· FX discussed in the cover story – cautious on the US$, saying in the future the dollar-centric model of the world will deteriorate w/other currencies (inc. the yuan and real) gaining in credibility and value. Says investors can benefit by buying some large multinationals (like KO, IBM, and XOM) or FX brokers (like FXCM, GCAP). Some ETFs inc. CEW (long) and UUP (short).
· HPQ – pos. comments; the stock could have upside into the $60s if new mgmt articulates a credible growth strategy to investors; HPQ’s multiple is one of the lowest in the industry; HPQ should embark on a low-cost open-source software strategy rather than compete w/ORCL and IBM by selling a me-too “stack”; Barron’s thinks HPQ should buy RHT. Other potential software targets for HPQ include SYMC, TDC, INFA, BMC, CVLT, and TIBX.
· Santoli – this is prob. just a long-awaited stock correction vs. the start of a broader macro downdraft. Correlations could start to break down again. Barron’s http://bit.ly/gF7zbA
· VC – pos. comments; the stock could be worth in the low $80s. Barron’s http://bit.ly/gF7zbA
· BAC – positive comments; the stock could rise 40% from present levels; earnings could be north of $2.
· Buying companies that were hit on news of Japan’s quake – pos. on TM, PRU, MFC, AFL, XL
· Hyundai – positive comments. The co is gaining a lot of market share and the stock could have another 40% upside from here.
· Interview w/Bridgewater’s Ray Dalio – US growth could slow meaningfully at year-end due to an end to fiscal and monetary stimulus unless private-credit growth picks up. The European debt crisis will intensify in the coming year as events get out ahead of regulators and tensions between Germany and the peripheral economies intensify. We could see a massive FX event in the next 18 months where creditor nations revalue their currencies higher and adopt independent monetary policies (China, Brazil) while debtor countries that can print money will devalue their currencies. Debtor countries that can’t print money will restructure their debts. Says he has exited the US bond market on the long side and has initiated some select short positions (not just in the US but in DM markets overall). Dalio says that currency devaluations are good for stocks, commodities, and gold.
· YHOO – nothing new in Barron’s – says that YHOO is considering monetizing its stake in Yahoo Japan; the article references comments made by mgmt over the last couple months and doesn’t contain any new information.
· SWY – somewhat cautious; notes valuation not really all that cheap.
· Meat processors discussed; no real investment opinion was offered; notes that meat markets are increasingly tight but processors also are facing higher feed costs.
· European M&A targets – C&C Group, Aggreko, DiaSorin, Eutelsat Communications are all takeout candidates.
· STX, WDC – positive comments on both following the WDC/Hitachi deal; a huge transformational transaction for the industry; gives WDC a lot of pricing power and scale. WDC could top $40. STX also will see better pricing power and could pick up market share from the combined WDC/Hitachi.
· Aggreko – Positive comments in Barron’s, saying the lessor of large power generators could be a takeover target, with ABB sited as the kind of firm that might be interested.
· Energy stocks – Barron’s was positive on energy stocks due to rising crude / gas prices, particularly XOM. With XOM, Barron’s highlighted buying Oct 85 calls and selling Oct 95 calls. If XOM advances to 95, investors will make 250% on their investment, with $87.86 the breakeven.
· Uranium – Barron’s says the recent slide in uranium of around 6% is the result of profit taking, not the reversal of a longer-term uptrend. Helping uranium is the fact that China barely has enough supply to meet half its current needs. Uranium also has mining restrictions in a few countries due to its use for nuclear weapons, which helps keep supply in check.
· Solars – Barron’s says that while these companies are outperforming the Nasdaq this year, they still trade at a fairly large discount to the rest of the market. FSLR (P/E of 14.9), LDK (5.3x), SPWRA (7.8x), and TSL (5.7x) were all highlighted as being undervalued. Barron’s does point out that some solars have company-specific issues, particularly ESLR, CSIQ, and STP, which range from not being profitable to not being able to each their cost of capital. Subsidy cuts in Europe could create a bit of a shakeout. Barron’s feels if that occurs, the best names would be TSL and to some extent FSLR.