'Fast Money' Recap: Microsoft in Stock Purgatory

Gary Kaminsky said the stock neither appeals to growth technology investors or those who are looking for dividend growth and income.
Publish date:



) -- The markets closed flat Thursday amid persistent worries about the


's quantitative easing plans.


Dow Jones Industrial Average

was off 12.3, or 0.11%, to 11, 183.95 while the

S&P 500

gained 1.26, or 0.11% to 1,183.71. The


added 4.11, or 0.16%, to 2,507.37.

The trading panel on


's "Fast Money" TV show, was skeptical about


(MSFT) - Get Report

despite a strong earning report and impressive sales of its Windows 7 operating system.

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 said he would take a wait-and-see approach to the stock, adding he would be a buyer if it goes above $26.95.

Tim Seymour said the consumer could be a headwind for Microsoft, while Guy Adami felt the company could have done a lot better. Adami said Microsoft seems to be a step behind and needs to "shake up the place."

Gary Kaminsky said the stock trades like a utility that generates cash. He said that if Microsoft doesn't want to use the cash for acquisitions, it should return it to the shareholders.

Jon Fortt, a


tech correspondent said he saw a lot to like in the earnings report. He said the Windows division is doing well, adding the company is investing in online, developing a cloud strategy and trying to tie a gaming strategy to its mobile strategy. Overall, he said it's hard to be down on the results.

The panel, though, said they weren't looking at the results so much as the valuation of the stock. Kaminsky said the stock is is in "no man's land" where it is not owned by growth technology investors or dividend growth and income investors.

Lee shifted the discussion to

Goldman Sachs

(GS) - Get Report

, which has been rising this month. She said the stock is breaking out because it doesn't have any exposure to the mortgage mess.

Terranova said Goldman also is seeing revenue coming in from commodity trading in which it excels.

Steve Cortes lamented not sellling

Bank of America

(BAC) - Get Report

today. He said there is weakness in a lot of banks that quantitative easing cannot address.

Lee spent some time on some stocks that had big intra-day moves. First up was


(HAL) - Get Report

which took a hit after a report that the cement it used on a BP well was unstable. Seymour said he would buy the oil service stocks on weakness because their core business model is "alive and well."

Terranova said he would rather get into a stock like


(SLB) - Get Report

because it allows investors to play the recovery without the headline risk.

Another stock that fell dramatically was


(STX) - Get Report

on reports that its talks with KKR were off.

Also taking a big hit was



on word that China would lift its ban of the export of rare earth elements. Seymour said the trade is totally controlled by China which dominates the niche market.

Lee brought in David Maris, an analyst for CLSA Asia-Pacific Markets, who said he was shut out of

Forest Laboratories


for his sell-rating on the company.

He said he was down on the company because 87% of its sales go off patent in five years. "It's a risky story."

Kaminsky said it's important for a company to maintain a dialogue with analysts regardless of what they say.

Lee said the dollar rally halted today. Seymour said he expects the dollar will decline long term, a direction the


is pushing.


(HBI) - Get Report

shares today on concerns of rising cotton prices.

Rich Noll, the company's CEO, downplayed the higher input costs, saying it would result only a few dollars more a year for consumers. Noll said high cotton prices are here to stay for some time, but expressed confidence in his company's ability to manage the higher prices.

He said it may be necessary to tell retailers in late 2011 that it may have to raise prices again.

Analyzing the midterm elections and the energy trade, Benjamin Salisbury, analyst for FBR Capital Markets, said Republican control of Congress would benefit nuclear, oil , coal and ethanol. He said nuclear would benefit because it has the backing of both Obama and the Republicans.

In the final trades, Seymour liked



and Adami liked


(BWA) - Get Report

. Terranova liked

Walt Disney

(DIS) - Get Report


--Written by David Tong in San Francisco.

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