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People Really Love Apple

Tuesday, 19 Aug 2008 | 8:57 PM ET

PEOPLE REALLY LOVE APPLE

Forget apple pie it’s Apple that America loves. According to a recent survey Apple outpaces all it’s competition in customer satisfaction. In fact, the gap between Apple and rival Dell is one of the widest margins ever seen.

If you have a position in Apple be careful, says Pete Najarian. At some point the stock will roll because investors will need to take profits from somewhere.


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AFTER HOURS ACTON: HEWLETT-PACKARD

Hewlett-Packard, the world's biggest computer maker, reported quarterly profit and revenue ahead of Wall Street targets on Tuesday due largely to strong international sales in its notebook computer and printer businesses.

I love the numbers out of HP, says Pete Najarian. But 68% of their revenue comes from overseas. That makes me a little cautious.

Also they haven’t closed their deal with EDS, adds Guy Adami. That should get priced in during the next quarter. If you look at Hewlett-Packard strictly on valuation it looks cheap.

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OIL REBOUNDS MIDDAY

Oil prices rose about 1.5 percent on Tuesday as part of a broad commodities rebound triggered by weakness in the U.S. dollar.

Oil pulled back late in the session, says Guy Adami. I still think there’s room on the downside in this trade.


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COMMODITY STOCKS REBOUND

It appears that some investors are reversing their long financials short commodities trade. After bank stocks took a hit shares of Agrium, Potash and Mosaic all jumped.

The trend is broken in commodities, exclaims Jeff Macke. If you’re gutsy and watch every tick you can try it on the long side but the risk / reward kind of stinks.

Money started flowing into these stocks when investors got a little nervous about the dollar, adds Pete Najarian. It’s a trade but nothing more.

To the extent that the dollar continues to rally it will obliterate gold, adds Guy Adami. Much more so than crude.

I think the important thing to watch is the short-term flow of funds out of this space, says Karen Finerman. The rotation out could outweigh everything else.


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HOME DEPOT, TARGET FALL AFTER EARNINGS

Although Home Depot beat quarterly profit expectations it’s forecast raised concerns going forward and shares traded lower.

We told you to get out before earnings, reminds Guy Adami. But on pull backs I think it’s a buy.

But HD stock is not going to take off like a scalded dog, adds Jeff Macke. And you should know I sold some of my Costco on Tuesday.

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TOPPING THE TAPE: DEFENSE STOCKS

Gulfstream maker General Dynamics has agreed to buy Swiss plane maintenance firm Jet Aviation for about $2.25 billion, expanding in a lucrative market as the global fleet of business jets hits an all-time high.

General Dynamics, a major U.S. defense contractor, said on Tuesday the deal for a firm that services and refurbishes planes would close by the end of the year and immediately add to earnings.

I like Lockheed Martin the best in the space, says Guy Adami. Some analysts say to sell the sector ahead of the election but I wouldn’t.

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IS SOLAR LEGIT?

Solar wafer maker LDK inked a deal worth $220 million on Tuesday in which Applied Materials will provide “precision wafering systems” supporting LDK’s expansion plans .

I think it’s a sign of some legitimacy in the business, says Pete Najarian. I’d play it with Applied Materials or Cypress.


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Trader disclosure: On Aug 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; Adami Owns (C), (AGU), (BTU), (GS), (INTC), (MSFT), (NUE); Macke Is Short (TM); Macke Owns (MSFT), (WMT), (DIS), (CY); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (CSCO) Call Spread; Finerman Owns (GS); Finerman's Firm And Finerman Own (C) Leap; Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO); Finerman's Firm Is Short (SPG), (COF), (IYR), (IWM), (IJR), (SPY), (MDY), (BBT); Charles Schwab Is A Sponsor Of "Fast Money"

  Price   Change %Change
AGU
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AMAT
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COST
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CY
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4331
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GD
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HD
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HPQ
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LDKSY
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LMT
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MOS
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POT
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AAPL
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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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