'Fast Money' Recap: Investors Like Facebook

NEW YORK ( TheStreet) -- The S&P 500 opened higher, but ultimately closed in the red after failing at the 1,700 level.

In a busy week full of earnings, Facebook ( FB) was among those that stood out. The company beat both top- and bottom-line estimates and, as a result, traded higher by roughly 20% in Wednesday's after-hours session. On CNBC's "Fast Money" TV show, Guy Adami said he doesn't think FB will get back its IPO price of $38 anytime soon.

Adami added that mobile monetization was much better this quarter than last, but he wouldn't chase the stock. He said Thursday will have a lot of volume and a top will probably be seen on Friday, which is when he recommended investors should sell it if they were long going into the report.

Dan Nathan said that while mobile advertising is doing much better, he still prefers Google ( GOOG). He noted that Facebook was up about 16% on the year going into the report and there should be plenty of resistance near $32.

Jon Najarian said there were a lot of buyers in the last couple of minutes of trading. He suggested that regulators may look into the tens of thousands of call options purchased and put options sold, both of which are long positions.

Karen Finerman also prefers Google over Facebook, but acknowledged Facebook is improving. However, she said she would not be a buyer on Thursday.

Qualcomm ( QCOM) also reported earnings on Wednesday, with in-line earnings per share and a beat on revenue estimates. Adami said he thinks Qualcomm is trading where it should be and doesn't think next quarter's guidance is all that great. He added he would not be a buyer on Thursday.

Visa ( V) beat on top- and bottom-line estimates after Wednesday's close. Finerman said she is long MasterCard ( MA), but Visa put up another good number. She added that both stocks shook off the European news regarding lower transaction fees well, but that Visa isn't cheap.

Caterpillar ( CAT) was highlighted as one of hedge fund manager Jim Chanos' top short candidates of the year at last week's Delivering Alpha Conference. Putting more downward pressure on the stock was its top- and bottom-line earnings miss on Wednesday morning.

Adami thinks the stock is a short, especially if the overall market begins to top out. He cited the broader market strength as the only thing keeping Caterpillar up at this point.

Finerman added that she was short the name and there are a lot of headwinds going forward, especially with the company providing worse-than-expected guidance.

Mike Khouw said options traders are betting on more downside, which has been a common theme for a while. In the short term, there is heavy activity in the weekly $82.50 puts and even lower in the long-term, with the November $77.50 puts remaining active.

The show's "Street Fight" segment highlighted Starbucks ( SBUX), which reports earnings Thursday after the close.

Adami said Starbucks is going higher because it's becoming a very diverse company, both geographically and with its products. He added that the company is making a bigger push into the food segment, which has huge margins. He also expects strong operating margins, which were very good last quarter.

Nathan said Starbucks is a very good company and is supposed to grow its earnings at 22% for the next two years. However, at 25 times future earnings, he said the price is a little rich. He would rather wait for the stock to come back down to the low $60s and buy it there.

A big company reporting earnings on Thursday is Amazon ( AMZN), which is up 20% for the year to date. Analysts are looking for earnings of6 cents per share on $15.4 billion in revenue. International sales will be a big question, especially with other companies showing struggles outside of the U.S.

Adami said he continues to like Amazon, although he wouldn't blame traders for taking a little off the table ahead of earnings. He added that operating margins have been improving for several quarters now and he expects that to continue. The price action has been very strong the past couple of months and the story is still intact, he said.

Hanesbrands ( HBI) was the first company on the show's "Pops & Drops" segment. Adami said that with the stock up 8% on Wednesday on big volume, he would not chase it into earnings, scheduled for July 30.

iRobot ( IRBT) was down 13% Wednesday and Najarian said traders should let the selling play out and avoid the name on Thursday.

Polycom ( PLCM) was down 15% on Wednesday from poor guidance and the dismissal of the CEO. Nathan said he was not a buyer, but the stock is becoming very cheap.

Omnicare ( OCR) was up 5% on strong earnings results and Finerman said that management was doing a great job with turning the company around.

For their final trades, Adami was taking profits in Lumber Liquidators ( LL), while Nathan was a seller of Boeing ( BA) after its earnings report Wednesday. Najarian is a buyer of Sina ( SINA) and Baidu ( BIDU), while Finerman said she was buying Activision ( ATVI).

-- Written by Bret Kenwell in Petoskey, Mich.

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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.

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