Barron's Recap (8/4/12): How to Play Energy Now
This weekend, Barron's online discussed the prospects for the oil and gas sector, the case for Activision, a look at Baltimore, profiles, interviews, book reviews and more.
"How to Play Energy Now" by Andrew Bary.
The oil sector bull case has long been that demand from emerging markets would outstrip supply. However, softness in the global economy may now have put this case on hold. As the supply of oil has grown faster than demand, energy stocks in the S&P 500 index were up only around 1 percent year-to-date, compared with an approximate 10 percent gain for the index overall. And second-quarter profits are down about 15 percent. This underperformance may have created opportunities for investors. Chevron (NYSE: CVX), Exxon Mobil (NYSE: XOM), Royal Dutch Shell (NYSE: RDS-A) and Total (NYSE: TOT) have appealing P/Es and carry dividend yields of more than 2.7 percent. Exploration and production companies like Apache (NYSE: APA), Anadarko Petroleum (NYSE: APC), and Hess (NYSE: HES) appear to be undervalued. The Barron's article also discusses oil service stocks, oil refiners, sector ETFs and much more. The world will likely be heavily dependent on oil and gas for decades, which could provide plenty of profits for a range of companies in the growing energy industry.
"Why Activision May Come Roaring Back" by Sandra Ward suggests that the stock of computer and online game maker Activision Blizzard (NASDAQ: ATVI) should soon benefit from a new game and a partnership in the booming China market.
In "The Naked Truth?" Gary Weiss says that a failed naked-shorting lawsuit lodged against all of the major Wall Street prime brokers, including units of Goldman Sachs (NYSE: GS) and Merrill Lynch, by Overstock.com (NASDAQ: OSTK) has raised intriguing issues.
Hedge-fund chief Pierre Lagrange wants the eurozone to guarantee troubled member nations' bonds, according to"Blueprint for the Euro Zone" by Leslie P. Norton. But those nations must hew to budget- and debt-reduction targets.
Richard C. Morais' "An Easy Getaway with Great Eats" features Baltimore, home of elegant neighborhoods, gourmet restaurants, fine accommodations, and the setting for the gritty television program "The Wire."
"Cool Head, Big Heart" by Alexander Eule offers advice from Mary Deatherage of Morgan Stanley Smith Barney, who is investing in solutions to the world's water shortage.
Christopher C. Williams's "Happily Stuck in the Middle" is a profile of Steven Pollack of the John Hancock Disciplined Value Mid-Cap Fund, a bottom-up investor who has his eye on CBS (NYSE: CBS) and Seagate Technology (NYSE: STX).
In "Three Stocks to Buy, Two to Avoid," Leslie P. Norton interviews value investor Bruce Geller, who likes Chico's FAS (NYSE: CHS) and two others, but is no fan of Fifth & Pacific (NYSE: FNP) or Ctrip.com (NASDAQ: CTRP).
Books by Paul Krugman on our current "depression," Charles Murray on class frictions and Jack Schwager on lessons learned from hedge funds are featured in "This Month's Book Reviews."
"American Hero" is an editorial commentary about legendary economist Milton Friedman by Thomas G. Donlan.
Columns in this weekend's Barron's discuss:
- What the employment report really means
- What happened at Knight Capital (NYSE: KCG)
- Dividends from cable companies such as Comcast (NASDAQ: CMCSA)
- The post-merger plan of online broker TradeKing
- Changes in preferred stock ETFs
- Safety in small-caps in small developing markets
- Macquarie Infrastructure's (NYSE: MIC) dividend boost
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Tags: Activision Blizzard, anadarko petroleum, apache, Baltimore, Barron's, CBS, Chevron, Chico's FAS, Comcast, ctrip.com, Exxon Mobil, Fifth & Pacific, Goldman Sachs, hess, knight capital, Macquarie Infrastructure, Merrill Lynch, Morgan Stanley Smith Barney, overstock.com, Paul Krugman, royal dutch shell, Seagate Technology, Total, TradeKing