Yahoo: Disband Quietly - Fast Money Recap (6/12/08)
Recap of CNBC's Fast Money, Thursday June 12.
“Disband Quietly”: Yahoo (YHOO), Microsoft (MSFT), Google (GOOG)Stocks were down on Thursday, partly on news of dashed hopes for a merger between Microsoft and Yahoo. While Yahoo blamed Microsoft for not accepting its terms, Finerman reminded viewers that she had said the best way to be long Microsoft is to short Yahoo. . Jeff Lindsay of Sanford Bernstein commented pressure is off Microsoft, and it will be interesting to see if Yahoo makes a deal with Google. Guy Adami thinks Yahoo might be a buy at the $22 mark, and Macke says Yahoo is a company without a plan and should “disband quietly.”
Great Man Theory” Apple (AAPL)
The group discussed a virtually unnoticed 4% drop in Apple’s shares on concern for CEO Steve Job’s health. Finerman said no company is as dependent on one man as Apple is and Macke commented Job’s departure would spell “big trouble” for Apple.
Lehman Shakeup: Lehman Brothers (LEH)
The Lehman drama continued as the bank ousted its CFO Erin Callan after a mere six months on the job. Karen Finerman called the move “disgraceful” and said Callan was “thrown under a bus.” Guy thinks Lehman is worth a trade with an upside of $26 to $27, but cautioned there is some downward potential. Although the stock is volatile, Najarian said it is worth keeping an eye on some put options; "You might want to have some puts to protect, if you decide to go for the bottom." Macke criticized Lehman for its “dilutive” strategies, selling a third of the company, and looking for scapegoats. When asked if Lehman could be a takeover target, Adami replied integration of Lehman with anyone would be a “disaster.”
Bud’s Rebuff: Anheuser-Busch (BUD), The Boston Beer Company (SAM)
BUD rejected InBev’s $65 a share offer and says it prefers a match with Mexico's Grupo Modelo. Adami still prefers SAM and Najarian says any buyout of BUD will be under $65. Macke says the company is only making things harder for itself by refusing the offer, and Adami says $85 is the right place to buy Bud.
Exxon’s Exit: Exxon (XOM)
Macke is not concerned about XOM’s decision to sell 822 retail gas stations, since these are just a hassle for the company and will not be a loss because Exxon is “huge.”
Banks versus Energy
Strategists at Morgan Stanley are telling investors to dump energy and buy banks. Finerman approves of the strategy, but Najarian thinks energy’s move is far from over.
Other Options: Boyd Gaming (BYD), Frontier Oil (FTO)
Narjarian said options activity in BYD and FTO is indicative of noteworthy action in the stocks in the near future.
Bill Fleckenstein, President of Fleckenstein Capital on Finance and Tech
Fleckstein said the bottom in financials is not close, and the main problem with the sector is statements are useless because of problems with accounting. He added the economy is weaker than many believe and would short tech, given the overconfidence in the sector.
Inflation Nation
Michael Darda, chief economist at MKM Partners, expects Friday’s Consumer Price Index to have "hot headline numbers" and thinks rate hikes are imminent, given Ben Bernanke’s recent anti-inflation rhetoric. Darda would buy stocks that work in an inflationary environment, and Najarian expects a rally in the dollar on the next Fed meeting. Macke added, in the current environment, “rallies are made to be sold.”
Hot Summer
Najarian predicts another volatile summer, and comments when volatility breaks through the 100-200 day moving average, the entire market is extremely volatile. Investors should not pay attention to day to day fluctuations, but the current market is for traders with opportunities in coal. Finerman says Najarian has been accurate in his predictions and says housing stocks with low price-to-earnings multiples will roll over.
What’s Next - Pharma Foods: Starbucks (SBUX), Pepsico (PEP), Hansen Natural (HANS), Coke (KO)
Macke discussed the perfect scam – Pharma-food, or food-as-medicine product. Examples include Starbuck’s healthy smoothies, Pepsi’s fitness waters and naked juice. Adami would play this trend with Hansen, which was recently upgraded and the group likes Pharma-food pioneer Coke with its Vitaminwater product.
Gassing Up: United States Natural Gas Fund (UNG), Apache (APA), Devon (DVN), Chesapeake (CHK)
While everyone is talking about oil, Joe Terranova says inventories of natural gas are also on the light side, and the fuel should rise 10% with an even greater gain if there is a hurricane. Natural gas should peak in early July, and Terranova would look at UNG, APA, DVN and CHK.
Fast and Furious: Marvel (MRVL)
Friday’s inflation number will show that prices jumped 0.6%, and Narjarian is surprised it isn’t higher. The University of Michigan will release its Consumer Confidence number, and Dylan Rattigan said whatever numbers is reported, expect something lower. On the G-8 Conference in Japan, Adami expects a higher dollar. Finerman thinks there may be another Lehman-like surprise in store on Friday. On Japan’s Central Bank meeting, Adami commented, “Japan waited two years too long [to cut rates] and they're paying for it for 10-15 years later." Shares of MRVL continue to climb in anticipation of the release of its newest super-hero film, “Hulk”
Final Trade: Macke: Disney (DIS), Adami: Lehman, Finerman: Microsoft, Najarian: Dell (DELL)
Seeking Alpha is not affiliated with CNBC, or Fast Money
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This article has 2 comments:
- BS Detector
- 250 Comments
Jun 13 08:14 AM- jptao
- 6 Comments
Jun 13 09:59 AM