CEOs Are On a Spending Spree—Get In On the Action!
America's CEOs are on a major spending spree. They're paying dividends, buying back shares, and most importantly, buying each other. So how can you profit as the corner offices open up their wallets? The Fast Money traders have some deals to reveal.
Options are definitely signaling this is not over, Pete Najarian said. Options volumes are incredible in the ag, tech and the coal space. A lot of people are looking for even further consolidation and many companies are seeing multiple bidders.
What's the trade?
Guy Adami likes Greenhill . JMP Securities upgraded the company Monday with a $100 price target. A couple of deals for these guys, and this stock goes through the roof, Adami said.
Najarian agreed, adding investors should also jump on Lazard. That stock was beaten down and it has some big upside, he said.
TODAY'S CONTRARIAN PLAY
Steve Cortes, founder of Veracruz LLC, said Treasuries are a sale here. It's time to take profit on longs and actually get short, he said.
First, interest rates are about to go higher because Treasury auctions have not gone well recently, he said, adding that auctions need to go flawlessly given the amount of government debt being auctioned off. Second, it's very difficult now to find Treasury bears.
If I'm right, fund managers may have little choice but to put money in the stock market. I think that's part of what we're seeing right now in terms of this rally.
And what does he think about the dollar?
The reason I'm not bullish the dollar any longer is the same reason for Treasuries. The market is not willing to take down the debt, at least not at these yields, and the government's borrowing costs are going to rise dramatically. The same sovereign risk spotlight shining on Greece is also going to shine on the United States.
COMMODITY STOCKS STILL STRONG
If commodities CEOs are any indication, commodity stocks are looking pretty good these days, and the Fast Money traders like them as well.
Najarian likes the coal names. This is an area that hasn't finished going to the upside, he said, adding that every pullback's an opportunity.
Guy Adami likes Transocean. In spite of its historically bad quarter, Adami still thinks it's solid, and Finerman agreed.
We're starting to see CEO confidence build, financing markets that are there for investment grade companies and seeing CEOs looking for topline growth, and therefore the deals.
But is the financing there for medium-sized deals?
Private equity isn't much of a player, CNBC's David Faber said. This is corporate driven, and they're staying in their industry.
Should it be a concern that CEOs feel they need to buy growth instead of creating it organically?
Not necessarily, Faber said. That's been a driving force behind M&A for years.
EAR TO THE WALL
Is Hartford Financial the next takeover target? The options pit is betting on it, but why?
It's a serial potential takeout, Najarian said. It's been trading about 12,000 contracts a day, but today it topped 45,000 contracts. But does that really mean anything?
Other than the fact that they deny it, no, Najarian said.
The company had no comment on the speculation.
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Trader disclosure: On March 2nd, 2010, 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 Adami Owns (AGU) (C) (GS) (INTC) (BTU) (MSFT) (NUE); Najarian Owns (MRVL) (BAC) Call Spread (CLF) Call Spread
(F) Calls (HIG) Call Spread (INTC) Calls (JOYG) (MYL) (PCX) (PFE); Finerman's Firm Owns (TJX),
Finerman's Firm Is Long S&P Puts Finerman's Firm Is Short (IYR), Finerman's Firm Is Short (IJR), Finerman's Firm Is Short (MDY), Finerman's Firm Is Short (SPY), Finerman's Firm Is Short (IWM)
Finerman's Firm Is Short (USO), Finerman's Firm Is Short (UNG), Finerman Owns (AAPL),
Finerman's Firm Owns (BAC), (BAC) Leap, Finerman Owns (BAC), (BAC) Preferred, Finerman's Firm And Finerman Own (GGWPQ), Finerman's Firm And Finerman Own (GOOG), Finemran's Firm And Finerman Own (JPM), Finerman's Firm Owns (MCD), Finerman's Firm Owns (MIL), (MIL) Calls, Finerman's Firm Owns (OSIP), Finerman's Firm Owns (QCOM), FInerman's Firm Owns (TGT), Finerman's Firm Owns (WFC) Preferred, Finerman's Firm Owns (WMT), Finerman's Firm Owns (YUM);
For Brian Kelly:
Kanundrum Capital Owns (SDS)
Kanundrum Capital Owns (BRCM)
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (CS)
Kanundrum Capital Owns (DB)
Kanundrum Capital Owns (NBG)
Kanundrum Capital Owns (GDXJ)
Kanundrum Capital Owns (TM)
Kanundrum Capital Owns (IPI)
Kanundrum Capital Owns (MOS)
Kanundrum Capital Owns (POT)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short Copper
Kelly Owns (AMZN) Calls
Kelly Owns (ELX) Calls
Kelly Owns (QLGC) Calls
Kelly Owns (HOV) Calls;
For Steve Cortes:
Cortes Is Short Treasuries Through Puts
For Brad Hintz:
Hintz Owns Morgan Stanley And Discover
Hintz Owns (CME)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of Barclays PLC, Credit Suisse Group, (C), (GS), (JPM), (MS), (BAC)
Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), (BAC) UBS AG Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Received Compensation
An Affiliate Of Bernstein Received Compensation From Barclays PLC, (C), Credit Suisse Group, (JPM), (GS), (MS), UBS AG (Non-Investment Banking-Securities-Related Services)
Bernstein Or Affiliate Received Investment Banking Compensation From (C) In Past 12 Months
Bernstein Or Affiliate Expects To Receive/Seek Investment Banking Compensation From Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), (BAC) UBS AG In Next 3 Months
For Stephen Weiss:
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