Barron's Summary: Positive on DLR, CSAL, NEM, LM; Cautious on GCI
Cover story: Tech companies such as GOOG, FB, TWTR, CRM, QCOM, and AMZN encourage investors to ignore the large and very real cost of stock compensation when calculating expenses and earnings, a process that leads to inflated and distorted earnings numbers than dont meet GAAP standards, yet are widely cited and embraced by analysts.
Tech Trader: Cautious on AAPL: Companys music-streaming service will be an underdog compared to industry leader Spotify, but the stakes remain high as Apple seeks to strengthen its ecosystem at a time when rivals such as GOOG, AMZN, FB, and YHOO have put the cloud to better use.
Trader: Hospitals stocks should continue to get a lift following the Supreme Courts decision on the Affordable Care Act, which ensures patients will have ongoing access to healthcare services; Positive on DLR, CSAL, NEM, VRTV, CTXS, FTR, ALK, LDOS, ROVI, GAS: Stocks saw a significant increase in Buy ratings during the past two weeks; Cautious on RRC: Natural-gas producer has recently faced a number of problems, but is improving efficiencies in some areas and could benefit when the price of gas improves;
Features: 1) Barrons list of the most respected companies is topped by AAPL, DIS, Berkshire Hathaway, V, and GOOG; 2) Cautious on GCI: After spinning off its broadcasting and digital segments into a new company, Tegna, newspaper company will be lucky to tread water as it seeks a new shareholder base; 3) Positive on LM: Firm is making a strong recovery from a long performance slowdown, and shares could return 20% or more during the next year.
Small Caps: Positive on MYCC: Owner and operator of golf and country clubs in the U.S. has seen memberships soar as it refurbishes some locations, and shares remain attractive for investors.
Profile: Peter Kolchinsky, portfolio manager, RA Capital Healthcare fund (top ten holdings: SGMO, ACHN, DYAX, BCRX, RGLS, DRNA, DVAX, TGTX, CHRS, TKMR).
Interview: William Eigen III, portfolio manager, JPMorgan Strategic Income Opportunities, says bond investors could be in for some real pain as the Fed gets closer to raising short-term interest rates, ending a 33-year bond bull market.
Follow-Up: Barrons argued in 2011 that Greeces total debt needed to be cut by 50% to avert societal and economic ruin, a situation the editors feel still holds true; Positive on BA: New chief executive Dennis Muilenburg is young and has 30 years at the company, a winning combination and one that should prompt investors to hold onto shares.
European Trader: Positive on Hella KGaA Hueck: Shares of German supplier of lighting technology and electronics components to the auto industry are undervalued and are likely to deliver further gains.
Asian Trader: With its decision to merger with Chinese healthcare firm Golden Meditech Holdings, CO will list on the Shanghai exchange, receiving a higher valuation but leaving U.S. investors high and dry. Emerging Markets: A rising number of strategists and asset managers predict that emerging markets will outperform in the next few years.
Commodities: A potential work stoppage in South African gold mines probably wont do much to boost low prices, because of the stronger dollar and upcoming Fed interest-rate increase.
Streetwise: Spinning off a REIT is not easy most of the time, and DRIs announcement it would do so to pay down debt may give the shares a boost, tough the success of such efforts is never certain.