Barrons summary: Positive on INTC, SLB, KEYS
Cover story: Most U.S. states-which "represent one of the most secure areas of the global bond market, typically benefiting from low debt levels relative to the size of their economies"-are healthier than they were a few years ago; 15 states have a triple-A rating from Moody's, and only two-Illinois and New Jersey-have a rating below double A; North Dakota, Wyoming, Utah, Nebraska, Iowa, and Alaska top the list in a ranking of general obligation bonds.
Features: Positive on INTC: Chip maker's shares are 7% cheaper than the S&P 500 index, relative to projected earnings for the next four quarters, and shrinking losses in its mobile-chip division will eventually uncover earnings power in the rest of the company that is currently hidden; stock offers a 2.7% yield and could have a 30% upside; A look at picks and pans from the Sohn London Investment Conference (Long: Accor, Z, Gazprom, Masonite International, Kruk, Piaggio; Short: Superb Summit International, BID).
Tech Trader: Tiernan Ray says Wall Street seems more interested in dividends and stock buybacks than innovation at companies such as INTC and QCOM; Both "are relatively inexpensive for such phenomenal sets of assets, though QCOM may be the better deal at the moment" even though it can't dissuade investors from focusing on risk in countries such as China.
Trader: Positive on SLB: Despite a lack of consensus on when falling oil prices will stabilize, company's "beaten up stock" is emerging as a good value and could have a 20% upside, while recent HAL-BHI deal offers it both short- and long-term positives; Positive on KEYS: Wall Street may be underestimating company's longer-term earnings and free-cash-flow power following its spinoff from A, and it is likely to be a major beneficiary of the Internet of Things.
Follow-Up: Positive on JBLU: Carrier is looking for increased revenue in the right places, and even when it adds seats to planes-something consumers don't like-the distance between them will still remain the highest in the industry; Cautious on TTWO: Games such as Grand Theft Auto are immensely popular, but the company makes too few of them too far apart, leading profits to soar and then disappear; now may be the time for investors to take profits; Positive on DISH: Satellite network is benefiting from the government's latest spectrum auction; chairman Charlie Ergen could sell company's spectrum, partner with a wireless carrier, or launch his own mobile service.
Hedge Funds: Interview with Jonathan Herbert, Founder, Camox Fund (Long on Temenos Group, Software, Montupet, Durr Group; short on Danone, UL); Interview with Christopher Wood, Chief Strategist, CLSA-Asia-Pacific Markets (Indian banks: HDFC, Indusind, ICICI; Philippines banks: Metrobank, BPI; India housing finance: HDFC, GRUH Fin; China Internet: Tencent; Philippines consumer: Universal Robina; Japanese real estate: Mitsubishi Estate, Mitsui Fudosan; Japanese drug stores: Tsuruha Holdings; Japanese trucks: Isuzu Motors).
European Trader: Some European oilfield-services companies see M&A as their best option despite the risks, given plunging oil prices that are hitting the earnings of oil majors and causing them to shutter some projects; The pressure for more mergers in Europe may grow following the HAL-BHI deal in the U.S., as evidenced by Technip's bid for CGG.
Asian Trader: Most of the predictions about how trading would happen on the Hong Kong-Shanghai Connect are turning out to be wrong; mainland interest in high-growth stocks can't move the needle for large caps.
Emerging Markets: Investors can ride the momentum of Indian stocks if they watch for those with improving prospects (Positive on ICICI Bank, HDFC Bank).
Commodities: The Arabica-coffee rally "is on thin ice," and prices are likely to ease as the year winds down. Streetwise: Goldman Sachs strategist David Kostin recommends buying stocks that trade less frequently and offer an "illiquidity risk premium," such as JNJ, PG, Berkshire Hathaway, GE, and IBM.