Barron’s Weekend Summary: The 30 top CEO’s in America were able to turn the crisis of the Covid-19 pandemic into opportunity.
* Cover Story: The 30 top CEO’s in America were able to turn the crisis of the Covid-19 pandemic into opportunity. And to understand the extent of the challenge, consider the rollercoaster ride that commodity prices experienced. “There was a day in April 2020 when Texas crude sold for less than nothing—$37 less, in futures trading….Now, oil is over $70 a barrel.” Therefore, chief executives at the country’s top companies had to navigate the storm from “dire downturn” to “frantic rebound.”
* Tech Trader: Just Eat Takeaway.com (ticker: JET.UK) serves as a gateway into the fast growing food delivery sector. The company was created by the merger of Takeaway and London-based Just Eat in June 2020. But shortly thereafter it acquired Grubhub, which had put itself up for sale, for $7.3 billion.
* Trader: “It’s as if the Fed meeting never happened.” Less than two weeks after the Federal Reserve hinted it would have to start raising interest rates over inflation concerns, triggering bearish sentiment in the Dow Jones Industrial Average – which endured its worst week since October 2020, the markets rebounded robustly in the week that started on June 21.
* Interview: Joyce Chang, Global Head of Research for J.P. Morgan, is an experienced observer. She analyzes some of the current market trends in this interview and what they mean. The main point for investors is: “expect continued gains for stocks and oil. The overarching trend she sees is a shift, prompted by digitalization and the demand for fintech and crypto. “Market dynamics have moved beyond talking about traditional market liquidity provided by banks and what hedge funds and mutual funds are doing, as nonbank financial institutions have ramped up activity.”
* Profile: Intellia (NTLA+) has gained over 60% in the course of 2021, clsing at $88.83 on Friday. The company’s appeal owes to its pipeline of the gene-editing technology treatments known as Crispr-Cas9, the discovery of which earned Emmanuelle Charpentier and Jennifer Doudna a Nobel Prize. “Intellia’s experimental treatment repairs an errant gene that causes transthyretin amyloidosis, or ATTR: a buildup of a misfolded protein in the nerves and heart that is often fatal.” Intellia’s partner in developing the treatment, Regeneron Pharmaceuticals (REGN), should also benefit as it will split profits if the treatment reaches market. Pfizer (PFE) and Alnylam Pharmaceuticals (ALNY) are also working on fast-growing new drugs for treating ATTR amyloidosis.
* Features: 1) Positive on HTZGQ, CAR. The rental-car industry is benefiting from a domestic US travel surge and a vehicle shortage this summer to raise prices. “Vacationers are paying $275 a day or more for midsize sport utility vehicles from Hertz in popular locations and $100-a-day rentals are common, double what Hertz was getting in the first quarter. Used-car prices, meanwhile, have surged, benefiting the industry when they sell their fleets.” Hertz (HTZGQ), Avis Budget Group (CAR), and privately owned Enterprise control some 95% of the domestic market. 2) Positive on The housing market. While house sales could slow after the summer, there’s still plenty of demand left and mortgage rates should stay near 3%. Mortgage insurance companies are appealing: NMIH, ESNT, MTG.
* European Trader: Cautious on FibroGen (FGEN). The EU’s Medicines Agency’s Committee for Medicinal Products for Human Use has recommended granting Fibrogen’s key product roxadustat marketing authorization in the European Union as a treatment for anemia symptoms in chronic kidney disease patients. The drug, meanwhile, has experienced setbacks in getting US approval.
* Emerging Markets: China is trying hard to stop Bitcoin, but it won’t be easy. Bitcoin’s decentralized system is intended to be “impervious to government control.” Bitcoin’s price did suffer, losing 16% after the Chinese central bank declared on June 21 that cryptocurrencies disrupted “financial orders, breed criminal activity, and seriously infringe property safety.” But, it then it rallied back.
* Commodities: Shares of copper mining company Antofagasta (ANTO.UK) could suffer “because of a political lurch to the left in Chile, raising the possibility of higher taxes on resource companies. Recent drops in the price of copper aren’t helping either.” “The left-wing is on the ascension in Chile, and that doesn’t bode well for where the taxes come out in the end,” says Tyler Broda, head of EU mining research at RBC Capital Markets in London.
* Streetwise: The focus is on non-disruptive technology, such as ubiquitous objects like pens, and the kind of products made by brands owned by Newell Brands (NWL) as UBS began coverage of the households-products group in the past week, recommending that investors buy Newell and sell Clorox (CLX).