Word On The Street
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Bad Company/Good Stock - Ford Motor
Seymour said that Ford Motor (F) is moving to become a global car company. He also mentioned that costs at Ford are coming down as the company writes down its UAW liabilities. Adami mentioned that he thinks CEO Alan Mullally is a genius and he wants to buy the stock. However, he said that Wall Street hates the name and doesn’t reward the shares for anything the company does right.
Consumer Discretionary Trade
The traders talked about trading some consumer stocks as the sector should see a benefit from falling oil prices. Finerman disclosed she bought some calls on Abercrombie & Fitch (ANF). She mentioned she likes ANF’s balance sheet and valuation. Macke said he likes Wal-Mart (WMT) and Costco (COST), and dislikes Proctor & Gamble (PG).
MGM Interview
The traders welcomed MGM (MGM) chairman Terry Lanni to the show to discuss his company’s prospects. Lanni said that oil and the airlift market are affecting business, but the company is handling it well. He explained that they’re getting a lot more business from abroad as gamblers fly into the MGM casinos. Lanni pointed out that 30% of the rooms at the Bellagio for June were occupied by international visitors.
Cisco Systems Take
Cisco Systems (CSCO) shares rallied after hours following the company’s earnings report. Cisco beat Wall Street estimates by a penny and guided above estimates. Macke said he wasn’t sure what to think of John Chamber’s comments, and he said he needs to read it over. Adami likes the valuation but he isn’t running out to buy it.
Fast&Furious
Freddie Mac (FRE) reports earnings Wednesday morning. Finerman said it could be a horrorshow. American international Group (AIG) reports earnings after hours on Wednesday. Adami credited Jon Najarian for picking the stock last week prior to a 10% move higher. Time Warner (TWX) has earnings before the open. Macke said maybe they will spin off the AOL division. Ralph Lauren (RL) reports earnings before the bell. Finerman said it looks cheap but she doesn’t own any here.
POPS&DROPS
POPS- Cablevision (CVC) traded up 8% after the cable operator said it will explore strategic options. Finerman said don’t get in bed with these guys. Pitney Bowes (PBI) jumped 10% after the postal meter firm beat earnings and reaffirmed its full-year guidance. Adami said don’t rush in. Dish Network (DISH) added 7% off speculation that the company might merge with DirecTV (DTV). Macke expressed doubt that a merger will happen. Steve Madden (SHOO) shot up 5% after the shoe maker beat earnings. Finerman says she likes other retailers better. Dollar Thrifty Automotive Group (DTG) popped 8% after the company beat earnings. Adami said he knows nothing about the company. ICICI Bank (IBN) surged 16% off the Fed rate decision. Seymour said this thing has more room to go if inflation continues to fall in India. Davita (DVA) added 6%. FInerman said they keep putting out good earnings.
DROPS- Fortress Investment (FIG) plunged 13% after Citigroup downgraded the stock to sell. Seymour explained the hedge fund isn’t raising money. Otter Tail (OTTR) fell 19%. Adami said the second-quarter was a disaster. Marvel Entertainment (MVL) dropped 12% after the comic book publisher guided down for full-year sales estimates. Macke said less then marvelous.
Final Trade
Seymour picked Freeport McMoRan (FCX). Finerman selected Flowserve (FLS). Adami recommended Exxon Mobil (XOM). Macke said buy Costco (COST). Chat and share ideas with the best small cap traders LIVE each day free at Stocknetworkonline.com