Word On The Street
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Financial Bottom
Anton Schutz, portfolio manager of Burnham Asset Management, joined the traders to discuss his belief that the financial stocks have bottomed. He sees opportunity in financial stocks like TFS Financial (TFSL) and American Capital Agency (AGNC). He said TFS has too much capital and they are buying back stock.
Google Trade
The gang talked about playing Google (GOOG). Terranova explained that Google has been trending down the past few months. He also pointed out that the trading volume is down significantly. He said he sold out of his position last week because he feels the market is risk averse. Adami said he likes Google on a valuation basis with shares trading at a 20 multiple. Jon Najarian said he wants to buy Google on a pull back to $460.
Consumer Trade
The crew discussed some plays off the strength in high-end beauty & personal care stocks. Jon Najarian advised viewers to look at Alberto Culver (ACV) and Bare Escentuals (BARE) around $12. Adami and Tatro like Bare competitor Avon (AVP). Tatro said play AVP with a stop below $41.
POPS&DROPS
POPS- Coach (COH) rose 7% after the company announced plans to buyback up to $1 billion worth of stock by 2010. Adami said the stock looks attractive from a valuation perspective. Chico’s (CHS) jumped 2% after the retailer beat Wall Street estimates. Jon Najarian said stay away from this stock.
DROPS- Delta Air Lines (DAL) fell 5% after S&P reaffirmed its negative outlook rating on the stock. Jon Najarian said the company recently tapped a $1 billion credit line. Big Lots (BIG) lost 7% despite a strong earnings report. Quint Tatro said stay away. CME Group (CME) dropped 5% after Bank of America lowered its price target. Terranova said avoid the stock until the end of the year. Smithfield Foods (SFD) traded down 7%. Tatro said the stock is worth a look as a value play in the teens. Sanderson Farms (SAFM) plunged 11% after the CEO Joe Sanderson Jr. said the company will need a miracle to make a profit in the current quarter. Terranova said give the CEO some credit for being honest. Solarfun (SOLF) dropped 5% ahead of its earnings report set for Wednesday. Adami thinks the company could crush the numbers.
Political Trade
The traders analyzed a recent report from Morgan Stanley that said if McCain wins the election it will  be bullish for asset managers, brokers, coal, oil & gas, Big Pharma and student loan providers. If Obama wins it will be bullish for alternative energy, generic drug firms, medicaid firms and natural gas companies. Adami said if defense stocks get sold before the election he would be a buyer. Najarian said sell any bio-fuel rally. Tatro said if McCain looks like he is going to win play nuclear with Market Vectors-Nuclear Energy ETF (NLR).
Hidden Gem
The traders discussed a small-cap stock that could have big potential. Jon Najarian mentioned MGIC Investment (MTG). The mortgage bond insurer is down 70% this year after the company fell victim to the subprime mess. However, the firm is now tightening its lending standards and raising rates. Also, the CEO just bought stock around $6.80.
Fast&Furious
Chinese solar company Solarfun (SOLF) is set to report earnings on Wednesday. Jon Najarian said he doesn’t like SOLF, it’s run too much. Men’s Wearhouse (MW) and Talbots (TLB) also report earnings on Wednesday. Quint Tatro said avoid both stocks. Tivo (TIVO) is set to report earnings before the bell Wednesday. Adami said he has never used the product.
Trader Radar
Shares of Chico’s (CHS) were among the most actively traded stocks on the NYSE Tuesday.
Final Trade
Adami picked Exxon Mobil (XOM). Quint Tatro selected iShares FTSE/Xinhua China 25 Index (FXI). Jon Najarian said buy Anderson Energy (AXL). 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!