'Fast Money' Recap: Driving With the Automakers

NEW YORK (TheStreet) -- The S&P 500 finished Tuesday with a slight loss, down 0.04%. 

On CNBC's "Fast Money" TV show, the trading panel discussed U.S. auto sales, which came in much stronger than expected. 

Karen Finerman, president of Metropolitan Capital Advisors, said the public obviously doesn't care about the recall issues at General Motors (GM) since sales came in quite strong. She added that the auto report was good for most automakers, indicating the consumer may be stronger than investors had thought. 

Dan Nathan, co-founder and editor of riskreversal.com, wondered whether this Friday's nonfarm payrolls report would be stronger than expected, too. Regarding the auto sales, he suggested this may be as good as it gets. 

Brian Kelly, founder of Brian Kelly Capital, said the auto sales gains were likely so strong because the weather prevented so many consumers from purchasing vehicles earlier in the year. But monthly auto sales may not be as strong as they were in May. 

Guy Adami, managing director of stockmonster.com, said the 1.5% rally in shares of GM was pretty "weak" given the year-to-date selloff of the stock. He added that BorgWarner (BWA) and Alcoa (AA) are good "derivative" plays on the auto industry.

Ben Kallo, senior research analyst at R.W. Baird, has a buy rating on shares of Tesla Motors (TSLA) with a $275 price target. It's good news that CEO Elon Musk will be around for roughly another five years, a point the chief executive made during the company's recent shareholder meeting, he said. Kallo added that margins should improve in 2014, and production looks likely to be higher than expected this quarter. 

Turning to solar, Kallo said his top pick in the sector continues to be SunPower (SPWR), on which he has a buy rating with a $42 price target. He also has a buy rating on First Solar (FSLR) and SolarCity (SCTY), with price targets of $87 and $80, respectively. 

Adami said he would rather buy Tesla Motors on a breakout over $225 than at current levels. 

Nathan said investors should avoid shares of SCTY due to its bearish technical setup. 

Adami said Microsoft (MSFT) appears to have its "mojo" back and shares can climb to $45. The stock is not overvalued and the last earnings report was strong. MSFT, along with Apple (AAPL), has "wind in its sails," he added. 

Nathan said that Apple's software continues to dominate over other devices and services. He pointed out the bullish call buying activity in the July $680 calls. The bigger Apple can build its ecosystem, the better off the company will be with retaining customers, Finerman reasoned. 

Kelly is a buyer of Advanced Micro Devices (AMD), as bitcoin and other digital currencies continue to gain steam. He reasoned that digital "miners" will need more chips to increase their mining capabilities.  

Nathan is bearish on shares of Wynn Resorts (WYNN). With negative news coming from Macau -- where Wynn derives three-quarters of its profits -- the stock could be in trouble, he said. If it breaks below $200, it will go right to $180. 

Finerman said she is long Fannie Mae (FNMA) and Freddie Mac (FMCC), as is hedge fund manager Carl Icahn. She called it an "asymmetric" investment, meaning it will either be worth a lot or practically nothing in the future. 

Kelly said shares of Google (GOOGL) could be "rolling over" and headed lower. He suggested investors use the stock as a "barometer" for the overall market. 

Bill Merritt, president and CEO of InterDigital (IDCC), was a guest on the show. The stock soared 21% as the company raised its quarterly guidance to $172 million to $210 million, from $65 million to $72 million. This came after the company signed a multi-year licensing deal with Samsung. 

Merritt said the company has a lot of cash on the balance sheet, approximately $17 per share is in cash, and InterDigital will continue with its aggressive buyback and dividend payouts. He added that the Samsung deal gives momentum for future licensing deals with other big companies, such as Apple and HTC. 

Adami said investors can likely buy shares of IDCC at current levels. 

Hillshare Brands (HSH) climbed 9% and was the first stock on the show's "Pops & Drops" segment. Kelly said it's hard to buy the stock with cattle prices near the highs. He added that rising costs could also be a bad sign for Chipotle Mexican Grill (CMG). 

Quicksilver (ZQK) plunged 41%. Adami said investors may be able to buy the stock later this week following the company's "lousy" quarter. 

Dollar General (DG) popped 4%. Finerman said the quarter wasn't that good but the second half of 2014 could be strong for the company. 

Skyworks Solutions (SWKS) jumped 6%. Nathan said he would not "chase" the stock at current levels. He is a buyer in the upper-$30 range.

Travis Katz, co-founder and CEO of Gogobot and former Myspace executive, said Myspace will have a hard time making a comeback, given that so many of today's users only use mobile rather than the company's  desktop platform. Its only real chance at winning users back is for the increased privacy Myspace provides, he said. 

As to Facebook (FB), Katz said investors should watch for two key things as potential warning signs: when daily active user growth begins to flatline, and when the younger audience shifts to a different platform because that is the driver behind big trends. However, he added Facebook continues to acquire other popular platforms for the younger generation such as Instagram. 

Nathan said that five years from now the Facebook platform looks likely to go the same route as Myspace. Kelly argued that Facebook continues to make important acquisitions while Myspace never did that to stay relevant. 

Matthew Mannelly, president and CEO of Prestige Brands (PBH), said this year's allergy season is unlikely to be as strong as 2013, but should be better than average nonetheless. The company's diversified product portfolio helps lessen the blow of a weak flu season, and the company plans on continuing its aggressive M&A strategy, he concluded. 

Adami said he is still a believer in Garmin (GRMN). 

Finerman called the selloff in Bank of America (BAC) a buying opportunity.

For their final trades, Nathan is a seller of FB and Kelly is a buyer of MSFT. Finerman said to buy GM and Adami is buying JetBlue Airways (JBLU). 

-- 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

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home