Word On The Street
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Fear Trade
The traders talked about some stock to buy off the fear in the market. Macke said play big caps like Citigroup (C) with a stop at $19.50 and the United States Oil Fund (USO) with a stop at $100. Adami said play ag with Deere & Co (DE). Terranova picked integrated oil. Najarian recommended Market-Vector Coal ETF (KOL).
CEO Interview - Agrium
The traders welcomed Agrium (AGU) CEO Mike Wilson to the show to discuss the amazing trends in ag. Wilson said prices will remain high as long as fundamentals stay strong. He said farmers like Agrium’s products because they increase yield and provide a higher return on investment. “Our priority is growth. We’ve done 7 acquisitions in the last 2 years. We’re unique because we bridge the whole value chain. We buy into the retail sector, into the specialty environmental sector, and the nutrient sector,” Wilson said.
Nike Trade
Nike (NKE) is set to report earnings next week, plus news broke Wednesday that Tiger Woods is injured and will sit out the rest of the golf season. Nike is one of Woods major sponsors. What is the trade? Macke said Nike is bigger than Tiger and the Olympics. Until the company messes up you have to believe in it. Najarian said he likes Nike as well.
Summer trade
Rising gas prices are forcing consumers to find cheap ways enjoy the summer. The traders discussed some trade ideas for plays on summer’s simple pleasures. Macke said consumers can eat on the cheap at McDonald’s (MCD), Darden (DRI) and Burger King (BKC). He also mentioned Panera Bread (PNRA) which he feels was up mostly due to short covering. Najairan said play Wal-Mart (WMT) because they sell wine for $3 a bottle.
Fast & Furious
Jon Najarian joined the traders to discuss some unusual options activity he noticed today. He explained that Schlumberger (SLB) and BJ Services (BJS) are seeing heavy call buying that suggest to him both will trade higher. He said the call buying could be on speculation of upgrades coming. Circuit City (CC) is set to report earnings on Thursday before the bell. Macke said CC isn’t a buy. Natural gas inventories are due to be released on Thursday at 10:30. Terranova said he likes natural gas and the number will be extremely bullish number. He set a price target of 413.50 for natural gas.
Trader Radar
Shares of Panera Bread (PNRA) were among the most actively traded stocks on the Nasdaq Wednesday.
POPS&DROPS
POPS- Union Pacific (UNP) popped 5% after Morgan Stanley said profits will rise 11% for the railroad company. Najarian said great news. Consol Energy (CNX) rose 7% after JP Morgan upgraded the stock to overweight from underweight. Najarian said coal keeps going higher. General Mills (GIS) bolted higher by 3% after the company raised its 2008 profit guidance. Macke explained that GIS continues to control their expenses better than anyone in the space. Panera Bread (PNRA) jumped 6% after the firm increased its fiscal second-quarter 2008 earnings. Terranova said he doesn’t like the stock, sell it. La-Z-Boy (LZB) moved up 9% after the company said it will turn a profit in 2009. Najarian explained that if consumers are staying in this summer the stock could continue to run.
DROPS- General Motors (GM) fell 6% after analysts said their sales might fall to a 15 year low. Adami doesn’t see GM going higher anytime soon. Tyson Foods (TSN) dropped 8% after Fitch cut its debt rating for the meat producer. Lindsay (LNN) plunged 17% after third-quarter earnings missed Wall Street estimates. Joe Terranova explained that volume was up big with the drop. MF Global (MF) dove 41% after the company issued a gloomy outlook. Adami said the “MF” in MF Global takes on a whole new meaning. Ohio Banks like Firth Third (FITB), Huntington Bancshares (HBAN) KeyCorp (KEY) and National City (NCC) all plunged. RHI Entertainment (RHIE) lost 4% after its IPO priced below the expected range. Adami said not so good.
Final Trade
Macke said buy Nike (NKE) ahead of earnings. Adami picked Chesapeake Energy (CHK). Joe Terranova selected Wells Fargo (WFC). Najarian said play XTO Energy (XTO) off the options action.
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