Wednesday, January 21, 2015

What Investment Professionals Are Looking For-and avoiding

In the hedge fund space,one of the most popular trades has been dollar strength,avoiding energy and shorting it,said Troy Gayeski of Skybridge Capital Partners.Two to three quarters from now,energy distressed credit will be sought.Six months ago,private equity was raising money to invest in energy.
Volatility has expanded dramatically since QE was ended.There will be stock market gains of 3-10% in 2015,but with increased volatility as Fed tightening begins.*
German,Japanese and Swiss bond yields are very low,notes John Brynjolfsson of the Armored Wolf hedge fund.The US inflation rate is falling,and US bond yields are among the lowest in the world.I previously thought the Fed would move quickly,but we're probably looking at negative inflation rates,and it's almost impossible for the Fed to tighten interest rates with negative inflation.*
We're looking for high quality companies with good returns on capital,added Kevin Tony of American Century Investments.We are classic value investors.LifePoint is a hospital company with a broad footprint throughout the US.We think as people get jobs,or get insurance through Obamacare,hospitals will do well.Waste services company Republic Services Group has a high return on capital and low volatility.*
Intel reported earnings per share of 0.74 versus an estimate of 0.66;while revenue came in at 14.72 billion versus the 14.71 billion estimate.Data center revenue was 4.1 billion,and better than expected.The company's guidance was strong,although it continues to lose money on mobile and the pc client group was down as well.Intel is ranked number two in mobile processing,but since its stock is already up 40%,it will need a lot to push it up further,CNBC's Tim Seymour observed.
LifePoint Hospitals Inc(LPNT),Republic Services Group(RSG),Intel(INTC),American Century Value Fund(TWVLX)

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