6 Stock Picks for a Weak Market - Barron's Interview 7 comments
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Barron's interviews Legg Mason (LM) value investors Harry Cohen and Scott Glasser, whose Legg Mason Partners Appreciation outdid the S&P 500 by nine points over the past year, despite losing 0.69%.
They say the time to get bearish was a year ago -- now it's time to be cautious. Financials will not bottom until investors "start thinking in terms of absolute losses and really get scared." Energy, industrials, agriculture and materials - not financials - will lead the market higher, although it doesn't seem to have bottomed yet.
Stocks they like:
- Travelers (TRV) - trades at just 1.1x book value, despite "the best management in the property-and-casualty insurance business." It has a pristine balance sheet.
- Newfield Exploration (NFX) - it's up 30% for the year, but still underappreciated by the Street which sees it as the risky offshore driller it once was and not the predictable domestic E&P it has become. More generally, E&P firms will heat up before the presidential change, after which it will be much harder for energy companies to do deals. ExxonMobil (XOM) is a likely buyer.
- Kimberly-Clark (KMB) - innovative products; strong international sales; top-notch management.
- DuPont (DD) - has dumped slower-growing units and is focused on agriculture; aggressive share buybacks and dividend increase.
- PPG Industries (PPG) - once a strongly cyclical company, its coatings business is seeing higher margins and more consistent earnings.
- Kraft (KFT) - dominant franchise; lots of room for margin improvement, asset sales, buybacks and dividend increases.
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This article has 7 comments:
I SAY CASH WHEN A CRASH IS NYE. Ben plans to talk one way and stand still, Hank is after regulation after the doors are off the barn, Congress can not spell Deep, must less recession. Cash my dear Eli, only Cash. Best. Hu