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Halftime Pt. 2: You're Going to Love the Way this Stock Looks

Citing international growth as a key catalyst, an analyst at JPMorgan upgraded The Men's Warehouse to 'overweight' from 'neutral' Friday. The target price for MW has been raised from $24 to $25.

This is a consolidation play, explained Brian Tunick, the analyst who made the call, while speaking on Friday's "Fast Money Halftime Report." Globally, corporate apparel is a $9 billion market. MW is an "interesting contrarian idea" in the US, where unemployment is at 9.5 percent, according to July's figures. The growth for MW, he said, is happening around the world.

At current levels, investors can buy MW at 12 times trough earnings that could reach $2.50 to $3 in earnings power over the next few years, Tunick said.

But it seems men are scaling back, noted Patty Edwards, principal at Storehouse Partners. Instead of buying suits, they are purchasing shirts and ties. She asked Tunick if that wouldn't affect The Men's Warehouse's bottomline. Tunick said MW has a 20 percent market share in tailored clothing, which includes shirts and ties. It also has a 25 percent market share of the tuxedo business.

Tunick reiterated that MW is a contrarian play, but said he expects additional growth from the company in the near future.

Watch the video for Tunick's full comments—it starts at 1:30.

What's the Trade?

Edwards said MW is too contrarian for her. She can't see what the stock's upside is.

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CALL TO THE FLOOR: ENERNOC

Based in Boston, EnerNOC provides energy management services for electric power grid operators and utilities. Its founder and CEO, Timothy Healy, spoke with CNBC's Melissa Lee on Friday's "Fast Money Halftime Report."

Many analysts loved the company's latest quarter, she said, because the services name raised guidance and said it expects a lot of catalysts in the near-term, including possible mergers and acquisitions activity.

Lee asked Healy when he'd have clarity on some of those catalysts because some analysts said the stock will be range bound until 2011.

Healy wouldn't provide a timeframe or reveal further details, but said EnerNOC can forecast that it's going to be a good year. They raised their guidance and expectations for both earnings and revenues. He expects further growth next year, as well.

Pete Najarian, co-founder of optionMONSTER.com, asked Healy why the Street doesn't seem to like ENCO stock. Healy responded by addressing how the stock has recently performed. It is up more than 300 percent since early 2009 and up 15 percent over the past 12 months, he said. EnerNOC currently has a pipeline of a billion dollars in contracted revenue and is seeing increased retention, he added.

Watch the video to see the full interview with Healy.

What's the Trade?

While the trends in this space are appealing, these kinds of stocks are really difficult, said Zachary Karabell, president of River Twice Research. It's difficult to tell when the momentum is going to shift, so he doesn't like these kinds of names. Instead, he recommends power management and big cap names that allow investors to play in the same space without the "incredible volatility."

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MARKET ROUND-UP

The railroad names had a significant pullback until Greenbrier Companies on Wednesday said they have orders for additional railcars, specifically those that move iron ore and coal, said optionMONSTER.com co-founder Pete Najarian. This tells me something about the global economy, said Najarian. As a result, rail stocks are moving to the upside.

Najarian is also watching Hecla Mining Co. , a Coeur d'Alene, Idaho-based company that deals in silver, gold, lead and zinc. There is an "incredible amount" of activity in the December 5 calls, he noted, with more than 35,000 contracts in the first hour. The majority of them, he said, were on the 5 calls for 72 to 83 cents.

In the agriculture trade, Joe Terranova, chief market strategist at Virtus Investment Partners, is adding to Potash . In addition to BHP Billiton , other companies are rumored to be looking at POT. As a result of the bidding war, he thinks there's more upside to come.

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CALL THE CLOSE

Patty Edwards, principal at Storehouse Partners, is going to stay hedged.

Joe Terranova, chief market strategist at Virtus Investment Partners, recommends playing for a higher euro and lower US dollar.

"Position yourself for September," said Zachary Karabell, president of River Twice Research.

"As your doing that positioning," continued Pete Najarian, co-founder of optionMONSTER.com. "Buy some puts. We're on the lower end of what's been a very, very interesting range recently."

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Trader disclosure: On August 27th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CELG), (TCK), (CNI), (TEVA); Najarian Owns (HPQ) Calls; Najarian Owns (V) Calls; Najarian Owns (STX) Calls; Najarian Owns (WDC) Calls; Najarian Owns (MU) Calls; Karabell owns (C), (GS); Terranova Owns (AXP), (GS), (IBM), (QCOM), (AAPL), (GOOG), (BRCM), (TER), (MSFT), (C), (MRVL), (BMO), (V), (POT), (OXY), (GLD), (SU), (FCX), (APA), (XBI)

For Zach Karabell
River Twice owns (GS)
River Twice owns (DD)
River Twice owns (POT)

For Patty Edwards
Edwards owns (INTC)
Edwards owns (TBT)
Edwards owns (TLT)
Edwards owns (LQD)
Edwards owns (JNK)
Edwards owns (HPQ)
Edwards owns (MOT)
Edwards owns (BAC)
Edwards owns (WFC)
Edwards owns (C)
Edwards owns (SLV)
Edwards owns (GLD)
Edwards owns (PGM)
Edwards owns (TIF)
Edwards owns (DD)
Edwards owns (SYT)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)


For Brian Tunick
Men's Wearhouse is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services.

JPMSI or its affiliates received in the past 12 months compensation for investment banking services from Men's Wearhouse.

JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next three months from Men's Wearhouse.

JPMSI has received compensation in the past 12 months for products or services other than investment banking from Men's Wearhouse. An affiliate of JPMSI has received compensation in the past 12 months for products or services other than investment banking from Men's Wearhouse.


CNBC.com with wires.

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BHP
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ENOC
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GBX
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HL
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MW
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POT
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DD
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