'Fast Money' Recap: The Problem With Growth Stocks

NEW YORK (TheStreet) -- The Nasdaq slipped 0.03% while the S&P 500 started off the week up 0.32%. 

On CNBC's "Fast Money" TV show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, pointed out the outperformance in large-cap stocks such as Chevron (CVX), Microsoft (MSFT) and International Business Machine (IBM) while momentum stocks such as Facebook (FB) continue to underperform. 

He added that Facebook reported a very good quarter while high-quality, low-valuation growth stocks like Google (GOOGL) and Priceline.com (PCLN) are being unfairly sold off.

Anthony Scaramucci, founder and co-managing partner of SkyBridge Capital, said negative investor sentiment has weighed on quality growth stocks. He suggested that Google will be higher from current levels in three to six months. 

Steve Grasso, director of institutional sales at Stuart Frankel, said investors should focus on the iShares Nasdaq Biotechnology ETF (IBB). He reasoned that this was the first sector to sell off and will likely be the first one to rally when the momentum selloff is over. 

Dan Nathan, co-founder and editor of riskreversal.com, argued there is more room to go on the downside for momentum names. He added that he is covering his short position in Netflix (NFLX). 

Najarian said he would continue to "press" Amazon (AMZN) on the short side. He suggested that investors avoid Gogo (GOGO), which could have more room to go on the downside. The stock fell nearly 20% on Monday. 

Brian Marshall, senior managing director at ISI Group, has a strong buy rating on shares of Apple (AAPL) with a $600 price target. Without repatriating some of its overseas money, the company will need to raise funds in order to perform its new buyback program. He suggested that Apple will continue to make small acquisitions, and will not make any large, blockbuster takeovers. 

Grasso admitted he missed Apple's recent move higher but he is still not a buyer of the stock. He said if the rotation into "safety stocks" ceases then the stock will likely fall. 

Scaramucci called shares of Apple cheap. Nathan said he would not buy the stock at current levels. 

Najarian said investors can buy the stock because Apple's mobile payments service will be "huge."

Nathan said he is short Herbalife (HLF) via a long position in put options. He suggested the stock will hit $50. 

Scaramucci suggested that retail investors avoid shares of Herbalife altogether. 

Jeffery Harte, principal at Sandler O'Neill, said Bank of America's (BAC) decision to suspend its capital allocation plan based on a small miscalculation isn't as big of a deal at seems. However, he argued that the delayed dividend increase could cause investors to sell the stock. He was a buyer of BAC near $14, while Citigroup (C) and Morgan Stanley (MS) are more attractive at current levels. 

Grasso bought a "half position" in BAC on Monday. He is looking to make it a full position near $14. 

CNBC's Meg Tirrell said Pfizer (PFE) will likely acquire AstraZeneca (AZN) at some point. The latest deal was near $100 billion, she added. However, AZN has two big patent expirations just around the corner with its Crestor patent ending in 2016 and the Nexium patent expiring this year. While AstraZeneca's revenues are expected to decline 10% by 2017, Pfizer is interested in the company's drug pipeline, and specifically, its oncology lineup. 

John Eeade, president and senior analyst at Argus Research, was a guest on the show. His top three takeover targets in the healthcare sector included: Bristol-Myers Squibb (BMY), Mylan (MYL), and Incyte (INCY). 

Dennis Gartman, editor and publisher of The Gartman Letter, was a guest on the show. He admitted to not liking the current back-and-forth nature of the market. However, due to this rangebound environment, he said he has no choice but to change his calls so often. He currently likes aluminum and coal stocks. 

Charter Communications (CHTR) jumped 8% and was the first stock on the show's "Pops & Drops" segment. Scaramucci said the stock will go higher. 

JA Solar Holdings (JASO) fell 10%. Najarian said to avoid the stock for at least a few more days. 

J.C. Penney (JCP) climbed higher by 9%. Grasso was not a buyer or a seller.

Wynn Resorts (WYNN) dropped 4%. Nathan said to avoid the stock on the long side unless it can consistently close above $200. 

Robert Peck, managing director at Suntrust Robinson Humphrey, said the biggest focus on Twitter's (TWTR) earnings report will be the monthly active users stat. He expects the number to come in around 255 million users, along with revenue of $232 million. If the results are close to these estimates, the stock should hold up, he suggested. He likes Google and eBay (EBAY) at current levels. 

Grasso said he is still long a small position in Yahoo! (YHOO), which should go higher due to its stake in Alibaba. 

Nathan said Twitter looks poised to go lower. He called the stock a buy in the low to mid $30s. 

Scaramucci said Twitter is not the type of company he looks to invest in. However, it could rally due to its oversold nature. 

Grasso said to stay away from Johnson Controls (JCI) at current levels. 

Najarian was a buyer of JetBlue Airways (JBLU). 

For their final trades, Nathan was a seller of Herbalife and Grasso was a buyer of Bank of America. Scaramucci was a buyer of FedEx (FDX) and Najarian said to buy Pfizer. 


-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

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.

More from Jim Cramer

Video: Why the Stock Market Is Discounting China Trade Fears for Now

Video: Why the Stock Market Is Discounting China Trade Fears for Now

All 2018 Graduates Must Watch Jim Cramer's Bucknell Commencement Speech

All 2018 Graduates Must Watch Jim Cramer's Bucknell Commencement Speech

3 Simple Tips on Investing From TheStreet's Jim Cramer

3 Simple Tips on Investing From TheStreet's Jim Cramer

Video: One-on-One With Pluralsight's CEO Following Its Successful IPO

Video: One-on-One With Pluralsight's CEO Following Its Successful IPO

Using Technical Analysis to Profit: Cramer's 'Mad Money' Recap (Friday 5/18/18)

Using Technical Analysis to Profit: Cramer's 'Mad Money' Recap (Friday 5/18/18)