'Fast Money' Recap: How to Play RIM

The trading panel discussed the next moves to make on Research In Motion after it failed to beat estimates.

Author:: David Tong
Publish date:: Mar 31, 2010 7:30 PM EDT

NEW YORK (

TheStreet

) -- The markets fell Wednesday on some troublesome unemployment numbers in the private sector.

The

Dow Jones Industrial Average

fell 50.79, or 0.47%, to 10,856.63, while the

S&P 500

lost 3.84, or 0.33%, to 1,169.43. The

Nasdaq

was down 12.73, or 0.53%, to 2,397.96.

Melissa Lee, the moderator of

CNBC

's "Fast Money" TV show, said that shares of

Research In Motion's

(RIMM)

were down more than 5% in after-hours trading after it missed estimates. The stock closed at $73.97, down 1.26% for the day.

Pete Najarian said on that investors were keying on the decline in unit sales and revenue in the earnings report. However, he thought the stock would be a "great buy" at $70.

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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Guy Adami agreed, saying it wasn't a "disastrous" quarter for the company, adding its operating and gross margins were much better than expected. He said he would buy the stock on a dip to $67.50.

Lee said the earnings expections for Research In Motion were much too high.

Karen Finerman

said it would be interesting to see what impact the earnings would have on

Apple

(AAPL) - Get Report

. She said the earnings miss could be the result of a loss of marketshare by Research In Motion to Apple, or maybe a drop in the size of the total market for smartphones.

Lee noted that the big winner in marketshare in the fourth quarter, according to a Comscore report, was Android, which gained 2.7%. Apple gained 1%, while Research In Motion lost 1%.

Seymour wondered how much growth is left in the emerging markets for Research In Motion. He said those markets appeared saturated. He and Najarian believe that

Nokia

(NOK) - Get Report

has been the leader in handsets in the emerging markets but hasn't made much of an impact in the smartphone market.

Goldman, who was in on the conference call, said that Research In Motion said that 48% of its revenue comes from outside out of North America. He also disputed Seymour's contention that the smartphone market may becoming saturatured. He said Research In Motion sees the momentum and growth continuing.

Brian Kelly said a good derivative play off the news would be to get into the tower space, specifically

Crown Castle

(CCI) - Get Report

. Finerman said the stocks in that space are too rich.

Lee asked Peter Boockvar, an equities strategist with Miller Tabak, to comment on the end of the

Fed

's huge mortgage securities buying program on the markets.

He said the markets will have to deal with higher interest rates and the risks from sovereign debt problems and the Fed's unwind. He said inflation is already in evidence in the rise in commodity and asset prices. He said investors should be getting into hard assets and Asia.

Seymour disagreed, saying there is too much slack in the labor market to worry about inflation.

Najarian and Seymour engaged in a "street fight" over the direction of coal. Najarian said he would still like to own the coals names, despite the run they've enjoyed. Seymour, though, said it's time to take some profits, saying these stocks have been priced for a perfect scenario.

Adami said he still likes

Walter Energy

(WLT)

in this space.

Lee brought in Daniel Clifton, head of policy for Strategas, to talk about the backlash from the health care bill. He said large companies like

AT&T

(T) - Get Report

are taking huge writedowns to cover the loss of tax credits for health benefits for retirees.

He said that "pain" is going to make it difficult for the Obama to proceed on the other parts of his agenda such as financial reform and immigration.

Lee asked Clifton to return to comment on the chances of congressional passage of a financial reform bill by Memorial Day. He said it could be done with bipartisan support but he said the White House has lost some of the momentum it gained from the passage of the health care bill.

He said the final bill will probably be watered down, with the Volcker Rule thrown out. He said there will probably be a consumer protection agency with a veto check by regulators and a clearing house for derivatives.

In the final trades, Seymour liked

Freeport McMoRan

(FCX) - Get Report

. Adami liked

McDonald's

(MCD) - Get Report

. Finerman liked

Yum! Brands

(YUM) - Get Report

while Najarian went with

JDS Uniphase

(JDSU)