Note from Barron’s from 2\/3\/2014. We encourage readers to purchase Barron’s for the complete set of news, some of which are highlighted very briefly below.<\/p>\n
Akami (AKAM) \u2013 is the WD-40 of the internet. Movement to cloud will help. Big opportunity is selling security services. Analysts expect 14% sales gain and eps of $2.15 this year. Price is currently $48.47 and selling at 22.5x earnings, but normally 25x. A similar multiple next year puts the price at $62. CEO bought $1.1m in December when priced at about $45. Q4 earnings release is this Wednesday.<\/p>\n
The Cheapest Tool in the Box \u2013 Stanley Black & Decker (SWK) \u2013 had disappointing earnings last quarter. Recent price $77.87. Now at 14.5x forward earnings less than peers SNA and ITW and at substantial discount based on p\/s and p\/b. Charles Bobrinskly of Ariel Focus fund thinks stock could eventually be worth $100\/share, \u201cInvestors have overreacted, by paying too much attention to quarterly results.\u201d Julisuz G. Sas of GSSR has a $93 sum of parts break up value.<\/p>\n<\/div>\n
Diet Firm\u2019s Shares Could Get Plumber \u2013 Weight Watchers (WTW) \u2013 meeting attendance down 16% in September and subscribers fell 5% for online offering. NI expected to drop 14% on a 7% drop in revenue on the next report in a few weeks. New CEO has laid out turnaround plan. Mark Boyar likes the shares, thinks stock could come close to doubling over next two years. New CEO plan calls up increased investment in core business, driving innovation and services to corporate customers for employees.\u00a0 Suspension of dividend will be used to improve balance sheet. Boyar see profit at $4\/share by 2017, intrinsic value in the low 50s in next two years.<\/p>\n
Ford or GM: Which One is the Better Buy? \u2013 F is at 11x and GM at 9x this year earnings forecast. GM might be better bet for 2014 but F for the longer run. GM can gain 30% over the next year versus 20% for F, both stocks yield 3.3%. F $14.96, GM $36.08. F has better products and scale. F is further along on consolidating platforms (scale). GM has a newer lineup for this year. GM expected to earn $4.21 this year, +25%, and $5.20 next year. Right now at 7x NY earnings.<\/p>\n
Canada\u2019s Hidden Gem \u2013 Imperial Oil (IMO) \u2013 produces oil mainly from unconventional fields in Western Canada. 70% owned by XOM. 10.7x \u201914 eps estimate. Has been hurt by cost overruns and delay of XL pipeline as well as train accidents. Oil sands are also not environmentally friendly. Low dividend and has focused cash on expansion.
\nRecent price $40.76.<\/p>\n
The Trader \u2013 Bed Bath & Beyond (BBBY) – $63.85 down over 20% from recent high. Q3 EPS rose to $1.12, +8.7%, falling short of expectations. Lowered guidance for Q4 and fiscal year \u201914 to $4.79 to $4.86.\u00a0 Alan Lancz recently bought shares for clients. $3\/share in cash and no LT debt. No dividend. Small internet presence.<\/p>\n<\/div>\n
Roundtable Part 3 \u2013 Mario Gabelli \u2013 JRN – $9 \u2013 owns 13 television stations, 35 radio stations and one newspaper. EBITDA will be about $75m and eps $0.55. MG values the newspaper at 4x EBITDA, TV stations at 8-9x and the radio at 7-8x. Could be worth $13 – $15. Has pension liability that should decline with rising interest rates.<\/p>\n
DBD – $33.63 \u2013 bloated cost structure and cutting costs. EPS $1.35. If turnaround works shares could double.<\/p>\n
CHMT \u2013 specialty chemicals – $26 \u2013 share count could fall to 70m from 96.5m in the next 3 years. Could sell for $45 in a couple of years. In takeoff stage of turnaround.<\/p>\n
NFG – $70 \u2013 owns gas utility in Buffalo that is worth $20\/share. Has pipeline business that it has not monetized and a growing exploration and production business. Could be worth $100\/share.<\/p>\n
WFT \u2013 needs to clean up its balance sheet.<\/p>\n
POST – $50 \u2013 CEO is recreating strategy he used at Ralson Purina via acquisitions and synergies. Could have $500m in three years. CEO is great value-adder.<\/p>\n
Brian Rogers \u2013 AMAT \u2013 likes laggards that can turnaround. $17.50 \u2013 2.3% yield. Consensual merger with Tokyo Electron. Will buy back 10% of shares within 12 months. In 2 years, $2-$2.50 of earnings power. Lots of upside with a\u00a0 12x on that.<\/p>\n
CNX – $36.63 \u2013 could get to $45 to $50.<\/p>\n
CVC – $16.88, could be a $22 stock. 3.6% dividend.<\/p>\n
ETR \u2013 could earn $5 this year. $61, 12x, yield 5.2%.\u00a0 Low growth, unexciting company with a safe dividend. It wouldn\u2019t take much to earn a total return of 15% in next year or two.<\/p>\n
NEM – $23.80 \u2013<\/p>\n
PRMSX<\/p>\n
Fred Hickey \u2013 recommends holding cash to buy things after dislocation. Like gold, CEF, sells at high discount to NAV (6%).<\/p>\n
GG \u2013 is growing. 2.6% yield, sells below BV of $25.54 at $23.19. Mines are in good locations.<\/p>\n
GDXJ \u2013 you can get massive moves up in gold stocks.<\/p>\n
CCJ \u2013 uranium play. Overhang in supply is done.<\/p>\n
Scott Black \u2013 \u201ckey is to buy businesses that generate free cash and will be able to sustain growth.\u201d ESRX – $72.86 \u2013 Revenue should be up 10% in 2013, could earn $4.32 versus $3.74 in 2012. Revenue growth could be zero this year but earnings could be $4.92 this year due to shift to generics and better SGA. Company thinks it can grow earnings by 10-20% per annum for next few years. Will benefit as more people come into the system.<\/p>\n
ACT \u2013 13x future earnings at 14.3x current. $183.32\/share. Earnings can be $9.35 versus $6. Can earn $12.83 (next year??). Has a set goal of 10% annual growth in eps. Has launched many generics recently.<\/p>\n
BCEI \u2013 small energy exploration and production company in Colorado.<\/p>\n
KLAC – $63.62 \u2013 a money machine. Great long term pick.<\/p>\n
SNDK \u2013 leader in flash memory.<\/p>\n","protected":false},"excerpt":{"rendered":"
Note from Barron’s from 2\/3\/2014. We encourage readers to purchase Barron’s for the complete set of news, some of which are highlighted very briefly below. Akami (AKAM) \u2013 is the WD-40 of the internet. Movement to cloud will help. Big … Continue reading