'Fast Money' Recap: The Apple Trade (Updated)
NEW YORK (
) -- The markets advanced on Wednesday on the strength of tech and financials.
The
Dow Jones Industrial Average
rose 49.88, or 0.53%, to 9547.22, and the
S&P 500
added 7.98, or 0.78%, to 1033.37. The
Nasdaq
was up 22.62, or 1.11%, to 2060.39.
Melissa Lee, the moderator of
CNBC
's "Fast Money" TV show, zeroed in on
Texas Instruments
(TXN) - Get Report
which was moving higher in afterhours trading.
Guy Adami said the company, whose stock has had a big run, is a "nice turnaround story" and has "done some good things." Texas Instruments raised its earnings and revenue guidance.
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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Pete Najarian applied a broader brush on the chip sector, saying that companies like
Intel
(INTC) - Get Report
,
Juniper Networks
(JNPR) - Get Report
and
Ciena
(CIEN) - Get Report
have come a long way since July.
Adami expressed concerns about
IBM
(IBM) - Get Report
, which was down today and hasn't been able to break through $120.
Apple
(AAPL) - Get Report
closed at $171.14, down 1.04%, on a day when Steve Jobs appeared at a new products show in San Francisco and there was a rash of company announcements.
Terranova said the decline was to be expected. He said the trade all along was to reduce the long exposure to the stock after Jobs appeared on stage. Other panelists discounted Jobs as a "surprise" factor. Tim Seymour said Apple didn't put enough video and cameras into the iPhones and the company is starting to see some cannibalization between products such as the iPhone and iPods.
However, Seymour said he still sees the stock heading to $190. Najarian asked Terranova why he would bail out of Apple now if he thinks it's heading to $200. Terranova said getting out now would allow investors to pick it up at a lower price like $155 to $165 over the next two weeks.
Najarian said the cleaner solution would be to buy puts in the stock. That way investors will be able to buy the stock and be protected on the downside, he explained. Najarian went to say that Apple's iPhone and Macs will thrive in the China's huge market.
David Pogue,
New York Times
columnist, appeared on the show, after interviewing Jobs. Pogue said Jobs, though "rail thin," was "energetic," "thoughtful," and "fully into it." According to Pogue, Jobs said he needs to gain 30 pounds and is "eating like crazy."
Pogue agreed with Lee's point that the cannibalization might be a "good thing" if it winds up with the iPhone gaining more share and healthier margins. He said the Apple won't talk about the tablet. But Jobs did say he had some "polishing" to do on some projects after his six-month hiatus, Pogue said.
Jim Goldman,
CNBC
reporter, said Apple's new products show displayed once again the company's impressive ability to drive growth in its App stores, iTunes and even in its maturing iPods, where the company said that 50% of the sales is going to first-time users. "That bodes well for the holiday season," he said.
Seymour said Apple's price cuts will hurt its competitors and move the stock higher.
Lee shifted the discussion to the industrials, especially
General Electric
(GE) - Get Report
, which was up 3% for the day. Adami continued to tout
Honeywell
(HON) - Get Report
and its low valuation.
Seymour said these companies are worthwhile investments because they have come through the cycle in much better shape than expected, having weeded out their balance sheets and become leaner.
Najarian was impressed with
Textron
(TXT) - Get Report
which has soared 383% the past six months. He said Goldman Sachs has put it on its conviction buy list. He said the company sees 8% to 10% annual growth for the next five years.
Lee invited Kevin Plank, CEO of
Under Armour
(UA) - Get Report
to the show to talk about the company's big run. The company, which develops and distributes performance underwear, footwear and accessories, was up 9% for the day and 103% in the past six months.
Plank said the company has performed well because of innovation and business savvy. He said the company is showing better revenue and earnings and putting more cash in the balance sheets.
Lee brought in Heath Terry, FBR Capital video game analyst, to talk about
Electronic Arts
( ERTS) and its new Beatles rock band release. He said the release marks the beginning of bigger releases from the company.
Health's favorite company in this space is
Activision Blizzard
(ATVI) - Get Report
, which he says has a huge product lineup, including "Call Up Duty," which is estimated to sell 15 million units.
Bill McDermott, president of global field operations for
SAP
(SAP) - Get Report
, a huge business software company, which has reiterated its 2009 outlook. The stock is up 39% year to date.
McDermott said growth is leveling off in Germany, the U.S. and Japan but taking off "substantially" in Asia. He believes the company has done well because it has come up with a business network that its customers want: a technology platform that supports business models within a collaborative ecosystem.
In the final trades, Seymour said he would short the gold miners. Adami said he liked
SAP
(SAP) - Get Report
. Terranova said he would sell
Carnival Cruise Lines
(CCL) - Get Report
at $32. Najarian said he would pick up
Titanium Metals
(TIE)
.
-- Written by David Tong in San Francisco
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