Mid-Year Picks and Pans From Barron's Roundtable

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).

Bill Gross

• 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).

Oscar Schafer

• 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.

Archie MacAllaster

• 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.

Scott Black

• 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.

Comments

[CrossProfit:]

Noticed out of 10 picks, 5 are banks. This may be a bit early as shorts haven't cashed in yet. However, on a longer horizon it should work out. In reality picking the bottom of a bottom is pure luck.

Lately, Barron's contributors have been early on bullish calls. It might pay to wait a couple of weeks!

2008 Jun 15 05:51 PM

[dieuwer:]

In 1982: Oil at $40, DOW at 1000.
In 2008: Oil at $140, DOW at 12,000.

In 26 years, oil increased 3.5 times, DOW increased 12 times! You tell me where the bubble is...

2008 Jun 15 09:03 PM

[bds231:]

Here's the difference dieuwer -- the dow is comprised of companies whose purpose is to create shareholder value by paying dividends and increasing stock prices. A barrel of oil is comprised of a barrel of oil, and it just sits there until it gets burned.

2008 Jun 15 11:49 PM

[dclark38:]

i like bill gross comment on fairpoint communications.[frp].i... have been snapping this one up...

2008 Jun 16 12:32 AM

[Gerry Sullivan:]

It didn't look like any of these roundtable participants had great
results for their Jan 4, 2008 picks. That includes many of them that made both long and short recommendations.

2008 Jun 16 08:00 AM

[Bear Stocks...:]

If you must, then buy LNN, MEE, AGU, ANR and CPX. After 3 months, compare with the picks by the roundtable participants and be prepared to be pleasantly surprised.

2008 Jun 16 11:33 AM

[bbowen7:]

Ah, the randomness of short term stock picks. What is useful is a three year record of the panelists, their view of where the economy is going, and what sectors will prosper if they are right. Of these 11, Bill Gross is excellent by that standard. Abby Cohen and Gabelli are poor. Don't know enough about the others.

2008 Jun 17 12:11 AM