Barron's magazine returns to its 11 Roundtable participants, who weigh-in with their mid-year thoughts, and updated stock picks (see parts II and III).
- Tepid growth should keep the Fed from hiking rates despite relatively high inflation. Foreign reserves, bolstered by another $500B in oil money, will continue propping up equity prices -- because they're not buying bonds.
- He likes: Fairpoint Communications (FRP), which acquired substantial properties from Verizon (VZ). JPMorgan's (JPM) 7.9% preferred stock ("The Fed loves Jamie Dimon, why shouldn't you?"). And Countrywide (CFC) at a 10% to future parent Bank of America (BAC).
- Debt deleveraging, falling housing prices and high gas costs will keep consumers at bay -- a benefit to discounters like Wal-Mart (WMT).
- He likes: Tyco International (TYC), which is undervalued, underlevered, and has great international potential. CommScope (CTV) has a superb, aggressive management team.
- Three bank stocks: conservative, growth, and speculative. Conservative: JPMorgan (JPM) should climb by 50% over the next 12-18 months. Growth: Wells Fargo (WFC) shares are down too far considering it's well run and has a diverse business. Speculative: Bank of America (BAC) buying Countrywide (CFC) will be a positive 18-24 months out; it will turn a big profit on its $15B stake in China Construction Bank.
- Despite real GDP growth, for Main Street this is a recession.
- He likes Bolt Technology (BOLT), a relative unknown in oil drilling, it fetches a cheap 10x earnings vs. Schlumberger's (SLB) 20x. And Belden (BDC), a cable manufacturer which earns 59% of its revenue outside the U.S.