'Fast Money' Recap: A New Year's Hangover

NEW YORK (TheStreet) -- The S&P 500 started 2014 hungover, falling nearly 1% in the first trading day of the new year. 

Guy Adami, managing director of stockmonster.com, said the sooner the S&P 500 trades down to 1,760, the better off it'll be in 2014. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, agreed that a pullback would be a great way to start the new year, giving investors a solid entry point into equities. 

Tim Seymour, managing partner of Triogem Asset Management, said today's selloff doesn't mean much in the intermediate term. He reminded investors that Thursday's U.S. and European PMI numbers were very strong. 

Shares of Apple (AAPL) traded lower on Thursday on a downgrade from Wells Fargo to hold from buy. 

Brian Kelly, founder of Brian Kelly Capital, said AAPL is still consolidating after its strong move higher in recent months. He said investors should not panic or sell the stock. Seymour added that AAPL's fundamentals are strong but it needs the technicals to cooperate in order for the share price to move higher. 

Brian Marshall, managing director of ISI, was a guest on the show. He said calendar year 2014 should be very good for AAPL, and the deal with China Mobile Limited (CHL) has not been fully factored into the stock price. He added that eventually margins will sag but the speed at which they decrease will not be fast. Marshall also suggested that AAPL will continue to trade with a below-market earnings multiple. 

Brown said that growth investors feel more comfortable chasing new technology stocks with high earnings multiples. He suggested 3D Systems (DDD) and Stratasys (SSYS). 

Adami was a buyer of Cisco Systems (CSCO) and a seller of International Business Machine (IBM). Kelly was a seller of Brazilian equities because of the country's struggling economy and currency devaluation.  Brown was a buyer of emerging markets, because of its multi-year underperformance. 

Aaron Jagdfeld, CEO of Generac (GNRC), was a guest on the show. Regarding the snowstorm hitting the midwest and northeastern U.S., he agreed with analysts that it could add $20 million to $50 million to the company's revenue. The recent storm in Michigan and Toronto could boost sales by $10 million to $20 million. 

Jagdfeld said that only 3% of residential housing has a generator and each 1% of the market is worth $2 billion. He suggested that the long-term trend looked good for residential generators and GNRC has 70% of the market share.

Kelly pointed out the market is not as big as it seems because standby generator systems from GNRC are not cheap, generally in the range of $10,000 to $20,000. With that being said, he likes the stock and said investors could get long and use Thursday's low as their stop-loss. 

Regarding oil, Seymour suggested investors short Kansas City Southern (KSU) and buy CSX Corp. (CSX) as part of a pairs trade. 

Bank of America (BAC) closed higher by 3.40%. Brown said the stock could hit $19 or $20 in a relatively short period of time, barring a massive correction in the broader market. 

Kelly said he was surprised by gold's move higher on Thursday. He added that it will eventually benefit from inflation. Seymour said gold will likely go to $1,100 per ounce. He was a buyer of the miners, specifically, Barrick Gold (ABX), when gold does eventually rally. 

Both Adami and Kelly suggested investors take some profits in Twitter (TWTR) after the recent rally higher. 

Seymour called Fiat the best global auto play and suggested that it should continue to move higher. It can be traded in the U.S. pink sheets, under ticker symbol FIATY.

Fran Malecha, CEO and president of Compass Minerals (CMP), was a guest on the show. While salting bids are usually set in the summer months, he said a strong winter this year should boost next year's pricing; 51% of the company's revenue come from highway salt sales. CMP has more recently been hindered by its fertilizer business, he said. 

Adami said the stock has support near $70 and could make a move to $90 if demand ticks higher for its fertilizer. 

DryShips (DRYS) fell 8% and was the first stock on the show's "Pops & Drops" segment. Seymour suggested that investors stay long the stock. 

Herbalife (HLF) was up 1% and Brown said the company's business in China appears to be growing rapidly and the stock's valuation is reasonable. He added that the short-squeeze higher can continue. 

Molycorp (MCP) soared 12% and Kelly said he is not a buyer of the stock. 

U.S. Steel Corp. (X) jumped 3%. Adami suggested taking profits on the move. 

Nik Modi, managing director at RBC Markets, was a guest on the show. He said Lorillard (LO) should have revenue growth of 8% and earnings per share growth of 15%. It also has a 5% yield, along with a large share of the e-cigarette business. His top picks in the tobacco and beverage industries were LO and Monster Beverage (MNST), respectively. 

Seymour said LO's e-cig business only accounted for 1% of revenue and there are many other reasons to be bullish on the stock. 

When asked what his top industrial picks are, Seymour likes General Electric (GE) and transporter FedEx (FDX). 

Brown likes Potbelly (PBPB) over the very long term and suggested investors could buy it on a broader market correction.  

Kelly said he would avoid Potash (POT) on the long side unless it gets above $34. He suggested investors buy Deere (DE) if they are looking for agriculture exposure. 

Adami said MasterCard (MA) should continue higher but will not do as well as it did in 2013 due to valuation concerns. 

Brown said Visa (V) is likely going to $250. Seymour's top e-payment play was Qiwi (QIWI). 

For their final trades, Brown is a buyer of Freeport-McMoRan (FCX) and Adami said to buy Crocs (CROX). Kelly is buying the PowerShares DB USD Bull ETF (UUP) and Seymour said to buy the iShares MSCI Emerging Markets ETF (EEM) with a stop-loss at $39.50. 

-- 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.

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