Barron's Recap (5/26/12): The Top 50 Annuities, and Tech Firms Hoard Cash
This weekend in Barron's online: the top 50 annuities, Intel finally goes mobile, what tech companies should do with all that cash, and the prospects for Snap-on.
"The Top 50 Annuities" by Karen Hube. A year ago, guaranteed payouts and benefits on all kinds of annuities were far more generous. But low bond yields and a sagging stock market have forced big insurers to re-evaluate their annuities strategies. Some major providers, such as Hartford Financial (NYSE: HIG), ING (NYSE: ING) and Genworth Financial (NYSE: GNW), have exited the business or significantly scaled back. But there are still some competitive products out there that provide significant assurances for a reasonable price. Out of hundreds of annuities, Barron's narrowed the list to 50 best-in-class investments in five annuity categories: deferred variable, fixed index, fixed deferred, immediate, and longevity insurance.
"Why Intel Deserves Another Look" by Mark Veverka suggests that investors in the Santa Clara, Calif.-based chip maker should be pleased to see its new line of low-power chips showing up in more smartphones in China, France, India, the UK, and the U.S. Intel (NYSE: INTC), the world's largest producer of computer chips, had missed a lot of the opportunity in the smartphone arena. This new Atom line of chips could change all that, allowing Intel to finally benefit from the ongoing surge in mobile Internet use.
See also: Intel Dividend Boosted by 7.1%
Andrew Bary's "Show Us the Money" points out that many technology firms, such as Dell (NASDAQ: DELL), Nvidia (NASDAQ: NVDA) and SanDisk (NASDAQ: SNDK), are sitting on huge piles of cash. Better dividends would do more for their stocks than hoarding that cash or using it to fund share buybacks, argues the article. The technology sector has a 1.6% yield, the lowest among the 10 sectors of the S&P 500. Apple (NASDAQ: AAPL), Cisco (NASDAQ: CSCO), Microsoft (NASDAQ: MSFT), Qualcomm (NASDAQ: QCOM) and the like should use more cash to pay higher dividends urges Barron's, not for the first time.
In "All Fixed Up and Ready to Go," Neil A. Martin wonders whether Snap-on (NYSE: SNA) stock can ratchet any higher, even as it has rebounded from the recession and is on a solid growth track. "Our business is not recession-proof," CEO Nicholas Pinchuk told Barron's, "but it is recession-resistant." The stock is up more than 100% since 2010. Some analysts and portfolio managers believe there is room for Snap-on to go as much as 20% higher.
Latin America's leading online retailer has had a great run, says Bill Alpert in "With Amazon in Hot Pursuit…" But how will MercadoLibre (NASDAQ: MELI) hold up now that Amazon.com (NASDAQ: AMZN) is set to enter Latin America in earnest , as recent hiring suggests? Barron's bottom line: MercadoLibre's shares could get hit if Amazon does ramp up operations in the region. The article also points out that MercadoLibre's founder recently sold shares.
See also: Morgan Stanley Upgrades MercadoLibre
"In Facebook's Fiasco, Hope for Reform" by Andrew Bary posits that the debacle involving the pricing of the Facebook's (NASDAQ: FB) initial public offering could end up changing the way new equity issues are sold. IPOs too often stack the deck in favor of big institutional customers of the underwriters, says the article. But the fuss over Facebook's heavily hyped offering has shown the need for more fairness and transparency in the process.
Other featured stories:
- "In Unfamiliar Territory" by Nancy F. Smith is a profile of managed-futures trader Salem Abraham.
- "Finding Inexpensive Stocks in China" by Kopin Tan is an interview with investment manager Earl Yen.
- And "Gloom of Night" is an editorial commentary by Thomas G. Donlan.
See also: China ETFs in Focus
This weekend's Barron's online exclusives include:
"Heinz Can Escape Tight Squeeze" by Johanna Bennett suggests that there could be life in HJ Heinz (NYSE: HNZ) despite its disappointing week. Two analysts downgraded the stock after the Pittsburgh-based company pared its long-term per-share earnings growth rates.
- "Raymond James Surveys 3 Energy Stocks"
- "The Improved Taste of Cracker Barrel"
- "IT Winners and Losers"
- "There's Strength in Terex's Weakness "
Columns in this weekend's Barron's discuss:
- The so-called "Death of Equities"
- Confronting the risks of high-speed trading
- The huge payout of Motorola Mobility's departing chief
- A review of Apple TV
- Low-volatility ETFs
- The decline in demand for electric power
- And more ...
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