'Fast Money' Recap: Texas Instruments Out of Tune
It was a mediocre Monday for the U.S. stock market. Tech companies had good news to offer, while the financials made investors squeamish. The Dow and the S&P 500 each lost about 0.2%, while the Nasdaq climbed 0.2%.On CNBC's "Fast Money" TV show, the traders discussed an in-line quarter and a lowered second-quarter forecast from Texas Instruments (TXN) - Get Texas Instruments Incorporated Report.
Pete Najarian said Texas Instruments looks terrible. He said the chip sector has had too much competition. He said that as
Nokia
(NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report
and
Ericsson
say they're looking for other suppliers for their phones, and Texas Instruments might have to go back to calculators.
3 Stocks I Saw on TV |
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Macke said that Texas Instruments is not very exciting, either from the long or short side. This earnings report is specific to Texas Instruments and doesn't say much about the rest of the market, he said.
Macke said that Texas Instruments has learned to lose in every business that it undertakes. There are better plays in almost any space Texas Instruments is in, he said.
In the financial services sector,
Bank of America
(BAC) - Get Bank of America Corporation Report
reported a 70% drop in profit and produced writedowns on its assets.
Karen Finerman said it was nice that the company was holding on to its dividend. At 6.8%, the stock's yield isn't bad, she said.
TheStreet Recommends
Adami said he would be looking at
Ameriprise Financial
(AMP) - Get Ameriprise Financial Inc. Report
after Bank of America's earnings. Ameriprise had a pretty good fourth quarter, he said. He said he thought the company might surprise when it reports earnings tomorrow.
Macke said the financial stocks were due for a break from bullish activity. He recommended buying the dips in the space.
Najarian recommended
MasterCard
(MA) - Get Mastercard Incorporated Report
. He said the company's transaction fees are working great. He also said to keep an eye on
Visa
. There won't be a pullback in Visa, he said -- the stock is on fire.
National City
(NCC)
announced today that it was raising capital. Adami said that of the regional banks, he recommends
USBancorp
(USB) - Get U.S. Bancorp Report
, which he said is very conservative. When the banks rally, USBancorp should rise too, he said. Macke said he wouldn't recommend the regionals.
Pharma's Ups and Downs
In the pharmaceutical space,
Eli Lilly
(LLY) - Get Eli Lilly and Company Report
offered disappointing profit and outlooks for the first quarter, while
Merck
(MRK) - Get Merck & Company Inc. Report
beat analyst expectations.
Bristol-Myers Squibb
(BMY) - Get Bristol-Myers Squibb Company Report
reports later this week.
Najarian said Novartis
(NVS) - Get Novartis AG Report
has a good pipeline. Adami compared
GlaxoSmithKline
(GSK) - Get GSK plc American Depositary Shares (Each representing two) Report
with
Merck
(MRK) - Get Merck & Company Inc. Report
in September of 2004. Other than
Gilead
(GILD) - Get Gilead Sciences Inc. Report
, he said, GlaxoSmithKline is the play.
Boston Scientific
(BSX) - Get Boston Scientific Corporation Report
shares jumped higher in after-hours action on earnings. Adami said he'd like to hear what the company says on its conference call on the stent business. That news would be relevant to
Johnson & Johnson
(JNJ) - Get Johnson & Johnson Report
, he said.
Oil Surges
Crude oil closed at a record high today. Addison Armstrong, director of market research at Tradition Energy, joined the show to talk about commodities. He said it's hard to fight the tape, and he believes oil will continue to rise. He pointed to supply information, including supply disruptions in Nigeria and a strike at a refinery in Scotland.
Armstrong said the trade is to remain long. He said every pullback is a buying opportunity. Najarian pointed out that the
Oil Services HOLDRS
(OIH) - Get VanEck Oil Services ETF Report
hit $210 today. He said that the price-to-earnings ratios in names like
Schlumberger
(SLB) - Get Schlumberger N.V. Report
,
Baker Hughes
(BHI)
and
Diamond Offshore
(DO) - Get Diamond Offshore Drilling Inc. Report
made the sector look bullish.
Armstrong said the oil services names look poised to go higher. He said, though, that a potential slowdown isn't quite priced in to the stocks. He recommended looking at demand from Asia after the Olympics.
For the Chart of the Day, the traders looked at the continued rise in oil prices, which appeared directly related to the decline in airline shares. Najarian said that the rails were a better transport play, noting bullish action in
Burlington Northern Santa Fe
(BNI)
and
CSX
(CSX) - Get CSX Corporation Report
.
Arch Coal
(ACI) - Get Albertsons Companies Inc. Class A Report
hit a 52-week high today. Najarian recommended looking at
International Coal
(ICO)
, which reports earnings Wednesday. He said the company is one of the largest producers of metallurgic coal, an ingredient in steel. He also noted bullish call activity in the stock.
Adami said that the Arch Coal story is great. He also pointed viewers toward
Joy Global
(JOYG)
and
Bucyrus
(BUCY)
. Investors should embrace the coal story, he said.
A Media Matchup
On news that
Viacom
(VIA) - Get Via Renewables Inc. Report
would be teaming up with MGM and
Lions Gate
(LGF)
to offer a pay cable channel, Macke said he'd rather be in
Disney
(DIS) - Get The Walt Disney Company Report
. He said the entertainment sector is a very competitive field.
Yahoo!
(YHOO)
reports earnings tomorrow. The traders observed that a beat from the Internet company could embolden its board to look for a sweeter deal than a current takeout bid from
Microsoft
(MSFT) - Get Microsoft Corporation Report
.
Finerman said her fund is long Yahoo!. She said the company has to come out with an unbelievable quarter. She predicted the company would put everything it could into revenue and bottom-line numbers.
Adami said that the Yahoo! buyout has always been about Microsoft, whose last two quarters have been "historic," he said. Macke said he's long both names, and agreed with Finerman's prediction that Yahoo! would try to make its earnings look strong. He said that Microsoft may raise its bid "a little to be polite," but it won't be fooled by Yahoo!'s earnings. Najarian said the deal between the two companies will get done, and said he owns both names.
The traders took time to discuss several rumors on the Street, including a potential buyout of the
New York Times
(NYT) - Get New York Times Company (The) Report
by New York Mayor Michael Bloomberg. Macke was dismissive of that idea.
Further Speculation
In other speculative news, Najarian pointed out bullish call activity in
RadioShack
(RSH)
. He said people may be speculating that the company can partner with somebody. He said
Under Armour
(UA) - Get Under Armour Inc. Class C Report
shares were also up today on no news, and noted that
Lululemon
(LULU) - Get lululemon athletica inc. Report
has a 52% short interest and a high valuation, making it look like Under Armour and
Crox
(CROX) - Get Crocs Inc. Report
at the end of last year.
Macke cautioned investors against chasing Radio Shack or other names on rumors.
Hasbro
(HAS) - Get Hasbro Inc. Report
reported very positive earnings today. The traders welcomed CEO Al Verrecchia to the show to discuss his business. Verrecchia said that the same brands that drove business in 2007 continue strong in 2008. The recession doesn't appear to affect the business to a great degree, he said.
Macke said Hasbro is the best player in an adequate industry. Sometimes, he said, adequate is good enough and he's still long the name. Adami urged investors to avoid rushing into the stock and advised waiting for dips. Najarian agreed.
Trader Radar
Hanesbrands
(HBI) - Get Hanesbrands Inc. Report
traded on extraordinary volume today.
Commander Planet
In honor of an upcoming Earth Day, Najarian donned his Commander Planet superhero persona to discuss natural gas. The energy source is cheaper than fuel and oil, and thanks to surging demand, its price is up 400% in the past decade, he said. He said the trade on the trend is
Chesapeake Energy
(CHK) - Get Chesapeake Energy Corporation Report
. The company's CEO, Aubrey K. McClendon, continues to buy shares of his own company, he said.
Najarian also said he likes
Apache
(APA) - Get APA Corporation Report
and
Devon
(DVN) - Get Devon Energy Corporation Report
. He also said that drilling companies
BJ Services
(BJS)
and
Nabors
(NBR) - Get Nabors Industries Ltd. Report
are worth a look.1
Chartology
Quint Tatro of Tatro Capital offered a technical look at the market. He said that a trend line that had offered support for the S&P 500 is now a resistance line. He said that the current environment is a stock picker's market.
For individual stocks, he recommended
DryShips
(DRYS) - Get DryShips Inc. Report
, which has been in a downtrend since late 2007 and only recently broke out of its trendline. He also recommended
Corning
(GLW) - Get Corning Incorporated Report
, which has traded sideways for two years and could double if it breaks out, he said.
Adami said he loves Corning. He pointed out that the company controls 57% of the LCD market and makes a lot of the glass that goes into cell phones. He called DryShips a risk-reward trades. He said he'd be interested if the company showed a turnaround in its business.
Macke said DryShips is a laggard, and he'd rather play the rails.
Final Trade
Macke chose Hasbro. Adami picked Intel. Finerman said she's short the
CurrencyShares British Pound Sterling
(FXB) - Get Invesco CurrencyShares British Pound Sterling Trust Report
. Najarian said to get long Baker Hughes.
