3 Stocks I Saw On TV
XLE - Get Report) and the Oil Services HOLDRS ( OIH - Get Report) pulled back despite oil prices soaring above $107 a barrel. He also noted that steel names, which had been performing well this week, "took it on the chin" late in the day. Karen Finerman said she saw more volatility in the market today. Tim Seymour observed that debt was down, the dollar was up, and equities were down today. He said that the fixed-income market may be lower for technical reasons. Liquidity is not there for the markets, he said. He said concern in financials has returned.
Jeff Macke said that Oppenheimer analyst Meredith Whitney "took a bat" to financial stocks. He said that Google ( GOOG - Get Report) performed poorly, Oracle was "a mess," and that the end-of-month rally ran out of steam today. Najarian said that the volatility index never got above where it had been yesterday. He called the financials a disaster. Tim Seymour said the volatility index chart looked like it was ready to break out to the upside. Former Bear Stearns CEO Jimmy Cayne liquidated his stake in the company for $10 a share, the price of JPMorgan's ( JPM - Get Report) revised offer for the company. JPMorgan had previously offered $2 for Bear. Finerman called the move "fascinating." She said the fact that Cayne sold his stake at $10 likely means there won't be a sweeter deal for Bear in the offing. She said that Cayne had too much inside information to sell his shares at any higher price. Macke agreed, saying Cayne would go to prison if he sold his Bear shares at $70. Former AIG ( AIG - Get Report) CEO Hank Greenberg was accused by the insurer's board of absconding with $21 billion of the company's treasury stock. The crew spoke with CNBC reporter Steve Liesman about the Federal Reserve's actions to stem the credit crisis. Liesman said the Fed was exchanging $37 billion in liquid bonds for illiquid subprime paper. He said that the Fed is reliquifying the market. Holders of subprime paper, he said, could net savings of anywhere from 70 basis points to infinity, because some of the paper couldn't be financed. Macke compared the Fed's action to the gasoline fight in Zoolander, saying the government is just spraying money into the market. The crew concluded that the investment banks had successfully accessed capital to help fund the mortgage securities market. Year to date, the tech sector has underperformed the beleaguered financials. Najarian said he still owns Oracle. He likes the stock at these levels, thanks in part to raised estimates for the stock from Friedman Billings. Macke observed that large-cap tech stocks have gotten "smooshed" this year. Microsoft ( MSFT - Get Report), Google and Oracle have all failed to post gains, and that makes them value stocks, he said. He said he likes Microsoft on a dip much more than he does Lehman Brothers , for example. He said there's no rush on names like Intel ( INTC - Get Report), and investors should expect that weakness in the financials will affect earnings from tech companies. Najarian noted heavy options action in Nvidia ( NVDA - Get Report). He recommended keeping an eye on the graphics chipmaker. Oil was up to $108 today on a supply disruption in Iraq. Seymour said that the oil pipeline in southern Basra had been disrupted, marking the first time in a while Iraqi oil supply had been interrupted. He said that this news, coupled with a flight to quality, makes for a nice uptrend in oil.
Najarian pointed investors to natural gas, recommending Apache ( APA - Get Report), Chesapeake Energy ( CHK - Get Report) and Devon ( DVN - Get Report). In the agriculture space, Seymour recommended Syngenta ( SYT), which he called the German Monsanto ( MON), and Chemical and Mining Company of Chile ( SQM - Get Report), which he compared to Potash ( POT). Williams Sonoma ( WSM - Get Report), a provider of expensive home goods, posted weak profits and a weak forecast. Finerman said that similarly, shoe vendor DSW ( DSW) refused to give forward guidance. She said that that's never a good idea for a stock. Hedge funds appear to be finding value in mortgage lenders. One fund made a $450 million investment in Thornburg Mortgage Finerman said. She called the financing deal an expensive rescue for Thornburg and noted that the deal used a similar override of shareholder voting power that was used in JPMorgan's acquisition of Bear Stearns. She noted that Thornburg paper is not subprime; rather it is very high-end. Seymour said that Thornburg is a "great company" that fell victim to fallen collateral. He observed that hedge funds are highly liquid and very efficient market players. He said the deal wouldn't be good for Thornburg shareholders. Macke said that the government prevented a seizure of Bear Stearns, and that the hedge fund activity today was a similar move to buy time for Thornburg. The company now gets to survive, he said. Merck ( MRK - Get Report) and Schering-Plough are presenting tomorrow on their controversial but potentially profitable drug Vytorin. Eli Lilly ( LLY - Get Report) and Bristol-Myers Squibb ( BMY - Get Report) will discuss Plavix and Effiant. Najarian said investors will be listening for developments on Vytorin. He thinks that Eli Lilly's effiant stands to have a big impact on the market because it is a play on diabetes. The traders turned to less-stable emerging markets, welcoming hedge fund and private-equity consultant John D'Agostino to the show. Seymour said that political issues in Turkey meant that there would be pressure on the company. He said that this market could bubble up, and he recommended Turkcell ( TKC - Get Report), calling it one of the most innovative phone companies in eastern Europe. D'Agostino said he didn't like that Argentina put price caps on some of its commodities. Seymour also pointed out export tariffs and recommended Tenaris ( TS - Get Report), a producer of seamless pipelines; he said the company's business feeds into the oil story. Both D'Agostino and Seymour said they liked Colombia and Peru. D'Agostino said that Colombia in particular is much safer than investors generally perceive and has a well-educated engineer base.
Seymour said that on the whole, Brazil is a good place to invest. He recommended Cemig ( CIG - Get Report).