'Fast Money' Recap: Industrials in the Spotlight

NEW YORK (TheStreet) -- After two straight weeks of losses, the industrials helped push the market higher on Monday, with Honeywell (HON), General Electric (GE), 3M (MMM) and Caterpillar (CAT) all showing signs of strength.

On CNBC's "Fast Money" TV show, Guy Adami, managing director of stockMONSTER.com and head of Advantage Point, said, "We've liked a lot of these names." He thinks GE has a lot of upside left to it.

"These names are showing life again, and for good reason," he said. "I think they all still have room. The best one out of the lot for me still is Honeywell."

Pete Najarian, co-founder of optionMONSTER and tradeMONSTER, recommended Boeing (BA) "if you're looking around in this space."

"I love it," he said. "I've loved it for a long time. I think it's going higher. There were some options in there today that tell me it's going higher quick."

Dan Nathan, co-founder and editor of RiskReversal.com, said: "To me another sector that maybe there's been a rotation out of into the industrials is consumer staples. If you look at the Consumer Staples Select Sect. SPDR (XLP), which is the ETF that tracks the staples, it's lagged. It's about two and a half percent off the recent highs here."

Karen Finerman, president of Metropolitan Capital Advisors, said she likes General Motors (GM). "That's the kind of name I'm going to stick with," she said.

Dennis Gartman of the Gartman Letter was asked if he thought the Fed would begin to taper after it's meeting this week.

"No, I really don't think it's going to happen on Wednesday," he said. "I think there will be a great deal of debate. I think it's far more likely to pass the baton on to the next regime, which happens after another meeting. And I think it's logical for them to exactly that."

He said that when the Fed makes a change in policy it wants to maintain that position for months and months or even years. "Nobody wants to reduce the amount of accommodation and then have bad numbers come out and have a new Fed chairman reverse that situation," Gartman said.

He said he thinks "the economy is on reasonably good firm footing" and "the Fed will make the decision after the turn of the year to reduce the amount of accommodation."

Nathan said, "I think people think that the taper next year is going to cause more volatility than we've had this year."

Najarian agreed, adding, "There's some nervousness going into this meeting."

Steven Grasso, director of institutional sales at Stuart Frankel, joined the panel on the Fast Line and was asked about Twitter's more than 4% drop on Monday after it analysts downgraded the stock.

"So today we all saw the momentum coming out of the trade," Grasso said. "It was to be expected when you get downgrades like that in a momentum name like Twitter you should see some sell side. But for me with a stock that's been up 30% in a short period of time, since I've been in, I had to lock in the profit."

Adami said, "Today is the day where the momentum has been taken out. You had this pretty significant reversal on two times normal volume traded. ... Now I think it's a coin flip."

He added, "Today, I think, set it up for the downside to be more accessible than the upside."

Host Scott Wapner weighed in with the news that Bill Ackman of Pershing Square, who has a significant investment in Herbalife (HLF), was responding to the company's reaudited financials from Price Waterhouse Coopers.

"It is not the role of Herbalife's auditor to determine if the company is a pyramid scheme," Ackman said. "Rather, that determination depends on whether distributors earn more from recruiting new distributors than from retail sales to consumers who are not distributors. The few Herbalife distributors that make money earn the vast majority of their profits from recruiting. ... Herbalife is a pyramid scheme that will be shut down by regulators."

The stock rose to more than $75 a share. "The real question is what happens next," Wapner said.

Phil LeBeau of CNBC reported that Tesla (TSLA) will introduce a lower cost electric car, the Model E, at the Detroit Auto Show in January 2015. The car would be available in showrooms in 2016 or 2017.

LeBeau said the price and the range of the car will be significant factors in determining whether consumers respond to this product.

In regard to the more expensive Model S, the company has opened a website for orders to be taken in China for the cars that start at $145,000.

Nathan said, "That geographic expansion story is a big part of it, and also going down range to a more mass-market product." But he emphasized that it will be 2015 before the new car is introduced.

Najarian said, "The problem for Tesla right now is they can't produce enough cars to really be relevant."

Two new studies call into question the benefits of taking vitamin supplements. Finerman said that she is invested in GNC Holdings (GNC) and that she hopes the stock doesn't react badly. "It's a growth story," she said. "I still like it."

Silver has had a tough year but if the Fed decides to taper, would that change things for the industry?

John Smith, president and CEO of Silver Standard Resources (SSRI), said that like most industries, the silver industry is cyclical. "I think we're starting to see the bottom of the cycle," he said. "Nobody can ever pick the absolute bottom but I think we're in that bottom region, which bodes well for next year and beyond."

Regarding quantitative easing, he said, "Once we get that noise out of the system and things work in a more fundamental dynamic, I think that will actually be good for silver."

Smith said the big story on silver is that it's "an old metal" but it's applications "are all brand new," including photovoltaic applications.

Najarian said that he would prefer to play industrials over silver.

The panel members were asked for the stocks they see as having the potential to go from "zero to hero."

Nathan chose eBay (EBAY), saying "it may need to be activist bait" in 2014. "You may see this one bust out above $60," he said.

Najarian recommended Target (TGT), noting that it spent a lot on its single store expansion in 2013.

"I think it's moving in the right direction," Najarian said. "Didn't perform at all this year. I think it goes up this coming year."

Adami chose John Deere (DE). "It's gone nowhere for the last two and a half, three years," he said, adding, "I don't think they get enough credit for their construction business."

Finerman said she thought Sodastream (SODA) would be a hero in 2013, but it wasn't. But she is choosing it for 2014.

"The stock is trading at what I think is a very reasonable multiple," she said. "And the numbers have actually been quite good. The number of machines they're selling is very high."

The Nasdaq 100 is rebalancing before 2014, removing five companies and adding five others. Is it better to buy the rejects?

Adami said he would buy Nuance (NUAN), and it could go to $15. Najarian agreed, saying he found Nuance "very intriguing."

Responding to questions from Twitter, Najarian said he would hold Solar City (SCTY) and buy First Solar (FSLR).

Nathan said that anyone shorting Foot Locker (FL) "should keep a tight stop on it."

Adami likes the airlines. "My favorite continues to be JetBlue (JBLU) ..." he said. "Delta's (DAL) probably the next one on my list."

Finerman said she didn't have a strong opinion about $50.50 calls on American International Group (AIG) for Friday but added that she is long on the stock.

In the final trade segment, Najarian chose Annaly Capital Management (NLY), Nathan recommended GM, Finerman mentioned GE and Adami said he liked Canadian Pacific Railway (CP).

-- Written by Carla Baranauckas in New York.

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