'Fast Money' Recap: Banking on Financial Stocks

NEW YORK (TheStreet) -- The S&P 500 climbed 0.29% to a new closing high on Thursday as U.S. equities rose on all the major stock indices.

On CNBC's "Fast Money" TV show, the trading panel took a look at financial stocks after the sector climbed 1.18%. 

Guy Adami, managing director of stockmonster.com, said U.S. Bancorp (USB) and Wells Fargo (WFC) have been "slow and steady" for quite a while, and are two names he continues to like. He also likes Citigroup (C) . 

Karen Finerman, president of Metropolitan Capital Advisors, said she hoped Bank of America's (BAC) settlement with the U.S. government will allow investors to once again focus on the company's fundamentals. 

Tim Seymour, managing partner of Triogem Asset Management, said eventually the Federal Reserve will have to raise interest rates. He likes Citigroup for its low valuation and solid fundamentals. 

Jon Najarian, co-founder of optionmonster.com and trademonster.com, said investors are seeing longer-term upside potential in stocks likes Morgan Stanley (MS) , Bank of America, and TD Ameritrade (AMTD) . 

Home Depot (HD) announced a new CEO. Seymour said everyone has been expecting this move to come. It now seems like an okay time to consider taking profits. Finerman said she expects a smooth transition. 

Adami said he continues to like shares of Home Depot on the long side. A few years ago a management shakeup would have mattered more but "not so much" now, he said. 

Dana Telsey, CEO of Telsey Advisory Group, said Gap (GPS) still has room to improve on same-store sales. She added that new merchandise this fall could boost comparable-store sales. Overall, the company reported a "very decent quarter" with solid inventory and cost management. The online business increased 11% and back-to-school seems to be going well. 

Adami said he likes Gap on the long side, suggesting that it could climb to $50. Seymour said Gap has efficient operations but also pointed out the stock is running into one-year resistance near $44. 

Chris Rolland, semiconductor analyst at FBR Capital Markets, said Fairchild Semiconductor (FSC) has a very similar business to International Rectifier (IRF) , which was just acquired by Infineon (IFNNF) for $3 billion. Infineon could circle back and pick up Fairchild in a few years, Rolland said, if it can improve the business. Another takeover candidate is Atmel (ATML) . 

Adami said Advanced Micro Devices (AMD) seems like the most interesting play in the sector. With support near $4, he suggested investors use a stop-loss near $3.90 or $3.85. 

Najarian likes Mentor Graphics (MENT) and Synopsys (SNPS) ; he is long Synopsys. 

Seymour said investors who are long semiconductor stocks should be careful because "a lot of people think the whole sector is a little ahead of itself." 

Adami likes GameStop (GME) on the long side, even after the big move higher following its earnings release. The stock has a low valuation and high short-interest. "I think you can actually chase this one," he said. Finerman is not a buyer of GameStop. 

eBay (EBAY) climbed nearly 5% on rumors that it is considering spinning off its PayPal division. Nathan said the stock could move to $70 if eBay does spin off the asset. Seymour said he was a buyer of the stock when it was trading near $49, not $56.

Andrew Fung, vice president and auto and auto parts analyst at CLSA, has an outperform rating on Tesla Motors (TSLA) and a $300 price target. 

Currently, Tesla only addresses about 5% of the luxury market, Fung said. He expects that to expand. By 2020 the company seems likely to control 40% of the electric vehicle market following the introduction of its Model 3. High demand and lower input costs will be beneficial for the company, which shouldn't experience much competition pressure through the rest of this decade, he concluded. 

Seymour said shares of Tesla seem to be overvalued and have all the good news priced in. He expects competition to be tougher than many investors and analysts expect. Adami said investors can stay long Tesla so long as the stock stays above $225.

CNBC's Morgan Brennan, said natural gas producers are ramping up production so quickly the building of infrastructure simply cannot keep pace. Raymond James recently upgraded pipeline stocks such as Crestwood Midstream Partners (CMLP) and Oneok Partners (OKS) for this reason, she said. 

Andrew Littlefair, president and CEO of Clean Energy Fuels (CLNE) , said his company benefits from lower natural gas prices. Even though gasoline prices are falling, natural gas prices still offer customers a steep discount, usually by $1.25 to $1.50 per gallon. The company will spend less this year than it had originally planned, while still opening 75 new stations. The company has enough capital on hand to satisfy its growth needs for the next few years, Littlefair concluded. 

Seymour, who is long the stock, said it has been frustrating to own. His main concern is competition. "Hopefully they can capitalize," he added. 

The Children's Place (PLCE) climbed 8% and was the first stock on the show's "Pops & Drops" segment. Finerman said she continues to like the stock and she is long. 

GoGo (GOGO) jumped 6%. Najarian said if the company's partnership with Verizon (VZ) doesn't improve connection speed the stock will give up these recent gains. 

iDreamSky Technology (DSKY) popped 8%. Seymour said the company continues to take market share in China and he is staying long. 

Cliffs Natural Resources (CLF) dropped 3%. Adami said he would rather be long Alpha Natural Resources (ANR) . 

Najarian pointed out the bullish options activity in shares of Finisar (FNSR) , specifically in the September $20 and October $21 call options. 

Scott Crowe, managing director at Resource Real Estate, said real estate in major cities likes New York and Boston is attractive. He reasoned that with few new construction starts, renting is poised to grow. He likes apartment rentals and urban office space. He added the European commercial real estate market is poised to grow and is roughly two years behind the U.S. real estate market.  

Seymour said he likes mall REITs, despite the current retail environment. Finerman said she is concerned about investing in REITs when considering the potential for rising rates. 

Finerman said she finds Sears Holdings (SHLD) "un-investable." However, the short interest of 50% is so high that investors should not short the stock either. It's a "no touch." 

Najarian said the time to buy into retail stocks is right after Labor Day and the time to sell is right before Black Friday in November. 

Seymour said the 3-D printing sector is unlikely to "move the needle" at Hewlett-Packard (HPQ) because the company is so big. The enterprise side of the business did well, however, he said. 

Adami said he would take profits in Hewlett-Packard. Najarian concurred. 

For their final trades, Seymour is a seller of the Market Vectors Russia ETF (RSX) and Najarian is a buyer of Salesforce.com (CRM) . Adami is a buyer of Gap and Finerman said to buy portfolio protection via a long position in SPDR S&P 500 Trust ETF (SPY) put options. 


-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

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