3 Stocks I Saw onTV
NEW YORK ( TheStreet) -- Strong earnings reports from Oracle ( ORCL) and Research In Motion ( RIMM) after the close of trading Thursday provided some hope for a market turnaround. At the end of the trading session, the Dow Jones Industrial Average was down 132.86, or 1.27%, to 10,308.26, while the S&P 500 fell 13.11, or 1.18%, to 1,096.07. The Nasdaq dropped 26.86, or 1.22%, to 2,180.05. For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
Pete Najarian said on CNBC's "Fast Money" TV show, that he was impressed with RIM, which was up more than 10% in after-hours trading, and its 4.4 million subscribers, revenue and earnings beat and upbeat forecast. Guy Adami said now might be time to short RIM, noting it's reached about the same level where it was in the past quarter when the stock broke down. Karen Finerman said RIM's success should rub off on other smartphone makers like Apple ( AAPL). Tim Seymour said the impressive point about RIM was its gross margins, which came in close to the analysts' estimates of 43%. Seymour and Najarian clashed over what impact it would have on Nokia ( NOK) . Seymour said RIM's gross margins would be good news for Nokia, while Najarian insisted Nokia has to do a better job of selling its smartphones in the U.S. market and being more price competitive. Najarian was so disgusted with Nokia that he threw his $500 Nokia phone on the floor.
Melissa Lee, the moderator of the show, said the other bright tech stock, Oracle, reported $5.8 billion in revenue and an EPS of 39 cents. Adami added that its new license growth was up 2% and its operating margin was 48.6%. He said it would be interesting to see if Oracle and RIM could provide a lift to the market Friday. Karen Finerman said the two stocks should breathe life into the Nasdaq. Najarian said chip stocks has been doing well off the cell-phone market. Intel ( INTC), which was sued by the FTC, was down slightly today, but Seymour said it will bounce back because Intel has seen this before. "They will take the fines and move on," he said. Jim Goldman, a CNBC reporter, disagreed with Adami, saying it would be a mistake to short RIM. He said the company has a lot of momentum going for it, as evidenced in its unit sales and subscribers. Shifting to the general market, Seymour said the markets had a terrible close despite good data from the U.S. in the form of a good leading indicator number and an encouraging jobless claims trendline. However, Seymour acknowledged the debt problems in Europe, especially in Greece, Spain and Italy, where governments are having problems reining in their spending. "That's the reason why the euro slid and the dollar is so strong," he said. Finerman expressed concerns about a global unraveling. Seymour said he sees the next stop for the dollar at 80.50, while Adami said he believes there is a good 10% more of upside to the dollar.
Shifting to the financials, Lee noted that shares of Citigroup ( C) fell more than 7% after pricing its secondary offering at $3.15. Adami, though, said the "real story" today was noted financial analyst Meredith Whitney's comments about Goldman Sachs ( GS) and Morgan Stanley ( MS), which have been underperforming on a good tape. He said that along with Bank of America ( BAC), closing below its secondary price, gave him cause for concern for the financials. He said he would be long Bank of America but short Wells Fargo ( WFC). Paul Miller, a FBR analyst, said that the board of Bank of America paid back the TARP money so that it could pick an insider like Brian Moynihan. He said they were afraid an outsider would break up the company. He also said the Street doesn't know much about Moynihan. Miller agreed with Adami's and Finerman's pick of Bank of America. He said the bank still hasn't make any money from its core operations and needs to focus on growing revenues and cut its losses. He said Bank of America, which closed at $14.86, could hit $20. Lee asked Richard Bernstein, CEO of Richard Bernstein Capital Management, for his predictions for 2010. Bernstein expects the trend in jobless claims will continue to improve slowly and along with it the economy. He said he likes the prospects for consumer cyclicals, smaller financial firms and some industrials that he said will have "huge operating leverage." According to Bernstein, employers will begin hiring again when the work week has lengthen to the point they realize it's cheaper to do that than to pay for overtime.
Lee brought in Rich Greenfield, co-head of Pali Research, to comment on Avatar on News Corp ( NWS). Greenfield, who saw the movie, called the 3-D live-action film a game-changer. He declined to say whether it would be profitable but he said there's no risk of it being a bomb for News Corp. He also said the movie would also boost IMAX ( IMAX). Lee invited Kendall Powell, CEO of General Mills ( GIS) to the show after his company on the top and bottom lines and raised guidance. Powell said gross margins are improving and prices have been stable despite the threat of deflation. He said the company continues to invest in brands and innovation. He also said the cereal category has been growing nicely in the past seven to eight quarters. In the final trades, Seymour liked iShares: MSCI Emerging Markets ( EEM) . Adami liked Oracle while Finerman liked Bank of America. Najarian said he liked Microsoft ( MSFT). -- Written by David Tong in San Francisco To watch replays of Cramer's video segments, visit the Mad Money page onCNBC. "Check out
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