Barrons weekend summary: positive on RRC, XRX; cautious on SNAP
Cover story: As Donald Trump tries to keep manufacturing jobs in the U.S., many companies that remain will use robots in an effort to lower labor costs; "For long-term investors, robots could be one key to securing healthy corporate profit growth, and stock returns, even as wages rise"; Investors should look at Fanuc, ROK, ABB, Yaskawa Electric, and ROBO.
Features:
1) Positive on RRC: Leading U.S. gas producer appears undervalued, and its ability to drill profitable wells, even at current prices, gives it staying power and makes it an "option" on higher gas prices;
2) Cautious on SNAP: Even assuming the startup sees strong growth, it's hard to justify more than half the current stock price, and the company is more likely to resemble TWTR than FB;
3) Positive on XRX: Now that it has spun off business-processing units such as CNDT, Xerox and its investors have the opportunity to realize substantial long-term gains under new chief executive Jeff Jacobson.
Tech Trader: At the Mobile World Congress the key topic was the advent of 5G technology, which is less about making phones faster than about connecting a wide range of devices to the Web; NOK, ERIC, CIEN, and JNPR stand to benefit from the trend.
Trader: "Merrill Lynch's Sell Side Indicator, a measure of Wall Street's bullishness, still sits in neutral territory despite hitting its highest level in 16 months"; Positive on PHM: Shares have lagged the market for the past four years and are nearing the top of their long-term range, but expectations of stronger growth and margins could carry them further; Cautious on SIG: Jeweler's valuation may be the one good thing it has going for it as it faces several challenges, including allegations it underpaid female workers.
Profile: Brian Kessens, manager of the Tortoise MLP & Pipeline fund, is upbeat about the prospects for pipelines, storage facilities, and other midstream energy outfits (top 10 holdings: KMI, WMB, TRP, LNG, SE, ENG, OKE, PAGP, TRGP, Inter Pipeline).
Interview: Mark Boyar, founder of Boyar Asset Management, is an "eclectic value investor" who looks for strong businesses that aren't in favor (picks: MSG, MSGN, QVCA, TRCO).
Advisor Rankings: Barron's list of the top 1,200 financial advisors by state looks at assets under management, revenue produced for their firms, regulatory record, quality of practice, and philanthropic efforts.
Follow-Up: Cautious on MLM: The miner's prospects remain strong, but the excitement is already priced into the shares, and investors may want to take profits; Cautious on AFSI: Questions Barron's raised earlier about the company's accounting and reserve levels remain, and there could be more bad news when it files its 10-K report for 2016.
European Trader: Positive on AZN: This could be the year the company starts to deliver on a promise made in 2014 that it would fare better alone than by accepting PFE's takeover bid.
Asian Trader: The Indian economy grew by 7% in the December quarter despite the government's ban of the use of large rupee bills, but Capital Economics doesn't see India's economy surpassing China's.
Emerging Markets: In a recent report, Jim Barrineau of Schroders Investment Management claimed EMB and PCY haven't properly tracked their benchmark indexes and aren't proxies for the diversity of developing market debt.
Commodities: Aluminum prices are up this year on expected boosts in China's smelting industry, but without more evidence that production is decreasing, investors may find prices falling.
Streetwise: Reducing the U.S. corporate tax rate, which Donald Trump is unlikely to do if he wants to increase infrastructure spending, would hurt some companies, particularly those with high interest rates.
Cover story: As Donald Trump tries to keep manufacturing jobs in the U.S., many companies that remain will use robots in an effort to lower labor costs; "For long-term investors, robots could be one key to securing healthy corporate profit growth, and stock returns, even as wages rise"; Investors should look at Fanuc, ROK, ABB, Yaskawa Electric, and ROBO.
Features:
1) Positive on RRC: Leading U.S. gas producer appears undervalued, and its ability to drill profitable wells, even at current prices, gives it staying power and makes it an "option" on higher gas prices;
2) Cautious on SNAP: Even assuming the startup sees strong growth, it's hard to justify more than half the current stock price, and the company is more likely to resemble TWTR than FB;
3) Positive on XRX: Now that it has spun off business-processing units such as CNDT, Xerox and its investors have the opportunity to realize substantial long-term gains under new chief executive Jeff Jacobson.
Tech Trader: At the Mobile World Congress the key topic was the advent of 5G technology, which is less about making phones faster than about connecting a wide range of devices to the Web; NOK, ERIC, CIEN, and JNPR stand to benefit from the trend.
Trader: "Merrill Lynch's Sell Side Indicator, a measure of Wall Street's bullishness, still sits in neutral territory despite hitting its highest level in 16 months"; Positive on PHM: Shares have lagged the market for the past four years and are nearing the top of their long-term range, but expectations of stronger growth and margins could carry them further; Cautious on SIG: Jeweler's valuation may be the one good thing it has going for it as it faces several challenges, including allegations it underpaid female workers.
Profile: Brian Kessens, manager of the Tortoise MLP & Pipeline fund, is upbeat about the prospects for pipelines, storage facilities, and other midstream energy outfits (top 10 holdings: KMI, WMB, TRP, LNG, SE, ENG, OKE, PAGP, TRGP, Inter Pipeline).
Interview: Mark Boyar, founder of Boyar Asset Management, is an "eclectic value investor" who looks for strong businesses that aren't in favor (picks: MSG, MSGN, QVCA, TRCO).
Advisor Rankings: Barron's list of the top 1,200 financial advisors by state looks at assets under management, revenue produced for their firms, regulatory record, quality of practice, and philanthropic efforts.
Follow-Up: Cautious on MLM: The miner's prospects remain strong, but the excitement is already priced into the shares, and investors may want to take profits; Cautious on AFSI: Questions Barron's raised earlier about the company's accounting and reserve levels remain, and there could be more bad news when it files its 10-K report for 2016.
European Trader: Positive on AZN: This could be the year the company starts to deliver on a promise made in 2014 that it would fare better alone than by accepting PFE's takeover bid.
Asian Trader: The Indian economy grew by 7% in the December quarter despite the government's ban of the use of large rupee bills, but Capital Economics doesn't see India's economy surpassing China's.
Emerging Markets: In a recent report, Jim Barrineau of Schroders Investment Management claimed EMB and PCY haven't properly tracked their benchmark indexes and aren't proxies for the diversity of developing market debt.
Commodities: Aluminum prices are up this year on expected boosts in China's smelting industry, but without more evidence that production is decreasing, investors may find prices falling.
Streetwise: Reducing the U.S. corporate tax rate, which Donald Trump is unlikely to do if he wants to increase infrastructure spending, would hurt some companies, particularly those with high interest rates.