'Fast Money' Recap: Stocks You Should Sell Now

NEW YORK (TheStreet) -- Stocks dipped slightly into the close but the S&P 500 finished higher by 0.24%.

On CNBC's "Fast Money" TV show, the trading panel took a look at stocks that may be worthy of profit taking. 

Brian Kelly, founder of Brian Kelly Capital, said to take profits in Home Depot (HD). He argued that shares have had a nice run and the stock looks likely to pullback. 

Steve Grasso, director of institutional sales at Stuart Frankel, said Exxon Mobil (XOM) was once a value stock but has now become too expensive in valuation. He said to take profits. 

Karen Finerman, president of Metropolitan Capital Advisors, was taking profits in United Rentals (URI) since it has "has run up a lot." Commercial construction has not improved enough to warrant the stock run up. she said. 

Guy Adami, managing director of stockmonster.com, said to take profits in Williams-Sonoma (WSM) because the stock is not attractively valued and guidance was unimpressive.

Hewlett-Packard (HPQ) reported in-line earnings results on a revenue miss. Amit Daryanani, managing director at RBC Capital Markets, discussed the results. He said all of Hewlett-Packard's business segments declined, except for PCs. He pointed out that revenue also declined 1% on a year-over-year basis. The company announced more job cuts and he guessed that it may be due to "much worse" product demand expected in the second half of 2014. 

Although margins improved, revenue had no growth, Adami said, who is a seller. Grasso said to take profits in HP, which he did roughly two weeks ago after owning the stock from sub-$20 levels. 

David Strasser, retail analyst at Janney Capital Markets, was a guest on the show. Discussing Best Buy (BBY), he said the new "4K" TVs should start to become more appropriately priced near the holidays, a time when the company tends to do really well. Despite lower forecasts for comparable-store sales, he said earnings per share should hold up in 2014. He added that operating margins have room to increase while the stock seems trapped between $25 and $30. He has a buy rating with a $34 price target on Best Buy. 

Kelly said investors should "stay away completely" from Best Buy because it's a play on the winter holidays, which are far from today. 

"This is really a problem," Finerman said of Aeropostale's (ARO) big revenue miss. However, she did not recommend short-selling the stock because shares have declined so much and because the balance sheet does not appear "distressed." 

Grasso was not a buyer of GameStop (GME), which has a short interest of 27%. However, he did acknowledge the stock's attractive 3.5% dividend yield.

Adami said investors could buy TiVo (TIVO), which seems likely to trade back up to the $13.50 to $14 range. 

Existing home sales rose 1.3% in the month of April, the fastest since December. However, Kelly said sales actually decreased 7% on a year-over-year basis and pointed out that housing supply is increasing. These are not good statistics to see for banking on a housing recovery, he argued. 

Adami said investors can buy Facebook (FB) near current levels. He added the company's last earnings report was "outstanding" and the stock seems likely to go "higher from here." 

Kevin O'Leary, chairman of O'Leary Funds and co-host of the CNBC show "Shark Tank," was a guest on the show. He said U.S Treasury bonds should be the safest investment. However, since the bull market in bonds over the last 30 years seems to be coming to an end, and with yields near historic lows, bondholders could suffer greatly should rates rise back to their historical averages. 

Hess (HES) climbed 1% and was the first stock on the show's "Pops & Drops" segment. Grasso said investors can stay long. 

Lorillard (LO) dropped 5%. Adami said the stock has a great yield and good valuation despite reports saying a merger with Reynolds American (RAI) may be further away than previously anticipated. 

Darden Restaurants (DRI) jumped 2%. Kelly said there's no reason for investors to stay long the name, even though there doesn't appear to be much risk in owning the stock. 

3D Systems (DDD) popped 8%. Finerman called the stock cheaper, but not cheap in valuation.

Jeff Papp, senior analyst at Oberweis Asset Management, said the valuation for JD.com (JD) is fair on the basis that the company will grow sales 70% in 2014. Turning to Weibo (WB), he said the company is focused on growing revenue and its user base, not profits. This is great for the platform, but not for investors, he argued. Finally, he said it wouldn't be unrealistic for Alibaba to be valued at $200 billion. 

Finerman said Alibaba is better than JD.com and she is long Softbank, which has a stake in Alibaba.

Adami said Oracle (ORCL) can move higher, along with other large-cap technology stocks. A lot of investors are buying the stocks because of the low valuation. Grasso questioned when the rotation into value stocks would end.

For their final trades, Finerman was a buyer of the Children's Place Retail Stores (PLCE) and Grasso said to buy Potash (POT). Kelly was buying Control4 (CTRL) and Adami was a buyer of TiVo. 

-- 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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