Barron's Weekend Summary: Positive on JPM, HDS, SJM
Cover story: Positive on JPM: Chief Jamie Dimon "has cemented his position as the world's top banker," using the firm's strength to gain ground in investment banking, credit cards, and asset management; Shares could rise 30% in a year, not including a 2.9% yield.
Features: 1) Positive on HDS: Company, one of the country's largest wholesalers of commercial building supplies, is affected by economic cycles, but has trimmed underperforming business lines and paid down debt, and has an upside of 30% or more; 2) Investors still hold about $50B of auction-rate securities that could remain outstanding for another 10 to 20 years, some yielding 0.5% or less; 3) Positive on SJM: Maker of jams and jellies has gotten into the pet food business with its purchase of Big Heart Pet Brands, a deal that could help it achieve double-digit earnings growth.
Tech Trader: Positive on SWKS, BRCM, LRCX, TXN, ATML: Semiconductors are priced in dollars, so chipmaker shares have dropped on signs the strong greenback may be crimping demand, but though there may be more pain ahead, there is nothing fundamentally wrong with the industry.
Trader: "Stocks could be in a dead zone for the next week--or two or three--as the economic-data schedule is relatively light and there is no news scheduled from the Fed; Cautious on SHAK: Shares of fast-casual chain appear overvalued, as New York-centric company may not be able to generate strong profits as it expands elsewhere; Cautious on CPB: Company, long seen as a takeover target, could see shares drop if that possibility becomes less likely following the Heinz-KRFT deal.
Follow-Up: Positive on HAS: Toy maker is doing many things well with its seven key brands; shares could rise further if movie tie-up deals with DIS pay off, so investors should keep shares in play for now; Cautious on URBN: Despite strides, retailer still faces problems, now may be the time for investors to take profits or wait for a pullback to buy in.
Profile: Pieter Taselaar and Thijs Hovers, portfolio managers, Lucerne Capital, see good opportunities in Europe (selected holdings: Braas Monier Building Group, Hella KGaA Hueck, Mediobanca, Stabilus, Tele Columbus, Eurazeo, EiTowers).
Interview: Mark Roberts, founder, Off Wall Street Consulting Group (picks: CCK; pans: TRAK, SLH, HCSG).
European Trader: Positive on ING Groep: "Dutch bank has bounced back from its near collapse during the financial crisis to become a solid performer among European financial companies.;
Asian Trader: India's bull market could be slowing down, becoming a stockpicker's market, with TTM and Bharti Airtel good defensive plays.
Emerging Markets: Despite the negative view of Iran in the U.S., some analysts see the country as the next great emerging market, and a nuclear deal is likely to throw open its markets.
Commodities: Wheat prices are on the rise amid bad crops in Russia and Ukraine and a strong dollar, and could more than double from current levels, depending on the weather.
Streetwise: Companies that have been big buyers of their own shares, such as ANTM, HAL, ITW, CBS, KR, and LYB have typically underperformed the S&P 500 during the blackout period before earnings season.