Barron's Recap (5/5/12): The Barron's 500
This weekend in Barron's online: the annual ranking of the top 500 companies (as well as finding bargain stocks from the list) and the prospects for airline United Continental, insurer Unum Group and the recently spun-off Phillips 66.
"Bravo to the Best!" by Jacqueline Doherty. It is time again for Barron's annual ranking of the 500 companies with the strongest financial performance, based on their revenue and cash flow return on investment. Apple (NASDAQ: AAPL), Intel (NASDAQ: INTC), Qualcomm (NASDAQ: QCOM), Visa (NYSE: V) and MetLife (NYSE: MET) all shine this year. But it was CF Industries (NYSE: CF) that came out on top, due in large part to its acquisition in 2010 of rival fertilizer producer Terra Industries. The Deerfield, Ill.-based company doubled in sized just as fertilizer demand and pricing surged. Some other companies in the top 25 include Southern Copper (NYSE: SCCO), Coca-Cola Enterprises (NYSE: CCE), Wynn Resorts (NASDAQ: WYNN) and Caterpillar (NYSE: CAT).
In "Combing the Barron's 500 for Underpriced Shares," Jacqueline Doherty suggests that rearranging the companies on the Barron's 500 according to by their price-to-earnings ratios could offer investors insights into some stocks that are inexpensive and possibly set to offer gains. Take a look at this article to see what bubbles to the top in this exercise.
Jonathan R. Laing's "On the Runway, Ready for Takeoff" suggests that United Continental (NYSE: UAL) could be the largest beneficiary of the years of struggle with painful bankruptcies and consolidation that the airline industry has suffered. United Continental, the world's largest airline, has a lot of potential despite its recent travails, due to its enviable route structure and global reach, says the article. Delta (NYSE: DAL) and US Airways (NYSE: LCC) could benefit as well, but not like United.
Focusing on a company's profitability, rather than on its market share, should pay off in the long run, claims Sandra Ward in "New Policies Make Unum Look Like a Buy." And Chattanooga, Tenn.-based insurer Unum Group (NYSE: UNM) has lackluster first-quarter results and worries about the company's checkered history that would have to be overlooked. See the article for reasons why investors might want to take a look anyway.
See also: Unum Group Increases Dividend by 23.8%
"The Right Spin on Phillips" by Andrew Bary points out that Houston-based Phillips 66 (NYSE: PSX) has traded poorly since it was spun off recently by ConocoPhillips (NYSE: COP). But, the article says, investors are pricing Phillips 66 like a refining company. They are underestimating its potential as a chemical and energy-transportation company, as well as a refining one. Phillips 66 began to operate independently last week, and the stock currently trades for less than seven times projected 2012 earnings.
Other featured stories:
- "Picking His Spots" by Amy Feldman is a profile of Carl Kaufman, lead manager of the Osterweis Strategic Income fund.
- "The New Mortgage Man" by Lawrence C. Strauss is a profile of Wells Fargo (NYSE: WFC) CEO John Stumpf.
- Bill Alpert's "Fighting Investor-Rights Abuses in China" is an interview with Dan David, who is a research director at GeoInvesting.
- And "Rotten to the Core" is an editorial commentary by Thomas G. Donlan
This weekend's Barron's online exclusives include:
John Hess now owns more than 330,000 shares of Hess (NYSE: HES) says Grace L. Williams in "Hess CEO Buys $2.5 Million in Stock." This is his second buy on record at the integrated-energy company this year. His stake of less than a 1%. However, Hess indirectly holds at least a 10% Hess stake through phantom shares and trusts, says this article.
- "TIGER 21: Tough Love for the Very Rich" by Richard C. Morais
- "Hold Off on the Home Builders"
- "Alpha Natural Feels the Burn"
- "Kraft's Sweet Outlook" by Dimitra Defotis.
Columns in this weekend's Barron's discuss:
- The legacy of the 2010 flash crash
- Good news from paid-content providers
- An app for stress-testing earnings
- Corporate social networking
- Energizer Holdings' (NYSE: ENR) first-ever dividend
- The turnaround at Ford (NYSE: F)
- What the April unemployment data signals
- And more ...
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Tags: Alpha Natural, Apple, Barron's, Barron's 500, Caterpillar, CF Industries, coca-cola enterprises, ConocoPhillips, Delta Air Line, Energizer Holdings, Ford, hess, Intel, John Hess, John Stumpf, Kraft, MetLife, Phillips 66, Qualcomm, southern copper, united continental, Unum Group, US Airways, visa, Wells Fargo, Wynn Resorts