Barron's Recap (12/8/12): Ten Stock Picks for 2013
This weekend in Barron's online: stock picks for 2013, speculation about who will be the next Treasury chief and the prospects for Men's Wearhouse, Crosstex Energy and big pharma.
"Our 10 Favorite Stocks for 2013" by Andrew Bary.
Barron's takes a look at where to invest in 2013. The list includes some names that should be no surprise, companies that are in the peak of financial health. Blue-chips Apple (NASDAQ: AAPL), J.P. Morgan Chase (NYSE: JPM) and Royal Dutch Shell (NYSE: RDS-A) are there.
But the list also includes some that are deeply out of favor now but turning things around, and therefore a bargain. Undervalued stocks include Barnes & Noble (NYSE: BKS) and Western Digital (NASDAQ: WDC). This handful of companies, Barron's feels, are poised to offer generous returns next year, 15 percent to 20 percent total returns (including dividends), no matter how the broader market fares.
Others that made the list include BlackRock (NYSE: BLK), General Dynamics (NYSE: GD) and Viacom (NYSE: VIAB). The article also reviews Barron's 2012 picks. The standouts were Seagate Technologies (NASDAQ: STX) and Comcast (NASDAQ: CMCSA), which are up more than 60 percent year to date.
The dog was Freeport-McMoRan Copper & Gold (NYSE: FCX), though most of its loss in value occurred this past week.
"Who Will Be the Next Treasury Chief?" by Jim McTague takes a look at a half-dozen top candidates who have emerged to replace Timothy Geithner now that he is planning to leave soon. Those candidates include White House chief of staff Jack Lew and BlackRock CEO Larry Fink.
In "Hey There, Handsome," Avi Salzman takes a look at Men's Wearhouse (NYSE: MW). Though the shares were beaten down following disappointing third-quarter earnings and lower fourth-quarter guidance, the stock may be set to rebound smartly in the coming year.
Jack Hough's "Looking Beyond the Patent Cliff" says that after navigating a massive patent cliff for a decade, big pharmaceutical firms now see rich dividend yields and opportunities for growth. The article makes the case for Merck (NYSE: MRK), Pfizer (NYSE: PFE) and Novartis (NYSE: NVS).
The beauty of incentive distribution rights is featured in "Let the Cash Flow" by David Englander, who says that Crosstex Energy (NASDAQ: XTXI) is a smart play due to rising cash flows at master limited partnership Crosstex Energy (NASDAQ: XTEX).
In Richard C. Morais's Penta article "A Season for Reading," are recommendations for three good books that will provoke deep thought and offer an escape from the holiday frenzy. They are Brothers, Nature Wars, and the Icelandic masterpiece, Independent People.
"First Eagle Global Flies Close to Home" by J.R. Brandstrader is a profile of Matt McLennan and others on the team that were hand-picked by famed global value investor Jean-Marie Eveillard to manage his legacy when he retired in 2009.
Money manager and value investor Wally Weitz is interviewed in Lawrence C. Strauss's "A Cautious Value Investor Finds Three Buys." Weitz is wary of the market, but bullish on Wells Fargo (NYSE: WFC), Texas Instruments (NASDAQ: TXN) and DirecTV (NASDAQ: DTV).
In "All in the Family" by Alexander Eule, the focus is on UBS (NYSE: UBS) financial advisor Sharon Sager, who specializes in family dynamics, and whose husband is her business partner. The article shows how one plus one can add up to four percent yields.
"Second-Grade Arithmetic" is an editorial commentary by Thomas G. Donlan suggesting that the budget numbers are not as simple as they may appear.
Columns in this weekend's Barron's discuss:
- The "weird but OK" jobs report
- Why Prudential (NYSE: PRU) and Caterpillar (NYSE: CAT) look promising
- Quality stocks remain appealing regardless of tax changes
- The prospects for a PC rebound
- The massive outflows from mutual funds
- Tax issues related to bond ETFs
- What the "real jobless rate" might be
- Some finds in Eastern Europe
This weekend's Barron's online exclusives include:
"A Telecom Stock with a Supersized Dividend" by Dimitra Defotis. The third-largest telecommunications company by market cap, behind AT&T (NYSE: T) and Verizon Communications (NYSE: VZ), is CenturyLink (NYSE: CTL).
But it as the largest dividend yield of the three, at more than seven percent. It has cut debt in the past year and recently announced that revenue could stabilize in 2014 after years of decline. It has expanded its base and its offerings via acquisitions of the likes of Qwest, Savvis and Embarq.
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