Once again while at 7-11 today, I wondered if this weekend's Barron's would be any good. Often my decision to purchase or not is based on the cover story, sometimes I will look on that front page to see if there is anything of obvious interest.
The Cover Story is "Time To Buy!" BANKS that is. The graphic is a picture of a bank with "Nobody Loves Me" written on it shedding tears... Poor banks... They would get little sympathy from my readers! Author Andrew Bary notes that banks have come down a LOT by many metrics, and so are CHEAP by some of those measures. There some tables and graphs showing how they have come down, their P/Es, book value, dividends, etc. The six banks most commented on are:
Bank of America (BAC)
Goldman Sachs (GS)
JP Morgan (JPM)
Morgan Stanley (MS)
Wells Fargo (WFC)
While each above bank carries its own set of problems (and has its own pluses), I cannot believe that ANY of these would be allowed to fail unless Armageddon is upon us.
Also mentioned in a bullish light (in separate tables) are various regional banks. trust banks and life insurers.
Bary mentions, but does not back up, the notion that our banks are stronger than Europe's banks, which may be true.
He also wrote:
"Banks have replaced energy companies as the most hated industry in Washington.", which of course is completely correct. OccupyWallStreet is mentioned along with the New York Times as being very unsympathetic to the banks.
The main meme in this article is that MANY have decided that now is a good time to get in these stocks.
Should you? Will I? I don't know about you, but I am not biting this lure...
Morgan Stanley is mentioned again, and again in a positive light in another article.
Alan Abelson did not write the kick-off article this weekend, so Randall W. Forsyth takes his shots at the Fed. He chronicles the inability the Fed has shown in trying to get people to spend, companies to invest and banks to lend. The near-zero interest rates have actually HARMED savers and potential investors. I agree. And he does not like Operation Twist, I also agree. Fred Hickey (The High-Tech Strategist) is quoted that QE3 is a "matter of when, not if". Forsyth also tells of more accounting tricks by the banks, illustrating JPM's little trick of counting as revenue a decline in the value of its own debt! Nice trick! But it did not fool Wall Street, who sold JPM and knocked its share price down 4.8%. Ha ha! Wall Street not even buying its own Bankster BS.
Numerous shipping indicators (alert ZH readers will have read this already) point to a possible recession (page 18).
Next Era Energy (NEE, used to be Florida Power and Light) got a strong bullish review in the "The Wal-Mart of Renewable Power". NEE is involved big time in natgas, nuclear and wind power, and has a JV going with GE on a solar farm in California.
In a similar vein, Itron (ITRI) got a thumbs up because it is a leader in smart-meters (mostly electric).
Tiernan Ray's "Technology Week" has interesting comments on why IBM has been kickin' butt this year, outperforming even mighty Apple (AAPL). Dull and safe, but very entrenched in its space (mainframe computers, middleware, services (like assembling netowrks providing and consulting on software, etc.). IBM has become the "Risk Off" play in tech...
Intel and Microsoft, he points out, are much more on the hook in the PC market ("Wintel") which is not doing so well lately...
And Apple? All eyes are on Apple having successfully (very successfully) rolled out its iPhone 4S, which a few days ago seemed to be a disappointment. The drama comes soon for Apple on Tuesday afternoon when they announce their earnings.
Right at the end of "Weekday Trader" is a little gem for followers of Europe (includes me). Richard Morais is quoted as saying that "Greece will be forced to restructure its debt in an orderly way, like any quasi-bankrupt company would...Germany will be picking up the bulk of the tab. That also means Germany and its $3.3 trillion economy is calling Europe's shots." Forget the little dramatic meetings of Merkel and Sarkozy. ZH can't scoop everyone all of the time...
Bill Alpert interviews Heidi Wood (Morgan Stanley, HEY! What is this, MS week at Barron's?) the defense stocks analyst there. She makes a pretty compelling case for General Dynamics (GD, they make subs...), Textron (TXT) and United Technologies (UTX). Less so for Boeing (BA) and ship-builder Huntington Ingalls (HII). Disclosure, I own a small holding in UTX, and I know they are involved in many non-defense industries in which they are very strong, I know a sales engineer who sells BIG TICKET equipment to LatAm, and they are doing great!
In the Classifieds (near the back of the main section, there is a curious ad for a Medical Marijuana business up for sale. Who'da thunk it, an ad like that in Barron's? $60,000 gross sales per day. Curious?
Thomas Donlan a hard core capitalist (in the sense of not liking government meddling, deficit spending etc., I am RIGHJT THERE with him) writes two editorials today. One is the loathsome Chuck Schumer pushing a Smoot-Hawley like act against the Chinese. They can retaliate... Trust me on the this one: trade wars are BAD. His other editorial concerns OccupyCampRunamuck, in which he suggests that they go to Washington and occupy Capitol Hill instead!
I would only add that the consider occupying 33 Liberty St. and the Fed in DC while they're at it...
The "Market Week" section was pretty slow this week (remember that I only review the MANY items in Barron's which draw MY attention).
Corn is mentioned in the "Commodities Corner" article as likely to not go up much more because of a harvest that met expectations (down, but not that much vs. last year). Soybean harvest was just tightened by the USDA and so might have better (upwards) price action. If you like "paper food" (as I kind of do) take a look at JJG, the grains ETF.
The Peruvian Sol again strengthened again vs. the US$! When you net it all out, a stronger Peruvian Sol is GOOG for our lil ol bearing company there in Peru.
Not much (as has been the case for weeks now) going on in the Money Supply or Fed statistics either.
Barron's is worth the $5.00 this weekend!