Post by Admin/YBB on Feb 20, 2021 11:07:32 GMT -6
Pg 10-11: No important meetings reported.
University endowments had a bad year [to 6/30/20] – they had to provide more support to cover operational shortfalls from pandemic and the markets plunged in the reporting period.
PayPal/PYPL [fwd P/E 67] market-cap is now higher than that for Mastercard/MA. PayPal introduced interest-free buy-now-pay-later program, started handling cryptos, expanded its Venmo business services, grew contactless payment business in stores.
Data this week: LEI, Dallas Fed Texas manufacturing survey on Monday; consumer confidence on Tuesday; new home sales on Wednesday; pending home sales, Q2 GDP [2nd est], durable goods orders on Thursday; personal income & consumption, UM sentiment on Friday.
www.barrons.com/magazine?mod=BOL_TOPNAV
Bullish: Stocks to benefit from Texas rebuilding [ETN, GE, GNRC, HES, NOG, PBF; pg 12]; engineering and construction firm Fluor [FLR; fwd P/E 15; restructuring under new CEO Constable since January (3rd CEO in 2 years): shift away from fixed-price contracts, reduce debt, sell noncore businesses, fix accounting issues under SEC investigation, lessen exposure to energy, more focus on growth areas in mining, petrochemicals, transportation, government services; would benefit from Stimulus3 and infrastructure bill; pg 14]; private-equity firm Blackstone [BX; big push into life sciences; it has been involved with the development of 99 drugs and related testing, diagnostics, logistics; from its extensive real estate operations, it has good feel for many startups that rent facilities; pg 16].
Bearish: Empire State Realty Trust [ESRT; owns 90-yr old Empire State Building; tourism revenues from sky-deck and observatory collapsed; post-pandemic recovery may be slow; competition growing from other buildings; other NYC REITs VNO, SLG also suffering; pg 17].
Pg 13: Ahead of the release of Warren Buffett’s [90] annual letter on Saturday, 2/27/21, Barron’s offers several suggestions: Start paying dividends at 2% to help badly lagging BRK-A/B stock [P/E 23, P/B 1.3]; provide plan for enormous cash – so far, there have been only missed opportunities; clarify succession plan, and if it is Greg Abel (58), make him CEO now but retain Chairmanship; better financial disclosures about business segments.
Pg 19: 100 Years of Barron’s focuses on past infrastructure projects during economic weakness.
Pg 26: Best fund families, 2020: #1-Manning & Napier, #2-Guggenheim, #3-Vanguard, #4-Fidelity, #5-Morgan Stanley,…, #12-Price,…, #14-American Funds,…, #19-Nuveen,…, #29-Pimco,…, #37-Hartford,…, #40-State Street, #41-Invesco,…, #45-Franklin Templeton,…, #51-DFA.
Short lists are also included for 5 categories of US stock, world equity, mixed assets, taxable bonds, tax-exempt bonds, and also overall rankings for 5- and 10-years.
Rankings are based on asset-weighted performance in the 5 categories mentioned above.
Pg 31: Simon Webber and James Gautrey of large-cap blend international SCIEX try to anticipate growth surprises. Fund portfolio is concentrated with core [60-70%] and explore/opportunistic holdings; ER 0.85%.
Pg 33: Some tech stock valuations are getting crazy. Goldman Sachs/GS doubled its target for Palantir/PLTR to $34 [P/S 44; S is sales; direct-listed at $10 in September] just because its peers trade that high. There are now dozens of stocks with P/S >> 35 [LMND, SNOW, AI, ZM, FVRR, SHOP, NET, etc].
Pg 34: Felix Zulauf, Zulauf Consulting, former Barron’s Roundtable member. We are in times now that we have previously only read in history books – pandemic, unconventional monetary policies, etc. It may be impossible to get out of this low-rate, low-growth environment [at least in a planned way]. Central banks have responded by pumping liquidity but that just got stuck in the financial system and didn’t reach the economy. Now, more fiscal expansion will follow – Stimulus3, infrastructure bill, etcl. The government sector of the economy will grow. All this monetary and fiscal expansion and weak dollar will lead to rise in commodity prices and finally in higher CPI, PCE, or whatever index. He sees 10-yr yield at 1.5% soon and near 2% by late-2021 or early-2022. Stocks may correct in 2021/Q1 and then rebound to new highs in 2021/Q2 [if the correction is shallow] or 2022/H1 [if the correction is deep]. But with easy monetary policies, bear market will be avoided. Asia doesn’t have these low-growth issues of the US and Europe. Global conflicts will rise as the US withdraws and China rises – these begin with trade but then may become military conflicts. The EU remains unstable. He is a thematic investor and likes ags [DBA], oil [USO, XLE], gold [GDX; in spite of selloff now], techs/FAANG [at reduced levels], Taiwan [EWT], S Korea [EWY]. He has concerns about China – while it is OK coming out of pandemic, it is tightening monetary policy. Bitcoin mania will end badly just as tulip mania of 1630s did. [Barron’s inserted ETFs corresponding to his general recommendations]
Pg 37: Pay attention to several BDCs reporting this month. BDCs provide higher-rate and floating-rate loans to small/mid-size companies; they must distribute 90% of their net income; typical yields are around 9%. They were cheap in March 2020 [what wasn’t?]. CCC-rated bonds are rallying now and BDCs have credit ratings around/under that. Lenders are willing to renegotiate loan terms to avoid messy defaults. In fact, the risk now is early prepayments and yields on newer BDCs account for that. Mentioned are OCSL, BBDC, BCSF, ARCC, ORCC, FSKR, TSLX and CEF RSF [14% in BDC stocks, 40% in BDC bonds].
Pg 38: Isaac Stone Fish, Strategy Risks. Hot Bitcoin has a worrying China connection. Almost 65% of Bitcoin mining [computation-intensive transactional verification process] happens in China using cheap but dirty coal energy, including the Xinjiang region with human rights abuses related to Uighur Muslims and other minorities. There are regulatory and PR risks from this. It is ironic that decentralized Bitcoin with origins related to independence from Western monetary system is so dependent on centralized China.
[Extras from online Friday that didn’t make the weekend paper version]
Top ESG REITs: KRC, HST, ARE, EQIX, KIM, WELL, AGNC, BXP, PLD, BRX.
University endowments had a bad year [to 6/30/20] – they had to provide more support to cover operational shortfalls from pandemic and the markets plunged in the reporting period.
PayPal/PYPL [fwd P/E 67] market-cap is now higher than that for Mastercard/MA. PayPal introduced interest-free buy-now-pay-later program, started handling cryptos, expanded its Venmo business services, grew contactless payment business in stores.
Data this week: LEI, Dallas Fed Texas manufacturing survey on Monday; consumer confidence on Tuesday; new home sales on Wednesday; pending home sales, Q2 GDP [2nd est], durable goods orders on Thursday; personal income & consumption, UM sentiment on Friday.
www.barrons.com/magazine?mod=BOL_TOPNAV
Bullish: Stocks to benefit from Texas rebuilding [ETN, GE, GNRC, HES, NOG, PBF; pg 12]; engineering and construction firm Fluor [FLR; fwd P/E 15; restructuring under new CEO Constable since January (3rd CEO in 2 years): shift away from fixed-price contracts, reduce debt, sell noncore businesses, fix accounting issues under SEC investigation, lessen exposure to energy, more focus on growth areas in mining, petrochemicals, transportation, government services; would benefit from Stimulus3 and infrastructure bill; pg 14]; private-equity firm Blackstone [BX; big push into life sciences; it has been involved with the development of 99 drugs and related testing, diagnostics, logistics; from its extensive real estate operations, it has good feel for many startups that rent facilities; pg 16].
Bearish: Empire State Realty Trust [ESRT; owns 90-yr old Empire State Building; tourism revenues from sky-deck and observatory collapsed; post-pandemic recovery may be slow; competition growing from other buildings; other NYC REITs VNO, SLG also suffering; pg 17].
Pg 13: Ahead of the release of Warren Buffett’s [90] annual letter on Saturday, 2/27/21, Barron’s offers several suggestions: Start paying dividends at 2% to help badly lagging BRK-A/B stock [P/E 23, P/B 1.3]; provide plan for enormous cash – so far, there have been only missed opportunities; clarify succession plan, and if it is Greg Abel (58), make him CEO now but retain Chairmanship; better financial disclosures about business segments.
Pg 19: 100 Years of Barron’s focuses on past infrastructure projects during economic weakness.
Pg 26: Best fund families, 2020: #1-Manning & Napier, #2-Guggenheim, #3-Vanguard, #4-Fidelity, #5-Morgan Stanley,…, #12-Price,…, #14-American Funds,…, #19-Nuveen,…, #29-Pimco,…, #37-Hartford,…, #40-State Street, #41-Invesco,…, #45-Franklin Templeton,…, #51-DFA.
Short lists are also included for 5 categories of US stock, world equity, mixed assets, taxable bonds, tax-exempt bonds, and also overall rankings for 5- and 10-years.
Rankings are based on asset-weighted performance in the 5 categories mentioned above.
Pg 31: Simon Webber and James Gautrey of large-cap blend international SCIEX try to anticipate growth surprises. Fund portfolio is concentrated with core [60-70%] and explore/opportunistic holdings; ER 0.85%.
Pg 33: Some tech stock valuations are getting crazy. Goldman Sachs/GS doubled its target for Palantir/PLTR to $34 [P/S 44; S is sales; direct-listed at $10 in September] just because its peers trade that high. There are now dozens of stocks with P/S >> 35 [LMND, SNOW, AI, ZM, FVRR, SHOP, NET, etc].
Pg 34: Felix Zulauf, Zulauf Consulting, former Barron’s Roundtable member. We are in times now that we have previously only read in history books – pandemic, unconventional monetary policies, etc. It may be impossible to get out of this low-rate, low-growth environment [at least in a planned way]. Central banks have responded by pumping liquidity but that just got stuck in the financial system and didn’t reach the economy. Now, more fiscal expansion will follow – Stimulus3, infrastructure bill, etcl. The government sector of the economy will grow. All this monetary and fiscal expansion and weak dollar will lead to rise in commodity prices and finally in higher CPI, PCE, or whatever index. He sees 10-yr yield at 1.5% soon and near 2% by late-2021 or early-2022. Stocks may correct in 2021/Q1 and then rebound to new highs in 2021/Q2 [if the correction is shallow] or 2022/H1 [if the correction is deep]. But with easy monetary policies, bear market will be avoided. Asia doesn’t have these low-growth issues of the US and Europe. Global conflicts will rise as the US withdraws and China rises – these begin with trade but then may become military conflicts. The EU remains unstable. He is a thematic investor and likes ags [DBA], oil [USO, XLE], gold [GDX; in spite of selloff now], techs/FAANG [at reduced levels], Taiwan [EWT], S Korea [EWY]. He has concerns about China – while it is OK coming out of pandemic, it is tightening monetary policy. Bitcoin mania will end badly just as tulip mania of 1630s did. [Barron’s inserted ETFs corresponding to his general recommendations]
Pg 37: Pay attention to several BDCs reporting this month. BDCs provide higher-rate and floating-rate loans to small/mid-size companies; they must distribute 90% of their net income; typical yields are around 9%. They were cheap in March 2020 [what wasn’t?]. CCC-rated bonds are rallying now and BDCs have credit ratings around/under that. Lenders are willing to renegotiate loan terms to avoid messy defaults. In fact, the risk now is early prepayments and yields on newer BDCs account for that. Mentioned are OCSL, BBDC, BCSF, ARCC, ORCC, FSKR, TSLX and CEF RSF [14% in BDC stocks, 40% in BDC bonds].
Pg 38: Isaac Stone Fish, Strategy Risks. Hot Bitcoin has a worrying China connection. Almost 65% of Bitcoin mining [computation-intensive transactional verification process] happens in China using cheap but dirty coal energy, including the Xinjiang region with human rights abuses related to Uighur Muslims and other minorities. There are regulatory and PR risks from this. It is ironic that decentralized Bitcoin with origins related to independence from Western monetary system is so dependent on centralized China.
[Extras from online Friday that didn’t make the weekend paper version]
Top ESG REITs: KRC, HST, ARE, EQIX, KIM, WELL, AGNC, BXP, PLD, BRX.