'Fast Money' Recap: Down on Big Blue

NEW YORK (TheStreet) -- After selling off midday, the S&P 500 closed higher on Tuesday to start the holiday-shortened trading week. 

International Business Machine (IBM) closed lower after reporting a miss on revenue while beating earnings per share estimates. On CNBC's "Fast Money" TV show, Guy Adami, managing director of stockmonster.com, said the EPS beat came largely from a tax break. 

He added that it was not a good quarter and the company is unlikely to turn around its slumping business model any time soon because it's such a big company. 

Tim Seymour, managing partner of Triogem Asset Management, said IBM is also lagging growth from emerging markets. He suggested not short-selling the stock or buying it at current levels. 

Steve Grasso, director of institutional sales at Stuart Frankel & Company, said it was IBM's seventh consecutive quarterly decline in revenue. He added the stock seems set up for further declines. 

Karen Finerman, president of Metropolitan Capital Advisors, said the valuation for IBM is getting very cheap but she is not yet a buyer. 

Brian Marshall, senior managing director at ISI Group, was one of two analysts to have a sell rating on IBM. He said the company's long-term EPS targets are too high. He added that revenue declined 5% year over year and most of IBM's markets decreased in sales for the quarter. Most notably, its China sales fell 23% from last year. 

Seymour said Google (GOOG) has been doing really well but is starting to seem overvalued at current levels. 

Finerman agreed that GOOG was getting stretched on a valuation basis. She suggested selling some upside calls against a long position or trimming some of the position ahead of earnings. 

Adami said he would buy the stock for the run-up into earnings, then sell before the report.

Advanced Micro Devices (AMD) beat earnings estimates but expects a double-digit percentage decline in revenue. Adami said every meaningful rally in the stock has been an opportunity to sell. Following the after-hours selloff, he suggests investors not touch the stock. 

Grasso said anyone looking to short the stock should be careful since there is a 20% short interest.

Finerman said Frontline (FRO) is a sell in the short term after the recent run higher. 

Grasso said he wants to stay long Alcoa (AA), which jumped 7% on Tuesday after a JPMorgan upgrade. 

Adami said he is still a buyer of Delta Air Lines (DAL), even after today's 3% move higher. 

BlackBerry (BBRY) jumped on news the U.S. Department of Defense may place a large handset order. Seymour said he is a "reluctant" buyer since the company has a good balance sheet and is worth $11 to $12 based on a "sum of the parts" valuation. 

Adami said that eventually Symantec (SYMC) should break out to the upside. 

Nuance Communications (NUAN) popped on a positive earnings pre-announcement. Seymour said investors should not buy the stock at current levels since it is fairly valued. 

Adami added that the initial selloff in NUAN was a complete overreaction in November, but he would not be a buyer at current levels either. 

Seymour said investors should not buy natural gas based on winter storms. It's almost always a sell around $4.50 to $4.75, he added. 

For her cold weather trade, Finerman said she would buy Deckers Outdoor (DECK) and VF Corp. (VFC). 

Seymour said Carnival (CCL) is overvalued. Starwood Hotel & Resorts Worldwide (HOT) seems like a buy, he added. 

Starbucks (SBUX) was the first stock on the show's "Pops & Drops" segment. Grasso said investors have gotten used to buying the stock on pullbacks, which could be a mistake going forward. He suggested waiting to see if it reaches its 200-day moving average. 

Verizon Communications (VZ) fell 1%. Seymour said buying the rest of Verizon Wireless from Vodafone (VOD) will be beneficial. 

Raytheon (RTN) was up 1% and Adami said the stock could surprise to the upside when the company reports earnings on Jan. 30. 

General Motors (GM) dropped 1% and Finerman said she continues to be a buyer of the stock. 

Andrew Left, executive editor of Citron Research, was a guest on the show discussing his bearish report on Organovo (ONVO). He said the company only has an 8% institutional ownership, which is quite low. He noted a report from the Swedish Ministry of Finance regarding cold calling for ONVO in Japan by Kanagawa Associates to help prop up the share price. He called the company highly speculative and he is short the stock. 

Adami said the short interest is not very high in ONVO, meaning short-sellers could benefit if these claims prove true. 

Dennis Gartman, editor and publisher of The Gartman Letter, said palladium should benefit from higher demand in the automobile market. The metal can be found in catalytic converters. Although the metal has trading sideways for the past 3.5 years, he said it could break out towards $1,000. He reminded investors that the asset is very illiquid. 

Seymour said he wants to be long the ETFS Physical Platinum Shares ETF (PPLT) and short the SPDR Gold Trust ETF (GLD). 

Seymour said shares of Best Buy (BBY) are completely oversold. He said the company has a strong balance sheet with solid online sales growth. He is long the February $28 call options. 

For their final trades, Finerman is a buyer of Citigroup (C) and Grasso is buying AA with a stop loss at $11.50. Seymour is buying Yahoo! (YHOO) and Adami suggested investors take profits in NUAN. 

-- 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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