BARRON’S ROUNDUP: Clinton Tops Trump for Markets, Mylan, Carmike
(Bloomberg) -- Electing Hillary Clinton as U.S. president would benefit investors more than Donald Trump, Barron’s said in the cover story of the March 7 issue. The Democratic front-runner won’t “stand in the way” of markets, while Republican Trump’s proposed tariffs against China could devastate the global economy. Key takeaways:
- Clinton’s tax, spending and trade proposals would be “easily processed” by markets because of their low uncertainty
- Trump’s proposed $12 trillion in tax cuts could cause the federal debt to balloon by more than $10 trillion, based on an assessment by the Tax Foundation
- Neither candidate has offered a realistic plan to cut spending on entitlements such as Medicare and Social Security, though Trump is more adamant in refusing to do so
- Investors who do see merit in some of Trump’s policies, including Bahnsen Group’s David Bahnsen, don’t see political feasibility in their implementation
Other highlights from this week’s magazine (subscription required):
- Martin Marietta Materials (MLM) could climb 35% in the next two years as the government expands budgets for roads and construction activity picks up. Public works, residential and nonresidential construction are rising at the same time, a rarity, CEO Howard Nye said in an interview. While bad weather and oil exposure could pose headwinds, the rock miner and transporter ships less than 5% to shale fields, and low energy input prices may aid margins.
- Mylan (MYL) could get a 33% boost in the next year as negative publicity about drug prices, driven by competitor Valeant, eases. Mylan’s acquisitions, such as its $7.2 billion deal for Sweden’s Meda announced last month, will diversify and add to earnings. Headwinds include potential regulatory action on companies that have moved headquarters out of the U.S. “When the noise subsides around companies like Valeant, we’ll rise to the top,” CEO Heather Bresch said in an interview.
- BMC (STCK) could gain 20% in the next 12 months if the building-materials distributor benefits from a rebound in new housing construction, which is predicted by the National Association of Home Builders. Cost synergies from BMC’s December formation by a merger of two companies will also benefit its bottom line. The company generates 35% of its sales in Texas, where the oil crash may weaken demand, but BMC executives say lower energy prices ultimately benefit housing.
- Carmike Cinemas (CKEC) could get a competing bid after AMC Entertainment (AMC) this week offered $30 a share for the theater chain. Chris Mittleman of Mittleman Brothers, Carmike’s largest shareholder, said $35 a share should be a “bare minimum” and $40 is “a more appropriate control premium.”
- Top financial advisers in the largest U.S. states by population, according to the magazine’s annual list: Morgan Stanley’s Gregory Vaughan (California, $16.1 billion in assets); Neuberger Berman’s Richard Szelc (Texas, $1.4 billion); Merrill Lynch’s Patrick Dwyer (Florida, $2.6 billion); Morgan Stanley’s Brian Pfeifler (New York, $9.3 billion).
Alert:
HALISTERSource: BFW (Bloomberg First Word)
Tickers MYL US (Mylan NV)
AMC US (AMC Entertainment Holdings Inc)
STCK US (BMC Stock Holdings Inc)
CKEC US (Carmike Cinemas Inc)
MLM US (Martin Marietta Materials Inc)
People Brian Pfeifler (Morgan Stanley)
Christopher Mittleman (Mittleman Investment Management LLC)
Heather Bresch (Mylan NV)
Patrick Dwyer (Merrill Lynch & Co Inc)
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