Barron's weekend summary: Positive on PII, VOD, BWA, NVO, BEL, PNRA; Cautious on TSCO, BEAV
Cover story: Retirement experts Ann Marie Etergino of RBC, Ross Levin of Accredited Investors, Mary Deatherage of MS, and Judy Fredrickson of UBS discuss how investors can maintain their wealth in retirement and provide for their heirs.
Tech Trader: Analog chip makers TXN and NXPI have wowed investors with dividends and debt-fueled deals, and sharesalong with those of MCHP and CRU Shave bested the Philadelphia Semiconductor Index, but when investors return their focus to products and technologies, the landscape may change.
Trader: Investors are likely to bide their time after the Fed communications blackout ahead of the FOMC meeting, but the markets precipitous drop on hints of just one hike doesnt bode well; Positive on PII: Company has a good long-term track record, and though another oil price collapse would hurt it, the worst appears to be over and it may be a good time for investors to buy; Positive on Goldman Sachs Group Pfd A, Goldman Sachs Group Pfd SHS D, Morgan Stanley Pfd A, Bank of America Pfd E, GMAC Capital Trust I: These adjustable preferred stocks offer a decent yield and potentially less volatility than fixed preferreds when rates go up.
Profile: Scott Wolle, manager of the Invesco Balanced-Risk Commodity Strategy fund, sees commodities as more than an inflation hedge (top 10 holdings: gold, silver, copper, sugar, aluminum, cotton, soybeans, unleaded gasoline, soy meal, Brent crude).
Features: 1) Positive on VOD: Companys shares have dropped over concerns about exposure to the European wireless market, but growing revenue, underappreciated developing-market assets, and a potential merger with Liberty Global could bring 33% upside; 2) Positive on BWA: Auto supplier will benefit from the growth of the electrical car market, where demand for its components is growing at an annual rate of 50%; shares are cheaper than usual, and could rise by 30%; 3) Positive on Novo Nordisk: Danish pharma, the industry leader in diabetes medications, faces increased competition and turmoil in the U.S. market, but plans to counter this by expanding into other lucrative pipelines; 4) Short seller Ben Axler, who targets companies with a research activism strategy, has launched Spruce Point Research Activism Partners, a hedge fund that will invest on his ideas before he shares them with the public.
Small Caps: Positive on BEL: At a recent $11, shares of luxury hotel chain have the potential for major upside, while the downside risk seems limited.
Follow-Up: Cautious on TSCO: The long-term bullish case for the retailer is intact, but after management lowered guidance, regaining investors confidence could take time, and investor may be wise to sell now; Positive on PNRA: While rival MCD has cut expectations, investors believe Paneras revenue could rise 7% next year to $3B, up from $2.8B this year; Cautious on BEAV: Most of the good news about the company is priced into shares now, and bad news could send them down.
European Trader: Positive on Greencore Group: Irish company, the U.K. market leader in manufacturing ambient, or chilled, convenience and private-label foods, is likely to keep providing profits for investors.
Asian Trader: Years of prosperity have attracted investors to the Philippines, but new president Rodrigo Dutertes efforts to clean up crime and drugs could rattle the markets in unexpected ways.
Emerging Markets: The long-awaited cease-fire between the Colombian government and rebel forces wont improve the countrys near-term economic situation, which may get worse before it gets better.
Commodities: Despite a recent boost in the platinum market, oversupply and weak prices are likely to continue amid heavy recycling and weak demand from China and other areas of the world.
CEO Spotlight: Anand Mahindra of Mahindra Group has boosted competitiveness by focusing on improved efficiency, and linked pay more closely to productivity.
Streetwise: Positive on CLR, NFX: A recent earthquake in Oklahoma isnt likely to affect the oil companies, and investors are betting they will be able to cut costs and drill more in the Scoop and Stack regions of the state.