The Word on the iPhone, Toyota vs. GM & More
The headline: Amazon.com (AMZN) Soars After Hours As Earnings More Than Double, Beating Estimates
The word: Jeff still isn’t bullish on Amazon and he certainly isn’t chasing it up 12%. That said, he concedes this was a terrific quarter for the company. Tim’s in the same camp. “I just don’t get the model or the valuations,” he says. “All it tells me is America us using Amazon to buy stuff” which is hardly surprising. Even Sanjaya’s run ended, Eric says.
The headline: Sun Microsystems (SUNW) Plunges After Hours As Sales Miss Street Estimates
The word: Tim thinks there will be some pullback since the expectations were that sales would be a lot higher than they ended up being. But the company is still the third biggest server manufacturer in the country. It’s a disappointing number, but Sun is in the midst of a turnaround, Tim says. He thinks in a week or so you could step back in and buy Sun at $5.50. Jeff likes the stock on the dip also.
Unplug Your Power Play:
The headline: Bolling Recommends Taking Profits In Electric Utilities American Electric Power (AEP), AES Corp. (AES)
The word: With these companies hitting all-time highs today, Eric says he still likes the space but would rather wait for the steam to come out and own it after this bubble bursts a bit.
Iacocca on Toyota:
The headline: Lee Iacocca, Legendary Former Chrysler CEO, on Toyota (TM) Passing GM (GM) In Sales
Iacocca said he thinks Toyota is a good company with a lot of built-in advantages, such as being quick to build small cars that are fuel-efficient. “GM’s been slow. GM’s been building Hummers. They shouldn’t be building Hummers today. They should be building more small cars and hybrids,” Iacocca said.
The word: Guy points out that Toyota is about to take over GM’s leadership title which they’ve had for 76 years. Toyota is simply a better-run company, Tim says, so it is free to address the whims of the buyer. “GM can’t fight that fight,” he says, especially as they fight battles with debt and their unions.
Calling on Borrowed Time:
The headline: Vonage (VG) Surges After Court Allows It To Sign New Customers During Patent Case Appeal
The word: This is merely a legal victory, Tim says. “The stock blipped, but you can’t chase these kinds of trades. Read about it in the newspaper but stay away from it.”
No one is arguing this one.
Corn Stock Soars:
The headline: Corn Products International (CPO) Shares Jump On Higher Quarterly Profit, Outlook
The word: CPO was up 10% on the basis of the corn sweetener the company sells to soda makers, Eric says. He’d still buy it, and other stocks in the agriculture sector which has been “on fire,” he says.
The headline: Target (TGT) Drops 2% After Warning Yesterday Of “Much Weaker” April Sales
The word: Jeff thinks this can be considered a significant revenue miss. The stock itself proved relatively resistant, but outside of special circumstances like the high-end retailers, Jeff wants no part of this sector right now. If Target is showing weakness, other companies surely will as well, he says. That doesn’t mean, however, that the American consumer is dead. Just wait until back-to-school season to get back into retail, Jeff says.
The headline: Apple (AAPL) Dips As Low As $89, Recovers After Ex-CFO Blames Steve Jobs In Options Scandal
The word: Guy doesn’t really think the options probe is much of a problem for the company. After all, it’s a company with a market cap of $80 billion and this is a $40 million issue. Tim thinks, whatever happens, Steve Jobs is going to be protected.
With regard to the concerns over the iPhone, Rick Lindner, chief financial officer of AT&T – the wireless company with exclusive rights to the iPhone – said today it is still on schedule for a June launch, and he predicts 60 - 70% of customers who buy the iPhone will be new to AT&T.
Eric thinks there is even more upside on the horizon for AT&T (T) stock. Tim agrees: the iPhone itself will have a halo effect just like the iPod did, he says, but AT&T is going to have a slew of new customers, as well as existing customers, who will be paying bigger cell phone bills per month on average – and that’s good news for the company’s bottom line.
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On APR 24, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Strazzini Owns (JBLU), (SNDK), (T)
Bolling Owns (XOM), Gold, Silver, Corn, Natural Gas, Is Short Soybeans