'Fast Money' Recap: Will Oil Companies Start Cutting Their Dividends?


NEW YORK (TheStreet) -- West Texas Intermediate plunged 4.3% on Monday, dropping to $63 per barrel. Companies like Transocean (RIG) will likely be forced to cut its dividend, Guy Adami, managing director of stockmonster.com, said on Monday's CNBC "Fast Money" TV show. 

If and when the company cuts its dividend, the ensuing selloff is a buying opportunity, Adami said. If ConocoPhillips (COP) continues to find support near $64, investors should buy the stock, he added. 

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Pete Najarian, co-founder of optionmonster.com and trademonster.com, is also a buyer of ConocoPhillips, although the stock has unlikely bottomed yet. Investors should continue to stay long the airlines stocks, like United Continental (UAL) , American Airlines (AAL) and Delta Air Lines (DAL) . 

"Who knows where the bottom in oil is?" asked Dan Nathan, co-founder and editor of riskreversal.com. There will likely be dividend and capital expenditure cuts in the future. 

Oil is likely to go lower, but that doesn't mean there aren't some stocks presenting investors with "extreme value," according to Tim Seymour, managing partner of Triogem Asset Management.

He advised investors to consider the integrated oil stocks on the long side and to avoid exploration and production companies and drilling companies. Lower oil prices should also help accelerate global economies, particularly in Europe. Investors can buy the iShares MSCI Germany ETF (EWG) . 

"I think oil can go down a lot farther," said Dennis Gartman, editor and publisher of The Gartman Letter. He added that the decline in oil prices seems to have only just begun due to the continually oversupplied state of the market. Lower prices will hurt certain governments, like Venezuela and Russia, but will largely act as a form of global stimulus. The U.S. dollar, which is headed "a lot higher," will continue to put pressure on oil prices. 

The conversation shifted to Apple (AAPL) . Guest Walter Piecyk, managing director and research analyst at BTIG, has a buy rating and $135 price target on the stock. 

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Apple is generating impressive iPhone 6 and 6 Plus sales via upgrades from previous consumers. he said. The holiday will act as a big driver for sales this quarter and margins should be strong. The stock has 20% earnings growth, fueled by increased buybacks. The stock is about 5% off recent highs, which represents a good buying opportunity, he concluded. 

"I think margins will be strong too," Najarian said, since many consumers want the larger phones. Sales in Asia should be impressive as well. Seymour said he was too "reluctant" to sell Apple near its recent highs, so he stayed long the stock despite the strength of the recent rally. The company has a lot of future catalysts, both as products and services. 

Apple seems unlikely to maintain its margins in a business that is so highly commoditized, Nathan argued. As for the phone carriers, Adami said investors can buy Verizon (VZ) at $46 per share. 

But don't forget about Google (GOOGL) and Facebook (FB) . Video advertisements for Facebook and Google's YouTube network remain very strong, according to Robert Peck, managing director at SunTrust Robinson Humphrey. This has created a competition between the two to maintain ties with their current "stars." Google is a buy on the recent pullback, he said. 

Nathan covered his short position in Google on Monday. The company's YouTube business is a "force to be reckoned with" and investors will likely support shares of Google near $500, if it gets that low. 

Facebook has been consolidating ever since its last earnings report, Adami said. The stock is started to trade more bullishly and should do well until its earnings report in January. Najarian agreed that Facebook seems likely to climb past $80 per share.

Google is a buy near current levels, given its reasonable valuation and impressive growth rate, Seymour said. 

For their final trades, Semour is buying McDonald's (MCD) and Najarian is a buyer of Regions Financial (RF) . Adami said to buy FireEye (FEYE) and Nathan is selling Yum Brands (YUM) .

Must Read: Cheap Oil Isn't the Only Reason Warren Buffett's Latest Fracking Bet Looks So Risky

-- Written by Bret Kenwell 

Follow @BretKenwell

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