Barron's Recap (1/26/12): Made in America
This weekend in Barron's online: a manufacturing boom in the United States is in its early days, part two of the Barron's 2013 Roundtable picks and pans, and the prospects for Intuitive Surgical, Apple and Ryman Hospitality Properties.
"The Next Boom" by Kopin Tan.
After decades of outsourcing, the United States is quietly experiencing a manufacturing revival. Inexpensive natural gas and increasingly competitive labor costs are luring factories -- and jobs -- back to American soil.
Apple (NASDAQ: AAPL), Caterpillar (NYSE: CAT), Ford Motor (NYSE: F) and General Electric (NYSE: GE) are just a few of the companies making more of their goods at home again. And foreign companies are drawn here by the cheap energy, weak dollar and stagnant wages too. Samsung Electronics plans a semiconductor plant in Texas, Airbus SAS wants a factory in Alabama and Toyota (NYSE: TM) wants to export to Asia minivans made in Indiana.
Barron's has identified eight stocks positioned to prosper in this manufacturing upswing, including Southwestern Energy (NYSE: SWN), Nucor (NYSE: NUE), Calpine (NYSE: CPN), CF Industries (NYSE: CF) and Union Pacific (UNP). The effects of this boom may also boost regional lenders, home builders and local small businesses.
Abundant gas and a weak dollar are long-term trends, says the article, and wages should behave until unemployment in the U.S. falls well below six percent. Offshoring went on for decades, but the reshoring trend is only getting started.
The Barron's Roundtable offers additional investment bargains in energy, retailing, banking and more in "It's Gonna Be Delicious" by Lauren R. Rublin. This week's experts include Abby Joseph Cohen, Brian Rogers, Oscar Schafer and Scott Black.
"Robots in Search of Added Employment" by Bill Alpert points out that Intuitive Surgical's (NASDAQ: ISRG) robots have revolutionized surgery for prostate cancer, as well as given the stock a pricey multiple. However, growth could get harder to find.
In "Rx for Apple: The 4% Solution," Andrew Bary suggests that now that Apple is no longer a high-growth company, it may be time for it to stop hoarding cash. A big share buyback might help the tech giant's faltering stock, but the strongest medicine would be a fatter dividend yield.
Jonathan R. Laing's "The Show's Just Gettin' Started at Ryman" points out that Ryman Hospitality Properties (NYSE: RHP), owner of the Grand Ole Opry and other country-music assets, has become a REIT, with more than 90 percent of its revenue coming from four giant hotel resorts.
Value manager Robert Sanborn of the Elkhorn Fund is profiled in Sarah Max's article "Ready for the Reckoning." Sanborn says he is prepared for the worst, and shares why he is short Facebook (NASDAQ: FB) and long PepsiCo (NYSE: PEP).
"Nailing the Answers in Our Contest" by Andrew Bary features Michael Danaher, the handyman from the Chicago area who topped nearly 2,400 entrants to win the Barron's 2012 forecasting challenge.
Jonathan Buck's "The Watchwords in Davos: 'Structural Reform'" says World Economic Forum attendees see the need for economic changes along with more stimulus programs. A possible United Kingdom pullout from the European Union is among the latest worries.
In David Englander's "Dole's Sweet Outlook," the stage could be set for a special dividend or share buybacks following a recent deal between Dole Food (NYSE: DOLE) and Japan's Itochu. The article says the future could be bright for Dole shareholders.
The CEO spotlight is turned on Doug Yearley in "The Master Builder" by Leslie P. Norton. The former corporate litigator and home-improvement maven helped build Toll Brothers (NYSE: TOL) into the nation's largest developer of luxury homes.
In "The Little Brokerage That Could" by Vito J. Racanelli, McAdams Wright Ragen again turns in a stellar showing in the Barron's-Zacks semiannual stock-picking contest. The Seattle-based firm has only five analysts.
"Details Still to Come" is an editorial commentary by Thomas G. Donlan in which he points out that the pace of innovation is uneven, but it is accelerating.
Columns in this weekend's Barron's discuss:
- The market as an investment guide
- Whether investor optimism has lifted the Dow Jones industrials too high
- Expectations that the new SEC head will get tough on Wall Street
- Whether Apple's glory days over
- Web services that put modern portfolio theory into practice for investors
- The unloved commodity ETFs
- Wells Fargo (NYSE: WFC) and other dividend boosts
- Complaints about the pace of government downsizing
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