'Fast Money' Recap: Oracle's Sweet Spot
NEW YORK (
) -- The markets rose Thursday on a decline in initial jobless claims.
The
Dow Jones Industrial Average
added 41.78, or 0.36%, to 11, 499.25 while the
S&P 500
rose 7.64, or 0.62%, to 1,242.87. The
Nasdaq
was up 20.09, or 0.77%, to 2,637.31.
The trading panel on
CNBC
's "Fast Money" TV show spent a great deal of time on tech, in particular the strong earnings reports of
Oracle
(ORCL) - Get Report
and
Research In Motion
(RIMM)
.
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 on TV |
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Joe Terranova detected a change in Research In Motion's business model toward emerging markets and expressed concerns about an erosion of its enterprise space.
Tim Seymour said there will definitely be margin erosion for RIM in the emerging markets. He said it will lose out to competitors like Samsung as well as consumers looking for cheaper handsets.
Simon Baker, who was on the conference call, said RIM expects to start shipping the Playbook in the first quarter. He said RIM is going all out on the Playbook next year as it expects its margins will drift below 40% due to increased manufacturing costs.
He said the company is saying there is an excitement about the Playbook, but he wondered whether it was people excited about it or the company excited about it.
Mark Mahaney, Citigroup tech analyst, said that if the trends hold true,
(GOOG) - Get Report
could be the leader in the U.S. smartphone market in two years. He said it already has 25% of the U.S. market in smartphones with $400 million in sales this year and possibly $1 billion in sales in 2011. He said Google is hitting on both cylinders: the Internet and smartphones.
Switching to Oracle whose stock was a 10-year high on stronger-than-expected numbers, Brian Kelly said he was impressed with the leadership displayed by co-president Mark Hurd and how the combination of hardware and software is "starting to catch on."
Joe Terranova, who lamented selling his shares of Oracle today at $28, said he believes Hurd can navigate the integration of hardware and software and provide Oracle with organic growth.
Jon Fortt, a
CNBC
reporter who was listening to the conference call, said Oracle reported a 21% increase in new software licenses to $2 billion and a gross margin of 53% in hardware.
In other major news,
Visa
(V) - Get Report
and
Mastercard
(MA) - Get Report
declined sharply on a federal proposal to cap debit card fees.
Terranova and Kelly advised getting out of both names. Terranova said the proposed rule is more restrictive than expected, and Kelly was worried about the lack of clarity hovering over both stocks.
Jason Kupferberg, a UBS analyst, maintained a buy rating on both stocks, saying the selloff was a bit overdone. He expects both card issuers to take a "manageable" 10% haircut on their earnings as a result of the proposal. He said there's still some uncertainties in the proposal that need to be dealt with on other issues.
Kelly hated the idea of government price controls and said it would be a lot better if the fees were dictated by market forces. Seymour said investors should buy shares of
American Express
(AXP) - Get Report
, which was swept up with the tide even though it's not in the debit card business.
In a "street fight" over gold, Dennis Gartman said he was sticking with gold in 2011. He said the metal's prospects continue to look good because of the confusion in monetary circumstances around the world, demographic problems in Japan and monetary problems in U.S.
Gartman acknowledged gold has dropped in the past two sessions but said the drop in percentage terms is very small. He said gold prices could drop to $1250 an ounce next month but he believes it will wind up at $1,600 in 2011.
Terranova said he is shorting gold into the new year because he thinks it's "vulnerable." He wagered Gartman on a bet that the next 50 dollars in gold will be on the downside.
Melissa Lee, the moderator of the show, brought in Mike Ryan, of UBS Wealth Management Research, to talk about his investment themes for 2011. He said the expectations for cloud are running far ahead of the technology and that the better bet would be in
Apple
undefined
. He also sees a strong demand for energy, with oil heading to $100 a barrel. He likes the plays in the oil service industry.
It was Joe Terranova to offered up his picks for 2011. He liked Apple and the prospects of 40 million iPads sold and a 20 P/E that would push the stock to $400 and make it the company with the largest market cap.
He said the dollar is going down the drain as it revisits the low of March 17, 2008. And he said oil is going to clean up, adding he likes the integrated, refining and oil service names.
In the final trades, Baker said
Amazon.com
(AMZN) - Get Report
looks good in the wake of the misfortunes of Visa and Mastercard. Seymour liked
Monsanto
(MON)
while Kelly liked
JPMorgan
(JPM) - Get Report
. Finerman liked
MacDonald's
(MCD) - Get Report
and Terranova liked
Salesforce.com
's
(CRM) - Get Report
.
--Written by David Tong in San Francisco.
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.
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To watch replays of Cramer's video segments, visit the Mad Money page on CNBC
.
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