Barron's Saturday summary: positive on CBS, WDC, ZURN.CH
Cover story: 59 percent of respondents to Barron's latest Big Money Poll say they are bullish or very bullish about the outlook for U.S. stocks through the middle of next year, up from 56% in the spring but down from last fall's 68%; some are worried about a coming change in Fed policy after years of falling interest rates, and say they expect a correction-defined as a 10% drop in share prices-within the next 12 months.
Features: Positive on CVX, DIS, ETFC, PFE, EXP: Shares are among those trading at attractive valuations as fundamentals improve in the wake of a stock market drop stemming from fears about slowing global growth; Positive on CBS: Though network faces concerns about slowing ad sales and lower ratings, fees from affiliates and strong profits from its Showtime division are boosting profits, and shares could reach $66 from $52; Positive on Zurich Insurance (ZURN.CH): Multi-line insurer has faced obstacles, including the death of its CFO last year, but it is focusing on growth, maintains a strong dividend, and is generating better investment returns; Positive on WDC: Disk-drive manufacturer "is an inexpensive way to get exposure to big data. Trading at 10 times profits, with a big cash cushion, shares have 40% upside."
Tech Trader: Positive on AAPL: Tiernan Ray says new iPads are more important than many observers think, because "it's about nurturing a franchise, which has to be done by companies that have one to nurture," especially since Apple now spans many product categories, something few of its rivals do; The coming week brings a range of tech earnings, including AAPL, IBM, ARHM, QCOM, YAHOO, VZ, and T.
Trader: The potential spread of Ebola and fear of slowing global economic growth continue to dominate a long laundry list of investor concerns; Investors should think about taking advantage of opportunities the near-correction presents; Cautious on UTX: Recent drop in price seems to discount much of the potential damage from headwinds in the market, company has done a great job positioning itself in the long-term growth trend of energy efficiency in buildings and jet engines.
Mutual Funds: Interview with Peter Langerman, Portfolio Co-Manager, Franklin Mutual Global Discovery (top ten holdings: MRK, AAPL, MSFT, TEVA, MDT, Royal Dutch Shell, British American Tobacco, WFC, APA, ACE); Interview with Dan Kozlowski, Portfolio Manager, Janus Contrarian (picks: CME, HTZ, LE, UAL).
European Trader: George Godber of Miton Value Opportunities fund doesn't believe the current market rout means Europe has plunged back into crisis, and he sees some bargains (Positive on Bellway, TSB Banking Group).
Asian Trader: Indonesia and the Philippines remain strong regions in Asia, with EIDO a good vehicle for U.S. investors seeking exposure to Indonesia and EPHE a way to play the Philippines.
Emerging Markets: Drop in emerging markets has opened opportunities in Turkey, despite risk due to turmoil in Syria, and India, where financial sector reforms put in place by Prime Minister Modi should contribute to earnings growth (Positive on TUR, Turk Hava Yollari).
Commodities: Coffee, cocoa, and cattle have been the standout commodities performers this year, all posting double-digit gains while many raw materials plunged to multi-year lows, and their strength should continue.
Follow-Up: U.S. fracking revolution has done more to undermine Russia's oil economy than sanctions, a situation that is also bad news for the Saudis, which explains why they have apparently decided to sell into the energy bear market rather than try to fight it.
Streetwise: Jefferies strategist Sean Darby screened for companies that have seen their forward price-to-earning and price-to-valuations drop significantly below their five year average while experiencing no drop in their earnings forecasts and price targets (Positive on GILD, PRU, WLP, NSC, UNP, CSX).