Monday, September 20, 2010

Summary of Barron’s from the Weekend 9/18

· The dangers of “beggar thy nation” currency policies – w/the world’s major central banks having already brought rates down to near 0% and having embarked on a round of QE, there was some evidence this week of competitive currency devaluations.  This could wind up being a dangerous game – the central banks can coordinate their policies for QE but not currency devaluation.  Barron’s
· PE firms need to deploy ~$50B worth of capital by the end of ’11 or else return it to shareholders – Barron’s
· Corn – Barron’s notes that trader continue to remain bullish on the commodity, saying it could rise to $6 by year-end. The article also says that once real-world users of corn decide they’ve bought enough, a wave of profit taking could hit the market, although it would take a record crop in 2011 to bring prices back to where they were early this year. Barron’s
· Gold – Barron’s is positive own gold, saying Merrill Lynch projects the metal could trade as high as $1,500 in the next 12-18 months due to current events. Large gold miners have also unwound their hedge books, suggesting they foresee gold remaining at least at these levels for the foreseeable future. Barron’s
· CHSBarron’s notes the takeover talk around the name; while the article doesn’t have any new information on whether a takeover is in the works, notes the company/stock has all the right attributes that would attract a buyer (Barron’s)

· AMTD pos. comments; the co is quickly gaining assets and market share; recent acquisitions, and 45% owner TD Bank, will provide for growth opportunities in the future.  Valuation is cheap.  There is the potential for TD to buy out the rest of AMTD it doesn’t already own.  Barron’s
· LOV – pos. comments on tiny Spark Networks, whose primary asset is JDate; valuation cheap and the co possess an attractive franchise; decent pile of cash and the firm is profitable.  LOV could be a takeover target.  Barron’s
· OPEN – cautious comments; valuation very rich and competition rising; analysts peg valuation in mid $40s.  Barron’s
· Tech cash balances – Congress should change the tax rates on repatriating cash; tech firms alone would bring back hundreds of billions of dollars and help stimulate the economy w/o Washington having to spend a dime.  Barron’s
· YHOO the co should become more serious about monetizing its Alibaba asset; the two companies were in talks for YHOO to sell some of its stake in Alibaba but negotiations broke down.  Barron’s
· VIG, PFM, SDY – positive comments on dividend paying ETFs.  Barron’s
· LOGM – cautious comments; valuation v expensive and competition on the rise; sentiment very bullish while insiders have been selling.  Barron’s
· STD positive comments on Santander; says recent expansion moves will wind up paying off in the long run.  New Basel capital rules shouldn’t be a major obstacle.  Barron’s
· NEM: Cited as a stock that allows exposure to gold’s upside. [Barron’s]  
· ITT – Positive comments in Barron’s, says the stocks sum of the parts valuation puts the stock at around $55-60 (Fri close $45.71). Barron’s also said despite defense budget risks, the rest of the company’s businesses are thriving and the valuation the market is pricing its defense business is too low. Barron’s
· MCD, PEP: While both McDonald’s and Pepsi are “strong and steady dividend payers” Barron’s prefers ETFs that specialize in dividend stocks because it reduces the risk of a single company. [Barron’s]
· HOG, HSY, GIS: Barron’s cites these stocks as having perpetually takeout speculation, tough takeover spec continues “as long as open interest exists”. [Barron’s]
· Internet Retailing: Barron’s highlights high end goods sales over the internet were up at least 10% last year and are still rising. [Barron’s]
· YUM: Mentioned as a stock for the “ultra – cautious” who want exposure to emerging markets.

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