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Aug.19

8:57 PM ET

Tuesday, 19 Aug 2008

People Really Love Apple

Posted By:Lee Brodie

Topics:Stock Picks

PEOPLE REALLY LOVE APPLE

Forget apple pie it’s Apple that America loves. According to a recent survey Apple [AAPL Loading... () ] outpaces all it’s competition in customer satisfaction. In fact, the gap between Apple and rival Dell [DELL Loading... () ] 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 [HPQ Loading... () ], 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 [US@CL.1 Loading... () ] 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 [AGU Loading... () ], Potash [POT Loading... () ] and Mosaic [MOS Loading... () ] 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 [HD Loading... () ] 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 [COST Loading... () ] on Tuesday.

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TOPPING THE TAPE: DEFENSE STOCKS

Gulfstream maker General Dynamics [GD Loading... () ] 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 [LMT Loading... () ] 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 [LDK Loading... () ] inked a deal worth $220 million on Tuesday in which Applied Materials [AMAT Loading... () ] 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 [CY Loading... () ].

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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"

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