Word On The Street
WORD ON THE STREET VIDEO HERE
Carl Ichan On Yahoo
Carl Ichan joined the traders to discuss his take on Yahoo (YHOO) and Microsoft (MSFT). Ichan said that Yahoo CEO Jerry Yang has totally sabotaged the takeover bid from Microsoft. He told the traders that he believes he can win a proxy fight with Yahoo to make the deal go through. Ichan said that Yahoo has no other alternative choice but to merge with Microsoft and he thinks Yahoo needs a new board and new CEO. He explained that Microsoft will only be able to compete with Google (GOOG) if they merge with Yahoo. Finerman said she thinks Ichan can get the deal done. Macke said Ichan will crush the guys at Yahoo. Najarian said Microsoft is a screaming buy and very undervalued.
Lehman Brothers Trade
The traders spoke with Fox-Pitt Kelton securities industry analyst David Trone about the future for Lehman Brothers (LEH). Trone said their is a strong bear case on Lehman and the other investment banks. He said investment banks with balance sheet issues problems could experience more trouble in the second half of the year if the credit markets unwind again. Tone said he doesn’t think Lehman will go the route of Bear Stearns (BSC), but the company does have a lot of exposure to mortgage paper. From a fundamental perspective, he thinks Lehman could be a trade here, but the stock does have a panic threat. Tone said that hedge fund manger David Einhorn of Greenlight Capital is looking at the irrelevant ratios and data and is just speaking his book with his bearish views of Lehman.
Drought Stock Picks
The traders discussed some stock plays on drought as the world demands more and more of the grain markets. Najarian said consider Lindsay (LNN) for a play on irrigation. Adami said he likes Pentair (PNR) for a play on pipes that move water. He recommended buying the stock if it trades down to $33. Macke advised investors to avoid the ag names because the commodities sector is too hot here.
Unusual Options Activity
Stacey Gilbert, a market strategist at Susquehanna Financial Group joined the traders to discuss some unusual options activity she is seeing in the coal and hotel sectors. She said their was some big call buying in Peabody (BTU), Alpha Natural Resources (ANR) and Massey Energy. Gilbert said the action in BTU suggests the stock could rise 20% before July. Najarian said he likes ANR in the space for its exposure to metallurgic coal. In the hotel sector, Gilbert said she is seeing big call activity in Starwood (HOT) and Marriott (MAR). She said the increased activity is due to merger rumors. Gilbert mentioned she likes Starwood because it trades at a cheap valuation. Najarian said he likes both stocks.
POPS&DROPS
POPS- American Express (AXP) popped 3% after the credit card issuer reiterated its 2008 guidance. Adami said he isn’t’ a fan of AXP. Disney (DIS) traded up 4% off speculation of strong NBA ad sales. Macke said he likes this stock. Goodyear Tire (GT) rose 4%. Najarian reminded viewers that highlight the bullish options activity on this stock yesterday. Advanced Micro Devices (AMD) jumped 6% after the company released a new line of high-powered chips for labtops. Adami isn’t in love with AMD. Hasbro (HAS) moved up 5% on no news. Macke said disclosed he is long HAS. Bob Evans (BOBE) surged 17% after the company reported a higher net profit and strong guidance. Najarian said the stock is okay with him. Koppers (KOP) ripped 11% higher after a UBS analyst upgraded the stock to buy from neutral. Adami said this is a new stock to him and he is going to do more homework on the name.
DROPS- Hovnanian (HOV) fell 10% after the company reported a large quarterly loss of $340 million. Finerman said the bottom isn’t here for HOV. Valero (VLO) dropped 5%. Finerman said bad data hit the stock.
Trader Radar
Shares of Bob Evans (BOBE) were among the most actively traded stocks on the NASDAQ Wednesday.
Final Trade
Macke picked Disney (DIS). Adami selected Starwood (HOT). Finerman and Najarian both recommended Microsoft (MSFT).
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