The Word on Chips, Liquor and more...
After Hours Deal:
The headline: Google Buys Web Advertiser DoubleClick For $3 Billion
The word: Jon Najarian, sitting in for Eric Bolling, recommends buying Google (GOOG) even though they’re “spending money like a drunken sailor.” The private equity firm Hellman & Friedman, which owned Doubleclick, bought it for $1.1 billion two years ago, and just made $2 billion off the deal. Tim Strazzini says this deal proves that advertising is becoming truly important on the internet. The web is now a legitimate industry, he says, and will become as important as television, at least, in the next ten years.
Merck’s Heart-Pumping Week:
The headline: Merck Shares Soar As Earnings Outlook Overshadows Heart Drug Rejection
The word: Guy Adami thinks Merck (MRK) is headed to $60. He says it should be noted that today was it’s 52-week high and the stock traded at 5 times what it usually does. He would own the stock on a dip. Tim says it’s a good play to selectively buy pharma after this huge week, but Merck was a standout on its own news. Jeff Macke is bullish, too, saying it’s under-owned.
Big Mac, Low Dollar:
The headline: McDonald’s, Multinationals Benefit As Dollar Hits Two-Year Low
The word: McDonald’s (MCD) is growing insanely fast in Europe and Asia, Jeff says, and it helps them to have a weak dollar in their back pocket. He thinks this stock goes even higher. On the multinational trade, Jon wants to own PerkinElmer (PKI), a company that makes scientific instruments that test biofuels. PKI is 55% exposed to overseas markets, he says.
The headline: Chip Shares End Week Flat As Samsung Reports Worst Profit Drop In More Than A Year
The word: Samsung is 40% of the chip market and they said they are moving production into flash, which is huge for Sandisk (SNDK), Tim says. "If Samsung does this, its because they see a cyclical shift in the market ... It should speak to the whole industry that they see a bottoming in demand in the consumer electronic industry."
Rail Rally Wrap-Up:
The headline: Burlington Northern (BNI), Rail Shares Surge Into Earnings Next Week On Buffet Buy
The word: You could trade for 100 years and not see a rail move like we saw this week, Guy says - up 5% Monday, down 5% Tuesday and Wednesday collectively, up 5% Thursday, and now down 1.5% today. Guy thinks the rails have gotten ahead of themselves. He loves the space, but thinks they could be bought cheaper. Tim says this is a case of multiple expansion that will take the space higher eventually. It doesn’t just last a week; it’s more of a long-term shift, but the sector has the balance sheets and pricing power for it. He thinks consolidation is likely as well.
Miners, Refiners, Early Bird Diners:
The headline: Shares of Miners, Refiners, Retirement Homes Surging
The word: Jeff loves all these spaces and says there’s more good news to come. Think M&A, he says, which Wall Street loves to hear.
The headline: Heavy Options Trading In Oil-Services Firm WFT
The word: Jon says the rumor is a takeover bid from Halliburton (HAL) and there’s been explosive trading on that. Volume is “undescribably delicious” if you long the stock, he says. It typically trades 3,000 contracts a day and traded 14,000 at one point today.
The headline: Constellation Brands, Maker of Mondavi, Corona, Looks To Rebound From 25% Drop This Year
The word: Richard Sands, CEO of Constellation Brands (STZ), is on set to discuss his company’s past pitfalls and hopeful future. What depressed the stock, in essence, was an excess of supply of grapes from Australia, which sells wine that is very popular in the U.K., Sands says. The April crop was also down 25% because of a huge drought and Sands anticipates it will be down another 25% next year, too. On the acquisitions front, Sands says STZ has been the leading consolidator in the wine space. Over the last five years the company bought $4b worth of wineries. It also just purchased the Svedka Vodka brand, which is growing at 60%. In beer, through a joint venture with Grupo Modelo, Constellation now has Corona as well. Jeff thinks it’s time to get long this stock. With the price down so much, he thinks M&A candidates are going to come knocking. Sands has his own prediction – he says his stock will go up from $22, where it is now, to $28 or $29 by year’s end.
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On APR 13 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Najarian Owns (AAPL), (BRCM), (BNI), (EBAY), (EMC), (FAST), (MRK), (MON), (MOS), (NDAQ), (POT), (STM), (STP), (WFT), (PKI), (HAL), (TRA), (T)
Strazzini Owns (SNDK), (STM), (USG), (WMT), (YHOO)
For the record:
Najarian Owned (STP) On 3/9/07
GE Is The Parent Company Of CNBC