'Fast Money' Recap: Is Amazon on Fire?

NEW YORK (TheStreet) -- The S&P 500 closed at a record high following the Federal Reserve's statements on the U.S. economy. 

However, on CNBC's "Fast Money" TV show, the trading panel shifted their focus to Amazon's (AMZN) new Fire smartphone. 

Guy Adami, managing director of stockmonster.com, said the phone is unlikely to be a "game-changer" in the current quarter. However, he said the company's next earnings report has to have improved operating margins. He reasoned the stock is headed to $345. 

Dan Nathan, co-founder and editor of riskreversal.com, called the phone "dead on arrival" and "gimmicky." He added that it's unlikely to have a big affect on the stock. 

Karen Finerman, president of Metropolitan Capital Advisors, questioned how much the company would need to generate in sales in order to justify creating the Fire smartphone. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said Amazon had to create this phone, with 20% of online shopping coming from mobile devices. He added that the company will continue to improve the device as time goes on.

Colin Gillis, director of research and senior tech analyst at BGC Financial, has a hold rating on shares of Amazon with a $365 price target. He said the company is likely to sell less than 5 million units of the Fire smartphone annually. He added the price is too high but the company needed "take matters into their own hands" to keep up with competitors and to get a mobile shopping platform. 

Turning to BlackBerry (BBRY), Gillis upgraded the stock to buy from sell and assigned an $11 price target. The company reports earnings on Thursday. While admitting his upgrade may be early by a "quarter or two," he reasoned that CEO John Chen is doing a good job turning the beleaguered smartphone maker around. The company still has impressive sales outside of the U.S. and can continue to cut costs. 

Brown said investors should buy Nokia (NOK), which is in the midst of a big technical breakout. 

Finerman said she does not see the long-term picture for BlackBerry and therefore is not a buyer of the stock. 

Nathan is not a buyer of BlackBerry because it has "the wrong products" for consumers. 

Red Hat (RHT) beat top- and bottom-line expectations. However, Adami reasoned that the stock needs to breakout over $60, otherwise it could head lower. He did not care for the stock's valuation and he is a buyer of Oracle (ORCL) instead. 

Speaking of Oracle, it was the featured stock on the show's "Street Fight" segment. Brown was the bull, arguing that each one of Oracle's major moving averages -- the 20-day, 50-day and 200-day -- are all moving higher, which is a bullish technical sign. He added the stock has a cheap valuation, at just 14 times next year's earnings estimates. The company's profit margins of 38% are some of the best in the technology industry. 

Nathan disagreed, arguing the stock is already up 43% in the past 12 months while earnings per share and revenue only grew 8% and 3%, respectively, in the same time frame. He reasoned that the company is not growing fast enough to justify its valuation. He is a buyer near or below $40. 

Paul Hickey, co-founder of Bespoke Investment Group, was a guest on the show. As to the Federal Reserve, he said it is likely to adjust interest rates in nine to 12 months. Since 1994 the Fed has announced an interest rate hike three times, (1994, 1997 and 2004). In each of those three times the stock market ultimately corrected by more than 8%, but was also positive one year after the announcement. Wednesday's comments were in-line with what investors were expecting, Hickey reasoned. 

Brown said the comments from the Federal Reserve did not sway his forward outlook on the economy. 

Nathan argued that 10-year Treasury yields have to go higher, especially if economic activity increases. If rates don't go higher as the Fed tapers, investors anticipate higher rates and economic activity increases, "we have a problem." 

FedEx (FDX) beat on top- and bottom-line fourth-quarter earnings estimates. However, Adami was not impressed with the company's guidance for 2015. While the valuation is reasonable, he would rather buy United Parcel Service (UPS). 

Brown said ConAgra Foods (CAG) has one of the "ugliest charts" he's ever seen. He added that canned food is not what people want to eat anymore, as brands like Chef Boyardee and Slim Jim continue to suffer. He is not a buyer. 

Finerman likes Golar LNG Limited (GLNG) and Dorian LPG Limited (LPG), which transport liquified natural gas and fracking byproducts, respectively. However, she said the space has been a little too hot and investors should wait for a pullback before getting long.

Dennis Gartman, editor and publisher of The Gartman Letter, was a guest on the show. On Monday, he suggested buying shares of Hi-Crush Partners (HCLP), due to its attractive dividend and involvement in fracking. However, after nearly a 15% rise in share prices since Monday, he is taking profits. He is a buyer of aluminum, banking on a continued "global economic upturn." 

Chris Rolland, vice president of FBR Capital Markets, was a guest on the show. He took a look at several possible M&A deals that would be favorable for U.S. companies from a tax perspective: Qualcomm (QCOM) buying ARM Holdings (ARMH); Intel (INTC) buying MediaTek; Cavium Networks (CAVM) buying Mellanox Technologies (MLNX); Texas Instruments TXI buying NXP Semiconductors (NXPI). All of the deals are "completely possible" and meet the inversion guidelines, he concluded. 

Chicago Bridge & Iron (CBI) climbed 2% and was the first stock on the show's "Pops & Drops" segment. Adami said investors could get long with a stop-loss at $66. 

SodaStream International (SODA) jumped 3%. Finerman pointed out the increased activity in the October $45 and $52.50 call options, but was not a buyer based solely on takeout rumors. 

Outerwall (OUTR) fell 6%. Brown said the stock "broke every level of technical support." He is not a buyer at current levels. 

Adobe Systems (ADBE) popped 8%. Nathan said the company beat earnings expectations and raised forward estimates. However, he told investors not to "chase" the stock and wait for a pullback.

Nathan pointed out the bullish call buying activity for shares of Kinder Morgan (KMI). Specifically, he noted that someone bought 40,000 January $42.50/$47.50 call spreads for $0.25 each. However, he said these trades rarely work out, since the break-even of $42.75 is so far from the current share price, and retail investors should not try to replicate it. 

Brown said stocks like KMI should not be traded "in and out" of, but rather, bought and held because of the yield. 

For their final trades, Brown is buying ORCL and Nathan said to buy eBay (EBAY). Finerman is a buyer of ADT Corp. (ADT) and Adami is buying U.S. Steel Corp. (X).

-- 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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