Barrons Saturday summary: Positive on MON, EMN, TW, OI; Cautious on UNH
Cover Story: A look at four managers who took over major funds and either turned them around or continued to steer them on a successful course (Jeff Feingold of Fidelity Magellan, Scott Mather of Pimco Total Return, Taymour Tarmaddon of T. Rowe Price Health Sciences, and Dan Kozlowski of Janus Contrarian).Tech
Trader: With the cloud computing sector maturing, tech giants such as AMZN, GOOG, MSFT, and CRM must adapt or risk falling by the wayside as new companies such as TXTR and VEEV gain ground; The tech sector has flipped, says Leonard Kleinrock of UCLA--now apps, instead of catching up with technology, are racing ahead of it.
Trader: Lack of storage for burgeoning supplies of crude oil could significantly depress U.S. prices, says Christopher Zook of Houston-based CAZ Investments; Positive on MON: Company has strong earnings visibility because of a strong pipeline, its valuation is the cheapest in the past five years, and for long-term investors it looks like a keeper; During the current six-month bull market, spin-offs are outperforming the market significantly, but could flag in a downturn.
Features: 1) Positive on T, PM, VZ, DUK, STX, GM, GE, MCD, CAT, DOW: Ten stocks offer reliable dividends of at least 3.5%, and payouts could grow over time, a sign there is still plenty of yield left in the stock market; 2) Positive on EMN: Earnings per share have doubled over the past four years, and though growth has slowed, it should resume, and shares could return 35% over the next year; 3) Positive on TW: Large companies such as HOT, IBM, DD, and TIME are moving their employee health plans onto private exchanges such as Towers Watson, and investors are beginning to take note.
Small Cap: Positive on OI: Weak demand in key markets, operating missteps, and a strong dollar have hurt shares of the worlds largest maker of glass containers, but it remains an attractive business and shares could rally 25%.
Interview: Richard Thaler, professor of behavioral economics at the University of Chicago and David Potter of JPMs Undiscovered Managers Behavioral Value fund (Potters picks: CLH, ISBC, TDW);
Follow-Up: Cautious on UNH: With acquisition of CTRX, nations largest health insurer is adding more bulk, and investors should consider trimming positions.
European Trader: Positive on Vivendi: Even if shareholder attempt to force French media and telecom giant to return cash to investors doesnt succeed, the company remains well-run and a good bet for investors.
Asian Trader: Chinas $4T stock market is one of the best-performing in the world, but though gains have prompted skepticism and profit-forecast cuts, skeptics are overlooking some key strengths.
Emerging Markets: Stocks in developing economies performed well in the first quarter, with Russia leading markets higher, along with Hungary, Philippines, and China, with Greece, Colombia, Turkey, and Brazil disappointing.
Commodities: After years of declining prices, copper may gain ground this year if Beijing boosts stimulus programs that would require use of the metal.
CEO Spotlight: Profile of TREX chief Ronald Kaplan, who has overhauled nearly every aspect of the deck-materials company, from finance to the factory floor.
Streetwise: Investors hoping to cut exposure to macro forces should switch to companies with low P/E ratios that have less sensitivity to default risk and oil-price swings such as GT, CHK, and YHOO.