Word On The Street
WORD VIDEO HERE
Brokerage Earnings Trade
Lehman Brothers (LEH), Goldman Sachs Group (GS) and Morgan Stanley (MS) are all set to report earnings next week. What is the trade? Najarian said the best play out of the three is Goldman Sachs. Adami thinks the trade is to fade whatever happens. Finerman disclosed her hedge fund is long Goldman.
Best Buy Earnings Trade
Best Buy (BBY) is set to report earnings on Tuesday before the market opens. Jon Najarian joined the traders to discuss his take on Best Buy. He said the play is to look at the big sellers at Best Buy like Tom-Tom and Garmin (GRMN). Najarian also mentioned Marvell Technologies which he has noticed strong unusual options activity in. He said Marvell is the best play for Best Buy. Macke said the only thing he is long that is sold at Best Buy is Activision (ATVI).
Corn Trade
Corn prices broke above $7 for the first time on Wednesday, driven by the massive rain in the Midwest that flooded crops. NBC Weather Plus Meteorologist Britta Merwin told the traders that rainfall looks to be subsiding in Iowa, but many rivers aren’t expected to crest until the middle of next week. She said NBC will be covering the flooding next week. Adami said the move in corn is overdone. He said he wouldn’t short it but he would sell if he was long. Najarian said buy corn on any pullback.
Suprise Guest - Annnika Sorenstam
The traders spoke with LPGA golfer Annika Sorenstam, who some call the best female golfer of all-time. Sorenstam told the traders she owns IBM (IBM), Boeing (BA), Harley Davidson (HOG) and Qualcomm (QCOM) for the long term. She told the traders she is a conservative investors who likes blue chip stocks. Adami said Qualcomm is a bit rich in valuation, but he said she might be on to something with HOG, which has a large short interest.
Fast Fire
Najarian recommended shares of Excel Maritime (EXM). If investors followed him into the shipping play they lost 29% from his call. Najarian said he owns this stock will continue to hold it. Finerman recommended shares of Big Lots (BIG) after she noticed lots of insider selling. The insider selling didn’t stop the stock from rising 10% from her call. Finerman said she is sticking with her sell call because she has noticed even more insider selling. Adami said buy Merck (MRK) for its cheap valuation with stop at $36.50. Unfortunately, the stock fell 9% from his call. Adami said the time to buy this stock will come, but it’s not here yet. Macke suggested investors wait to buy Pep Boys (PBY) after the stock traded up 10%. He was dead wrong and the stock climbed another 10% since his call. Macke still thinks investors should wait for the stock to come down.
Quicker Then The Ticker
Najarian told investors to buy SandRidge (SD) after he noticed the CEO bought a million shares. He was right and SandRidge jumped 13% from his call. Adami suggested buying Hexcel (HXL). Shares of the high-tech materials maker rose 20% after his call. Recently, Macke and Finerman recommended shorting Yahoo and buying Microsoft (MSFT). The duo nailed the Yahoo call and shares fell 17% and they also hit the Microsoft call out of the park with shares rising 4%.
Fast & Furious
Goldman Sachs Group (GS) is set to report earnings before the bell on Tuesday and Morgan Stanley MS) reports on Wednesday. Finerman said its a huge wild card and the only information she knows is that they have not preannounced. Best Buy (BBY) is set to report earnings. Najarian said the stimulus checks should help but Wal-Mart (WMT) might benefit the most. FedEx (FDX) is due to report earnings on Wednesday before the open. Adami said stay away and look for $84 for the level to get in. Carnival (CCL) is set to report earnings on Thursday. Macke said sell the stock.
Trader Radar
Shares of US Airways (LCC) were among the most actively traded stocks on the NYSE Friday.
POPS&DROPS
POPS- McDonald’s (MCD) popped 5% after the fast food firm reported strong May same-store sales figures. Macke said MacDonald’s is interesting. Sallie Mae (SLM) traded up 8% after Sandler O’Neil started coverage with a buy rating. Finerman said its a decent upgrade. Freeport-McMoRan (FCX) added 6% on takeover speculation. Adami said he likes FCX. FPL Group (FPL) surged 5%. Najarian picked this stock for a trade earlier in the week. He said he still likes the stock. Smith & Wesson (SWHC) popped 6% after the gun maker posted fourth-quarter earnings that beat Wall Street expectations. Finerman said its a nice earnings pick. Qualcomm (QCOM) rose 6% after the company raised its guidance for the third-quarter. Adami thinks the stock is getting long in the tooth.
DROPS- Archer Daniels Midland (ADM) fell 12% after Morgan Stanley downgraded the stock. Najarian explained that the AG sector has been hot, but its not always going to work. Whole Foods (WFMI) dropped 5%. Macke said short WFMI. Merck (MRK) lost 5%. Najarian thinks the company is making some poor moves.
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