Barron's Summary: positive features on STAN.UK, BTU, AGO, STE, and AVII

gtotoy post

posted by gtotoy

Oct 04, 2009 12:57 pm

- Positive feature on Britain's Standard Charter (STAN.UK), an "emerging banking power" with a solid balance sheet and fast growing base in developing markets. As one of the handful of global banks that is not still licking its wounds from the financial crisis, Standard could see its stock rise 30% in the next twelve months, says Barron's.

- Barron's is positive on coal producer Peabody Energy (BTU), predicting a revival in global demand for coal could lead the stock to double over the next few years. Peabody is boosting its investment in Asia, where demand for coal is expected to grow the fastest. Article cites the CEO as saying its coal reserves are worth $18B, well above its market cap of $10B.

- Positive article on Assured Guaranty (AGO), which has emerged from the financial crisis as "about the only U.S. bond insurer of seven longtime competitors...that still has both the credit rating and the financial wherewithal to easily write insurance on new issues of municipal bonds and bond securitizations," says Barron's. The firm steered clear of writing collateralized debt obligations (CDOs) and in July acquired its one still healthy competitor, Financial Security Assurance. With all of this going for it, the stock could eventually double or even triple, says Barron's.

- Steris (STE), a leading supplier of sterilization and disinfectant equipment and services to hospitals, is featured as a flu season play. The company has a strong balance sheet and a healthy dividend, notes Barron's, which could send the stock up another 30%.

- Positive feature on AVI BioPharma (AVII). The company has a drug for Duchenne muscular dystrophy, the most severe form of the disease in early stage clinical trials. The drug, which targets one of the many mutations in a gene on the X chromosome, has shown promising results in animal trials and so far has been reported to be 'well tolerated' in early human trials. This version may be able to help about 13% of Duchenne patients, though the company hopes to expand its effect to other mutations that may eventually help half of patients with the disease. Barron's predicts if the drug proves to be effective "this biotech will soar" garnering as much as $1B in annual revenue from the drug.

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