Top Takes From Real Money

The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.

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1. Navistar

By Tim Melvin
2:34 p.m. EDT The report out of Navistar(NAV Quote) this morning was horrible. Sales were down 30% and earnings fell 94%. The truck and engine manufacturer also lowered its guidance for 2009 to $2.80 to $3.10 a share. The previous guidance was for $5.10 to $5.60.

The press release called the current economic conditions for the industry the worst since 1962. CEO Daniel Ustian added that the recovery was going to take longer than expected.

I have to confess I am impressed the company has remained profitable. They have taken advantage of the bad times to gain market share and expand their military business.

The shares do appear to be ahead of themselves in trading today. The stock is up more than 2.5% so far today. The multiple of falling earnings is a tad high for my taste at almost 15 times the estimate.

As analysts adjust their estimates down from the previous $4.09 level the stock may weaken from these levels. It might be a good time for long-term holders to sell some near-term calls.

No positions.

2. From Russia With Crude

By Howard Simons
2:28 p.m. EDT

Both Russian stocks and the ruble came back after February as a logarithmic function of Urals crude oil delivered to Northwest Europe.

That logarithmic part is key: The huge kick in Russian stocks off the low and off of crude oil prices will start witnessing diminishing returns unless crude oil prices remain on an early 2008-type of run. I think we are headed higher in crude oil still, but not at that pace.

An indirect beneficiary of the Russian rebound is Switzerland. Why park your money in a cold, drafty Moscow bank when you can park it in a Swiss bank? The connection here is surprisingly direct and applies to money coming out of hot, dusty banks in the Middle East as well.

No positions.