Post by Admin/YBB on Jun 25, 2022 9:02:37 GMT -6
Pg 12-13.
REVIEW. The US HOUSING is rapidly deteriorating due to high mortgage rates and economic slowdown. Lennar/LEN summarized the mixed outlook for regional housing markets well in its report last week by categorizing its businesses into 3 areas: Doing well (FL, NJ, Phoenix, San Diego, etc), stalling (Atlanta, Nashville, Philly, Reno, etc), slumping (Raleigh, Austin, LA, Seattle, etc). (As they say, all housing is local)
PREVIEW. There is a long line of IPOs waiting but few are proceeding, only 47 smaller IPOs YTD. The markets have to improve and then we need to see some profitable startups coming forth and doing well post-IPO. Globally, there are 1,000+ unicorns waiting for proper market opportunities.
DATA THIS WEEK: Pending home sales, durable goods orders on MONDAY; home price index on TUESDAY; PCE (+4.9% est), personal income & spending on THURSDAY; construction spending, ISM manufacturing PMI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Cheap stocks (very low P/E and attractive yields) with good rebound potential (Homebuilders DHI, LEN, TOL, TPH; steel-makers CLF (no dividends), NUE, STZHF, STLD, X; pg 15);
Starbucks (SBUX; fwd P/E 22; China a wild card; founder Howard SCHULTZ returned again as CEO; pg 16);
Cadre Holdings (CDRE; yield 1.6%; fwd EV/EBITDA 10; 11/2021 IPO that was a 2012 spinoff from UK BAESY and has grown by acquisitions; stock was a rare performer in 2022 but sold off after 06/2022 secondary; manufactures equipment and accessories (but not firearms) for police departments and public safety agencies; funding for these government departments/agencies is rising again; Chairman and CEO KANDERS owns 49%; pg 17).
BEARISH. See other stories.
Pg 24: FOLLOW UP. GM (fwd P/E 5) has kept falling after Barron’s recent bullish recommendation (5/9/22), but Barron’s is reiterating its bullish call on the prospects of EVs. Autos are now priced for recession and GM is cheaper than at the depth of the pandemic.
Pg 25: FUNDS. Bell BELLAMY of multi-asset TSHIX (M* 50-70% allocation, ER 0.72%, 5*, Neutral-Q; TASHX ER 0.98%, no-load/NTF at Fidelity and Schwab) says that most investors don’t realize that HY bonds have high correlations with equities and have less interest rate sensitivity. Fund provides more income with less volatility than SP500; unlike M*, it uses SP500 as its benchmark. (Fund category was affected by the new M* methodology that was based on beta and other risk based MPRS)
Pg 28, TECH TRADER. From Barron’s INVESTING in TECH (virtual) Summit. The mood was sour due to the brutal selloff in the techs. But several important themes/issues were covered by participants from companies mentioned within the parentheses: AI (GOOGL, MSFT, IBM), supply-chain disruptions (CSCO, Resilinc), US chip production (INTC), tech-bottom? (MS, C3.ai/AI, Cowboy Ventures).
Pg 29: INCOME INVESTING. High current dividend funds (HDV, VYM, BUFBX, etc) are outperforming dividend-growth funds (DGRO, VIG, VDIGX, etc). Some high current-dividend funds have exposures to energy and cyclicals. (Not mentioned are dividend-blend like SCHD, etc)
(Note: % TR = %Dividend_yield + %Dividend_growth + %Change_in_P/D)
Pg 31: ECONOMY. What would 18c/gallon relief for federal GASOLINE tax accomplish for $5-7/gallon gasoline? It is a gimmick that may be DOA in DC The hoped-for DEMAND DESTRUCTION from high gasoline prices hasn’t occurred; that may happen eventually from higher interest RATES. The CRACK-SPREADS^-are at record highs (meaning that refiners’ margins/profits are very high). The recent sudden and sharp SELLOFF in energy companies has made them more attractive as their PROFITABILITY remains high. Barron’s has several constructive and practical suggestions: Use the SPR to stabilize supply; create a special federal fund to FINANCE oil/gas explorations; provide REGULATORY RELIEF from environmental standards; speed up the PERMIT process.
(^For crack-spreads, see ybbpersonalfinance.proboards.com/thread/102/energy-complex?page=1&scrollTo=658 )
Pg 32: Brian SMOLUCH and David SWANK, Small-Cap Growth HRSRX (ER 1.26%; M* 4*, Gold-Q; no-load/NTF at Fido and Schwab)/HRSMX (ER 1.08%). They search for overlooked growth SCs with good fundamentals and strong managements; SCs have sold off hard this year. They were college buddies at U Virginia who initially followed different career paths but finally became cofounders of Hood River Capital and fund comanagers.
Pg 62: OTHER VOICES. Laurie HAYS, own communications advisory firm. Now that SUPREMES have repealed ROE vs WADE, 33 million women in 26 states with restrictive reproductive policies will be affected. Many public companies have responded by offering extended health coverage for out-of-state travel and lodging. Some states (MO, TX, etc) are trying to put additional restrictions on such out-of-state travel and health coverage by threatening penalties for their residents and companies that operate within their states, but that may be legally tested.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Accessible from Morningstar (M*), Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. The US HOUSING is rapidly deteriorating due to high mortgage rates and economic slowdown. Lennar/LEN summarized the mixed outlook for regional housing markets well in its report last week by categorizing its businesses into 3 areas: Doing well (FL, NJ, Phoenix, San Diego, etc), stalling (Atlanta, Nashville, Philly, Reno, etc), slumping (Raleigh, Austin, LA, Seattle, etc). (As they say, all housing is local)
PREVIEW. There is a long line of IPOs waiting but few are proceeding, only 47 smaller IPOs YTD. The markets have to improve and then we need to see some profitable startups coming forth and doing well post-IPO. Globally, there are 1,000+ unicorns waiting for proper market opportunities.
DATA THIS WEEK: Pending home sales, durable goods orders on MONDAY; home price index on TUESDAY; PCE (+4.9% est), personal income & spending on THURSDAY; construction spending, ISM manufacturing PMI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Cheap stocks (very low P/E and attractive yields) with good rebound potential (Homebuilders DHI, LEN, TOL, TPH; steel-makers CLF (no dividends), NUE, STZHF, STLD, X; pg 15);
Starbucks (SBUX; fwd P/E 22; China a wild card; founder Howard SCHULTZ returned again as CEO; pg 16);
Cadre Holdings (CDRE; yield 1.6%; fwd EV/EBITDA 10; 11/2021 IPO that was a 2012 spinoff from UK BAESY and has grown by acquisitions; stock was a rare performer in 2022 but sold off after 06/2022 secondary; manufactures equipment and accessories (but not firearms) for police departments and public safety agencies; funding for these government departments/agencies is rising again; Chairman and CEO KANDERS owns 49%; pg 17).
BEARISH. See other stories.
Pg 24: FOLLOW UP. GM (fwd P/E 5) has kept falling after Barron’s recent bullish recommendation (5/9/22), but Barron’s is reiterating its bullish call on the prospects of EVs. Autos are now priced for recession and GM is cheaper than at the depth of the pandemic.
Pg 25: FUNDS. Bell BELLAMY of multi-asset TSHIX (M* 50-70% allocation, ER 0.72%, 5*, Neutral-Q; TASHX ER 0.98%, no-load/NTF at Fidelity and Schwab) says that most investors don’t realize that HY bonds have high correlations with equities and have less interest rate sensitivity. Fund provides more income with less volatility than SP500; unlike M*, it uses SP500 as its benchmark. (Fund category was affected by the new M* methodology that was based on beta and other risk based MPRS)
Pg 28, TECH TRADER. From Barron’s INVESTING in TECH (virtual) Summit. The mood was sour due to the brutal selloff in the techs. But several important themes/issues were covered by participants from companies mentioned within the parentheses: AI (GOOGL, MSFT, IBM), supply-chain disruptions (CSCO, Resilinc), US chip production (INTC), tech-bottom? (MS, C3.ai/AI, Cowboy Ventures).
Pg 29: INCOME INVESTING. High current dividend funds (HDV, VYM, BUFBX, etc) are outperforming dividend-growth funds (DGRO, VIG, VDIGX, etc). Some high current-dividend funds have exposures to energy and cyclicals. (Not mentioned are dividend-blend like SCHD, etc)
(Note: % TR = %Dividend_yield + %Dividend_growth + %Change_in_P/D)
Pg 31: ECONOMY. What would 18c/gallon relief for federal GASOLINE tax accomplish for $5-7/gallon gasoline? It is a gimmick that may be DOA in DC The hoped-for DEMAND DESTRUCTION from high gasoline prices hasn’t occurred; that may happen eventually from higher interest RATES. The CRACK-SPREADS^-are at record highs (meaning that refiners’ margins/profits are very high). The recent sudden and sharp SELLOFF in energy companies has made them more attractive as their PROFITABILITY remains high. Barron’s has several constructive and practical suggestions: Use the SPR to stabilize supply; create a special federal fund to FINANCE oil/gas explorations; provide REGULATORY RELIEF from environmental standards; speed up the PERMIT process.
(^For crack-spreads, see ybbpersonalfinance.proboards.com/thread/102/energy-complex?page=1&scrollTo=658 )
Pg 32: Brian SMOLUCH and David SWANK, Small-Cap Growth HRSRX (ER 1.26%; M* 4*, Gold-Q; no-load/NTF at Fido and Schwab)/HRSMX (ER 1.08%). They search for overlooked growth SCs with good fundamentals and strong managements; SCs have sold off hard this year. They were college buddies at U Virginia who initially followed different career paths but finally became cofounders of Hood River Capital and fund comanagers.
Pg 62: OTHER VOICES. Laurie HAYS, own communications advisory firm. Now that SUPREMES have repealed ROE vs WADE, 33 million women in 26 states with restrictive reproductive policies will be affected. Many public companies have responded by offering extended health coverage for out-of-state travel and lodging. Some states (MO, TX, etc) are trying to put additional restrictions on such out-of-state travel and health coverage by threatening penalties for their residents and companies that operate within their states, but that may be legally tested.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Accessible from Morningstar (M*), Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).