Barron’s summary: Positive on DOW, TUP; Cautious on THRX, AAPL, GPRO, WMT
Cover story says that Long hailed as the next big thing, wearable technology has yet to catch on with users, in part due to limited features and short battery life, and notes that though tech giants GOOG, AAPL, and Samsung will be in the game, the better bet for now may be chip and sensor makers such as QUIK, OVTI, NXPI, MediaTek, and INVN.
Features: Positive on DOW: Company, under pressure from activist investor Dan Loebs Third Point, is seeking to improve operations and boost investment returns; stockholders are likely to win whether or not Loeb succeeds in his push to break up company; Cautious on THRX: Shares at company that manages drug royalty payments appear overvalued, with sluggish uptake of GSKs Breo and Anoro raising questions about companys long-term revenue growth and its dividend strategy; In a Barrons-Zacks first-half ranking of stock picking, RBC Capital Markets and Morgan Stanley Wealth Management led the pack.
Tech Trader: Cautious on AAPL: Story suggests that tablet sales may be slowing down, and that a larger iPhone may cannibalize iPad sales; further, that the post-PC world has settled into an equilibrium, with PC shipments beginning to grow again after a decline; Cautious on GPRO: Smartphones may never match the quality or convenience of companys cameras, but they could stunt growth, and companys vaunted branding power may wane.
Trader: Cautious on WMT: Investors are likely to find that outgoing head of U.S. operations Bill Simon wasnt the problem, and the change is likely to lead to disarray instead of renewal; Positive on TUP: About two-thirds of the companys sales come from emerging markets that are still growing, and the business model remains resilient despite the growth of Internet retailing.
Small Caps: Positive on LXU: Shares of manufacturer of heating, ventilation, and air conditioning (HVAC) products for commercial buildings have a huge upside, and could be worth almost twice as much if company is split-up.
Hedge Funds: Interview with Fabrice Vecchioli, Co-Founder, Parus Fund, who likes big U.S. stocks with clear paths to rising profits (long on GOOG, FB, AAPL; short on DO, ESV, RIG, BBY, SPLS, BBBY); Interview with T. Gibbs Kane and John DeGulis, Co-Chairmen & President, Sound Shore Management, who say they arent bearish or bullish, but skittish (picks: GOOGL, WLP, C).
Follow-Up: The future of FNMA and FMCC rests on lawsuits filed against the government arguing that old preferred shareholders are entitled to a full face-amount payment following earlier seizure; Positive on CIT: With acquisition of OneWest Bank, small- and middle-market commercial lender is finally more than a work in progress, and shares remain undervalued.
European Trader: The eurozones sputtering economy seems to be gearing up again, and should get a boost from a pickup in corporate earnings in the second half of 2014, but the U.K. for now looks less appealing for investors.
Asian Trader: Recent crashes of Malaysia Airlines, TransAsia, and Air Algrie planes have brought safety into focus, and have also created a buying opportunity for beaten-down Asian airline stocks.
Emerging Markets: Saudi Arabia next year will open its $530B stock market to foreigners, offering access to an important emerging market the size of Russias, though Wall Street expects a limit on foreign ownership.
Commodities: Rubber supply is expected to exceed global demand for a fourth consecutive year in 2014, and demand is growing at a slower pace. CEO Spotlight: Profile of KEY chief Beth Mooney, who is changing the whole DNA of the company, thinking long-term.
Streetwise: The HLF saga serves as a welcome reminder of the folly of following any single hedge fund manager into battle; Positive on ESRX: Stock fits Warren Buffetts description of a company with sustainable competitive advantage