The market strategist survey was as usual effectively worthless with most of the analysts predicting a market very close to where we are today, Treasury bills at 1.75 give or take, and without decisive opinions about whether the “fiscal cliff” will be avoided. Only Goldman Sachs stood out with an end of year S&P prediction of 1250.
Steven Auth of Federated recommended CAT at 84.47, QCOM at 61.20 and Daimler DDAIF at 48.85 (“luxury goods”). Robert Doll of Blackrock recommended Chevron CVX @ 110.93, ConocoPhillips COP at 56.11, and UnitedHealth UNH at 54.69, Adam Parker of Morgan Stanley concurred on Chevron, Bristol Myers BMY at 32.8, AmerisourceBergen ABC at 38.1
I like the CAT call — 8 p/e also favorably ranked at Valueline — and this is on my watchlist after any market drop but low priced enough perhaps just to jump in.
Steven Sears’ Striking Price commented on an 100 point call spread Apple option strategy recommended by Michael Schwartz of Oppenheimer. Buy January 700 2014, sell the 800, for a net cost of $35.8
In an interview expressing concern about high end retailers Deborah Weinswig of Citi recommended:
Wal-Mart WMT @ 72.25 (a price target of $82)
J.C. Penney JCP @25.99 (trying to turn retailing upside down. Lots of concerns expressed but hopes still in Ron Johnson.) This seems like a classic wait for a technical breakout
Dollar General GD @50.07 (price target $65. Ho hum justification for this.)
Barron’s Take was favorable on Pandora which is mystifying to me but analysts like Doug Anmuth at JPMorgan Securities is excited about gaining share and a $37 billion opportunity etc etc. Pfft. Oh FYI the CFO is leaving and Spotify is crushing them at an actual product level. P is at 11.52 now.
More Downside for the Euro by Gene Epstein made more sense to me, effectively reiterating his prediction from last year of parity between the Euro and USD. Quoted John Floyd of Floyd Capital: “The euro is largely a political currency…beginning to crack both from the top, in Germany, and from the bottom…” which I think is right. Euro is at 1.25 now.
Major favorable piece on Chicago Bridge & Iron CBI now at 36.80, that it will effectively integrate Shaw (or the stock will rally if the deal fails) and deliver on an enormous infrastructure opportunity in the developing world. Michael Dudas of Sterne Agree has a $56 target. Eric Mintz of Eagle Asset Management concurred looking for mid 40s shortly.
Other favorable mentions of Starwood HOT $55, Syngenta SYT $68, and Waddell & Reed WDR at $29.25