3 Stocks I Saw onTV
NEW YORK ( TheStreet) -- The markets reversed early losses and ended mixed Thursday. The Dow Jones Industrial Average rose 22.10, or 0.21%, to 10,594.83. The S&P 500 slipped 0.41, or 0.04%, to 1,124.66, while the Nasdaq gained 1.93, or 0.08%, to 2,203.25. Joe Terranova said on CNBC's "Fast Money" show that Oracle ( ORCL), which posted a strong earnings report, picked up some momentum with the appointment of Mark Hurd as a co-president and two new systems combining Oracle's software with Sun's hardware systems However, he said he may reduce his position Friday in the stock, which was up 4% in afterhours trading. For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
Guy Adami said Oracle crushed on new licenses and is fairly cheap in terms of valuation. Pete Najarian said Oracle's growth is coming at the expense of its arch competitor SAP ( SAP). Melissa Lee, the moderator of the show, cited reports Hurd saying in the conference call that Oracle plans to spend $4 billion on research and development in 2010 and add to its product portfolio. Najarian said it's a good time for investors to take advantage of the sharp decline in volatility in the stock to buy some puts. The other tech stock that was soaring in afterhours was Research In Motion ( RIMM), which was up more than 8%. Lee said RIM reported shipping 12.1 million smartphones for the quarter and better-than-expected gross margins. Adami said the stock made a huge move, while Karen Finerman said this was not the kind of news that the short sellers were hoping for. Terranova said those who played it aggressively from the short side made the mistake of equating RIM with Palm ( PALM). He said the shorts will be spending the next several days unwinding. He said the new point of reference for those who want to get in the stock will be $40 to $45. Brian Kelly, who was listening on RIM's conference call, said the company called the Torch's debut the best launch ever for the company. He also said the company is seeing growth in prepaid and in emerging markets such as India. However, he said the company also said in its guidance that margins might be lower than expected in the next couple of quarters. Adami said that conflicting information might cause a wild tussle between the bears and bulls over the stock. Lee said one analyst, Colin Gillis, of BGC Financial, wasn't initially impressed with the level of net subscriptions and the quality of the earnings.
Meanwhile, CNBC reporter Jon Fortt said Oracle executives boasted about doubling the size of the hardware business, guiding higher to 47 cents a share and a 48% increase in systems revenue. Fortt said Ellison talked about hiring 2,000 sales persons and service engineers and the need for Sun to have a direct sales relationship. He also said Ellison wants to crack 50% in margins in hardware and 60% in margins for software by the next quarter. Looking at the overall market, Lee said Fedex ( FDX) cut its forecast for the current quarter but lifted it for the year. Adami said Fedex's announcement that it was cutting jobs didn't sit well in an economy with a poverty rate that is the highest since 1994. Gold another record today, prompting Terranova to say again that it's the one asset left that is a buy and hold. Dennis Gartman said gold is no longer gold, but a currency. He said gold hasn't peaked and is doing quite well against major currencies. He agreed with Adami that silver has been a good trade since it is used in auto production along with platinum and palladium. Gartman said if he were the minister of finance in Japan, he would punish traders speculating against the yen. Najarian said gold mining stocks have been outperforming the physical commodity. He also said the upside call buying in copper has been strong. Lee shifted to the topic of inflation and brought in Peter Boockvar, of Miller Tabak. Boockvar said the market and gold are signaling that inflation is more of a problem than deflation. Unfortunately, the Fed has been much more focused on unemployment, he said. Lee returned to tech and the amazing run of Apple ( AAPL) and Amazon.com ( AMZN). Terranova said both companies should do well in holiday sales in the fourth quarter. Najarian said the Apple-related feeder companies shouldn't be overlooked. He said these are companies that are involved in data, security and acceleration, as he noted companies such as Riverbed ( RVBD) and F5 Networks ( FFIV). In the trading the globe segment, Bruce Rockowitz, president of Li & Fung Limited, said U.S. retailers must prepare themselves for rising prices on Chinese goods. He said the next 10 years will be a very different picture for consumer goods as the cost of goods moves higher. He said retailers have to respond by buying later, buying quickly and having less markdowns. He said markdowns have hurt the margins the most for retailers.
For the pitch of the day, Najarian picked Siemens AG ( SI), for its growth in the emerging markets, rollout of 3G, P/E, and 2% yield. In the final trades, Terranova said he liked Wal-Mart ( WMT) and Target ( TGT). Adami liked Ford ( F). Finerman liked CareFusion ( CFN) And Najarian liked Dupont ( DD). --Written by David Tong in San Francisco. To contact the writer of this article, click here:
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