Sunday, November 18, 2012

Barron's Likes (WYN) (LUK) (JEF) Hates (DELL) (MSFT)

Barron's (11/19) Check In To This Hotel Stock

       With 7,260 hotels under its umbrella, including the Days Inn, Super 8, Wyndham, Ramada, and Howard Johnson chains, Wyndham Worldwide is the world's largest hotel franchisor. It is also the world's largest operator of time shares, with 180 resorts and 915,000 owners.  But if its properties are pretty easily recognizable, Wyndham (ticker: WYN) clearly is not, and that's reflected in its stock price. Wyndham trades at 13 times consensus earning estimates for 2013, compared with 17 price/earnings for Marriott International (MAR) and 19 for Starwood Hotels & Resorts Worldwide (HOT).
      This is a steady operation, with 60% of revenue coming from fee-based services, including franchise arrangements, property management, and memberships. But until recently, the company has gotten little respect from investors, in part due to the supposed taint of time shares.That's changing, as Wyndham puts up increasingly better numbers.
    The company is expected to earn $465 million, or $3.22 a share, this year on revenue of $4.5 billion; that's up from $2.49 a share last year and headed to $3.67 a share in 2013, based on analysts' estimates. The stock is up 42% over the past 52 weeks, to near $49, and could grow another 20% over the next year. It yields 1.9%.

Barron's (11/19) Big Deal For A Baby Berkshire
      It's one of the oddest marriages in Wall Street history, and it may work.  Leucadia National, a super-low-profile conglomerate that amounts to a small- scale Berkshire Hathaway, agreed last week to pay about $2.6 billion in stock for Jefferies Group, the scrappy securities firm that survived a financial scare last year after the collapse of MF Global.
      The deal offers benefits to both. For Leucadia (ticker: LUK), it solves a leadership-succession issue because the CEO of Jefferies (JEF), Richard Handler, 51, is slated to head Leucadia after the closing of the deal expected in next year's first quarter. The current duo that have led Leucadia since the 1970s,
Joe Steinberg and Ian Cumming, are 68 and 71, respectively.

 Barron's(11/19) Tech Trader: Trouble Mounts In PC Land, As Dell Deeply Disappoints

By now you know the heir apparent at Microsoft has left the building. Steven Sinofsky, who ran Microsoft's Windows division, worth 25% of the company's annual revenue and more than half its operating profit -- and who worked at the company for 23 years -- announced Monday he was leaving for "personal reasons."
      There's not a lot to be gleaned from Sinofsky's departure about the immediate health of Microsoft (ticker: MSFT).

 Dell's stock is cheap, but that isn't a reason to bid for it as long as the PC business is a millstone around its neck, says Tony Ursillo of Loomis Sayles, which doesn't own the stock. "When the fundamentals are bad, a stock is never too cheap," is what Ursillo says about Dell.

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