As usual, the writers at Barron's have made some suggests in this weekend's edition for stocks to buy and stocks to avoid. Among the new picks are a chainsaw maker, a leading private equity firm and the media company behind the likes of Animal Planet and TLC. But they also make what could seem a contrarian call on an industry close to the hearts of Carl Icahn and Warren Buffett.
Blount International Inc. (BLT) attributed disappointing quarterly results to slow sales in its Forestry, Lawn and Garden division. But Barron's called for a "saw-tooth recovery" for this Portland, Ore.-based maker of equipment, replacement and component parts. The Thomson/First Call consensus price target for the stock is $12.67, but Blount ended last week at $13.83.
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Carlyle Group L.P. (CG) was upgraded to Buy at Goldman Sachs last week. Barron's pointed out that the private equity firm lags the gains of rivals, but thinks that it could return 20% or more next year. And investors receive a 2.0% dividend yield. The consensus price target for Carlyle is $33.77, and shares closed Friday at $31.52.
Discovery Communications Inc. (DISCA) recently announced the acquisition of Espresso Education, the leading provider of primary school digital education content in the United Kingdom. Barron's suggests that the media company could rise another 20%, due to its pursuit of overseas markets. The consensus price target for the stock is $91.15, and it closed Friday at $85.44.
On the other hand, Barron's was not so keen on oil tank-car makers such as Trinity Industries (TRN), American Railcar (ARII) and Greenbrier (GBX). The article makes the case that thought oil production is booming, these companies may have overestimated demand, and their shares may be vulnerable to a price drop of 20% or more. Also note that surveyed analysts by and large see little to no upside in the shares of these three companies.
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