Barron's top picks for 2014

Barron's top picks for 2014

Barron's top 10 stock picks for 2014 shows an affinity for low P/E ratios, with 6 of the group sporting multiples of 10 or lower. The 2013 picks - which are up 35.2% on average, 900 bps ahead of the S&P 500 - had five names with single-digit P/Es. This year's list:

A depressed play on a depressed commodity, don't be surprised if Barrick Gold (ABX) gets the attention of an activist investor next year.

Up just 11% YTD, Canadian Natural Resources' (CNQ) free cash flow is set to quintuple to $5B in 2018 once the Horizon oil-sands facility expansion is completed.

A rising world population needs food. At less than 10x earnings, Deere (DE) is the kind of company Warren Buffett might like to buy if it became available. "Stranger things have happened," writes Andrew Bary.

Even after gaining 55% YTD, MetLife (MET) sells for less than 10x 2014 EPS and just above book value, but bigger gains are ahead once the company is given regulatory permission to buy back stock and boost its dividend. Met's also a good hedge against rising rates, as life insurers will benefit by having higher yields to invest in.

The rest:

Citigroup (C)

GM

Intel (INTC)

Nestle (NSRGY, NSRGF)

Simon Property (SPG)

U.S. Airways (LCC)

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Merrill Lynch unveils its top 10 stocks to buy for 2014 -12/7/13

Merrill Lynch unveils its top 10 stocks to buy for 2014

BofA Merrill Lynch is a more cautious buyer of stocks after this year's gains, and its top 10 large-cap stocks to buy for 2014 are mostly under-owned and unloved on Wall Street:

Archer Daniels Midland Company (ADM)

Caterpillar (CAT)

CenturyLink (CTL)

Citigroup (C)

Cisco (CSCO)

DaVita (DVA)

Exxon (XOM)

General Motors Company (GM)

NextEra Energy (NEE)

Nucor (NUE).

On CAT, the Lynch analysts point to high foreign sales prospects for 2014, and see strength in energy-related profits offsetting weakness in global mining; the firm has a $100 price target vs. ~$90 consensus.

XOM is considered inexpensive compared to many large-cap energy names, it is expected to continue its large share buyback program and should increase the dividend; Lynch's target is $110 vs. $96 consensus.

NUE is the ultimate contrarian play, as Wall Street is underwhelmed by steel stocks, but Lynch sees a rebound in commercial building as a big boost for 2014 earnings; the firm has a $60 target vs. $55 consensus.

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Looking to take some profits? U.S. shares look relatively expensive, says Barron's -11/24/13

Looking to take some profits? U.S. shares look relatively expensive, says Barron's

• As the taper approaches, it may be time to ring the register and book some gains, Barron's thinks. Add in the fact that the S&P's 26% YTD gain has "likely [left] many investors with a higher mix of stocks than they would prefer," and the issues isn't whether or not to sell, but rather "what to sell and where to put the cash."
• Food for thought from Jack Hough: "The S&P 500 trades above 17 times trailing earnings, versus a historical average of about 15 [and] U.S. shares are 57% more expensive than emerging markets and 67% more expensive than Europe" based on "a long-term average of earnings to adjust for cyclicality."
• Investors might want to consider putting small companies on the chopping block first, as they have outperformed their larger cap counterparts this year and their P/E premium to large caps has stretched well beyond its historical average.
• Small/Micro Cap ETFs:
• IWM, TZA, TNA, IWC, UWM, VB, IJR, SLY, RWJ, URTY, TWM, SCHA, RWM, SRTY, SAA, DWAS, VTWO, SBB, SDD, RSCO, JKJ, FDM, PZI, XSLV, WMCR, FYX, VIOO, EWRS, TWOK, SMLV, PXSC
• Large Cap U.S. ETFs:
• SPY, QQQ, SH, DIA, SSO, SDS, PSQ, IVV, SPXU, UPRO, SPLV, VOO, QID, PRF, SPXS, SPXL, TQQQ, DOG, RSP, SQQQ, DXD, QLD, RWL, EPS, UDOW, SDOW, DDM, VV, SCHX, IWB, SPHB, NY, BXUB, QQEW, QQQE, JKD, VONE, EQL, TRND, ROLA, SFLA, BXUC, QQXT, EEH, ONEK, SPXH, TRSK, BXDB, PXLC, FSU, FSE, EWRI, FWDD, TNDQ, LGLV, ALTL

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White House preparing to name Yellen Fed chair: WSJ report - 10/8/13

White House preparing to name Yellen Fed chair: WSJ report

WASHINGTON (Reuters) - President Barack Obama is preparing to announce that he will nominate Federal Reserve Vice Chairwoman Janet Yellen to become the U.S. central bank's new head in the coming days, perhaps as soon as Wednesday, the Wall Street Journal reported on Tuesday.

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North Korean Leader Kim Jong-il Dies

North Korean leader Kim Jong-il died of a heart attack while on a train trip, state media reported on Monday, sparking immediate concern over who is in control of the reclusive state and its nuclear programme.

South Korea, which is still technically at war with the North, placed its troops and all government workers on emergency alert, Yonhap news agency reported. But Seoul's Defence Ministry said there were no signs of any unusual North Korean troop movements. 
   
Japan's Foreign Minister Jun Azumi said his country had to be prepared for the unexpected on the security front. 

Market players and regional powers will be on edge over what might happen next in the isolated state, whose collapsing economy and bid to become a nuclear weapons power pose major threats to northeast Asia. 
   
Asian stocks and U.S. index futures fell, with South Korean shares tumbling as much as 5 percent, and the dollar gained after the announcement. The Korean won [KRW=  1174.50    16.00  (+1.38%)] fell 1.8 percent. 

Already selling off overnight, risk markets leg down a bit more following news of Kim Jong Il's death. Hong Kong -2.6%, Shanghai -2.6%, Sydney -2.4%, S&P 500 futures -0.7%, DAX futures -1.1%. Capital flows into greenbacks, the euro -0.4%, aussie -0.7%, kiwi -0.5%, sterling -0.4%.

 

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