'Fast Money' Recap: M&A Picks Up

The trading panel discussed the pickup in M&A activity and offered their picks.
By David Tong ,

NEW YORK (

TheStreet

) -- 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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Karen Finerman

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.

> > Bull or Bear? Vote in Our Poll

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

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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