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. Upside in SKMBy Robert Moreno Cramer
1:46 p.m. EST SK Telecom ( SKM) provides wireless and data service in its home market of South Korea, as well as Mongolia, Vietnam and the U.S. It has a market cap of $11 billion, a forward P/E of 10.79, revenue of $12.5 billion, gross profit of $6.3 billion and total debt of $6.2 billion. The company went into the credit-card business in December, announcing a deal to purchase 49% of Hana Card, the credit-card unit of South Korea's fourth-largest financial concern. SK Telecom plans to place a chip in its cellphones that will let subscribers make purchases through their mobile devices. The company also announced an alliance with IBM ( IBM) to provide "cloud computing services." The technicals on the daily chart are interesting and illustrate a repeated pattern. In each case, a downtrend line was broken to the upside with a positive moving average convergence/divergence crossover and the relative strength index crossing above the 50 center line. Price action was strong in Tuesday's down market, and again on Wednesday. If the pattern repeats, there is more upside to the trade.
2. Taste Is a Lousy Investment ThesisBy Scott Rothbort
1:27 p.m. EST Never -- I repeat, never -- invest in or make a judgment call on a restaurant based upon how you think the food tastes. What is important is what the consumer is doing, how management performs and the financial condition of the company. I've never had a sip of coffee in my life. That has allowed me to be far more objective with a company like Starbucks ( SBUX), making money on the long or short side. Taste is subjective. Sales, margins, earnings and traffic are objective. Wendy's' ( WEN) margins are around 25%. Burger King's ( BKC) margins are around 30%. McDonald's ( MCD) are just less than 40%. To Wendy's credit, the company has expanded its margins the past few quarters, but it may be leveling off. However, as management admitted in a recent Cowen consumer conference, lower commodity costs and price increases in 2008 accounted for the margin expansion. The company's strategy and plan for 2010 was rather generic; more like keeping up with the competition than surpassing them. How is Wendy's going to expand margins beyond these levels? It certainly won't do it by pulling out of Japan. How many Wendy's restaurants are located at rest stops and along major highways, especially compared to McDonald's and Burger King? Not many. I would not eat a Big Mac, but I do own McDonald's stock. Position: Long MCD
3. "Flip It" To BankersBy Robert Marcin
11:18 a.m. EST My pal Cody Willard has this idea called "flip it," where one turns conventional wisdom on it's head and recommends the exact opposite. Considering this, I say we flip it to the bankers! Instead of "too big to fail" we start a policy of "too big to bail." That's right, after some obscene asset target, say $500 billion, we make a bank too big to bail out. Get too big, you're on your own, bank shareholder and manager. This would have huge consequences for how banks would run their businesses and how investors would fund them. It would require prudence. And I absolutely guarantee they would have not done
4. GOOG's DroidBy Timothy Collins
10:59 a.m. EST I've seen a lot out there about how Baidu ( BIDU) will benefit if Google ( GOOG) exits China, but has anyone noticed the strength in Research in Motion ( RIMM)? I was fortunate to pull my put protection off at a profit here, although that was a bit of luck beyond just targets being hit. Could RIMM, Apple ( AAPL), and even -- cough, cough -- Motorola ( MOT) benefit if we don't see Android in China as well? Position: Long RIMM stock, GOOG Volatility, Short AAPL Jan 210 straddles, net short GOOG
5. Retail SalesBy Ken Shreve
8:50 a.m. EST The retail sector continues to show good leadership, but it's a broad sector. I think the leadership can continue in 2010. The department stores have been the shining stars, but don't forget about the restaurant stocks. My favorites, in no particular order, are Buffalo Wild Wings (BWLD), Panera Bread ( PNRA) and Chipotle Mexican Grill ( CMG). All three have outstanding fundamentals and intriguing technical pictures as well. If earnings season sparks another leg up for the broad market, I think these three names can outperform. Position: none