Sunday, December 24, 2006

Barron's Summary

Barron’s cover discusses US economy and stock mkt, saying that a cloud hangs over them. Bears worry that a serious recession lies ahead, spurred by overleveraged consumers cutting their spending in response to a collapse in home prices. Longer term, gloomsters bemoan the US' huge current-account deficit, a reflection, they insist, of America's lust for consuming more than it produces and spending more than it saves. Only the kindness of strangers (mostly Chinese and other Asian central bankers buying US debt securities) lets Uncle Sam continue his profligate ways. But such opinions aren't shared by everyone. Nor is Wall St. poised on a precipice. Stocks actually are cheap by many measures, says research boutique GaveKal. And shares of a certain type of nimble and tech-minded U.S. multinational could rise the most in coming years. Co’s mentioned include: AAPL, MOT, HPQ, DELL, BDK, IBM, DHR and ADI.

Fund managers like TXT, CSX, HES, TIN, D, IHG, CS and AZ.

Peabody Energy (BTU) trades for around 41 a share, far below its May peak of 76.29. As the co converts coal into earnings, its stock could rally toward 60.

After outpacing many media stocks in recent months, the shares of E.W. Scripps (SSP) could easily rise another 20%. New-media rev is surging, and the newspapers are holding up relatively well.

ITT (ITT) could trade up to 72 in 2 years, commanding a sector average of 18x earnings, as investors grow to appreciate its earnings visibility.

Hedge fund manager likes CVS, VRSN, YHOO and HB.

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