Barrons Summary: Positive on BX, MBT, TSN
Cover story: As China opens its stock markets to global investors, its bull market may be just beginning, and the booming Hong Kong stock market could rise with the occasional bump; "Long-term investors with horizons of more than three years may need to hold their noses and look to pullbacks to build their Chinese portfolios"; Eight stocks look reasonable (positive on Citic Securities, BIDU, JKS, Baoxin Auto, Orient Overseas International, Nine Dragons Paper Holdings, China Cinda Asset Management, Jumei International Holding).
Features: 1) The annual Barron's 500 list of the largest public companies measured by sales in the latest fiscal year is topped by GILD, CBG, VRX, TMO and MA; 2) Positive on MBT: Bank's merger with Hudson City Bancorp has yet to close three years after it was announced, but gloom about the shares is overdone, and they could rise 20% once deal is approved; 3) Positive on TSN: Regardless of how earnings report plays out, shares look cheap, and company's push into packaged goods could boost its brand and give it a higher valuation; 4) Positive on BX: Private equity titan continues to thrive, shares could rise to $47 from $41 over the next year, and with its dividend it could return 20%.
Tech Trader: Cautious on TWTR, LNKD, YELP: Disappointing earnings at top social media stocks "is the same problem of the dot-com era--namely, investors playing public venture capitalists"; The shakeout is likely to favor top players such as GOOG and FB.
Trader: "It remains to be seen what the crumbling of high-valuation stocks means for the rest of the market"; Positive on EMR: Shares of industrial-equipment maker haven't done well lately, but analysts say negative news is already priced in, and since expectations are low, any good news will send them up; Positive on TACO: Levy Acquisition is acquiring regional Del Taco chain in a deal that is effectively an IPO for a food chain whose shares trade at a big discount to restaurant stocks.
Small Caps: Positive on CVA: New Jersey-based waste-to-energy firm is well-run, has secured long-term deals with clients, and is likely to prosper as it inks new deals, cuts costs, and grows overseas.
Profile: Steve Czepiel, co-manager, Delaware National High-Yield Municipal Bond fund, looks at a dozen deals a week--and passes on most (top ten holdings: Buckeye Tobacco Settlement Financing Authority, County of Jefferson, Ala. Sewar Revenue, Gold State Tobacco Securitization, Salt Verde Financial, Tobacco Settlement Financing Corp./N.J., New York Liberty Development, Pennsylvania Turnpike Commission, Foothill-Eastern Transportation Corridor Agency, California Statewide Communities Development Authority).
Interview: Mark Freeman, manager, Westwood Income Opportunity fund, who focuses on growth as he evaluates yield (picks: BDX, HON, COF).
Follow-Up: Barron's looks back on India picks from last year, noting it would keep the three funds it recommended (MINDX, INDY, EPI), take profits in IDFC, and add Relaxo Footwears; Positive on AKAM: Shares are up as the Internet TV sector booms, and they could add another 10% this year.
European Trader: Positive on NVS: Amid a strong European equities market, pharma giant has had a good year following a restructuring; recent deals are less about creating a megasize business than about fine-tuning.
Asian Trader: Indonesian stocks are the worst-performing in Asia, prompting investors to begin questioning the country's leadership.
Emerging Markets: Positive on CX: Maker of cement and concrete should see a profit this year for the first time since 2009, and a 25% gain in share price is possible.
Commodities: Working paper from the Center for Financial Studies says gas prices are likely to climb steadily higher during the next 18 months.
Streetwise: Despite the collapse of a few major mega-mergers, the boom may just be gaining steam, and even more active government oversight isn't likely to prevent companies from making deals--and boosting the stock market.