'Fast Money' Recap: Netflix Too Pricey?

The trading panel debated whether Netflix has more room to run.
Publish date:



) -- The market rallied Wednesday on some strong earnings.


Dow Jones Industrial Average

jumped 129.35, or 1.18%, to 11,107.97, and the

S&P 500

added 12.27, or 1.05%, to 1,178.17. The


gained 20.44, or 0.84%, to 2,457.39.

Brian Kelly said on


's "Fast Money" TV show that he liked


(NFLX) - Get Report

, which was up more than 9% in afterhours trading on an earnings beat. He liked how the company was innovating, accepting new technologies and enjoying an astounding subscription growth.

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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But Karen Finerman said the valuation was stretched for the stock, which closed at $153.15 and trading more than 60 times earnings. She said she would be terrified if she were long. Steve Cortes agreed, saying the only reason why the stock was going higher was the heavy short interest in the stock.

Melissa Lee, the moderator of the show, shifted the discussion to


(EBAY) - Get Report

, which was trading higher after an earnings beat.

Despite the high valuation, Guy Adami said he was more comfortable investing in Netflix than eBay. He said the momentum is behind Netflix and the shorts will get squeezed. Patty Edwards liked eBay, noting it is trading only 16 times its current earnings and is being increasingly looked upon by small businesses as a forum to get items sold.

Lee said


(STX) - Get Report

was trading down, after reporting weaker-than-expected revenue and declining to give an outlook. Kelly said the takeover chatter surrounding the stock is the only reason why it is being held.

Looking at the overall market, Kelly attributed today's rebound in part to a better understanding of the rationale behind China's rate hike on Tuesday.

Cortes, though, said the market is getting the message that another round of quantitative easing is not a panacea. Finerman said the market has been rallying for some time on the same QE story. Adami said he continues to be impressed with the market's resilience and desire to move higher.

Is the dollar about to bottom? Eric Jackson, president of Ironfire Capital, believes the dollar will rally in two weeks when the FOMC is set to meet. He said the dollar has been oversold and sees an overdue pullback in stocks, commodities and even gold.

Lee shifted the discussion to the put-back issue dogging the banks. Finerman said she is still in

Bank of America

(BAC) - Get Report

and believes the issue is overdone. Cortes, though, feared the entry of trial lawyers into the mix will drag things out so that it becomes a situation akin that of the lengthy asbestos legal proceedings that severely impacted that industry. "It will preclude real growth," he said.

Finerman said the fallout is spreading to the bonds issued by homebuilders and homebuilder CDS spreads.

Lee brought in Peter Misek, a Jefferies analyst, to talk about



(AAPL) - Get Report

show today. He said what he took away from the show were two points: the speed with which Apple is moving in setting an app store for the Mac and how FaceTime will be a driver for iPhones, iPods and iPads.

Misek said the only Achilles heel for Apple will be the difficulty in moving such a high-priced stock.

Are retail investors exiting the U.S. markets and going overseas? Charles Biderman, president of Trim Tabs Investment Research, said that is the trend. He said investors are responding to the weak dollar and believe their losses will be less in global stocks.

Lee shifted to a developing story in which China is moving to ban the export of rare earth elements. She said the move has sent U.S. rare element companies like

Rare Element Resources





higher today, even though the U.S. companies are not in production mode.

Despite the oddity, Kelly said the U.S. companies have room to go higher, with Molycorp being in the better position because its production is scheduled to come on line in 2011.

Kelly said the U.S. is going to do something about the situation because China currently dominates the market.

In the final trades, Edwards liked

Chicago Bridge and Iron


. Cortes liked

Goldman Sachs



Morgan Stanley

(MS) - Get Report

. Adami liked

Robert Half

(RHI) - Get Report

. Finerman liked



. Kelly liked

iPath DJ-AIG Coffee

(JO) - Get Report


--Written by David Tong in San Francisco.

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