Word On The Street
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IPO Talk
Dan Fitzpatrick, president of Stockmarketmentor.com, joined the traders to discuss an IPO that Wall Street is ignoring. He advised investors to take a look at recent IPO Titan Machinery (TITN).
Microsoft Talk – Bad Company/Good Stock
The “Fast Money” crew presented a new segment called “Bad Company, Good Stock,” that will focus on poorly managed companies that could be great stocks. Microsoft (MSFT) was the first stock discussed. Finerman likes their cash flow and balance sheet and she thinks the stock is trading at an attractive valuation. Adami said he will keep is long in Microsoft because he also likes the valuation. Seymour agreed that Microsoft’s valuation is low with the stock trading at a 5 year low in Price-to-earnings ratio.
Callaway Golf CEO Interview
The traders spoke to George Fellows, CEO of Callaway Golf (ELY) about the prospects for his company. Fellows said Callaway will continue to post strong profits with help from overseas sales that will offset weakness in the US market.
Cisco Earnings Trade
Cisco Systems (CSCO) is set to report earnings this week. Jon Najarian mentioned that he isn’t seeing any unusual options activity in the name, but he did see some bullish activity for October strike prices. He thinks the action is moderately bullish for Cisco. However, he feels the stock could trade flat for awhile, so he recommended taking a covered writing position. Adami said the stock is trading at an attractive price, but he’s worried that the Cisco’s CEO might say something that could hurt the shares. Macke said he thinks the company will say things are slowing again.
Breaking News – Sirius Insider Buying
Dylan Ratigan mentioned breaking news that Mel Karmazin, CEO of Sirius Satellite Radio (SIRI) bought 2 million shares.
Leasing Talk
The traders discussed the current status of the leasing industry. Finerman said the issues go farther than leasing. She mentioned that Capital One (COF) has a very high exposure to auto loans. Adami said the troubles could make their way down to the auto parts companies. He doesn’t think the sector is a short but he would lighten up on the names.
POPS&DROPS
POPS- Dell Computers (DELL) traded up 4%. Adami said take profits. Philip Morris (MO) jumped 3% after the company announced it bought Rothmans for $1.96 billion. Southwest Airlines (LUV) popped 2%. Seymour explained that the stock has popped 25% from its lows and he thinks its overdone. Elan (ELN) surged 11%. Finerman said it wasn’t much of a pop since the stock was at $33 a week ago.
DROPS- Exxon Mobil (XOM) dove 4% after oil dropped below $120 a barrel. Seymour thinks the stock will continue to trend lower. Dish Networks (DISH) dipped 4% after the the satellite-TV provider reported it lost 25,000 subscribers. CSX (CSX) lost 3%. Adami thinks the stock will continue to trend lower. Freightcar America (RAIL) plunged 23% after reporting a second-quarter net loss due to higher costs. Macke joked about the company and seemed to not like the stock.
Final Trade
Macke went with Costco (COST). Adami picked Johnson & Johnson (JNJ). Finerman selected Microsoft (MSFT). Seymour said he is going to add to his EEV (EEV) position. Chat and share ideas with the best small cap traders LIVE each day free at Stocknetworkonline.com