Barron’s cover discusses favorably JP Morgan (JPM), saying that the co isn't immune to current banking problems. It wrote down $1.3bn of its leveraged-loan portfolio in the 3Q. It's been nicked by its subprime business, home-equity loans in particular, for which it recently added $306m to its loss reserves. But the big investment and commercial bank has fared better than many of its peers, and its stock has held up better, too, falling 4% for the yr. The co provides the best evidence yet that a well-driven banking behemoth can negotiate the harrowing curves of the world's financial mkts. And when the road straightens out, JPMorgan could really accelerate. Thus far, it's shown a talent for avoiding the worst of the subprime wreckage, thanks to risk-conscious CEO Jamie Dimon's firm hand on the wheel. With ample reserves, capital and liquidity, the bank also has the wherewithal to pounce on strategic deals; it could buy a big consumer bank or brokerage. "Jamie and his team are in the catbird seat to be opportunistic," says Susan Roth Katzke, of Credit Suisse, which has an Outperform rating on the stock, with a 12-18mo price tgt of 60-65.

Allstate (ALL) is trading at a depressed level, but investors are focusing too much on potential risks and too little on potential rewards. Barring a Katrina-like catastrophe, the stock could rise at least 25% in a year.

Kinetic Concepts (KCI) shares, which have fallen back after strong gains, look like dead money for now. The medical company faces new competition, including the U.K.'s large Smith & Nephew.

According to the “The Trader” column, Utility shares have the added attraction of potential upside. David Kovacs, of Turner Investment Partners, believes stocks like FPL Group (FPL), with 7% annual dividend growth over the past 5ys, and Exelon (EXC), with 15% annual dividend growth, have room to rise. "Nobody's paying attention to this group," which Kovacs believes will outperform the mkt for the next 6mo’s or so.


Fund top 10 holdings include: GE, NVS, MS, JPM, MRK, DD, HES, OXY, PG and NSC.

“Technology Trader” section discusses Yahoo (YHOO), saying despite a recent high-profile mgmt change, with Terry Semel booted out as CEO in favor of co-founder Jerry Yang, and a much-ballyhooed program called Panama to improve the monetization of search results, Yahoo continues to flounder. Yang's tenure so far has featured a flurry of mgmt shifts and pruning of some minor operations, but not the grand gestures the Street is hoping to see. Jeffrey Lindsay, of Bernstein, contends that the co seems more and more befuddled. "It is becoming increasingly difficult to put a positive spin on Yahoo's continuing misfortunes," he wrote in a research note. He points to mounting signs of operational problems.