Barrons summary: positive on VZ, YUM, ATW; cautious on weight loss names WTW, NTRI, cautious on NDLS
Cover story: Special Penta section says average allocations to hedge funds and private equity by wealth managers jumped from 12.5% to 14.1% this year, and that long-short hedge funds should come into their own in 2014.
Features:
1) Positive on VZ: Telecoms massive share issuance to VOD holdersmay have kept a lid on Verizon stock and given an investors an attractive entry point, shares look appealing at 13.6 times projected 2014 earnings, and 4.5% dividend looks safe;
2) Positive on YUM: Food giant is retooling its menus and operations, and though it has had problems in China, shares are set to rise 15%;
3) Positive on ATW: Stock is down on fears day rates for rig use will fall while oil companies plan to reduce spending, but mid-cap driller is well-positioned to handle a weaker market and shares could rise 40%.
Tech Trader: Tiernan Ray provides an overview of the Mobile World Conference, noting chipmakers such as QCOM, MediaTek, INTC, STM, and BRCM stand to benefit from the growing market for cheaper mobile devices, as well as the potentially hot wearable market.
Trader: Results from retailers such as M are an indication Americans are feeling confident; Cautious on WTW, NTRI, VVUS, ARNA: Drop in shares of weigh-loss and diet drug companies is either a sign the obesity epidemic has been solved or that people have given up trying; WTW has a heavy debt load, while NTRI faces increased marketing expenses, though it is earning below potential; VVUS and ARNA face challenges growing their prescription base and sales as they struggle to reach the right customers; Cautious on NDLS: Noodle chain has been expanding despite inability to boost same-store sales the way CMG has, and is struggling to live up to its post-IPO valuation.
Follow-Up: Positive on BKS: Companys lucrative bookstore business carries one of the lowest valuations in the retail industry, while the Nooks losses are narrowing and its prospects likely to improve as production is outsourced and company focuses on driving sales of e-content, all of which could lead shares to a 60% rise; Positive on ALV: Company still looks like a good value despite management upheaval at its Pimco unit, of which analysts say day-to-day operations are unlikely to be affected by departure of chief Mohamed El-Erian.
Small Caps: Positive on FTD: Shares of dominant player in the flower market have barely budged since unit was spun off from UNTD; at current price, and with a 10% free cash flow yield, they look attractive.
Mutual Funds: Interview with Dave Carlsen, Portfolio Manager, Buffalo Discovery Fund, who finds technological innovations in unusual industries (top picks: ALGN, HSP, GTLS, AAPL, CRR, ARAY, FB, PKI, GILD, ACT); Interview with Martin Cohen and Robert Steers, Founders, Cohen & Steers, who say investors shouldnt buy REITs based on the dividend yield, but rather its sustainability and growth rate.
European Trader: European Unions latest economic forecasts made for grim reading last week, but they left some investors believing that now is a good time to buy stocks laid low by the financial crisis, with good picks including UBS and BUD.
Asian Trader: So far in 2014, Indonesia is the top performer in Asia, partly due to a rise in its currency and stocks, and it has one of the fastest-growing Asian economies this year, behind China and the Philippines.
Emerging Markets: Cautious on SINA: Though at first glance Chinese Internet portal seems to offer lots of value, shares seem pricey in light of uncertainties surrounding its sizable portfolio of technology companies.
Commodities: Gold has staged a rebound in 2014, but few market watchers it to last, as two long-term pillars of support, loose monetary policy and cost-sensitive buyers in emerging markets, are crumbling.
Streetwise: Positive on ICPT: The hottest small stock this year is already up 501%, part of a recent and surprising surge in biotech sector; We in a bull market, but its an uncommitted, antsy herd.