Top Stocks

By Robert Hsu, editor of Asia Insider

On Thursday, the Hong Kong stock exchange approved Agricultural Bank of China Ltd.’s application for a $20 billion to $30 billion initial public offering. Hong Kong’s approval now makes the Chinese bank’s IPO a virtual certainty, and the stock could begin trading on both the Hong Kong and Shanghai stock exchanges by mid-July. The deal would represent the world’s largest-ever IPO.

I understand how hungry investors are for picks in China right now, as 2010 has been less than fruitful for the country’s equity markets after a red-hot 2009. The Shanghai Composite Index is down nearly 22% year to date. So investors should rejoice over the opportunity created by the Agricultural Bank of China IPO, right? Wrong.

 

By Jim Cramer, TheStreet

 

Just go buy Deutsche Bank (DB). Just go buy Barclays (BCS). If you really and truly believe that our investment banks will not be able to offer hedging and foreign exchange protection on bonds, if you really think that we are going to wipe out investment banking competitiveness at the altar of some Arkansas senator's desire to raise less corn and more hell, William Jennings Bryan-style, then just go buy the winners.

 

Deutsche is a well-run bank. It is in the strongest country in Europe with a healthy stock market that's barely down. Barclays got the good part of Lehman and is making real strides in the investment banking business without financial regulation.

 

These two banks stand to emerge as gigantic winners off of financial regulatory reform, if you are to believe the stories -- which I don't. If the stories were true, these two stocks would be much higher. But you know what? As the late great Sam Cooke crooned, "Don't fight the feeling."

 

In the business world, there’s rarely a thing as growing too big. But unfortunately for Sam Adams brewer Boston Beer (SAM), the price of success could be higher costs -- and the loss of its label as an "artisan" craft beer.

That’s not to say a cold bottle of Sam Adams Summer Ale will taste any different to consumers. But according to the Brewers Association," artisan" brewers include small outfits that put out less than 2 million barrels of suds a year. That means the brewer that almost single-handedly sparked interest in smaller batch brews with more flavor could be pushed into the same category as the big beer vendors like Anheuser Buch Inbev (BUD) and Molson Coors (TAP).

 

A federal agency has given the go-ahead to Chicago-based Media Derivatives to begin trading futures based on the box-office performance of movies.

• Related: Why Hollywood should embrace movie futures trading

The Commodity Futures Trading Commission announced Monday that the terms and conditions of Media Derivatives' proposed exchange didn't violate any regulations.

The trading was approved with a 3-2 vote.

 

Stocks refuse to give in but they have been unable to move out of the danger zone either. The U.S. stock market could still swing either way.

Take a look at the New York Stock Exchange Composite Index, for example. At the beginning of last week, the index fell through its February low, threatening to break through that level of support and turn a correction into something worse. 

But by the end of the week, the index had moved back above the February low and looked like it was trying to make a bottom.

 

Starbucks (SBUX) is finally loosening up its Wi-Fi rules, and will soon allow anyone to connect to its network for free.

It's about time. The company had a ridiculous approach to Wi-Fi in the past, requiring customers to buy a Starbucks loyalty card, put money on it, register it and periodically use it. After all that, you get two hours of Wi-Fi a day (any more than that would cost you).

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People didn't like it. And Starbucks is feeling the pressure from the free Wi-Fi offered at McDonald's (MCD) and other coffee shops. So, starting July 1, Starbucks will stop splitting hairs and open its Wi-Fi at 6,700 locations.

 

There's a lot of talk about whether the recovery will stall or continue building momentum. Well we could get a very clear picture this week since the big economic news will likely be the May price reports. I'm expecting to see signs of deflation across the board -- which could take some of the wind out of consumers' sails.

Here's the news to look for:

• Tuesday, June 15: May Import Prices. Expected decline of -1.5%.
• Wednesday, June 16: May Producer Prices. Expected decline of -0.5%.
• Thursday, June 17: May Consumer Prices. Expected decline of -0.2%.

 

Coffee bean prices have soared in recent days, jumping 8% Friday and reaching their highest level since last January. Blame it on Rio.

An early cold snap in Brazil has traders worried that some of the coffee bean crop there could be damaged, according to the AssociatedPress. Those concerns pushed up coffee prices for July delivery to as high as $1.49 a pound.

The continued rise in coffee prices could be worrisome in the long term for Starbucks (SBUX) and Green Mountain CoffeeRoasters (GMCR), analysts say. Could we eventually see Starbucks prices get even higher? 

Apple (AAPL) has become one of the most valuable companies in the world, and boy, is it ever throwing its weight around.

The company has gone from beloved underdog to ruthless competitor, squeezing out rivals like Adobe (ADBE) and Google(GOOG) in surprisingly bold ways.

• If only you had a better broker . . .

And that's got the attention of antitrust regulators, who are set to begin investigating the company's actions. But has Apple really been that bad? Do shareholders have anything to worry about here?

 

In early May an equal investment in each of my Top 10 Stocks for 2010 were up more than 15%. Since that time the market has been in a tailspin resulting in that performance dropping to a more modest 9% gain.

 

Not bad considering the market as measured by the S&P 500 index is down more than 1% year to date, but the returns could be better if one deployed an absolute return strategy that included incremental moves in managing the portfolio.

 

I made just that suggestion to followers of my Top Stocks strategy in April.

 

As stocks moved lower out of the April high, you started to hear a lot more talk about the rising potential for "double-dip" recession -- a la the experience of the early 1980s where the economy, instead of embarking on a multi-year expansion, started contracting again.

 

With all the concerns over the sovereign debt troubles in Europe, ho-hum job growth here in the United States, and falling stock prices, I'll admit there is plenty of raw material to base these fears on.

 

But a closer look at what's driving the economic cycle gives us reason for hope and optimism.

 

Apple (AAPL) is synonymous with exclusivity, from its closely controlled operating systems to its top secret research. So it’s a bit surprising that for the first time ever, the mass retailer Wal-Mart (WMT) will be partnering on the launch.

When the Apple iPhone 4 debuts June 24, Wal-Mart will stock the gadget on its shelves at the exact moment the company’s namesake Apple Stores do.

And if that's not impressive enough, the Wal-Mart-iPhone deal is not just a first for Steve Jobs & Co. -- it’s a first for the big-box store, too.

 

By Jim Cramer, TheStreet

 

Every weekend when I review the charts, I list all the ones that seem buyable or interesting on the front page of the hand-delivered booklet.

 

This weekend, I ran out of room. There were so many that looked like they had found solid positive momentum, or have bottomed and are on the way up.

 

All sorts of groups appear worth buying, including aerospace with Boeing (BA) leading the way; auto, with Magna (MGA) and Ford (F); and health care, with Cardinal (CAH), Express Scripts (ESRX), Medco (MHS), Stericycle (SRCL), and United Health (UNH) finally joining AmerisourceBergen (ABC) with nice trends (the HMOs all show up strongly, at last).

 

 

Has the recent correction presented investors with a chance to buy back into the market, or is it a sign of more -- and greater -- trouble to come for stocks? While the market gurus I keep an eye on are tending to lean to the bullish side of that question, there are some very bright minds on both sides of the issue.

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On the bullish side, for example, there's Bob Doll, portfolio manager and chief equity strategist for fundamental equities for Blackrock. In an opinion piece for The Wall Street Journal this week, Doll said that despite the formidable challenges the U.S. faces, “overweight positions in U.S. equities are more than warranted”.