3 Stocks I Saw on TV
NEW YORK ( TheStreet) -- The markets were mixed today as investors awaited GM's IPO. The Dow Jones Industrial Average fell 15.62, or 0.14%, to 11, 007.88 while the S&P 500 gained 0.25, or 0.02%, to 1,178.59. The Nasdaq added 6.17, or 0.25%, to 2,476.07. CNBC reporter Kate Kelly provided more details on GM's IPO on the "Fast Money" TV show. She said the vast majority of the order book went to investors in North America, with 10% going overseas. She said the retail allocation was higher by dollar value than the Visa ( V) IPO. For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
She said the Kuwait investment authority pulled out of the offering when the pricing reached $33. Steve Grasso added some of the large institutions were finding the offering too expensive for their taste. Karen Finerman liked what she saw in the IPO, including the automaker's strategic market position, significant size of the offering, satisfactory comparable sales and backing of money managers and underwriters who need the offering to work well. Jon Najarian predicted investors will flip the stock quickly, but he also believed the stock will head higher into next week. He said options trading in the stock will begin on Nov. 29 at the CBOE. Joe Terranova said there is every reason to believe that GM will be profitable. Finerman added the offering comes at a time where the auto industry is near the bottom of a "pretty big cycle" with the potential for a huge upswing. Phil Lebeau, CNBC reporter said the turnaround in GM has been dramatic. He said the automaker has moved from a loss of $1,101 for every vehicle it produced in 2008 to a profit of $3,005 in 2010. He said pent-up demand could drive auto sales higher the next couple of years. He also said GM is well positioned, with its costs under control and the likelihood of strong sales in the coming years. Terranova said the stock should get a boost when it is added to the S&P sometime next year. Najarian said the only hitches might be a move by Treasury to want more of its money back or a snag in the global recovery.
Finerman said GM might face problems if inventory starts to build in its SUVs and trucks. Eamon Javers, a CNBC reporter, said the IPO will be a good deal for the government, which will earn back half of what it put it in, while still retaining 400 million shares. Ron Kruszewski, president and CEO of Stifel Financial, said the deal hasn't been a good deal for U.S. taxpayers who have been shut out of the allotment. He said his company, along with other large retail companies, have been excluded from the allotment. Kruszewski said the government will still be in the hole for $10 billion at the end of the deal. Gary Kaminsky said he has heard from sources that the stock could open at $36. Terranova said the underwriters wanted the IPO in the "strong" hands of institutional investors so that the stock will have a better chance to appreciate. Grasso said those comments were contrary to those who believed hedge funds would be flipping the stock soon after the opening of trading. Grasso also it was an insult to retail investors. Shifting to the cloud computing space, VMWare ( VMW) CEO Paul Martiz said demand for virtualization software is still strong into 2011. Jon Fortt, CNBC tech correspondent, said the company is not seeing public sector weakness, a point Cisco ( CSCO) noted in its earnings call. On the prop desk, Kelly discussed how to trade in crude without investing United States Oil ( USO). He said he would look at Oil Service HOLDRS ( OIH) and Energy Select Sector SPDR ( XLF). In afterhours trading, Kelly said DryShips ( DRYS) was up 6%. He said the company is in a good position because ultra-deep shipping rates have bottomed and that demand is expected to outstrip supply in 2011.
Kelly also has some ideas on how to profit from QE2. He said he would play the apparently large inventory restocking cycle in corn and soybeans by getting into Diana Shipping ( DSX) and Baltic Trading ( BALT). In the final trades, Kelly liked Energy Select Sector SPDR with a stop at $16.50. Terranova liked GM while Grasso preferred Ford ( F). Finerman liked Daimler AG ( DAI). And Najarian reiterated his pick of Sourcefire ( FIRE). --Written by David Tong in San Francisco. To contact the writer of this article, click here: David Tong. To follow the writer on Twitter, go to http://twitter.com/davidtong. To submit a news tip, send an email to: firstname.lastname@example.org. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. Follow TheStreet.com on Twitter and become a fan on Facebook.