'Fast Money' Recaps Retail's Winning Strategies and Dupont Activist Dog Fight

 

NEW YORK (TheStreet) -- CNBC 'Halftime Fast Money' report Monday covered retail companies with a winning strategy of low-price and an online presence, and dove deep into the Dupont (DD) proxy fight and Bank of New York Mellon (BK) brouhaha.

Some of the panelists addressed the question whether it was still the time to buy stocks. "Yes," said Stephen Weiss, managing partner with Short Hills Capital.

"We haven't seen any pain in equities, but the people who own U.S. debt feel so much more pain and will continue to feel pain as interest rates go up," Weiss added.

Joe Terranova, chief market strategist at Virtus Investment Partners, said the financials sector "looks good." Josh Brown, CEO and co-founder of Ritholz Wealth Management, agreed and suggested banking stocks, such as the SPDR S&P Regional Banking ETF (KRE).

"Look at KRE and regional banks. These are telling you when big bets are being made. These stocks are in the midst of a potentially massive breakout," Brown said, noting investors can buy the stocks individually or in an ETF. 

On the retail scene, Gerald Storch, CEO of Canadian department store chain Hudson's Bay, suggested some winning retailers to the Fast Money panel and discussed the strategies that make them winners. These tips may prove particularly useful after consumer spending dropped to 1.9% growth in the first quarter, compared with 4.4% growth in the fourth quarter, as was noted in a USA Today report.

"I think it will get better," said Storch, who described the results from the first quarter as muddled and hard to read. He pointed out that retailers that focused on value or discounted prices performed well and will likely continue to do so. These included stores that market items for a dollar, as well as discount retailers like Costco (COST) and TJX Companies (TJX).

He noted the luxury retailers have been particularly hit hard due to the foreign currency exchange rates, losing some love from European shoppers.

Activist shareholders took center stage in this segment of Fast Money. Nelson Peltz, co-founder of $11 billion hedge fund Trian Fund Management, told the Fast Money panel that the prospects of reaching a settlement in his proxy fight with DuPont are "very dim" as the two sides square off on Wednesday during the shareholders meeting.

Peltz wants his proposal of four directors to be named to the DuPont board, but DuPont is asking shareholders to elect its slate of 12 directors. The activist shareholder has also proposed breaking the company into three parts and had previously made comments about the amount of money being spent on research and development with inadequate returns. 

When asked if he plans to sell his stake in DuPont should he lose the proxy fight, Peltz threw the question back at the panel and asked, "What do you think the stock would do if we lose?" He then pointed to how it has risen 50% since his investment in DuPont became known.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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