Barron's magazine returns to its 11 Roundtable participants, who weigh-in with their mid-year thoughts, and updated stock picks (see parts I and III)
- Stock market negatives include still-inflated earnings estimates, potentially higher interest rates, and an Obama candidacy.
- He likes Japan (NYSEARCA:SCJ) for its low valuation, including Mitsubishi UFJ (NYSE:MTU) and Mizuho Financial (NYSE:MFG). AMR (AMR) on a predicted drop in oil prices. Gold (NYSEARCA:GLD) ("If you have no exposure to gold, start buying it here."). And shorting U.S. Steel (NYSE:X), which will take a hit if the pace of building in China and elsewhere subsides.
- Besides the housing and auto markets, which need help, there will be less financial stress in the second half of the year.
- Three themes he likes: Environmental stocks, companies with pricing power, and the following takeover possibilities: 1) Telephone and Data Systems (NYSE:TDS), which has tremendous untapped value. 2) Tootsie Roll Industries (NYSE:TR), controlled by the aging Gordon couple, who should be looking to sell. 3) Tredegar (NYSE:TG), diaper maker which will benefit from growing child population and the use of diapers for incontinence. 4) Herley Industries (NASDAQ:HRLY) another takeover target. And 5) Diebold (NYSE:DBD), which already rejected a bid from United Technologies (NYSE:UTX).
- Consumer credit and commercial lending will drag the markets down this year and next. IPOs are dead.
- He likes copper, natural gas and coal. Namely: Ultra Petroleum (UPL) and Southwestern Energy (NYSE:SWN), which he calls "double play" stocks. Freeport-McMoRan Copper & Gold (NYSE:FCX) a lack of electricity is making it harder to mine copper. Vale (NYSE:RIO) is super cheap. Halliburton (NYSE:HAL).
- Hickey says things haven't been this bad since 1929. "The market will get killed when companies admit the second-half rebound isn't going to happen."
- He recommends buying gold and selling "horsemen" tech stocks (MSFT, ORCL, EMC, HPQ, AAPL, and semis). He likes Golden Star Resources (NYSEMKT:GSS) and streetTRACKS Gold Trust ETF (GLD).