'Fast Money' Recap: Merger Mania

NEW YORK (TheStreet) -- The S&P 500 climbed 0.38%. Also making headlines was Google's (GOOGL) acquisition of live video-streaming provider Twitch for $1 billion. 

Dan Nathan, co-founder and editor of riskreversal.com, said a lot of acquisitions have been made lately for unprofitable companies that only have a lot of users. He added the M&A activity seems to have raised the value of initial public offerings as well. 

Tim Seymour, managing partner of Triogem Asset Management, said Google doesn't appear to have a problem with growth and still trades at a reasonable valuation. He added the companies that are acquiring other companies to "reinvent themselves," unlike Google, are the ones that are in trouble. 

Karen Finerman, president of Metropolitan Capital Advisors, said she likes Google's acquisition of Twitch, which could complement YouTube, another one of Google's assets. 

Guy Adami, managing director of stockmonster.com, expressed concern that all of the recent M&A activity may be marking a "top" in the stock market. 

Steven Milunovich, managing director and IT hardware analyst at UBS, said the rumored deal by Apple (AAPL) for Beats Electronics is "okay." It allows the company to broaden its reach to consumers through different products. He called Apple a technology company and a "brand" play, referencing Nike (NKE) as an example of branding power. He has a buy rating on Apple with a $625 price target. 

Nathan said he would not "chase" the stock, although the 7-for-1 stock split and coming Worldwide Developers Conference should boost shares of Apple. He argued that expectations for its next earnings report may be tough to top. 

Seymour said he is not long Apple but is looking to buy on a pullback. He liked the valuation. 

Urban Outfitters (URBN) "better hold" the $35 level, Adami said. Otherwise the stock is on its way back to $30. 

CNBC's Josh Lipton was a guest on the show, discussing GoPro's IPO filing. He pointed out that net income and revenue has doubled in the past year. CEO Nick Woodman has also indicated GoPro's footage may be considered media content and therefore, another business opportunity for the company. 

Seymour called the $11 billion stock offering from Deutsche Bank (DB) a buying opportunity. Shares are down 23% for the year to date but investors have already priced in this announcement, he said.  

CNBC's John Jannarone was a guest on the show, discussing the possibility of a Dish Network (DISH) takeover. He said the normal Dish business is worth roughly $14 billion when valued at five times Ebitda, while the spectrum business is worth $18 billion. If AT&T (T) or Verizon Communications (VZ) were to attempt a takeover, regulators may block the move, he said. He argued that valuing the spectrum business is hard because its not entirely clear what the acquirer would do with the asset.

Jim Lewis, senior fellow and director at the Center for Strategic and International Studies, was a guest on the show. He said the Chinese are not following the rules of the World Trade Organization, which the country willingly joined. The U.S. has continually asked China to address the issues over its economic cyber espionage, which is affecting U.S. corporations. He added China may try to retaliate by making it harder for companies such as Qualcomm (QCOM) and Cisco Systems (CSCO) to clear the necessary hurdles in the country. 

Dennis Gartman, editor and publisher of The Gartman Letter, was a guest on the show. He said the divergence among all of the major stock indices is concerning. While the Dow Jones Industrial Average and S&P 500 continue to hover near new highs, the Nasdaq and Russell 2000 continue to show weakness. He is long coal, aluminum and basic materials. He reminded investors that it is still a bull market for stocks. 

Nathan is a seller of the rallies in the PowerShares QQQ Trust ETF (QQQ) and the iShares Russell 2000 ETF (IWM). 

World Wrestling Entertainment (WWE) fell 3% and was the first stock on the show's "Pops & Drops" segment. Adami said investors could buy the stock and use Friday's low of $10.55 as a stop-loss. 

Vale S.A. (VALE) dropped 3%. Seymour said investors could buy VALE and sell Petrobras (PBR). 

FireEye (FEYE) jumped 4%. Nathan said investors can buy the stock if it has a large selloff from Tuesday's secondary offering. 

Sketchers USA (SKX) popped 4%. Finerman said to buy Foot Locker (FL) instead. 

Craig Leavitt, CEO of Kate Spade (KATE), was a guest on the show. In order to get more people involved in the brand and to target the younger consumers, the company is releasing products with lower price points, he said. Eventually, he hopes, these consumers will move on to high-end products such as $600 to $1,300 bags. He said China continues to be a strong market for the company, while cost-cutting and moving certain operations in-house will boost the bottom line. 

Finerman said she sold her position in KATE too early and the company is doing a "fantastic job." Adami said the valuation is looking a little "stretched" but it appears that shares of KATE can trade up to the 2007 high near $45. 

Nathan pointed out the bullish call buying in Abercrombie & Fitch (ANF), with a trader buying 4,500 of the January $42/$52.50 call spreads for $2.18. The breakeven point on the stock at $44.18 by January expiration. 

For their final trades, Nathan was a seller of Starbucks (SBUX) and Seymour was a buyer of DB with a stop-loss at $40. Finerman was a seller of Corrections Corporation of America  (CXW) and Adami was a buyer of (ANF). 

-- 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.

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