'Fast Money' Recap: Focus on Apple

NEW YORK ( TheStreet) -- The markets had another quiet session, closing slightly lower after the S&P 500 made another all-time intraday high.

The biggest news on Tuesday was Apple's ( AAPL) third-quarter earnings results. On CNBC's "Fast Money" TV show, Guy Adami said he still likes Apple on the long side. The double bottom aids in price support and the June low can act as a stop-loss for traders.

Karen Finerman said she was really focused on Apple's gross margins, which came in at the upper end of the company's range and are estimated to be higher for the next quarter. She added that iPhone sales of 31.2 million seem to be enough to spark a relief rally.

Tim Seymour didn't like the revenue guidance from the company and said it needs new products. However, he acknowledged that margins are starting to improve.

Turning to a chip supplier for Apple, Broadcom ( BRCM) had a rough day of trading Tuesday from a harsh downgrade, before reporting worse-than-expected revenue figures after the close.

Adami said that traders could certainly get in this name on the long side. He pointed out the stock has been rangebound for years and that right now the stock is at the bottom of that range.

Peabody Energy ( BTU) was the first up for the show's "Top Trades" segment. Seymour likes Peabody, which was up 5% on Tuesday after posting a surprise profit. He pointed to higher productivity, higher coal prices and higher demand as reasons to own the stock.

The next trade was defense stocks including Lockheed Martin ( LMT), United Technologies ( UTX) and Northrop Grumman ( NOC). Adami said Lockheed Martin crushed it on earnings, but investors don't have to chase it and can own it on a pullback.

Finally, the bar was so high for Netflix ( NFLX) when it reported earnings late Monday that it fell 4% in Tuesday's session even after an earnings beat. Finerman said that she just couldn't be a buyer at such lofty valuations.

AT&T ( T) also reported earnings on Tuesday. While the results weren't great, Adami said that if the stock doesn't have a violent selloff on these numbers, it's probably a safe dip to buy, especially with a 5% dividend yield.

Facebook ( FB) reports earnings on Wednesday after the bell and Adami said he thinks there's still room on the upside, possibly up to the $28.50 to $29 range.

For the show's "Street Fight" segment, Altria ( MO) was in the limelight. Seymour says it's a buy because of a strong dividend, diversified business segments and earnings per share growth.

Finerman disagreed. She acknowledged the nice dividend, but said she sold her position because she believes smoking will begin to decline. She added that volume shipments are down, margins are down and the valuation is stretched.

For "Tomorrow's Top Trades," Ford Motor ( F), Boeing ( BA) and Caterpillar ( CAT) all report earnings before the open on Wednesday.

Seymour said Ford has had a good run this year, up 30% since January, but now the valuation is getting rich and the bar will be high. He added that the North American segment would probably beat expectations, but Europe would be the big question.

Boeing, which is up 41% for the year to date, still has more room to run, according to Adami. He said that the company has been shrugging off a lot of bad news and that the stock will take off over $110, which is where it looks like it wants to go.

Anthony Scaramucci said he is siding with Jim Chanos, who announced that Caterpillar was his best short pick for the year last week at the Delivering Alpha Conference. Scaramucci said Caterpillar had a flawed revenue model, and that management has made too many acquisitions.

Panera Bread Company ( PNRA) reported earnings Tuesday after the close and missed on both top- and bottom-line estimates. The company reported $1.74 in earnings on $589 million in revenue, below estimates of $1.77 in earnings on $596 million in revenue.

Adami said he did not like this report at all. While he did not advocate shorting Panera, he did say that he would be a seller if he owned it. He pointed to the lower full-year guidance, flat margins and horrible comps as reasons for his distaste.

Another stock that reported earnings on Tuesday was DuPont ( DD), which beat earnings per share estimates but missed slightly on revenue. However, the quarter seemed to be more hinged on activist investor Nelson Peltz than the actual results.

Finerman said that she found the stock interesting, but not because of Peltz's role. The company said it will consider spinning off its performance chemicals unit, which is what Peltz wanted. She said this possible spinoff shows that management does have a focus on creating shareholder value.

Mike Khouw said that there was a lot of buying in the options market today for DuPont, which traded three times its average volume. Of that, the six most active contracts were calls, mainly the October 60s. He added that if he was going to take a long position in the stock, he would do it via call options.

For their final trades, Seymour said he is a buyer of Altria and is staying long Brazil via the iShares MSCI Brazil ETF ( EWZ) until $47.50. Scaramucci said he's a buyer of Google ( GOOG) and Adami said he's looking for Phillips 66 ( PSX) to continue rallying Wednesday.

-- Written by Bret Kenwell in Petoskey, Mich.

Follow TheStreet.com on Twitter and become a fan on Facebook.
Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

If you liked this article you might like

Cramer: There's More to Tech Than FAANG

Cramer: There's More to Tech Than FAANG

Broadcom's Earnings Call Remarks Suggest More Acquisitions Are On Tap

Broadcom's Earnings Call Remarks Suggest More Acquisitions Are On Tap

Spotify's Big Pre-IPO Investor Presentation: 8 Key Takeaways

Spotify's Big Pre-IPO Investor Presentation: 8 Key Takeaways

FANG Stocks Continue to Rally Hard Even as Broader Market Stumbles

FANG Stocks Continue to Rally Hard Even as Broader Market Stumbles

Why I'm Cashing Out of Square -- For Now

Why I'm Cashing Out of Square -- For Now