Barron’s Saturday summary: Money managers bullish on stocks through to Mid 2014; positive on AT&T, OUTR; cautious on AMZN
Cover story: Barrons Big Money poll finds money managers think stocks are the best place for investor money over the next 12 months, with half thinking the U.S. will be the best-performing market during that time; favored stocks include AAPL, GOOG, MSFT, Samsung, EMC, KMI, CF, while TSLA, NFLX, AMZN, FB, and CRM appear too richly priced.
Features: 1) Positive on T: Carrier is posting strong subscriber growth, shares could rise to about $40 in the next year, which in tandem with a strong yield could generate a 20% total return for investors. 2) Story says Odds are the current political standoff will continue, maybe until we hit the debt ceiling again, adding the only way to avoid another battle is if bipartisan House and Senate panel can formulate a mutually acceptable budget blueprint by December 13. 3) Positive on CAN, AET, RTN, WU: Four companies focus on returning cash to shareholders not just via dividends, but by buying back shares on a regular basis.
Tech Trader: Cautious on AMZN: Range of estimated Kindle sales vary widely, but company is clearly making progress on the tablet front, and is increasing Fire sales at a brisk pace, with some observers suggesting black-and-white reading devices will slowly fade as tables become the go-to device; columnist Alexander Eule says the most important issue is the degree to which Amazon has become a tangled web of information, and that its complex, interwoven set of businesses leave investors in the dark.
Trader: Positive on MOS: Shares of potash producer appear attractively valued, and theres some downside protection in company as a low-cost producer with a strong balance sheet; Positive on VLO, MPC, HFC, WNR: The next two years should be good for oil refiners as production in the U.S. continues to grow, despite some volatility in the market.
Small Caps: Positive on OUTR: Activist investor Jana Partners could be the catalyst that investors have been waiting for, and could push management to boost cash generation and return more capital to shareholders.
Follow-Up: Cautious on GS: Banks recent weakness could spur an activist investor to push to break up the company, with one approach being to spin off of the investment management unit, which could be worth $20B or more based on nearly $1T in assets.
Mutual Funds: Interview with Rajeev Bhaman, Portfolio Manager, Oppenheimer Global (top ten holdings: L.M. Ericsson, Euro Aeronautic Defense & Space Co., GOOG, UBS, BMW Preferred, EBAY, LVMH Moet Hennessy Louis Vuitton, WLP, SAP, DIS); Kevin Starr, Co-Founder, Third Rock Ventures, who with his partners created a new way to finance medical breakthroughs (medical portfolio includes: Blueprint Medicines, Eleven Biotherapeutics, Zafgen, Sage, Jounce Therapeutics, CytomX).
European Trader: Positive on LYG: Bank is well capitalized and domestically focused, and could be past the worst of some of its recent problems, as well as being freed from the state-owned stock overhang that has taken some sparkle out of an otherwise stellar share performance.
Asian Trader: Asia has the fastest-growing air travel market in the world, with growth coming from lesser-known, short-haul, low-cost carriers who are expected to see more growth amid Southeast Asian deregulation (Positive on AirAsia, Cebu Air, Nok Air).
Emerging Markets: Corporate India is on pace to deliver its best quarterly growth in more than a year, but thats unlikely to translate into a broad stock-market rally because local consumption hasnt improved, and much needed structural reforms wont occur until next Mays elections.
Commodities: Cocoa futures are hot, but the market still has room to run. CEO Spotlight: Profile of CBS chief Leslie Moonves, who says Whether you watch your favorite show this week or next week, we will still get the same advertising revenue.
Streetwise: Michael Shaoul of Marketfield Asset Management thinks the S&P 500 has a chance to hit 1,800 before year end, but many observers think a new set of snares awaits the market as we head into the new year.