(Bloomberg) -- Four experts select 18 exchange-traded funds for income investors, ranging across risk spectrum as Federal Reserve "determined to keep interest rates even" and "hopes are starting to fade" on pro-business Trump administration, according to cover story in Barron's May 8 edition.
* Top pick from each of experts: iShares Floating Rate Bond (FLOT), iShares JPMorgan USD Emerging Markets Bond (EMB), iShares 7-10 Year Treasury Bond (IEF), iShares U.S. Preferred Stock (PFF)
* Second-tier picks: VanEck Vectors J.P. Morgan EM Local Currency Bond (EMLC); PowerShares Senior Loan Portfolio (BKLN); SPDR Bloomberg Barclays Convertible Securities (CWB); SPDR S&P Dividend (SDY)
Other highlights from this week's Barron's (subscription required):
* Amazon, whose stock, Barron's says, is likely to top $1,000 per share by summer from Friday's $934, will continue to pummel the operating environment for retail competitors. But some "potential victims" can benefit, at least relative to S&P 500 Index, through changes Amazon creates, including Dick's Sporting Goods (DKS), TJX Cos (TJX), Ross Stores (ROST), Burlington Stores (BURL), Macy's (M), Gap Inc. (GPS), and J.C. Penney (JCP).
* Novartis (NOVN) could be poised for "multi-year run of earnings gains" as it benefits from new drugs for heart failure and psoriasis, plus a promising pipeline of new drugs that would drive longer-term growth, Barron's writes. The company's shares could grow 9 percent, or more than $7 a share, from 2018 to 2022, says Bernstein drug analyst Tim Anderson.
* Ford Motor (F) and General Motors (GM) could benefit from a slowdown in automobile sales because they've streamlined their operations to better weather slumps, Barron's says. That should gain them higher valuations on highly cyclical companies from investors. If a 15x multiple is applied to trough earnings, GM would be worth $45 a share and Ford $15, about a 35% premium to current trading levels.
* Wild swings could hit shares of technology stocks that aren't congruent with their reported financial performance, writes Barron's columnist Tiernan Ray. A 2% fall in Apple (AAPL) stock after weak earnings show Wall Street "doesn't care much about the business right now" and instead is considering another product release will propel later growth, he writes. Fitbit (FIT) reported better-than-expected results but its stock fell because, he said, investors believe the activity-tracking business is "still lousy."
* New Jersey bank OceanFirst Financial (OCFC) could outperform its peers owing to a "high-quality franchise" including a low-cost deposit base and modest credit costs, Barron's writes. Its shares could rise in next 12 months and a sale of bank is a possibility. Piper Jaffray analyst Matthew Breese values the stock at $31 against Friday's $28.10.
* Carpet and tile giant Mohawk Industries (MHK) has jumped 25% in a year but could continue to gain on strength in the home-improvement market. The world's largest flooring company is also riding the coattails of earnings surprises of Home Depot (HD) and Lowe's (LOW). Barclays Capital analyst Michael Dahl has a target of $272 against Friday's close of $232.
To contact the reporter on this story: Laura J. Keller in New York at lkeller22@bloomberg.net.
To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Kenneth Pringle, Ros Krasny
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
