'RealMoney' Radio Recap: Market Marvels
The market was experiencing a "pleasant" -- not a perfect -- storm today, Aaron Task, co-executive editor of
TheStreet.com
, told
"RealMoney" radio show listeners Monday. Task is filling in for Jim Cramer this week.
Part of that so-called pleasant storm had to do with today's muted home-sales data. Task said that today's results may not be good for those who are selling their homes, but they're good for investors because it will keep the
Fed
from being overly concerned about an overheated real estate market.
Sales of new single-family homes in the U.S. fell 5% in January, and the amount of unsold inventory rose to the highest level in nearly 10 years, the Commerce Department said Monday.
Sales in January were at a seasonally adjusted annual rate of 1.233 million, down from 1.298 million in December and up slightly from 1.194 million a year ago. Economists expected a rate of 1.26 million sales, according to
Reuters
.
Task also said that home improvement retailer
Lowe's
(LOW)
had good numbers today, which means that the housing sector will not fall apart and that a soft landing is possible.
Another part of Task's pleasant storm is the recent spate of M&A activity which included the purchase by Britain's National Grid of utility
KeySpan
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and
GE's
(GE)
decision to buy a piece of
TXU
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.
"Merger activity takes away from the supply of stock," said Task. "And when you get down to it, the market runs on supply and demand."
Task added that the final piece of the pleasant storm came in the form of lower oil prices attributable to the Iran situation "cooling off a bit."
The Disciplined Trader
Lenny, the Disciplined Trader, Dykstra joined Task today to comment on his latest column on
TheStreet.com
. Lenny's first order of business was to tell listeners not to give up on oil driller
Nabors Industries
(NBR)
despite the fact that it has taken it on the chin recently.
"This is one of the best companies in the world, and its fourth quarter was mind-boggling," said Dykstra.
Dykstra also discussed his current pick,
Eli Lilly
(LLY)
, with Task. He described it as a "great company on both the pharmaceutical and pet sides of their business."
The stock will move into the $60 range because this company will have a great quarter. He suggests buying the October $45 deep in-the-money call options that cost around $12. "That will give you the ability to own $57,000 worth of stock for just $12,000."
Dykstra told listeners not to be afraid to take profits on
Bank of America
(BAC)
after its recent run-up.
"Sell on strength, you'll get a chance to buy lower later," said Dykstra who recommended the June options in his last column.
Another caller asked if he should catch the proverbial knife on
Grey Wolf
undefined
. Dykstra cautioned the caller not to buy calls on stocks under $10, but if you are in it for the long term, don't quit it. Buy more, he said.
Task reviewed the problems at
Dell
(DELL)
for a caller. Dell has been out of favor as late, which makes it a good candidate for Dykstra's deep in-the-money call strategy.
"This company is overcooked. There is not much downside risk," said Dykstra.
Another caller wanted to know about
Schering-Plough
(SGP)
, a company that Cramer has liked in the past. Task said that SGP is a good defensive name as rates rise and defensive stocks are in demand.
Dykstra would avoid the name, saying that there are better opportunities out there.
The caller also wanted to get Task's opinion on
MTR Gaming
(MNTG)
. Task said he would prefer
Penn National Gaming
(PENN)
, but don't quit MTR because it's currently in play.
Task's Callers
After Dykstra departed, Task fielded questions about
Intel
(INTC)
. Technically speaking, Task said, Intel represents value and is now a defensive name compared with smaller chip players.
Task also addressed an email about
Forest Oil
(FST)
, which is more of a natural gas player.
As natural gas prices fall, it's tough to make money because these are mature industries. Task also offered the emailer
Bronco Drilling
(BRNC)
, a lesser-known company recommended by John Layfield on
TheStreet.com
.
Task said that if you want commodities with diversification then you may want to try the
U.S. Global Investors Resources Fund
(PSPFX) instead of picking individual stocks.
Aaron L. Task is the co-executive editor of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships.
to send him an email.
