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1. Kraft Goes Hostile
By Sham Gad
8:32 a.m. EST
announced a hostile $16.3 billion bid for
today, the deadline for a formal deal. This is below Kraft's $16.7 billion original offer. Considering Cadbury has no other offers on the table, I wouldn't immediately dismiss Kraft's chances of success. I continue to feel that Kraft shares are undervalued and like the fact that no more stock is being given away in the deal. This deal is fantastic for both sides -- at a fair price -- and I wouldn't count out Kraft.
By Tim Melvin
10:22 a.m. EST
Not an entirely terrible report from refiner
this morning. Earnings were down substantially, falling from $259 million last year to just $33 million this year. Revenues fell by just about half in the quarter. Given the horrible conditions in the refining industry, the fact that they did not lose money is pretty impressive, in my opinion. Total system throughput was down 9% as the company adjusted production levels in the face of slower demand. Tesoro also cut the dividend in half to conserve cash.
I continue to view refiners, particularly Tesoro, as deeply undervalued assets that are almost irreplaceable. The hurdles to building new refineries in the U.S. are enormous and eventually I think the share prices will reflect this. I have not bought back into this stock yet, so the lower it goes, the more I like it.
3. Ford (F)
By Alan Farley
10:37 a.m. EST
has moved to the top of its three-month trading range, after a "high pivot" that followed earnings and a convertible notes offering. I think the stock is just about ready to break out and test the 2009 high at 8.86.
I've been holding Ford for a few months, with the intention of keeping it through most of 2011. The stock has the potential to become a near monopoly for U.S. customers that are committed to "buying American." (No, I don't think
will survive long term.)
4. Three-Year Auction Very Strong
By Tom Graff
1:10 p.m. EST
Pre-auction expectations were for 1.42% on today's $40 billion three-year auction. Actually, it came at 1.404%. Not only that, the bid/cover was 3.33 times, and indirect bids were awarded 68.5% of the auction. Both are all-time bests for the three-year. Both are also well above the recent averages for any Treasury note/bond auctions.
Any way you slice it, there is plenty of demand for shorter-term Treasuries, both foreign and domestic.
Treasuries should rally more on this result, but I caution that tomorrow's 10-year and Thursday's 30-year auctions will be more difficult to place.
5. There Is No Bearish Case
By Rev Shark
2:06 p.m. EST
In response to a question from Jim Cramer about what the bears can be arguing now:
The only possible bearish arguments right now is that the dollar carry trade or the massive liquidity will somehow come to an end. This rally is all about the G-20 saying we have will have endless stimulus with no ultimate cost. Arguing economic numbers, fundamentals or charts is pretty useless.
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This article was written by a staff member of RealMoney.com.