HPQ is running its business better not just overseas, but domestically too. Guy Adami noted that U.S. revenues were up 8% - less than international revenues but better than many other companies. The Hewlett earnings make Guy believe that the constant beatings Intel (INTC) and Cisco (CSCO) have been taking may now subside. He called it a rising tide for Dell (DELL) also. If Hewlett opens at its price as of air time ($46), Guy would be a buyer.
Jeff Macke, however, would sell HPQ on its earnings beat. The quarter might be good enough to stymie the shorts but the overall economic landscape it still too treacherous to own this, he said. Sell the rips, buy the dips.
IT SURGED FROM BENEATH THE EARTH
The headline: Gold, Coal, Copper, Iron Ore – If It Came From the Earth, It Rallied Tuesday
The commodities boom has much to do with a broad supply disruption issue, according to Tim Seymour. He thinks the spot price for most, if not all commodities will be higher in six months but it hasn’t stopped investors from going on a shopping spree buying up the supplies. His best commodities trade is steel. He would buy mining giant Vale (RIO) for Latin American exposure or the domestic big names like Commercial Metals (CMC), U.S. Steel (X) and Nucor (NUE).
The headline:Lehman Leads Bank Stocks Lower on Write-Down Fears as Group Heads Back Toward January Bottom
Karen Finerman reiterated her Lehman short. She sees more pain ahead for the bank.
It can’t be good news that Lehman’s head of fixed-income stepped down last month either, Guy Adami said.
The overarching problem with Lehman and all the financials – and this has always been the problem, according to Jeff Macke – is that they just don’t know what their write-downs will be. That sense of ambiguity is going to keep these stocks from rallying. Why not just walk away from this group?
Guy Adami agreed. While he remained convinced that US Bancorp was the most conservatively managed bank without any skeletons in its closet, this sector is just too tough. Don’t buy the financials if you don’t have to, Guy offered.
THE FREE CUBA TRADE
The headline: What’s the Trade as Fidel Castro Resigns as Cuban President?
While the world took this news with not much more than a yawn, the Herzfeld Caribbean Basin Mutual Fund was screaming higher – even though none of the funds top holdings are domiciled in Cuba.
Tim Seymour called it a stretch to think an investor-friendly move would happen overnight in Cuba but he did say a free Cuba would be an “exciting trade.” He would use Brazil as an alignment trade on Cuba by way of ethanol by buying Cosan Ltd. (CZZ), Brazil’s number one sugar and ethanol producer.
MISTER SOFTEE PLAYS HARDBALL
The headline: Microsoft (MSFT) to Authorize Proxy Fight as Yahoo (YHOO) Continues to Battle Bid
Microsoft has all the power, Yahoo shareholders Karen Finerman and Jeff Macke agreed. Karen thinks MSFT should do a tender offer, a proxy or both to make its bid go through.
Jeff said he just hopes YHOO will come to its senses and accept the bid, which he thinks is far higher than anyone else would be willing to pay.
AFTER HOURS ACTION: CROCS
The headline:Crocs Shares Fall 14% After Hours on Weaker-Than-Expected Guidance
Karen Finerman, long a Crocs shareholder, said she needs time to go over the company’s conference call before she decides it’s finally time to abandon ship. It looks like the stock is falling on a big jump in inventory, which is very bad news. Without a good explanation of that, she said she would be very concerned.
Crocs’ bottom line is that it needs to figure out how to expand its business, according to Jeff Macke.
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Trader disclosure: On Feb.19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC); Finerman Owns (GS); Finerman's Firm And Finerman Own (CROX), (KALU); Finerman's Firm Owns (MSFT), (TSO), (VLO), (WMT), (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM),(COF); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (INTC), (MER),(MSFT), (BLK), (GOOG), (AAPL); Seygem Asset Management Owns (CCJ), (TIE), (TSO), (EEM), (GFI) (HMY), (FMX), (FMCN); Seygem Assset Management Owns Shares Of Uranium One