The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial.
1. Two Points of InterestAlan Farley
4/8/2009 1:26 PM EDT 1. Insurers have been getting sold all day, after gapping higher on news of TARP eligibility. They've just taken another leg down in the last half hour, which will make a late-day recovery more difficult. 2. Retailers are up big ahead of March same-store sales data to be released after the close and before Thursday's open. This type of positive action into the data usually triggers a sell-the-news trade. Intraday Prudential Financial ( PRU) chart here.
2. AT&T Strike Is Likely but a Long-Term PositiveDavid Eller
4/8/2009 12:46 PM EDT AT&T's ( T) employment contract with the Communications Workers of America (CWA) expired on Saturday, and the threat of a strike has recently pressured the stock. However, the key sticking points being negotiated are not comparable with those of competitors or non-union management. The likely outcome is a compromise that will boost EPS by 2 cents to 4 cents in the next 12 months. AT&T has had numerous outages by trying to maintain its existing wireless network in the face of an exponential traffic increase generated by Apple's ( AAPL) iPhone. Additionally, the exclusivity window is closing, and this is no time to have increased downtime. However, a high-level contact indicates that AT&T's management will let the strike occur because it will highlight the discrepancy between union and non-union benefits. A long-term strike has the potential to hurt the company by increasing churn, but if it is short lived, it will result in an operating expense benefit of 2 cents to 4 cents to EPS over the next 12 months. While this small contribution wont have a significant impact on valuation, the stock is likely to close the gap to $27 for safe 5% trade. The expired union agreement covers 112,000 employees, of which 80,000 are focused on the landline business. Considering the migration away from landlines to mobile, it should be no surprise that the company wants to reduce costs in this non-strategic area. According to the CWA, the sticking points are 1.) AT&T is trying to shift a portion of its health care costs to employees, and 2) the company wants to end retirement health care coverage and pensions for new hires. The union benefit packages, however, are not comparable with those of competitors or non-union management. This is why the company believes a strike will result in the shift of public opinion away from the union.
3. JOSB and BBBY Are Retail StandoutsGary Morrow
4/8/2009 11:52 AM EDT Jos. A. Bank Clothiers ( JOSB) is up over 15% after reporting record results for fiscal 2008. Earnings per share increased 17%, to a record $3.17 vs. $2.72 for 2007. The stock has responded extremely well to the news with a powerful gap-higher open.
4. Out of KBR; Adding to RIMMScott Rothbort
4/8/2009 11:49 AM EDT This morning I booked some gains in KBR ( KBR) and added to our positions in Research In Motion ( RIMM). I believe RIMM has more room to grow and run. It is quite possible the stock makes another move toward the mid-$70s or beyond.
5. Pulte-CentexJim Cramer
4/8/2009 6:44 AM EDT The long-awaited consolidation in housing is at last taking place, between Pulte ( PHM) and Centex ( CTX), and it is hugely bullish for this horrid group. ... That will help the housing index (HGX). When combined with TARP for insurers, it could blunt the downturn, although not stop it... For free trial to Real Money, where you can get updated trading and investment ideas throughout the course of the day, please click on the tile below.