Barrons Saturday summary: Positive on ANET, AAPL, HCA, SSP; Cautious on BNS
Cover story: Barrons annual list of the top 1,200 financial advisors and what they recommend; The average advisor and his or her team manages $2.42B this year, up from $2.16B in 2014 and $2.14B in 2013, with revenues rising accordingly.
Tech Trader: Positive on ANET: Company is emerging as a viable competitor to CSCO and could dent its dominance of the switching-equipment market; customers include MSFT and FB, and though shares are expensive, they may still be worth it if company doesnt make the mistakes JNPR did when it took on Cisco.
Trader: European stock markets have sharply outperformed the U.S. since the mid-correction last October in local currency terms, almost doubling up the S&P 500 indexs 13% rise; Cautious on BNS: By various metrics the shares appear cheap, and revenue should grow if firm can avoid any stumbles; The bottoms-up consensus of analysts anticipates a drop of 3.6% in Q1 earnings, according to Zacks, with energy-sector earnings likely to be down more than 60%.
Features: 1) Positive on Nasdaq: In 2000, the Nasdaq Composite traded at more than 100 times earnings, a far cry from 21 times earnings today; unlike during the dot-com era, strong profits now bolster it, and when the index tops 5000 again, it should stay there; 2) Positive on AAPL: Analysts are pushing shares up because they believe the iPhone has more upside, with only 15% or so of the user base having upgraded to the new model, and confidence in the Apple Watch is growing; shares could rise to more than $160 over the next year for a 25% return, including dividends; 3) Positive on HCA: Healthcare giants earnings could climb by 17% this year to reach a new high, and yet they trade in line with peers and the historical average.
Small Caps: Positive on SSP: Media company has a strong balance sheet and debt equal to two times annual cash flow once its merger with Journal Communications closes, and share buybacks are likely.
Profile: Interview with Peter Collery and David Hurwitz of SC Fundamental, which targets deeply undervalued securities that have low intrinsic volatility and which has generated net annualized returns of 12.2% since its founding; Interview with Tom Herzfeld of the Thomas J. Herzfeld Advisors (picks: KMF, FOFI, JQC, CCL, CX, CPA, LML, NCLH, RCL, SEB, VMC).
Follow-Up: Beijing has a tough job ahead as it seeks to balance pressure to further weaken the yuan with its desire to prevent a loss of confidence in the currency as a store of value; Positive on AAL: Company intends to raise profits and returns to shareholders, and isnt depending on lower jet fuel prices to do so.European
Trader: Positive on Ashtead Group (AHT.UK): Shares of British firm have dropped on fears about the U.K. economys exposure to the oil industry, but concerns could be overblown and shares could add 20% in the next 12 months.
Asian Trader: Chinese shares listed in Hong Kong could see a boost this year, the region could be the biggest beneficiary of easing by the Peoples Bank of China because it trailed other markets last year (Positive on FXI, GXC, CHL, PTR).
Emerging Markets: Positive on LTOUF, HDB, IBN, Bharti Infratel: Indian companies could do well if the countrys domestic-policy reforms proceed as planned.
Commodities: Arabica coffee prices are due for a rebound, but traders and analysts warn there are still risks to the current crop.
CEO Spotlight: PNRA chief Ron Shaich, who brought artisanal bread and pay-what-you-can cafes to the restaurant chains operations.
Streetwise: Columnist Ben Levisohn says discretionary stocks such as DIS, HD, and MCD could be headed for a drop, with valuation part of the problem. - Source TradeTheNews.com