Carlyle Group and Other Barron's Picks for Upside

Investing

Published: November 18, 2013 7:10 am

As usual, the writers at Barron’s have made some suggests in this weekend’s edition for stocks to buy and stocks to avoid. Among the new picks are a chainsaw maker, a leading private equity firm and the media company behind the likes of Animal Planet and TLC. But they also make what could seem a contrarian call on an industry close to the hearts of Carl Icahn and Warren Buffett.

Blount International Inc. (NYSE: BLT) attributed disappointing quarterly results to slow sales in its Forestry, Lawn and Garden division. But Barron’s called for a “saw-tooth recovery” for this Portland, Ore.-based maker of equipment, replacement and component parts. The Thomson/First Call consensus price target for the stock is $12.67, but Blount ended last week at $13.83.

Carlyle Group L.P. (NASDAQ: CG) was upgraded to Buy at Goldman Sachs last week. Barron’s pointed out that the private equity firm lags the gains of rivals, but thinks that it could return 20% or more next year. And investors receive a 2.0% dividend yield. The consensus price target for Carlyle is $33.77, and shares closed Friday at $31.52.

Discovery Communications Inc. (NASDAQ: DISCA) recently announced the acquisition of Espresso Education, the leading provider of primary school digital education content in the United Kingdom. Barron’s suggests that the media company could rise another 20%, due to its pursuit of overseas markets. The consensus price target for the stock is $91.15, and it closed Friday at $85.44.

On the other hand, Barron’s was not so keen on oil tank-car makers such as Trinity Industries (NYSE: TRN), American Railcar (NASDAQ: ARII) and Greenbrier (NYSE: GBX). The article makes the case that thought oil production is booming, these companies may have overestimated demand, and their shares may be vulnerable to a price drop of 20% or more. Also note that surveyed analysts by and large see little to no upside in the shares of these three companies.

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