Halftime Pt. 2: 'Fast' Traders' Two Earnings To Watch Next Week
The month of July may be over, but earnings season is in full-swing and on Friday's Fast Money Halftime Report, the traders discussed what earnings reports they'll be watching next week.
Patty Edwards of Storehouse Partners will be looking for earnings results from Vulcan Materials , a Birmingham, Ala.-based company that produces and sells construction aggregates.
"We've had a lot of construction spending that came out of the stimulus," says Edwards. "That should have been very good for them over the past few years. The stock has not responded."
She wants to hear from Vulcan's management how stimulus spending will affect business moving forward. The company reports Monday, Aug. 2.
Steve Cortes, founder of Veracruz, will look for earnings from Kforce on Tuesday, Aug. 3. Even though the Tampa, Fla.-based staffing agency operates almost entirely in the US, Cortes says it's stock has traded "fairly well."
"The outlook on employment is so overtly and uniformly pessimistic that the contrarian in me says maybe things are improving and maybe Kforce is a leading indicator," says Cortes.
Jon Najarian of optionMONSTER.com thinks the staffing agencies will continue to do well. He says employers could spend more on core staffing after Labor Day because there should be more clarity on midterm elections.
SHARES OF RESEARCH IN MOTION PUSH HIGHER
Shares of BlackBerry maker Research in Motion gained ground this week. The Canadian competitor of Apple says it will release what it calls the "iPhone killer" next week.
"I like RIMM. They're playing offense. They're getting aggressive," says Joe Terranova of Vitrus Investment Partners. "I think RIMM now gets north of 60 bucks and the momentum moves higher."
Jon Najarian of optionMONSTER.com says the device should help the company retain their current base, but doesn't think it will bring them additional customers.
CALL OF THE DAY: KELLOGG
It may have disappointed Wall Street with its earnings Thursday, but Citi has nonetheless put Kellogg on its top-pick list. The firm said it expects momentum to improve and that the Battle Creek, Mich.-based company simply suffered transitory events, like a cereal recall, disruption at a Eggo waffle manufacturing plant and large push in spending on advertising by its competitor, Ralcorp Holdings .
"You've got a good quality company here that is going to get through these small issues and I think it's absolutely something you need to be looking at," says Patty Edwards of Storehouse Partners, adding that she likes its dividend.
Joe Terranova of Vitrus Investment Partners agrees with Edwards, calling Kellog a "quality brand." He also likes Colgate-Palmolive , even though it reported disappointing second quarter earnings results Thursday.
Steve Cortes, founder of Veracruz, says it's interesting that the so-called defensive names have been anything but defensive in July. He recommends going with the cyclical names instead.
UNUSUAL ACTIVITY: ARENA
Shares of Arena Pharmaceuticals pushed higher in midday trading Friday, where at point point, it rose by 11.9% with 20,627,400 shares traded.
"Talk about a fantastic month of July," says Jon Najarian of optionMONSTER.com, where Arena's stock had been trading at around $3.50 a share, but exploded to nearly $8 a share Friday.
Najarian thinks the spike could be attributed, in part, to possible take-overs in the biotech space and the buzz over its weight-loss drug lorcaserin. The drug still needs to be deemed safe by government regulators and the US Food and Drug Administration is scheduled to give it consideration in September.
CALL TO THE FLOOR: EASTMAN CHEMICAL
Eastman Chemical announced its second quarter profits more than doubled, as sales and margins rebounded thanks to global markets.
Speaking on Friday's Fast Money Halftime Report, CEO James Rogers says sales have been strong around the world, but especially in Latin America. He is really excited about Brazil, where he notes its economy is so strong, it didn't experience a downturn last year. To play this emerging market, Rogers expects to have some inorganic growth there by way of acquisitions within the next 12 months.
Watch the video to see the full interview.
What's the Trade?
"Investors might be too focused on China and not enough on Latin America," says Steve Cortes, founder of Veracruz, adding that he's buying Bancolombia, which hit an all-time high earlier this week.
CALL THE CLOSE
"I'm staying small," says Patty Edwards of Storehouse Partners. "I don't like the fact that we couldn't get above 1113."
Steve Cortes of Veracruz is "very bullish" on Freeport-McMoRan Copper & Gold .
Jon Najarian of optionMONSTER.com likes that the VIX is much lower than it was last quarter at this point in the earnings cycle. He thinks the market could push higher.
Cleary the natural resource trade is "back on," says Joe Terranova of Vitrus Investment Partners. With copper pushing higher, he recommends going that route.
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Trader disclosure: On July 30, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (AMZN), (EMC), (CREE), (BRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL), (XBI), (BAX), (JNPR), (UAUA), (RIMM); Jon Najarian owns (NYX), (CBOE), (CME), (ARNA), (AAPL), (TXN); Cortes owns (NDAQ), (GS), (MS), (IAI), (RSX), (CIB), (FCX); Cortes is short Japanese Yen; Cortes owns Crude Oil; Cortes is short Gold; Cortes is short the S&P500; Cortes is short US Treasuries
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