Barron’s summary: Positive on JBLU, TAP, BECN; Cautious on VMW, GPRO, STZ
Cover story: Barrons Penta special section reports private bankers say their Silicon Valley clients invest very differently from the rest of the country, seeking stakes in venture capital, timberland, farmland, and municipal bonds; Pentas ranking of the top 40 wealth management firms is led by Bank of America Global Wealth & Investment Management, Morgan Stanley Wealth Management, and JPMorgan.
Tech Trader: Cautious on VMW: Former tech-sector darling now faces disruption of its own, with the latest threat being bare-metal computing in which a technology known as a container is used to fool each individual software application, rather than the operating system itself, into thinking it has full control of the server.
Trader: Investors are concerned about how much more economic pain is to come in Europe and Japan; Cautious on GPRO: Close reading of regulatory filings suggests plenty of vulnerabilities for such a highly valued stock, and with costs rising faster than revenue and a number of governance issues, investors should be wary; Cautious on STZ: Companys track record shows little to justify its lofty valuation, and recent jump in revenue stems from a change in accounting methods.
Features: Positive on JBLU: A few changes to the carriers business model, which has been better at creating passenger comforts than meeting earnings forecasts, could give shares a boost of as much as 50%; Positive on TAP: Ongoing consolidation of the beer industry could lift shares 30% or more if brewer is acquired, though with steady earnings growth and cost reductions it still looks good on its own; Cautious on DE, POT, MON: With farmers likely to lose money on corn, soybeans, and wheat for the first time in almost a decade, the companies that serve the industry could take a hit.
Small Caps: Positive on BECN: Second-largest roofing-products distributor in the country is seeing strength in demand for nonresidential roofing, and shares could rise if company rides the industrys consolidation wave and makes an acquisition.
Hedge Funds: Interview with David Ford and David Sabath, Founders, Latigo Ultra Fund, who target compelling event-driven opportunities largely in the U.S. with a bit in Europe; Interview with Joe McNay, Founder and Chief Investment Officer, Essex Investment Management (picks: ACT, AERI, TWOU, PANW, IDTI, FSLR, CSIQ, SUNE, SPWR).
Follow-Up: Positive on COF: Nations fourth-largest issuer of credit cards has benefited from improving credit quality, greater efficiencies, and strong growth in auto loans and commercial lending; Cautious on THRX: Shares of firm that manages royalties from sales of prescription respiratory drugs Breo and Anoro, distributed by GSK, still arent a bargain amid slowing prescription trend.
European Trader: Cautious on Rocket Internet, Zalando: German tech companies could see a pop when they go public, but the new stocks may struggle to live up to the hype.
Asian Trader: Japan is at an interesting crossroads in its macroeconomic policies that should prompt investors to rethink some of their holdings there"; Christopher Wood of CLSA in Hong Kong suggests microeconomic plays, and likes five real estate companies (Positive on Mitsubishi Estate, Mitsui Fudosan, Sumitomo Realty, Sekisui House, Daiwa House).