Barron’s is bullish on WalMart, bearish on Papa John’s

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

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BULLISH  MENTIONS

Wal-Mart, BlackRock attractive amid seasonal market volatility – September and October may bring seasonal volatility that could push stocks around, Steven Sears writes in this week’s edition of Barron’s, while recommending that rather than just trading the swoons, one should focus on companies with indestructible, “cockroach-like qualities.” Some nearly indestructible stocks seem to be Wal-Mart (WMT) and BlackRock (BLK), the publication notes.

Wall Street may want to look at Japan – Investors worried about valuations and an impending correction on Wall Street may want to take a look at Japan, as its macroeconomic fundamentals have not looked this good in years, Assif Shameen writes in this week’s edition of Barron’s. Honda (HMC) and Sony (SNE) hold attractions, the publication noted.

Gartner Inc. (IT) could earn $8 a share of free clash flow in 2019, and potentially could trade 20 times or more to at least $160, Andrew Peck, a fund manager at Baron Capital Management, tells Barron’s. The tech research and advisory firm closed at $120.79 on Friday. TransUnion (TRU), which closed at $47.81, could rise to the mid $60s by 2019 as it expands its data products from credit to health care, Peck says. Online travel giant Priceline Group Inc. (PCLN), which closed at $1,850 on Friday, could rise to $2,500.

Nathan’s Famous trading at 40%-45% discount – Nathan’s Famous (NATH) has gobbled up share in the premium hot-dog market, while its stock has done well, compounding at 17% a year in the past decade, but the stock is not followed by Wall Street analysts and the company is “poorly understood,” Adam Seessel writes in this week’s edition of Barron’s. At a recent $58, Nathan’s trades at a 40%-45% discount to his estimate of intrinsic asset value, he notes.

Most of Harvey insurance money will go to replace flooded cars – A big part of Harvey insurance dollars will go to replace flooded cars, Alex Eule writes in this week’s edition of Barron’s. Wall Street analysts spent the last few days trying to better understand the transfer of wealth from insurance companies to car makers and auto dealers, with investors quick to pounce on their findings, the publication notes. Publicly traded companies that saw their shares rise include Group 1 Automotive (GPI), AutoNation (AN), and Penske Automotive Group (PAG), Eule adds.

Refiner shares probably volatile, long run opportunity – Hurricane Harvey flooded refineries and forced about a quarter of U.S. capacity off-line, but the damage “didn’t faze Wall Street,” and most refining stocks rose afterward, Avi Salzman writes in this week’s edition of Barron’s. While this dynamic may be short-lived, and the refiners could give back those gains in the near-term, in the longer-term, U.S. refining stocks are attractive, and people looking to profit from U.S. energy independence should consider buying them, the publication notes. Publicly traded companies in the space include Delek US (DK), HollyFrontier (HFC), Marathon Petroleum (MPC), Phillips 66 (PSX), Andeavor (ANDV), Valero (VLO) and Western Refining (WNR).

BEARISH  MENTIONS

Papa John’s run of underperformance may continue– Papa John’s (PZZA) is lagging behind the S&P 500 this year and, despite a plan to spend $500M to buy back shares, its run of underperformance may continue as competition hits its plans for growth, Leslie Norton writes in this week’s edition of Barron’s. Competition is everywhere as pizza will increasingly be delivered by Amazon (AMZN) and Uber, she notes, adding also that the choices have expanded dramatically, with chicken nuggets and fries being ordered from McDonald’s (MCD) or soup and a bagel from Panera.

Dialysis providers claim they make no money on patients – Although 88% of dialysis patients are insured by government programs, dialysis providers say they make no money on those patients, Bill Alpert writes in this week’s edition of Barron’s. And if private insurers succeed in cutting payments to dialysis firms, either by refusing subsidized premiums or simply reducing reimbursement rates, DaVita (DVA) and American Renal (ARA) will see their profits contract, he notes. Other dialysis providers include Fresenius Medical Care (FMS).


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