Word ON The Street
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Bank Trade
The traders talked about the prospects of a bottom in the financial sector. Jon Najarian said that put selling in Lehman Brothers (LEH) makes him believe that the stock could be near a bottom. However, he said he put activity on MBIA (MBI), Wachovia (WB) and Washington Mutual (WM) are suggesting to him these stocks are going lower. He said he is short both names.
Multinational Trade
The traders discussed some multinational stock plays. Macke said look at Nike (NKE) and Wal-Mart (WMT). He explained that Nike recently hit a 52-week high. Finerman said she also likes Wal-Mart. Seymour picked Procter & Gamble (PG) even though the stock is boring. He also mentioned he favors Boeing (BA) and the stock is oversold. Najarian said his favorite names are Hewlett-Packard (HPQ) and IBM (IBM) which earn 60% of their sales from abroad.
Diabetes Drug Trade
Shares of Amylin (AMLN) dropped over 8% on Monday after news broke that a competitor announced it had developed a diabetes drug that only needs to be taken once-a-day. Najarian said keep an eye on Amylin because the stock was over sold on the news. He explained that the company is working on a once-a-week diabetes drug and if they publish positive data the stock could trade much higher.
Frontier Market Trade - Kenya
Frontier markets were all the rage Monday after Kenya had its biggest IPO in history that sent shares of Safaricom, a mobile phone company, 60% higher. The traders spoke with emerging markets specialist Tim Seymour about the potential of Kenya. He explained that investors can play Kenya by buying shares in British-based Vodafone (VOD), which controls a 40% stake in Safaricom. He also likes wireless plays Vimpel Communications (VIP), Mobile Telesystems (MBT) and TurkCell (TKC). For exposure to Africa he suggested T. Rowe Price Africa & Middle East (TRAMX) and SPDR S&P Emerging Middle East & Africa ETF (GAF).
POPS&DROPS
POPS- Honeywell (HON) popped 2% after the company sold its fasteners division for $1.05 billion. Seymour said the stock is looking good. Third Wave Technologies (TWTI) jumped 6% after the company was acquired by Hologix for $580 million. Najarian said there’s consolidation in this sector. Dreamworks Animation (DWA) traded up 5% after the movie maker reported strong box office sales for Kung Fu Panda. Macke said that the appeal of the company’s Kung Fu Panda film escapes him but it’s good for the stock. Chemical & Mining Company of Chile (SQM) popped 10%. Seymour said this stock has doubled since April. James River Coal (JRCC) surged 11%. Najarian said you can’t go wrong with the coal story. Chico’s (CHS) tacked on 2% after a Citigroup analyst upgraded the stock. Macke explained that specialty retail is where love goes to die and investors should stay away.
DROPS- Washington Mutual (WM) dropped 17% after UBS said future losses for the mortgage lender could surpass $27 billion. Finerman told market players to move on. VMWare (VMW) lost 3% after news broke that an employee share lockup is set to expire this week. Najarian said the stock has had a great run and the lockup is the only reason the stock is selling off. National City (NCC) slipped 10%. Macke said run away from the regional banks. Taser (TASR) plunged 11% after the stun gun maker lost its first product liability lawsuit. Seymour said the company was accused of being 15% responsible for a death. He explained this is a problem for the company.
Trader Radar
Shares of Vodafone (VOD) were among the most actively traded stocks on the NYSE Monday.
Final Trade
The “Fast Money” traders picked stock plays for the “Million-Dollar Portfolio Challenge” on CNBC. Macke selected Pier 1 (PIR). Seymour went with Tata Motors (TTM). Najarian recommended GameStop (GME). Finerman said trade the Kenyan shilling for a currency play.
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