'Fast Money' Recap: Selling Best Buy

NEW YORK (TheStreet) -- The S&P 500 ended slightly lower on Thursday, making its year-to-date performance essentially flat so far in 2014.

On CNBC's "Fast Money" TV show, the trading panel discussed Best Buy (BBY), which plunged nearly 30% in Thursday's session. 

Tim Seymour, managing partner of Triogem Asset Management, said the stock was set up for a big move lower after tripling in 2013. However, he admitted the move lower was an overreaction. 

Brian Kelly, founder of Brian Kelly Capital, said it's a massive overreaction and he would buy the stock as a trade. He added that shrinking the number of stores will likely help the retailer. 

Guy Adami, managing director of stockmonster.com, said the stock traded 85 million times compared to its average of 5 million times and could be purchased near current levels. 

Karen Finerman, president of Metropolitan Capital Advisors, said she is not a buyer but BBY has a pretty good balance sheet. 

David Strasser, retail analyst at Janney Montgomery Scott, was a guest on the show. He said a tough consumer hurt BBY as seen by the decreasing gross margins. Promotions hurt most of the retail companies this holiday season, he added. He concluded that next year could be better, especially as Best Buy continues to benefit from increased appliance sales and an ailing Sears Holdings (SHLD). 

Kelly argued that the global and U.S. economies are showing signs of slowing down, evidenced by ISM reports, employment data and struggles within the retail sector. 

Seymour disagreed. He said wage growth and consumer spending continue to climb. He did admit stocks that are overvalued are getting nailed for under-delivering. 

Finerman said she bought shares of J.C. Penney (JCP) as a trade. She does not believe in the company's long-term success but thought the stock could go higher over the short term. 

Guest Doug Freedman, an analyst at RBC Capital Markets, has a market perform rating on Intel (INTC), which is slightly lower after reporting earnings. 

He did not like the management team's decision to "double down" on its investment in the tablet market since it was costing the company in upside earnings potential. He's disappointed that Intel saw lower demand in its server business, which is more profitable than its PC business, which rose. He prefers Marvell Technology Group (MRVL). 

Adami said Intel's earnings report was okay but the stock reacted negatively because it ran up so far into the report. 

Seymour really likes what SolarCity (SCTY) is doing in the residential solar market. However, he's not a buyer at current levels.

Adami said Hershey (HSY) could have slightly more upside from current levels but is richly valued. He wants to avoid the stock.

Brad Hintz, an equity research analyst at Sanford C. Bernstein and former CFO of Lehman Brothers, was a guest on the show. He said Citigroup (C) has a low valuation. Citi has great international exposure, especially to Asia, and rising interest rates will likely help the financial sector. 

Kelly said U.S. banks have gone up too much from previous levels. He is short European financials. 

Rio Tinto (RIO) was the first stock on the show's "Pops & Drops" segment. Seymour said investors should stay long. 

Adami said to buy UnitedHealth Group (UNH) at $68.50 after it fell 3% on Thursday. 

Herbalife (HLF) dropped 10%. Finerman attributed the fall to a report that China would investigate Nu Skin Enterprises (NUS) and whether it's a ponzi scheme.

Kroger (KR) dropped 5% on an analyst downgrade. Kelly said he would take profits. 

Seymour said Union Pacific (UNP) is cheaper than Kansas City Southern (KSU) and still provides investors with solid exposure to Mexico. 

Kelly said he would short the railroad stocks but suggested Greenbrier Companies (GBX) could benefit from mandated rail-car modifications. Adami added that Trinity Industries (TRN) would benefit, too. 

Seymour said traders should stay short the Australian dollar and Canadian dollar. 

Adami said investors who are buying T-Mobile U.S. (TMUS) are doing it on M&A speculation, not valuation.

Finerman said Under Armour (UA) could have further downside than upside. She likes the company, just not its valuation. 

Kelly said the best way to play a short-term rise in natural gas is through the United States Natural Gas ETF (UNG). For the longer term, he suggests Apache (APA). 

Seymour said both the iShares MSCI Turkey ETF (TUR) and the Grananti Bank (TKGBY) were very cheap, but also subject to headline risk from the country's rising political tensions. 

For their final trades, Finerman is a buyer of C and Kelly said to buy the iShares 20+ Year Treasury Bond ETF (TLT). Seymour is buying BHP Billiton (BHP) and Adami said to buy Republic Services (RSG). 

-- 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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