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TheStreet Open House

'Fast Money' Recap: Vulnerable Companies

NEW YORK (TheStreet) -- The S&P 500 slid 0.65% on Tuesday while the Russell 2000 fell 1.53%. 

On CNBC's "Fast Money" TV show, Dan Nathan, co-founder and editor of riskreversal.com, pointed out how disappointing retail companies' results have been. These companies have a "mulligan" on first-quarter results because of the weather but will have to prove themselves down the stretch. 

Steve Grasso, director of institutional sales at Stuart Frankel, argued retailers do not typically have catalysts going into the summer, the slow time of the year. He added that U.S. GDP is unlikely to grow 4% in 2014.

Brian Kelly, founder of Brian Kelly Capital, pointed out the 18% slide in shares of Dick's Sporting Goods (DKS). He suggested that Cabela's (CAB) and Callaway Golf (ELY) are both vulnerable, based on negative comments from DKS management about its hunting and golfing categories. 

Guy Adami, managing director of stockmonster.com, said Home Depot (HD) traded well on Tuesday after missing on top- and bottom-line estimates. However, he suggested leaving the stock alone until it breaks out over $80, or fades below $75 and moves lower.

Colin Gillis, senior technology analyst at BGC Financial, called Microsoft's (MSFT) new Surface 3 tablet a "nice device." He said if the company can sell a reasonable five million units per year, it should boost revenue by roughly 6%. He warned that the June quarter, which is usually quite good, could have some negatives in it due to the closing of its deal with Nokia (NOK) and lower sales. 

Nathan said shares of Microsoft could fall to the mid-$30s on an earnings miss, but will likely get support from the company's share buyback program. 

Grasso said it makes sense for Microsoft to release hardware products, which usually have lower margins, because it has such good margins in its cloud and software business. 

Salesforce.com (CRM) beat on revenue and earnings expectations. Adami pointed out the company's solid booking numbers and margins but did not like that the stock has failed to rally off of the results. He suggested the price action may be a warning sign. 

Nathan called CRM a well-run company but he was a seller on its rich valuation and lack of significant earnings. Kelly said he is currently not a buyer of CRM or any other cloud stock. 

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