Barron's Saturday summary: positive on MRO, GME, DNR, GPS; Cautious on INTC
Cover story: Barrons 2014 Roundtable includes panelists Scott Black, Abby Joseph Cohen, Marc Faber, Mario Gabelli, Bill Gross, Fred Hickey, Brian Rogers, Oscar Shafer (picks: Northgate, INXN, INAP, Orkla, BIOS, ANIP), Meryl Witmer, and Felix Zulauf (long on TLT, GDX, buy U.S. dollar/sell Turkish lira; short on EWH, TUR, sell Swiss franc/ buy Japanese yen). - Tech Trader: Cautious on INTC: Tiernan Ray praises chief Brian Krzanichs decision to end companys dismissive attitude toward tablets and smartphones, but says mobile market isnt the monopoly the PC chip market is, with competitors such as QCOM, NVDA, MRVL, and MediaTek; Ray calls for company to end its practice of keeping PC and mobile chips separate on the income statement, saying it should list revenue and profit in two groups, not the current three, one made up of server chips, the other for any that go into PCs, smartphones, or tablets. - Trader: Cameron Hinds, regional chief investment officer at WFC, expects the market to rise 10% in 2014, but says that will require consistently good earnings; There are tentative signs the truck industry could see a boost this year, but rise in NAV shares reflects an overly rosy short-term view of potential operational progress, and it wont take much of a disappointment in first half to dent the price; Positive on MRO: Shares are cheap, and with West Texas Intermediate at current levels, stock has a lot of potential value, especially if crude oil prices continue to expand. - Follow-Up: Positive on GME: Recent share drop may be an opportunity for investors, as retailer remains financially healthy with good market share, and probably has at least ten years left on its core business; Positive on KEY: Bank has solid loan growth, especially on the commercial side, and theres still upside for investors.
Features: 1) Barrons 134 bullish stock picks in 2013 rose an average of 17%, compared with a 13.2% gain for their benchmarks, with IEP, DAL, WEN, Tencent, ROCM, YHOO, CQB, CKEC, GNW, and LYV leading the pack. 2) Positive on DNR: Oil extraction company with a presence in the Gulf and the Rockies has a highly profitable technique for bringing oil out of the ground while disposing of carbon dioxide; shares look cheap and dividend could triple in two years. 3) Positive on GPS: Wall Street has been glum on the stock despite the fact shares have doubled over the past two years, but there is much to like about its growth prospects and increased global presence, and shares could climb another 30%.
- Small Caps: Positive on DF: Company, which has more than 50 dairy brands, has a solid balance sheet and is a slimmer, more attractive investment than it was a year ago; free cash flow, which could increase 50% in the next two years, will likely be returned to shareholders. - Mutual Funds: Interview with Ronald Desautels, Portfolio Manager, MassMutal Premier Short-Duration Bond, for whom one of the best performing BBB issues over the past year has been ARW; Desautels also likes the debt of LyondellBasell Industries. - European Trader: Positive on Jeronimo Martins SGPS: Even with the margin-pinching investment needed to ride out a competitive market in Poland, company has lots of room to grow. - Asian Trader: Japanese companies, sitting on more than $2T in cash, are again shopping in the U.S. after a long hiatus, with machinery and financial firms among the candidates for making overseas purchases. - Emerging Markets: As BRICs growth slows, frontier Africa, where an estimated one-billion people reside, could be the next big prize for investors. - Commodities: Investors who bet on falling raw-sugar prices last year can keep those wagers in place. - Streetwise: Rising mortgage rates may persuade more people to rent, but wont dent homebuilding, boosting related companies such as USG, AXLL, and HUN, according to Charles Lieberman of Advisors Capital Management.