Barron’s Summary: positive on DVN, ALV.DE; cautious on TWTR and 3D printer names
Cover story: Special retirement report takes a deep look at long-term care insurance and how to choose a policy, noting the benefits generally outweigh the high costs; two key factors to take into account are when a person applies and the benefits chosen, with the best age for buying being the mid-50s to the early 60s; Story looks at the so-called 4% rule for withdrawing money from savings during retirement, noting low rates and longevity have changed the thinking on retirement withdrawals.
Features: 1) Positive on Allianz: German insurer isnt getting sufficient credit for its lucrative asset-management business, headlined by U.S. bond giant Pimco, and could return 20%, dividends included, in a year. 2) Positive on firms with strong free cash flow: HBI, IP, LLL, XRX shares look healthier than they appear based on the fact paper profits understate the amount of free, spendable cash they bring in. 3) Positive on DVN: Company has been hit by plummeting natural gas prices, new effort to search for more oil could pay off in 2014 with 25% rise in share price.
Tech Trader: Cautious on TWTR: Story suggests comparisons to GOOG at this stage are futile, since the search giant was profitable when it went public, and Twitter isnt expected to report an operating profit until 2015; Companys small float of only 13% of its stock left $1.3B on the table, the fourth-largest gap on record.
Trader: - Cautious on DDD, SSYS, XONE, VJET: 3-D printing stocks are up sharply and trade at rich valuations, and though theres a lot of hope in each, even investing in all four doesnt mean a buyer will bag a winner; - Cautious on AEO: Retailer has a history of steady sales growth and has remained profitable; selloff may be overdone, and downside risk is mitigated by the dividend yield, inexpensive valuation, and solid balance sheet.
Small Caps: Positive on GLF: Boom in offshore drilling has led to uptick in demand for companys vessels, and as revenue and earnings rise, shares could rally another 30%.
Follow-Up: - Cautious on TSLA: Automaker still faces troubles meeting demand due to limited supplies of lithium-ion cells and efforts to improve their efficiency, as well as concern over second incident of a Model S catching fire; Cautious on IEP: Carl Icahns firm has gained a stunning 169% this year, but units trade at a significant premium to their estimated net asset value of about $78.
Mutual Funds: Interview with Chuck Akre, Portfolio Manager, Akre Focus, who focuses on companies that employ shareholder-friendly management that puts cash to good use (top ten holdings: MCO, MA, CFX, AMT, MKL, DLTR, DTV, V, ROST, AMTD); Investors who buy into focused funds approach should be comfortable with periods of underperformance, or even with some all-out uglieness, since every decision is magnified, for better or worse; Interview with Ed Yardeni, President and Chief Investment Strategist at Yardeni Research, who says Investors Intelligence, the number of bullish investment advisors divided by bearish, shows the market is overbought and at least prone to a correction.
European Trader: Europes central bank trimmed a key interest rate Thursday in a bid to prevent a sustained period of low inflation from destabilizing a fragile economic recovery; - Positive on Ryanair: Recent plunge in share price is a buying opportunity for carrier that generates lots of cash while European legacy airlines struggle.
Asian Trader: Positive on TM, Nissan, HMC: Falling yen has given Japanese automakers a pricing advantage in foreign markets they havent enjoyed in years, with Toyota and Honda the best bets for investors as global demand for cars rises.
Emerging Markets: Before getting into frontier markets, investors should be aware of shortcomings, such as the fact they arent liquid or diversified enough to provide protection in times of trouble.
Commodities: Any dip in production of natural gas will likely be short-lived, and price rises throughout the winter probably would be related to bursts of demand brought on by cold weather rather than shrinking supply.
Streetwise: MSs Adam Parker sees little reason to doubt the bull market, and with corporate debt burden pushed out to 2016 and beyond and companies wary about spending, all pullbacks are buying opportunities, until that changes.