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TheStreet Open House

'Fast Money' Recap: An Important Week for Earnings

NEW YORK (TheStreet) -- The S&P 500 slid 0.23% ahead of an important week of earnings. 

On CNBC's "Fast Money" TV show, the trading panel looked at Chipotle Mexican Grill's (CMG) revenue and earnings beat. 

"Unbelievable quarter," said Guy Adami, managing director of stockmonster.com. However, despite the strong results, he is not a buyer of Chipotle at current levels. Instead, he prefers Jack In The Box (JACK)

Karen Finerman, president of Metropolitan Capital Advisors, said Chipotle appears to be taking market share from its competitors. She is surprised that the stock only has a short interest of roughly 5%. 

Tim Seymour, managing partner of Triogem Asset Management, said the company has one of the most loyal customer bases. However, Chipotle does not seem capable to continuing growing this rapidly, he argued, and he is not a buyer based on valuation. He likes Starbucks (SBUX).  

Steve Grasso, director of institutional sales at Stuart Frankel, said shares of Chipotle seemed poised to move higher. The higher menu prices are still being undervalued by investors, he suggested.

Johnson & Johnson (JNJ) announced a new $5 billion share repurchase plan. Seymour said this is good news as the company has a ton of cash, a strong balance sheet and a healthy international business. 

Michael Pachter, managing director at Wedbush Securities, has an underperform rating on shares of Netflix (NFLX) with a $215 price target. He said Netflix continues to grow its subscriber base and offer better content. However, the company has generated negative cash flow for the past nine quarters. 

Pachter argued that eventually the negative cash flow would start to weigh on Netflix's income, which will weigh down its earnings per share. When that happens, the share price is likely to decline precipitously, he concluded. 

Seymour said Netflix is imposing a secular change in how people watch video. However, its valuation is unattractive and for that reason he is not a buyer. Finerman agreed she is not a buyer based on valuation.  Grasso argued that shares of Netflix seem poised to move higher.

Brian Goldner, president and CEO of Hasbro (HAS), was a guest on the show. The company beat on bottom-line estimates, despite missing top-line expectations. He said timing is an important factor in the business headed into the second half of 2014. He added Hasbro is putting more focus on customization, which can be done with board games and 3-D printing of select toys. 

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