Barron’s Weekend Summary: In Barron’s Big Money poll, 67 percent of the respondents were bullish on the outlook for stocks in the next 12 months
* Cover Story: “The nationwide rollout of Covid-19 vaccines, the persistence of ultralow interest rates, and expectations for torrid economic growth have convinced America’s money managers that the stock market still has more room to rise”; Among professional investors surveyed in Barron’s spring Big Money poll, “67 percent call themselves bullish on the outlook for stocks in the next 12 months. About a quarter are neutral, and 7 percent are bearish. The most recent results represent a marked shift from the fall 2020 poll, which found 54 percent of managers bullish and 13 percent bearish, nearly twice the current bearish reading.”
* Tech Trader: Positive on NFLX: The streaming giant has become a victim of its own success, drawing so many new subscribers during the pandemic that it faces a lull—but the focus on subscribers is “short-term noise,” and its recent weakness looks like a buying opportunity for five reasons: Neftlix will get a lot bigger, it’s a reopening play, subscribers love the service, it generates large cash flow, and it is benefiting from a virtuous circle.
* Trader: The pandemic reopening trade may have come to an end, but the real estate sector still has room to run—it closed above pre-Covid levels this past week, and further gains could be ahead; If the US is starting to decelerate, Europe, Japan, and emerging markets are likely to accelerate as they start to get Covid-19 under control, so investors should consider buying economically sensitive stocks with international exposure—GS strategist Ben Snider likes NEM, BWA, ALB, Ryanair Holdings, Restaurant Group, and Hennes & Mauritz; Economic data continue to get better—jobless claims fell to another post-pandemic low in the most recent report—and the Fed will have to show that it recognizes that growth, while still having a reason to take things slow.
* Profile: Mike Kirkpatrick, portfolio manager for the Virtus Seix High Yield fund, tries to smooth out the portfolio’s performance over time by staying flexible through selecting higher-quality credits that can minimize losses during selloffs, while also looking for mispriced securities to improve performance.
* Interview: Bill Miller, formerly of Legg Mason and now running his own firm, Miller Value Partners, is likely the largest individual shareholder of AMZN outside of Jezz Bezos and his former wife MacKenzie Scott, while his investment in Bitcoin has produced such a windfall that it’s now worth even more than his Amazon stake.
* Features: 1) Positive on MRNA: In the first 11 months of 2020, Moderna shares rose by nearly 700 percent as the company designed and tested its vaccine, but they have wobbled amid the rollout—but the concerns are overblown, because there is likely to be an ongoing need for coronavirus vaccines, and the company should be able to replicate its success in the future with other vaccines using its messenger RNA technology; 2) Positive on XPO: The company, a leading provider of trucking services and a major global logistics player, has returned 31 percent a year on average for 10 years, but with the upcoming spinoff of its GXO Logistics division, the company hopes to unlock value in its shipping business while creating new value with outsourced logistics at GXO; 3) Concern on Wall Street that Americans will revert to out-of-home eating habits when the pandemic eases, and that many companies will see profits squeezed this year by rising commodity prices may be too pessimistic, since remote work is here to stay in some form, helping sustain pandemic trends; 4) Positive on PRGO: The company’s sale of its generic-drug business, which ends a yearslong expansion into pharmaceuticals and returns the company once again into a pure-play consumer-health and self-care business, should create an opportunity for investors, who can expect to see shares rise.
* European Trader: Positive on Johnson Matthey: The world’s largest maker of catalysts that filter pollution from diesel engines took a hit during the pandemic because of slumping demand, but the shares may be undervalued because concerns over the dwindling diesel market may have blinded the market to the company’s other growth opportunities.
* Emerging Markets: China’s proposed digital currency may appear to be an innovation, but the country’s Internet giants, including BABA and Tencent, already manage payment systems that have effectively become coin of the realm in urban China, and greater regulation from Beijing isn’t likely to have a material impact for now.
* Commodities: “Oil prices have climbed more than 25 percent this year, as production was restrained and a rise in consumption is expected for the summer travel season.”
* Streetwise: Bonds may be the next promising frontier for ETFs—ETFs for bonds make up just 1.6 percent of the total bond market, says Salim Ramji of BLK. “They’re essentially modernizing aspects of the bond market that were over-the-counter, nontransparent, really quite expensive to transact.”