Barron’s Weekend Summary: Cover story says online sports betting has become the hottest trend in the US gaming industry; Tech Trader says a change in how NFLX measures viewership could be a red flag
- Cover story: Sports betting—especially online sports wagering from mobile phones—has quickly become the hottest trend in the US gambling industry, and the market is potentially enormous: People illegally bet an estimated $150B on sports each year, and states are eager to get their hands on it through tax revenues on legal wagering; DraftKings will emerge as the only pure play in online US sports gambling and a potential takeover candidate for industry leaders MGM, ERI, CZR, WYNN, or LVS; Other options include Flutter Entertainment—which plans to merge with TSG—William Hill, GVC Holdings, BYD, and PENN.
- Tech Trader: Positive on NFLX: The first season of The Witcher proved to be a massive hit for the streaming giant, which is taking so many chances on new shows that it’s almost certain to find a few big hits every year and maintain its momentum—though a big change in how it measures viewership, while it will boost metrics, could be a red flag about future trends.
- Trader: The coronavirus outbreak in China is unlikely to tip the US into recession—market internals are still strong, with the advance/decline line (a cumulative measure of the number of stocks rising versus those falling) still making new highs, and the recent drop is likely not the big one, though it may feel that way; China is the world’s biggest market for electric cars, and with growth expected to continue, there are more ways than just TSLA to play it—investors frustrated about missing out on Telsa’s epic run may want to consider Chinese rival BYD.
- Profile: Rajiv Jain of GQG Partners works with at 12-person investment team that includes former journalists, long/short managers, and credit analysts who work from a shortlist of a few hundred global names (top 10 holdings: BABA, HDB, Air Liquide, SAP, AZN, Cellnex Telecom, Deutsche Boerse, Nestlé, MA, NVS).
- Features : 1) Abby Joseph Cohen of Barron’s Roundtable talks about her picks (BMRN, LHX, PG, CVX, TEX) and says that growth is still important—though she is looking for growth that comes from innovation rather than through financial engineering; 2) Stories feature picks from the remaining Roundtable members: Todd Ahlsten of Parnassus Investments (VZ, CMCSA, CME, DE, FDX); Mario Gabelli of Gamco Investors (BATRA, MSG, AJRD, FOX, VIACA, AGSR, NEP, David Campari-Milano, Swedish Match); Sonal Desai of Franklin Templeton Fixed Income (long Japanese yen vs. US dollar, EWU, PYEWX, FTFQX, FKIQX, CQQQ); Scott Black of Delphi Management (SAIC, RCL, ENS, MHO, HTGC); 3) Cautious on Liberty Braves Group, MANU: Investors can buy shares in the Atlanta Braves or Manchester United—and will be able to do the same with New York’s Knicks and Rangers when MSG splits its entertainment and sports operations—but the shares are driven more by private transaction valuations than by fundamentals; 4) Positive on AMZN, GOOGL, MSFT: A vast number of eyeballs around the world—mostly teens and young adults—are fixed on the incredibly popular world of e-sports, or competitive videogaming, which presents an opportunity for investors as big tech companies move more into live streaming the matches; 5) Cautious on FOXA, OMC, IPG, Publicis, WPP: Fox sold out of Super Bowl ad slows much earlier than it had in previous years, but that doesn’t mean boom times are back on Madison Avenue—the NFL and Fox agreed to cut one commercial break from each game quarter, leaving fewer spots available for marketers; 6) Sustainability was ostensibly the key topic at the World Economic Forum, but the overriding theme turned out to be the need for more conversation, collaboration, and long-term planning among companies and nations.
- European Trader: Positive on Melrose: The firm that buys and improves underperforming companies was the FTSE 100 index’s second-best performer during the past decade, according to Refinitiv, but it looks like there’s still more upside in the stock.
- Emerging Markets: Vietnam has escaped both the growth slowdown and the political upheaval that have bedeviled many other emerging markets, and GDP expansion has held steady, driven by internal and external dynamics—but 45 years of Communist control have left a maze of investment barriers and restrictions.
- Commodities: The phase-one trade deal between the US and China the countries announced in mid-January should create frequent opportunities for soybean traders to make money, but it won’t create a bull market for the grain.
- Streetwise: Positive on NFLX: The company has more than five subscribers outside the U.S. for every three inside, a metric its rivals might not match for many years.