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Halftime Pt. 2: BP Is Just Too Cheap, Says Widely Followed Hedgie

Shares of BP are simply "too cheap" for Whitney Tilson of T2 Partners, who on Tuesday's Fast Money revealed that the oil company is his latest long position.

The headlines about BP and the oil spill in the Gulf of Mexico are horrible, he says. But people are forgetting that BP is one of the most profitable companies in the world, he says. BP consistently earns more than $20 billion in profits a year. It can afford to pay for any damages and clean-up from the Gulf oil spill, Tilson says. The damages are also being paid pre-tax, he adds.


The London-based company is currently yielding 9%. Some fear the US government will force the company to suspend the dividend, but Tilson isn't worried. He says BP is one of the most widely held companies in the UK. Suspending the dividend would be "outrageous," he says.

Tilson says this is a long-term play, where he is taking a 4% position. The danger, he says, is that BP could file bankruptcy. But he points out that shareholders were not hurt when Texaco filed for bankruptcy in the 1980s. He thinks long BP is a good play, given the company's inexpensive share price now.

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CALL TO THE FLOOR: HAVE 3D MOVIES RUN ITS COURSE?

From Avatar to Alice In Wonderland, it has been one of the biggest trends in film today: 3D.

But is it here to stay? Going into the summer movie season, Imax shares are off to a sluggish start and some cite Shrek 3's performance in the box office as an indicator that the movie business is in decline, even though the film has earned $25 million.


Imax CEO Rich Gelfond told the Fast Money desk that one bad movie is not an indicator of what the movie industry has to offer moving forward. He said the movie business is gaining strength, especially in China, where his company announced a joint venture with Chinese Cinema last week. Gelfond says the business level there is "unprecedented" and he plans to open additional theaters in China soon.

Watch the video for the complete conversation.

What’s the Trade?

Patty Edwards of Storehouse Partners is bullish on Imax. She says in hard economic times, people tend to go to the movies more often.

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TOPPING THE TAPE: CORNING GETS UPGRADED

Corning, a glassmaker based in New York State, was upgraded to 'outperform' by Sanford Bernstein Tuesday.

The upgrade came as a result of Corning's valuation relative to LCD panel manufacturing, the firm said. GLW produces Gorilla Glass, a scratch resistant and durable glass used in touch-screen devices, which Sanford thinks could be a key driver in the share price.

What’s the Trade?

Corning's story is pretty interesting, Guy Adami of Drakon Capital says. He thinks the company had a nice selloff. Being as the markets have twice bounced off of 1040 on the S&P, GLW could "give you a couple bucks to the upside."

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CALL THE CLOSE:

Brian Kelly of Kanundrum Capital says the NASDAQ is still down, so sell the rallies.
Patty Edwards of Storehouse Partners says “nibble, nibble with protection.”
Guy Adami of Drakon Capital thinks we might hit 1040.
Pete Najarian of optionMONSTER.com thinks the commodities will push markets to close higher today.



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Trader disclosure: On June 8, 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 (AGU), (BTU), (C), (GS), (INTC), (MSFT): Kelly owns (GS) puts; Kelly owns (SPY) puts

For Patty Edwards
Edwards owns (RIG) for clients
Edwards owns (NE) for clients
Edwards owns (SLB) for clients
Edwards owns (HAL) for clients
Edwards owns (DO) for clients
Edwards owns (MMM) for clients
Edwards owns (MCD) for clients
Edwards owns GOLD for clients
Edwards owns PLATINUM for clients
Edwards owns SILVER for clients
Edwards owns (JPM) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (WFC) for clients
Edwards owns (MS) for clients
Edwards owns (INTC) for clients
Edwards owns (STM) for clients
Edwards owns (TXN) for clients
Edwards owns (NVDA) for clients
Edwards owns (AAPL) for clients
Edwards owns (HPQ) for clients
Edwards owns (MSFT) for clients
Edwards owns (GOOG) for clients
Edwards owns (VXX) for clients
Edwards owns (SPY) for clients
Edwards owns (QQQQ) for clients

For Brian Kelly
Kanundrum Capital is short (AMZN)
Kanundrum Capital is short (RCL)
Kanundrum Capital is short (XLY)
Kanundrum Capital is short (AFL)
Kanundrum Capital is short (EWI)
Kanundrum Capital is short (EWO)
Kanundrum Capital is short (GS)
Kanundrum Capital is short (HIG)
Kanundrum Capital is short (XLF)
Kanundrum Capital is short (FCX)
Kanundrum Capital is short (XLB)
Kanundrum Capital is short EURO
Kanundrum Capital is short POUND
Kanundrum Capital is short SWILL
Kanundrum Capital owns (GLD)
Kanundrum Capital owns (GDX)
Kanundrum Capital owns (GDXJ)
Kanundrum Capital owns (AUY)
Kanundrum Capital owns (GFI)
Kanundrum Capital owns (TLT)
Kanundrum Capital U.S. DOLLAR

Collin Gerry (RIG, DO)
**No Disclosures**

Whitney Tilson
Funds managed by tilson own (BP)
Funds managed by tilson own (XOM)

CNBC.com with wires

Symbol
Price
 
Change
%Change
BP.
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GLW
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IMX
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