GO
Loading...

Halftime Pt. 2: Charge It To Your iPhone, BlackBerry?

Monday, 2 Aug 2010 | 2:08 PM ET

Think your BlackBerry or iPhone does everything already? Well it could do even more!

According to published reports, AT&T and Verizon Wireless may be planning a partnership to displace credit and debit cards by letting consumers pay with their smartphones.

But if you think this new venture is just one more way to use your Visa or MasterCard, think again!

The partnership, which also includes T-Mobile USA, appears most likely to be with Discover Financial Services and Barclays to test a system at stores in Atlanta and three other US cities, the people told the agency.

AT&T and Verizon declined comment. The carriers have been searching for a chief executive officer,according to Bloomberg News.

The planned service is similar to those already available in Japan, Turkey and the UK, and would use contactless technology to pay for purchases in stores, the report said. For that reason, muses Tim Seymour of EmergingMoney.com, the market is overreacting to this news.

Moshe Orenbuch, an analyst at Credit Suisse, also thinks the market is overly excited about the new potential payment method. He notes that infrastructure in the US is older, however well-developed. Because infrastructure in other countries was built more recently, they often include things the US doesn't have, like mobile payment systems.

---
FAST FLASH: BAIDU.COM HITS ALL-TIME HIGH

In midday trading Monday, shares of Baidu.com hit an all-time high.

Tim Seymour, founder and managing partner of EmergingMoney.com, likes the Chinese Internet search service provider. The Beijing-based company's growth continues to support a valuation that's north of $70 a share and have "blown away" numbers over the past three quarters, he notes.

Seymour recommends staying in this trade right now, but be cautious and pick spots to take the momentum off the table.

---
TAKE YOUR POSITION: FORD GETS AN UPGRADE

On Monday, Standard & Poor's raised its rating on Ford Motor by two notches and said it's likely it will raise the rating again in the next 12 months. The rating agency raised the auto maker and its finance arm's ratings to "B-plus," the fourth-highest junk rating, from "B-minus."

By wiping debt off its balance sheet and having free cash flow for the first time in years, Tim Seymour of EmergingMoney.com thinks Ford is a story he could own. He says people are underestimating auto sales in the US and beyond.

---
TAKE YOUR POSITION: PFIZER REPORTS TUESDAY

Pfizer , a New York City-based biopharmaceutical company, is scheduled to report quarterly earnings results Tuesday.

If you have the money, says Brian Kelly of Kanundrum Capital, buy Pfizer right now. The drug maker has a "decent" valuation and pays a "great" dividend, Kelly says.

At current levels, Kelly thinks it's a good idea to get into this stock because you can put in an options strategy on where you buy a 15 put, protect yourself, buy the stock and then sell an out of the money call. In doing so, he says you risk 1-2% and give yourself 20% upside.

"But Pfizer's like buying cash," countered Zachary Karabell, president of River Twice Research. "It's a great cash cow, but it's a terrible pipeline and it's a problematic company. And maybe the stock will rally, but still."

---
CALL TO THE FLOOR: AMERIGROUP

Amerigroup , which operates as a multi-state managed health care company, could acquire up to 1 million new members in the three years following Medicaid expansion starting in 2014, according to CEO James Carlson.

Speaking on Monday's Fast Money Halftime Report, Carlson says the health insurer is "well-positioned" to participate in the Affordable Care Act—the health insurance reform bill that President Barack Obama signed into law in March 2010.

Asked by host Melissa Lee about potential costs the company may incur, Carlson says the expansion will largely be funded by the federal government, so "they'll have every incentive to make sure that they've set up these prices right so that we ought to be able to get off to a reasonably good start."

Call to the Floor: Amerigroup
Another health insurance company that has seen major gains in revenue ahead of analysts expectations is Amerigroup, with Jim Carlson, CEO of Amerigroup.

If the changes occur in an existing market, Carlson says the company will be ready for the influx of new members because they have a lot of infrastructure already in place, seasoned management and knowledge of current prices. But he notes it will be a different story if the market changes, where health care costs tend to increase by 3-4% a year.

Watch the video for the full interview.

What's the Trade?

Brian Kelly of Kanundrum Capital likes Amerigroup because it's a "pure play on Medicaid." He also likes they the Virginia Beach, Va.-based company has a lot of cash on-hand.

---
POLL OF THE DAY

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Aug 2, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell owns (MON), (POT), (RIMM), (AAPL), (BP); Grasso owns (ASTM), (ABK), (BAC), (BA), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST)

For Brian Kelly
Accounts managed by Kanundrum Capital own (CM)
Accounts managed by Kanundrum Capital own (BMO
Accounts managed by Kanundrum Capital own Swiss Franc
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (BAK)
Accounts managed by Kanundrum Capital own (ORI)
Accounts managed by Kanundrum Capital own (UNG)
Accounts managed by Kanundrum Capital own (PFE)
Accounts managed by Kanundrum Capital are long (JPM)
Accounts managed by Kanundrum Capital are long (GLD)
Accounts managed by Kanundrum Capital are long (OIH)
Accounts managed by Kanundrum Capital are long (RIMM) call spread
Accounts managed by Kanundrum Capital are short the US Dollar

For Steve Grasso
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (DYN)
Stuart Frankel & Co and it’s partners own (ESV)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (LEN)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (KEG)

For Zach Karabell
River Twice Capital owns (CSCO)
River Twice Capital owns (POT)
River Twice Capital owns (MON)
River Twice Capital owns (MA)

For Moshe Orenbuch
(MA) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse
Credit Suisse provided investment banking services to the subject company (MA, AXP) within the past 12 months.
Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (V, MA, AXP, DFS) within the next 3 months.
As of the date of this report, Credit Suisse Securities (USA) LLC makes a market in the securities of the subject company (MA).
As of the end of the preceding month, Credit Suisse beneficially owned 1% or more of a class of common equity securities of (V)

CNBC.com with contributions from Reuters wire service (Reporting by Sakthi Prasad in Bangalore; Editing by Anshuman Daga).

  Price   Change %Change
YAF
---
BARC
---
BIDU
---
DFS
---
F
---
MA
---
PFE
---
T
---
V
---
VZ
---
PG
---
MCD
---

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.