Word On The Street
Light trading ruled the day in the stock market Friday. The Dow finished up 6 points and the Nasdaq closed down 2 points. Guy Adami was surprised that the bears didn’t knock the market down 200 points with the light volume. He was encouraged the market was able to hold off any material selling pressure. Pete Najarian liked the action in the Nasdaq stocks especially the strength in the four horsemen. Jeff Macke explained that all we saw Friday was some jockeying by money managers before the end of the year. Warren Buffett’s Berkshire Hathaway Inc. (BRK.A) announced plans to start a municipal bond insurer. Finerman thinks this is bad news for MBIA Inc. (MBI) and Ambac Financial Group Inc. (ABK). Macke feels this move is genius for Buffett and he will kill the competition. Najarian says wait for any lift in MBIA and then put on an option put spread because the stock is in trouble. Gold trades up 3.3% and the dollar drops the lowest level against the Euro since 2006. Adami thinks the dollar will rally in 2008 and he continues to be bearish on gold at the levels. Najarian favors the commodities stocks especially the names tied to coal like Peabody Energy Corp (BTU) and Joy Global Inc. (JOYG). Retail stocks fell this week off of disappointing Christmas sales. Macke explained it’s late to the party to short the retail stocks but that doesn’t make them good buys. He mentioned a trade might be worth taking in the The Retail HOLDRS Trust (RTH), which tends to trend up in January. Japan’s benchmark index fell 11% in 2007 for its first loss in 5 years. Adami mentioned that Japan’s ETF iShares MSCI Japan Index Fund (EWJ) trades in a range from $13 to $15. He feels the EWJ is dead money for 2008. Najarian prefers China to Japan and he likes playing it with China Mobile Limited (CHL), Apple Inc. (NASDAQ: AAPL), Research In Motion Limited (RIMM), Cisco Systems Inc. (CSCO) and Juniper Networks Inc. (JNPR). The Finish Line Inc. (FINL) plunges 24% after a judge rules it must complete the $1.5 billion deal for Genesco Inc. (GCO). Finerman explained that Finish Line is now forced to do a deal that will bankrupt them. She says if you want to play this dicey mess use options only. Macke called the deal a “stink show”. Cal-Maine Foods Inc. (CALM) explodes higher after second-quarter profits jumped sixfold. The stock is up 218% for the year. Najarian explained the amazing part of this company is that they ship eggs all over the world.
WORD ON THE STREET VIDEO
Top Stocks Of 2007
The biggest winners for the S&P 500 in 2007 were Jacobs Engineering Group Inc. (JEC) up 144%, National Oilwell Varco Inc. (NOV) up 141%, Amazon.com Inc. (AMZN) up 139%, Apple Inc. (NASDAQ: AAPL) up 134% and MEMC Electronic Materials Inc. (WFR) up 131%. What is the trade? Adami explained that the valuation on Jacobs Engineering is getting rich, but he would look to buy on any pullback. He feels the infrastructure story is the real deal. Najarian loves Amazon and Apple and he sees no reason for either of these stocks to pullback. Macke thinks the bears are dead wrong on Amazon and he wouldn’t short the stock. Finerman mentioned she is worried that Apple is priced for perfection. Najarian likes MEMC Electronics for a way to play the solar sector. Adami also likes National-Oilwell Varco on any pullbacks.
TOP STOCK VIDEO
Worst Stocks Of 2007
The worst performing stocks for the S&P 500 in 2007 were E*TRADE Financial Corporation (ETFC) down 83%, Countrywide Financial Corporation (CFC) down 79%, Circuit City Stores Inc. (CC) down 77%, Washington Mutual Inc. (WM) down 70% and MBIA Inc. (MBI) down 70%. Adami says take a look at E*TRADE for a possible takeover play, but if it doesn’t happen it’s a dead stock this year. Macke thinks Circuit City is going to zero and will be booted from the S&P 500 in 2008.
WORST STOCK VIDEO
Analyst Contrarian Trade
A study recently showed that if you buy the stocks that analysts say will be the worst performing Dow components for 2008 you can make money. The stocks that analysts are bearish on for 2008 are General Motors Corporation (GM), Pfizer Inc. (PFE), Caterpillar Inc. (CAT), Dupont (DD) and Citigroup Inc. (C). Adami loves Pfizer and he thinks the stock will trade to $35. Macke likes Caterpillar and he thinks it’s bizarre that the analysts hate it.
ANALYST VIDEO
Tech Comeback Kids
Microsoft Corporation (MSFT), Intel Corporation (INTC) and Oracle Corporation (ORCL) all put in a strong performance in 2007. Are these stocks worth betting on for 2008? What is the trade? Macke thinks these companies are the technology survivors and are all buys. He advised that investors don’t bet against this group. Adami continues to favor Microsoft and he thinks that $32 will be strong support for the stock.
TECH VIDEO
Quicker Than The Ticker
On Dec. 17th Najarian said buy Amazon.com Inc. (AMZN). He was dead right and the stock traded up 12% since his recommendation. On Dec. 3rd Macke recommended Take-Two Interactive Software Inc. (TTWO). Take-Two has risen 15% since Macke’s call. On Dec 18th Adami picked Joy Global Inc. (JOYG). Adami was on the money and JOYG went up 19% since his call. On Nov 26th Finerman recommended shorting Big Lots Inc. (BIG). Finerman nailed the call and Big Lot fell 21% since her call.
Fast Fire
On December 6th, Najarian recommended buying Target Corporation (TGT), but he was off the mark and Target fell 8% since his call. Najarian still likes the valuation on Target and he suggested investors stay with the stock. On December 5th, Finerman advised investors to avoid Solarfun Power Holdings Co. Ltd. (SOLF). She was dead wrong and the stock soared trading up 44% since her call. Finerman still thinks the stock is overvalued and she isn’t changing her tune.
FAST FIRE VIDEO
Happy 52-Week High The Mosaic Company (MOS)
POPS&DROPS
The following POPS&DROPS highlights the stocks that made extreme moves for the week.
POPS- CDC Corporation (CHINA) traded up 23% after insiders bought almost 500,000 shares. Najarian likes that insiders were buying stock. United States Steel Corporation (X) traded up 2%. Adami likes X. Global Payments Inc. (GPN) traded up 5%. Najarian thinks GPN will report a good number next Thursday. Amazon.com Inc. (AMZN) traded up 4%. Macke doesn’t understand why people are shorting this AMZN. DSW Inc. (DSW) traded up 9% after Jay Schottenstein, Chairman of American Eagle, reported he holds a 14% stake in DSW. Finerman disclosed she owns DSW. Checkpoint Systems Inc. (CKP) traded up 13% after guiding up for 2008 earnings. NetSuite Inc. (N) traded up 8%. Najarian disclosed he sold out of his position Friday, but would look for a pullback to get back in.
DROPS- KB Home (KBH) fell 9%. Adami thinks KB Home is a lousy company. Mattel Inc. (MAT) fell 7%. Macke says Mattel is a sell. The Gap Inc. (GPS) fell 3% after 16,000 boys winter jackets were recalled due to a faulty drawstring. Simon Property Group Inc. (SPG). Finerman disclosed she is short SPG and she still sees more room to the downside.
POPS&DROPS VIDEO
Final Trade
Adami picked Deere & Company (DE). Finerman recommends shorting Big Lots Inc. (BIG). Najarian likes Caterpillar Inc. (CAT).
FINAL TRADE VIDEO