'Fast Money' Recap: M&A Picks Up
NEW YORK (
) -- The
Dow Jones Industrial Average
teased the 11,000 level Friday before falling a few points back.
The Dow jumped 70.28, or 0.64%, to 10,997.35, while the
S&P 500
gained 7.93, or 0.67%, to 1,194.37. The
Nasdaq
added 17.24, or 0.71%, to 2,454.05.
Tim Seymour said on
CNBC
's "Fast Money" TV show that the surge in the shares of
Jacobs Engineering
(JEC) - Get Report
on takeover rumors is indicative of the large sums of cash that private equity has to spend as well as the interesting valuations in the engineering and construction services space.
He said there are a lot of similar plays in the coal and ag spaces where the underlying assets are the currency.
He said
Potash
(POT)
and
Intrepid Potash
(IPI) - Get Report
are good picks in the ag space, which he said is fundamentally strong. Steve Grasso said
Monsanto
(MON)
was his play.
For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
3 Stocks I Saw onTV |
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expressed more interest in deals with actual bids like
Casey's General Stores
(CASY) - Get Report
, the target of a hostile takeover bid.
She said it's still early on for mergers and acquisitions activity, but she said all the incredients are there for an uptick. She said the financing markets are open, corporate buyers are looking out and not in and stock prices are not that expensive.
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Are IPOS set to surge? Gary Kaminsky, who has said IPOs represent one of the three legs for a sustained market rally, said the IPO market is not frothy. He said to watch out for
Goldman Sachs
(GS) - Get Report
whose merchant bank picked up a lot of businesses when there was no liquidity and is now about to get them ready for IPOs.
Brian Kelly said his derivative play off the IPO activity is
Blackstone
(BX) - Get Report
, which he said has a lot of "undeployed" capital and will be earning management fees from the deal-making. He also liked
Morgan Stanley
(MS) - Get Report
, another "market lagger" that will benefit from the pickup in deal activity.
Shifting to the topic to crude oil prices, which were down Friday, Joe Terranova said that with spot contracts losing support, the oil trade is over. He said the better trade is in gold.
Terranova said it was time move away from stocks like
Oil Services HOLDRs
(OIH) - Get Report
and
United States Oil
(USO) - Get Report
and consider integrated names like
Hess
(HES) - Get Report
and
Occidental Petroleum
(OXY) - Get Report
.
Seymour added
Exxon
(XOM) - Get Report
,
BP
(BP) - Get Report
and
ConocoPhillips
(COP) - Get Report
were also good picks in this space.
Terranova also mentioned a buy opportunity in natural gas with
Apache
(APA) - Get Report
and Exxon.
Seymour said
US Steel
(X) - Get Report
looks exhausted from the higher input costs, while Grasso advised short
AK Steel
(AKS) - Get Report
.
Hobbs brought in David Reidel, president of Reidel Research Group, to comment on the stock rally in Greek banks today. Reidel, who is shorting the
iShares MSCI EMU Index
(EZU) - Get Report
, told investors not to be "suckered into this rally." He said countries like Spain, Portugal and Ireland still have serious debt problems.
Kelly, who owns the
National Bank of Greece
(NBG)
, took the opposite view. He said the euro is going to rally and Greece will get a deal.
Hobbs asked Jon Najarian to comment on
Alcoa
(AA) - Get Report
, which got a second downgrade today. He and other panelists weren't worried and said there may be a buying opportunity if there is a selloff after it reports its earnings next week.
Shifting to tech, Terranova said he would take
Intel's
(INTC) - Get Report
earnings next week as a benchmark to trade in other tech stocks including
Marvell
(MRVL) - Get Report
and
Lam Research
(LRCX) - Get Report
.
In the financial space,
Bank of America
(BAC) - Get Report
reports earnings next week, and Finerman remains solidly behind the stock. Kelly said
Fannie Mae
( FNM) and
Freddie Mac
( FRE) may be doing a better job with delinquent and nonperforming loans than BofA.
In the 30-second pitch, Finerman liked
Best Buy
(BBY) - Get Report
for selling 3-D plasma TVs and the iPads and growing overseas. She said the stock is very attractive at less than 13 times earnings and has "significant upside."
In the final trades, Grasso liked
Citigroup
(C) - Get Report
. Finerman liked Best Buy while Terranova liked
3M
(MMM) - Get Report
. Seymour favored
Fluor
(FLR) - Get Report
.
-- Written by David Tong in San Francisco
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.
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