Barron's summary: positive on LVLT, MEG; cautious on MSFT; highlights potential activist targets (VRSN, XLNX, MDT, COH
Cover story: Profile of Lyrical Asset Management, which oversees more than $3B, including $2.5B in its flagship Lyrical U.S. Value Equity fund, No. 14 on Barron's Penta 2015 ranking of the 100 Best Hedge Funds; The fund "only replaces stocks a couple of times a year, follows a set valuation formula, and owns exactly 33 U.S. stocks"; During three years through 2014, it returned 27.62% a year, net of fees.
Features: 1) Positive on LVLT: Fiberoptic network provider "is well-positioned for the broadband explosion" that could see usage tripled in the coming years; shares could rise 20%, in addition to which it owns valuable assets; 2) Positive on MEG: Synergies from acquisition of Young Broadcasting and LIN Media, along with greater free cash flow generated by the deals, could push the stock up 50% in the next two years.
Tech Trader: Cautious on MSFT: Tiernan Ray says that despite seemingly fresh thinking from chief Satya Nadella, the tech giant remains too obsessed with Windows; It should instead become a development platform for mobile and Web computing, a process it could jump-start by acquiring coding-tool startup Xamarin.
Trader: A catalyst to propel the market out of its range trading could be the growing conviction a September Fed rate hike won't happen, says Adam Sarhan of Sarhan Capital; Positive on RL: Though fashion company faces near-term challenges, none are insurmountable; Wall Street's gloomy outlook seems overdone, and results are likely to show sustainable improvement later in the fiscal year; Cautious on WIN: Networking communications company is a short-term buy, not a long-term investment, and requires vigilance on the part of investors.
Small Caps: Cautious on BCO: Armored truck firm has struggled amid banking consolidation and sector competition, and following a recent rally it may be time to take profits.
Profile: Michael Kass, portfolio manager, Baron Emerging Markets, which focuses on growing entrepreneurial companies (top ten holdings: Haitong Securities, Samsung Electronics, Sinopharm Group, China Telecom, Steinhoff International Holdings, Torrent Pharma, China Mobile, Taiwan Semi Manufacturing, Tencent Holdings, Axis Bank).
Follow-Up: Private investors are seeking growth opportunities in companies such as Uber and Lyft, even though the IPO market hasn't been living up to expectations; Negative on ITT: For-profit education company continues to face myriad problems, and shares have plummeted as regulators try to track its industry-high student loan defaults; Cautious on AMTD: Long-term growth prospects are good, but the stock "is vulnerable to further dithering over rates," and investors should consider taking some profits for now.
European Trader: Positive on Syngenta: Even if tie-up with MON doesn't come through, investors can still profit from chemical company's plan to generate savings and efficiencies; + Delhaize: Shares are up 60% since last April, but they may still have more upside if Royal Ahold merger goes through.
Asian Trader: Slowdown in India's stock market is likely to continue, barring big economic changes; Of the big four Indian infotech vendors, Tata may be the best choice for investors.
Emerging Markets: Lower oil prices could continue to have a negative effect on Russian and Nigerian stocks and Venezuelan debt, but could benefit importers such as India, Indonesia, and Turkey.
Commodities: Some investors think aluminum's big gains will ease even as other metals push higher.
CEO Spotlight: L'Oreal chief executive Jean-Paul Agon believes digital technology can transform the relationship between consumers and brands.
Streetwise: Companies that could be potential targets for activist investors include VRSN, XLNX, MDT, and COH.