Tuesday, April 29, 2008

Barron's Review

Most weeks I go through Barron's and use a highlighter mark things that jump off the page. It is not every week and I usually do not get Barrons until Monday or Tuesday. Anyway below are some things that seemed interesting to me.

April survey conducted by Merrill Lynch, 50% of global money managers said the greenback is undervalued, up from 30% three months ago, while a whopping 71% found the euro overvalued.

Mobile Telecom was the best performing sector last week. It is ranked 96th out 99 from a year ago and 97th ytd.

Consumer Electronics is ranked 99th out of 99 (not banking or mortgage) year to date.

Paper is 91 year to date, 93 from a year ago, and 90 last week.

NYSE stock volume was 6.5 million shares last week compared to 8.0 last year the same week.

In the last twelve month Russell growth is down 1.5% while Russell value is down 11.24%. YTD however Russell growth is down 4.9% while Russel value is down 4.4%

Money market funds for the second week in a row had a draw at a rate of $839 million. (over a 44 billion inflow in the beginning of February)

From March 1st to April 15th NYSE short interest increased .3% while NASDAQ short interest decreased .7%. Both short interest ratios jumped dramatically on the volume disappearance.

Last Friday's 3 month Libor was fixed at 2.912% up dramatically from 2.537% on March 18th.

In a recent study, Dredner Kleinwort found that 120 Japanese stocks, or 7% of those included in the Topix index, have market caps that are less than their net current assets. Among smaller companies, that percentage jumps to 10-15%.

Fujumura notes 60% of Japanese companies trade below book values, P/Es are historically low and stocks yield 2%, versus a benchmark interest rate below 1.5%.

U.S. demand for oil is expected to drop 410,000 barrels a day in '08 but China growth alone is seen rising 500,000 barrels a day.

GFI and Cummins were both individual stocks mentioned I found interesting. (Cummins was mentioned by Defiance Asset Management)

Extreme Networks and Avnet both pointed to slowing technology sales in the month of March.

Big Money Poll - 12% of poll participants now call themselves bearish, down from 18% in the fall. Not a one felt compelled to tick of the very bearish box. Those same managers softened their stance toward real estate; about 70% were bearish in our fall survey, compared with 48% now. Just 8% consider property an attractive investment these days. More than 55% of the poll participants think the market is undervalued, while just 10% say it's overvalued. 87% expect to be net buyers in the next 3 to 6 months while 13% intend to be net sellers.

That is the Barron's recap. There was other things I highlighted but that is the stuff I found interesting. Interpretation is up to you. In general I think this once again showed how bullish everyone really is. I love looking at the Dow Jones industry groups and see who is underperforming. That is where you can find value.

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