportunity—the company should resume its winning ways. 

Commodities: “Sugar prices have fallen to their lowest levels in a decade and are likely to drop further as record worldwide production collides with healthier eating.” 

Streetwise: Senator Elizabeth Warren’s introduction of legislation that would require large U.S. companies to create a “material positive impact on society” is misguided, and would fail to solve the problem of growing inequality.