Sunday, March 24, 2013

Review Of Barron's -- Dated 25 March 2013

Perhaps Barron's heard me (and others in my city) about the poor distribution I had noted in recent weeks past.  It still took until today for me to get my copy (it was not at the airport last night either), but it arrived, and, there is a lot of ground to cover this weekend, so let's get on it!

Note:  Cyprus is not mentioned ANYWHERE on the cover...

The Cover Story (World's Best CEOs) is in a special section.  I was expecting this to be boring, but reading the mini-bios of most of these CEOs turned out to be interesting.  While, of course, there would controversy and disagreement about WHICH CEOs should make this list (30 of them), the list seemed reasonable.

I pick a few names that for me are the most compelling:

Bernard Arnault (LVMH), the French billionaire who reacted to French President Hollande's idea of greatly increasing taxes on the wealthy by threatening to move to Belgium.  LVMH is one of the few kings of luxury brands, and Arnault has been adept at making sure LVMH went along for the ride.  Annualized total return while CEO: 11.3%

Warren Buffett (Berkshire-Hathaway), while much-reviled in some quarters, has delivered out-sized returns to shareholders for decades, including a 50% increase in the value of the Burlington Northern railroad (arguably the best managed railroad) he bought a few years ago.

Morris Chang (Taiwan Semiconductor) built the first semiconductor foundry (that is, a manufacturer of chips for companies too small to make them on their own, these smaller players contract out the manufacturing to a foundry).  Annualized total return while CEO: 17.7%

Larry Ellison (Oracle), a shaker in Silicon Valley for decades is playing catch-up in cloud computing.  Even with Oracle's stock down last week on a profit miss, it is probably a big mistake to bet against mighty Oracle  (the most profitable company in the software industry).  Oracle has awesome data analysis software...  Annualized total return while CEO: 25.7%

Hugh Grant (Monsanto), even though Monsanto is also hated in many quarters, Grant has delivered the seeds that farmers want.  Annualized total return while CEO: 28.4%

Nick Hayek (Swatch) has built another Swiss giant in luxury brands, not just cheap Swiss watches.  Annualized total return while CEO: 22.6%

Carol Meyrowitz (TJX) built a multi-branded retail empire of women's clothes, she refreshes her stores' items and his thinking ahead.  Annualized total return while CEO: 21.7%

Alan Mulally (Ford) has done well for Ford, refusing the bailout and leading Ford back from the brink (although there are still plenty of challenges ahead).  Annualized total return while CEO: 7.6%

Larry Page (Google) is focusing Google's efforts a bit more after big acquisitions.  Don't bet against Google!  Annualized total return while CEO: 23.4%

Howard Schultz (Starbucks) has added Teavana and Square (a mobile-payments platform)...  Annualized total return while CEO: 24.4%

Tadashi Yanai (Fast Retailing (of Japan), "Uniqlo" brand stores), his company makes "fastidiously minimalist basics in multiple hues", meaning basic well-made clothing.  Annualized total return while CEO: 19.0%

There are 19 others in the Special Section I did not mention...

***

Randal W. Forsyth writes Alan Abelson's column this week, and he DOES discuss Cyprus and how Cyprus resembles past small dominoes that fell over to unleash recent financial crises (Thailand, Iceland and Greece).  He pretty well chronicles the past week of Cyprus and Europe, nothing that Zero Hedge readers don't already know, but he does a good job of putting Cyprus into context as well.

Maybe it is only in Abelson's column where the bears are allowed to growl at Barron's...

***

Kopin Tan ("Streetwise") writes of earnings misses...  He then goes on to write about water companies, especially those involved in "fracking" and shale hydrocarbon exploration.  One of those companies is Xylem (ticker: XYL) that was spun-off from ITT in 2011, XYL is a company involved in various facets of water.  XYL is a company I am looking at, one of the few I would consider buying now...

***

At "Review and Preview" William Waitzman has written both short pieces, one on a complaint that Budweiser has been watering their beer (probably NOT true) and a nice piece on whether or not it is smart for the EU to be messing with Russia over Cyprus...

"He Said:"

"Those who adhere to the ideology of rejecting Israel's right to exist might as well reject the earth beneath them and the sky above, because Israel is not going anywhere."

President Obama

***

At "Follow-Up", we find that there is a rumor that Pepsi (PEP) might buy Mondelez (MDLZ).  The potential merger would make sense writes Andrew Bary.

***

Andrew Bary also writes about Sarepta Therapeutics (SRPT), and how if they can get the FDA to move faster on its new drug (eteplirsen) for muscular dystrophy (fatal), that might be good for sufferers of that awful disease and shareholders as well...

***

Jack Hough writes that five companies are increasing R & D spending, and he approves!

Gilead Sciences (GILD): HIV, cancer and hepatitis C treatments
Google (GOOG): more money coming in, and in, and in....
Forest Labs (FRX): Lexmpro's patent expired, but six more drugs poised to launch
Intel (INTC): inked a deal to make chips for Altera, becoming a high-end chip foundry
EMC (EMC): expanding its data analytics unit and developed a public cloud service

***

Christopher C. Williams writes a bullish piece on Seacor Holdings (CKH) a provider of offshore work-boats for the oil & gas drilling industry.  He writes that CEO Charles Fabrikant has sold off some units and done well with his fellow shareholders.

***

"Technology Week" author Tiernan Ray writes that although Meg Whitman seems to have done well at Hewlett-Packard (HPQ), the shares are up and morale at least in part restored (despite a LARGE number of planned layoffs: 29,000 people), well, there is still a lot more to do.  But, so far so good is this widely watched story of HP...

***

Gene Epstein ("Economic Beat") writes that, at least for now, the economy has not yet suffered under the "Sequester".

(In fact, I have asked a number of people (not scientifically of course) for their observations on whether teh Sequester has meant anything, so far only ONE person said she KNEW someone who MIGHT suffer...)

***

Lawrence C. Strauss interviews David Winters (Wintergreen Fund, WGRNX).  Winters searches the world for undervalued jewels and offers the follwoing picks:

Swatch Group (UHR.Switzerland), they own Harry Winston (big diamonds...)
Richemont (CFR.Switzerland), they own various luxury brands
Canadian Natural Resources (CNQ), Winters believes this is an undervalued player in O & G
Wynn Macau (1128.Hong Kong), Macau is bigger and more exciting than Las Vegas now...

***

Jim McTague ("D. C. Current") informs us that it looks like a Sales Tax for internet purchases is coming, apparently there is bipartisan support for this.

***

Editor Thomas Donlan writes that we should give priority to highly-skilled and similar immigrants.  This is controversial (many tekkies here complain how hard it is now to get jobs...), but I am with Donlan here.  Highly skilled immigrants have helped our country grow and prosper...

***

The Market Week section's COVER features "Old Mr. Barron" pondering Bitcoins...  It seems that some bookmakers are saying that a Bitcoin may reach $500 by year end.

Assif Shameen ("Asian Trader") writes that Chinese battery and electric car maker BYD (1211.Hong Kong) may be in a bubble, even though Warren Buffett's (guy is everywhere, no?) Berkshire-Hathway owns 9.9% of it...

Ben Levisohn ("Emerging Markets") writes that it is harder to find good picks in developing markets (?), one easy way, he suggests, is low cost ETFs in the emerging markets sector.

"European Trader" author Digby Larner writes of Cyprus...  Monday is the big day, we'll be watching!

Michael Aneiro ("Current Yield") writes that events seem like they will keep the 10-Year Treasury around 2.0% or so for a while.  Low rates because so many are nervous about Europe and stocks, yet at some point the Federal Reserve will likely have to stop purchasing the $85 billion in Treasuries each month...  Sometime...

Simon Constable ("Commodities Corner") writes that oil and LNG shippers will do well, at least in part due to shut down refineries as well as the NatGas boom here in the USA.

Insiders sold some $66 million in LinkedIn (LNKD) and some $48 million in Fleetcor Technologies (FLT, who?) recently.

Gold finally moved up (for the week, $1606 / oz) even as the other precious metals moved down...

Now that the Federal Reserve has finally had to some clean with its holdings, I will resume watching (with occasional reporting) on increases in it Balance Sheet, now at 3.226 trillion dollars (recall only weeks ago it finally broke the $3 trillion mark), up $56.4 billion last week.

And finally, the Mighty Peruvian Sol lost a bit vs. the dollar, of course after I am back from Peru where I paid a scandalous $6.00 for my haircut...  Alert reader "Nobody" has been keeping me informed of central bank actions of the Sol, and recently mentioned to me that I might ought to "STFU" about expensive haircuts (he lately paid $30.00, which is about what I have to pay here)...

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