Word On The Street
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August Prediction
The traders gave out their predictions for August. Jon Najarian said he thinks the financials have bottomed and he likes Prudential (PRU) and American International Group (AIG). He pointed out that AIG has unusual options activity. Adami said avoid AIG because the company is too exposed to the financial services market. Macke said rent stocks in August don’t buy them.
Yahoo Chat
The traders spoke with Thomas Weisel Partners analyst Christa Quarles about Yahoo’s (YHOO) approaching annual meeting. She said that investors should look for three things to come out of Yahoo: they will put the Microsoft (MSFT) deal to bed, cut their 3-year growth plan they unveiled in March and Yahoo! will introduce a new ad platform product. She also mentioned that she downgraded Yahoo! a few weeks ago to underweight from market weight and cut the price target to $18 from $28. Quarles explained that Yahoo! has lost over 140 executives over the last 6 to 8 months. “Is it riskier to stay at YHOO or go to a start up,” she said and “a lot of executives are choosing the latter.”
Drug Trade
The traders discussed some biotech plays in the wake of negative data from Biogen Idec (BIIB) and Elan (ELN) on their blockbuster drug Tysabri. Adami said stay with best of breed biotech stocks like Celgene (CELG). He mentioned that Celgene has big earnings growth and revenue growth potential. Macke said investors really need to know everything about the biotech stocks they invest in.
POPS&DROPS
POPS- Tyco (TYC) traded up 5%. Finerman said that company is doing performing well. International Paper (IP) jumped 14% after the company beat Wall Street estimates. Adami thinks the stock is going to $30. Schering-Plough (SGP) popped 5% after Merrill Lynch upgraded the stock to buy. Seymour said the stock looks interesting. Symantec (SYMC) added 7% after the security software firm posted second-quarter earnings that doubled. Finerman said very good for SYMC. Research In Motion (RIMM) shot up 3% after Jim Cramer made bullish comments about the firm on the “Mad Money” TV show. Wyndham (WYN) popped 3% after the hotel operator posted strong earnings. Finerman said it was a surprise.
DROPS- Eastman Kodak (EK ) fell 7%. Adami said nobody is taking pictures anymore. Akami (AKAM) plunged 25% after the largest software and web content company cut its annual profit forecast due to a the weakening economy. Macke said that’s not good. Green Mountain Coffee Roasters (GMCR) slid 6% after the specialty coffee maker missed revenues but beat earnings. Seymour said the numbers don’t look to good but he likes the story. Parker Hannifin (PH) fell 9% after the hydraulic equipment maker lowered its 2009 outlook. Adami said the guidance was bad but he likes what they said about their aerospace sector. Bare Escentuals (BARE) plunged 32% after the cosmetics firm lowered its 2008 forecast. Macke said that it appears people are cutting back on their cosmetics.
Whale Watch - Warren Buffett
The traders discussed trading in the wake of legendary investor Warren Buffett. Some of Buffett’s top holdings right now are Coca-Cola (KO), Wells Fargo (WFC), Proctor & Gamble (PG), American Express (AXP) and Burlington Northern Santa Fe (BNI). Adami said BNI is a buy, but not at current prices. HE said another good Buffett holding is US Bancorp (USB). Seymour likes Buffett’s call on the rails for a long term trend. Finerman said she likes American Express and thinks Buffett might have bought more of the stock. Macke explained that investors should understand that Buffett is a value investor and he takes his time and builds positions.
Fast&Furious
The unemployment data will be released at 8:30 a.m. Seymour said if the number is in-line the market will take-off higher. NYSE Euronext (NYX) is set to report earnings before the bell. Adami said he isn’t bullish on the name. Yahoo! (YHOO) will hold an investor meeting on Friday. Macke said he would be surprised if they said anything that made anyone bullish on the stock. Clorox (CLX) will report earnings before the open. Finerman thinks CLX will post good numbers. Chevron (CVX) is due to report earnings Friday morning. Seymour thinks their refining margins will hurt the numbers.
Final Trade
Macke said avoid Elan (ELN). Adami picked Celgene (CELG). Seymour likes Freeport McMoRan (FCX). Finerman said short BB&T (BBT). Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!