'Fast Money' Recap: Google Shocks
NEW YORK (
) -- Google's selloff in afterhours trading on Thursday centered on the absence of CEO Eric Schmidt in its earnings conference.
Jim Goldman, a reporter for
CNBC
, said on the network's "Fast Money" show that the company said his absence was part of a "streamlining process to let others take care of the message."
Those comments, though, failed to stem a slide in the stock, which was down more than 4% in afterhours.
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 said the market skepticism over Schmidt's absence was deserved, adding the company could have handled it better. Joe Terranova called the company's explanation "lousy."
Pete Najarian said the addition of employees and increased spending also may have played a role in sending the stock down on an earnings report that he characterized as generally positive.
Tim Seymour felt the market overreacted to Schmdit's absence and undeservedly punished the stock after the company beat estimates. He also downplayed the impact of Google's problems in China, saying the company hasn't been "kicked out."
Melissa Lee, the moderator of the show, brought in Colin Gillis, an analyst with BGC Financial, who was in on the conference call. Gilllis said the company's explanation did little to put down suspicions about a possible leadership change or a succession occurring.
He said it was also poorly timed as Google moves into a historically weak quarter and faces competition from Apple, Facebook and other players. He also said the company has been involved in a lot of initiatives recently that haven't panned out. He sees the stock sinking to the "lower side of the range."
The Google story came on another good day for the markets with the
Dow Jones Industrial Average
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rising 21.46, or 0.19%, to 11,144.57, while the
S&P 500
gained 1.02, or 0.08%, to 1,211.67. The
Nasdaq
added 10.83, or 0.43%, to 2,515.69.
Lee moved on to another story involving Carl Icahn raising his offer for
Lionsgate
(LGF)
from $6.20 a share to $7 in an offer valued at $826 million.
Finerman said the Icahn move was to be expected because his original tender wasn't going anywhere. She said the bidding may go higher because Icahn is "bidding against himself" and the situation won't be resolved until the two sides begin negotiating.
Shifting to the global growth story, Najarian said the coal and steel sectors still have some room to run. He especially liked
Arch Coal
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and what it doing to produce cleaner coal.
Seymour said some of the coal trades look long in the tooth and favored moving into infrastructure plays like
Deere
(DE) - Get Deere & Company Report
and
Caterpillar
(CAT) - Get Caterpillar Inc. Report
.
Terranova reminded the panel of the natural gas play. He said he would stay away from the spot price of natural gas and
United States Natural Gas
(UNG) - Get United States Natural Gas Fund LP Report
and look for longer-term exposure over the next 12 to 18 months in stocks such as
Devon
(DVN) - Get Devon Energy Corporation Report
and
XTO Energy
(XTO)
.
That prompted Najarian to mentioned the integrated names in the natural gas space like
BP
(BP) - Get BP Plc Report
and
Exxon
(XOM) - Get Exxon Mobil Corporation Report
as ones that could deliver "more bang for the buck.
For another view of the market, Lee brought in Hilary Kramer, chief market strategist for A&G Capital, who believes the market is a critical point. She said the S&P 500 has reached a critical point after an incredible run, where it could pull back 7% to 10%.
She offered two of her favorite stocks:
DineEquity
(DIN) - Get Dine Brands Global, Inc. Report
which could she said could hit $55 when it reports its earnings, and
VMware
(VMW) - Get VMware, Inc. Class A Report
which she sees heading to $62 and $6 when it reports earnings on Tuesday.
Anthony Scaramucci came on the show to toute a hedge fund trader's pick:
Carmike Cinemas
(CKEC)
. He said the company boasts 2,400 theaters in 37 states, 25% of which are equipped to show 3-D movies. He said his company has a 12- to 18-month price target of $23 to $25.
Although the stock is already up 300% over the past 52 weeks, it is generating a lot of cash, he said.
Continuing on the global growth story, Lee brought in Joseph Carrabba, CEO of
Cliffs Natural Resources
(CLF) - Get Cleveland-Cliffs Inc Report
, whose shares are up 60% so far this year. He painted a bullish picture of the company, with iron ore volumes up 75% in North America, the coal business up 100% over last year, and higher prices for iron ore and coal.
Looking ahead at upcoming earnings, Najarian said "everything is clicking" for
General Electric
(GE) - Get General Electric Company Report
. He said it's innovation never stopped, has good cash flow and doing well in the industrial and technology sides of its business. He said the stock should perform well based on recent options activity.
Finerman said much of the good news has already been priced into the stock of
Bank of America
(SYMBOL)
, which reports earnings Friday.
She expects the bank's credit quality will improve but she said that has probably been factored into the pricing.
Both Najarian and Seymour said
Citigroup
(C) - Get Citigroup Inc. Report
crossed a major psychological point when it moved above $5 today.
Terranova said the stock will soar once the federal government sells its huge stake.
Stephen Weiss, founder of Short Hills Capital Partners, discussed what he feels is a gem of a shipping stock:
Frontline
(FRO) - Get Frontline Ltd. Report
.
Weiss said all the company does is ship oil. He said the company is well-positioned to take advantage of China's need for tanker capacity for the oil it needs to import for its fast growing economy.
He said the stock is being held down by the opinions of 25 analysts who cover the stock, with nine rating it a sell and seven rating it a hold. He said once reality catches up, the stock will move higher.
In the final trades, Seymour said he liked
Forest Oil
(FST) - Get FAST Acquisition Corp Class A Report
. Terranova said to short
Sonic
(SONC)
. Finerman liked
Corning
(GLW) - Get Corning Inc Report
. Najarian liked
Ford
(F) - Get Ford Motor Company Report
.
-- Written by David Tong in San Francisco
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.
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