Barron's Summary: Positive on IP, NTAP, ADBE ; Cautious on VLO, RMD
- Cover story: Barrons list of the Worlds Most Respected Companies is topped by AAPL, BRKA, BA, GOOG, JNJ, DIS, AMZN, V, MA, and MMM; Criteria include operating metrics strong management, ethical business practices, sound business strategy, competitive edge, and product innovation.
- Tech Trader: Chip stocks have been strong performers, and though the run is likely to cool in coming months, the fundamentals look good for companies themselves, which could power them to new gains in the next 12 months (Positive on AVGO, MRVL, MU, SWKS, TQNT).
- Trader: Nobel Prize-winning economist Robert Shiller notes the market has looked more expensive on a cyclically adjusted price/earnings basis only three other times in the past 130 years: 1929, 2000, and 2007; Cautious on VLO: Shares are down on news Commerce Department will allow oil producers to export some forms of unrefined crude, but investor concerns may be overblown, and shares are trading at a 15% discount to historic multiple.
- Features: Positive on IP: Shares of paper and packaging company are among the cheapest in its peer group, and could see a 40% boost as economy recovers and company ramps up dividend payouts and stock buybacks; Positive on NTAP: Company is replacing lower-end OEM sales with lucrative branded sales and is initiating buybacks, which could prompt dirt-cheap shares to rise 25% or more; Positive on ADBE: While peers dithered on cloud computing, company embraced it, creating a subscription program to replace boxed software, a move that has led to steady earnings growth and a potential 20% rise in share price; Cautious on RMD: As Medicare works on ways to limit costs for sleep-apnea treatments, among its top outpatient expenses, company could see profit growth slow and a possible 15% decline in share price.
- Hedge Funds: Interview with Justin Abercrombie, Portfolio Manager, Schroders Global Value Extension Fund (picks: AAPL, AXA, BNP Paribas, Indo Tambangraya Megah, Legal & General, Vale; pans: Commonwealth Bank of Australia, TSLA, TWTR, Vallourec); Interview with Sarah Ketterer, Co-Founder & CEO, Causeway Capital Management, who is interested in finding companies with profitability and operating leverage (picks: Komatsu, International Consolidated Airlines Group, Schneider Electric);
- European Trader: Positive on SHPG: Though shares have jumped since ABBV bid, there could be more upside to come, especially if another bidder emerges.
- Asian Trader: Best performers in Asia in first six months of the year have been South and Southeast Asian markets, including India, Philippines, Indonesia, and Thailand; The biggest risk in Asia remains China, says Markus Rosgen of Citigroup, who likes Asian banks such as MTU; Benjamin Yeo at BCS likes Larsen & Toubro and Hon Hai Precision.
- Emerging Markets: Value has started to emerge in Chinese property stocks, but it seems premature to jump into a group thats down 12% this year, though nimble investors could short stocks such as China Resources Land, Evergrande, and Country Garden. - Commodities: U.S. oil prices have trailed the West Texas Intermediate benchmarks gains and could retreat more quickly if crisis in Iraq continues.
- Follow-Up: Headlines seem to suggest Africa is a scary place to invest, but the stock market there tells another story, and many of the countrys stocks are poised for growth (Positive on MTN Group, Shoprite Holdings, Safaricom, FM, AFK, NGE); Positive on NXST, SBGI: Companies are the biggest winners following Supreme Court ruling on Aereo, while large media stocks such as CBS, CMCSA, DIS, FOXA, GCI, and Tribune also stand to benefit.
- CEO Spotlight: Profile of BAC chief Brian Moynihan, who has focused on cost-cutting, selling non-core assets, and sought ways to increase efficiency across operations.
- Streetwise: Industrials seem to be benefiting from the pickup in U.S. economic growth, and could see a boost with the first quarter in the rearview mirror (Positive on LLL, CSX, PH).