BARRON’S ROUNDUP: Disney Magic, UPS, Nucor, Ingredion, Dorman

Barron’s cover story says Walt Disney shrs are poised to rise 50% over next 3 yrs thanks to CEO Iger’s ability to turn hit movies into “dependable and growing” cash flows. Some stories in June 1 edition (subscription required):

  • DIS shrs may reach $165 before Iger’s slated ’18 retirement assuming EPS above $8 vs $5.03 consensus for ’15, Barron’s said; “Frozen,” “Star Wars” and other hits boosting tie-in merchandise sales, theme park and cruise traffic, minimizing damages from occasional flops, according to Barron’s
  • United Parcel Service shrs may rise 20% to $119 over next yr as improved logistics in ground-delivery system boosts oper. margins, prevents peak-season online shopping disasters, Barron’s said, citing PER est. by Tom Kim of Goldman Sachs
  • Nucor shrs nay rise 25% to $60 as it cuts production costs, focuses on higher-grade steel to cope with lower commodity price environment, Barron’s said, citing PT by Edward Shill of QCI Asset Management
  • Jeffrey Saut, Raymond James chief investment strategist who correctly called equity mkt recovery following Lehman shock, sees S&P 500 Index doubling to 4,300 within 9 yrs; we’re 6 yrs into secular bull mkt that could last 14-15 yrs, he told Barron’s in interview
  • Broadcom’s agreement to be acquired by Avago Technologies may reflect executives’ willingness to sell out, raising some “red flags” that tech asset value may be approaching its peak, “Tech Trader” column said; investors may as well “take profits” or “avoid initiating” new positions, Barron’s said, without citing anyone
  • Ingredion is “hunting” for opportunities to buy $300m- $500m size cos. in U.S., Europe or Asia to expand its healthy-food ingredient business, CEO Gordon told Barron’s in interview; INGR, which used to rely on high-fructose corn syrup, wants to generate 30% of rev. from specialty-food segment by ’19 vs 10% 6 yrs ago, according to Barron’s
  • Dorman Products shrs look attractively priced, may rise 50% to $70 within 2 yrs as its niche advantage in automotive replacement parts supports pricing power in growing mkt of cars and trucks, Barron’s said, citing est. by Nate Brochmann of William Blair
  • Germany’s Volkswagen, Daimler, France’s Accor, Total, U.K.’s InterContinental Hotels and Netherlands’ Royal Dutch Shell are among European shrs that look “appealing” as EU economic recovery gains momentum, “Follow-Up” column said without posting PT
  • SunEdison shrs may rise to $44 by yr-end vs latest $29.97 as its “YieldCo” strategy of spinning off renewable-power projects into dividend-producing entities appeal to income-seeking investors, “Follow-Up” column said, citing PT by Gordon Johnson of Wolfe Research
  • D.R. Horton shrs look like “particularly attractive choice” amid housing mkt recovery as its lower-priced “Express” line benefits from resurgence of first-time buyers, “The Trader” column said, without posting PT
  • Trinity Industries, Greenbrier among freight railroad-car makers that look appealing as 7 qtr-worth of industrywide order backlog suggests the boom “still has a ways to go,” offsetting concern for oil transportation slowdown, “The Trader” column said, citing est. by Bascome Majors of Susquehanna Financial, without posting shr price outlook

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