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Analyst’s Cloud-Computing Picks: Taleo, Kenexa

Cloud-computing stocks soared Monday in midday trading on news of SAP's $3.4 billion cash bid for SuccessFactors, and one analyst said two other companies within the sector were worth a look.

Taleo, “from a technical point of view, has certainly broken through to the upside, J.J. Kinahan, chief derivatives strategist for TD Ameritrade, said on “Fast Money.” “They seem to be one people like.”

German software powerhouse SAP traded in the $59 range, while SuccessFactors traded above $39, near it’s 52-week high of $40.44. The acquisition is expected to make SAP more competitive with Oracle.

Kinahan was also bullish on Kenexa, which was trading in the $25 range midday.

“If you’re looking for a stock that could break out, starting on a climb, that’s one I would certainly keep my eye on over the next few weeks and see what happens there,” he said.

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Trader disclosure: On Dec. 5, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Grasso owns AKS, AMR, ASTM, AVAV, BA, BAC, D, LIT, MHY, PFE, PRST, S, XLU; Kelly is long IWM, Kelly is long EURO, Kelly is long Italian bonds, Kelly is long KRE, Kelly is long Aussie dollars;

Steve Grasso

Stuart Frankel & Co. and its partners own CSCO

Stuart Frankel & Co. and its partners own CUBA

Stuart Frankel & Co. and its partners own GERN

Stuart Frankel & Co. and its partners own GM

Stuart Frankel & Co. and its partners own HPQ

Stuart Frankel & Co. and its partners own HSP

Stuart Frankel & Co. and its partners own HSPO

Stuart Frankel & Co. and its partners own JPM

Stuart Frankel & Co. and its partners own MET

Stuart Frankel & Co. and its partners own MSFT

Stuart Frankel & Co. and its partners own MU

Stuart Frankel & Co. and its partners own NYX

Stuart Frankel & Co. and its partners own PRST

Stuart Frankel & Co. and its partners own RDC

Stuart Frankel & Co. and its partners own UAL

Stuart Frankel & Co. and its partners own WFT

Stuart Frankel & Co. and its partners own XRX

Patrick McKeever
No disclosures

Thomas Lee
No disclosures

Jens Nordvig
No disclosures

Chris King
Verizon Communications, Inc. is on the Stifel Nicolaus Income Opportunity Ideas List. This Income Opportunity Ideas List represents our Stifel Nicolaus analysts’ best yield ideas, however is not intended to represent a model portfolio. Each stock is on the Buy List, and offers what Stifel Nicolaus analysts believe are companies with solid fundamentals, a favorable valuation, and a current dividend higher than that of the S&P 500 Index. Stifel, Nicolaus & Company, Inc. makes a market in the securities of Verizon Communications, Inc.

Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek compensation for investment banking services from Comcast Corporation in the next 3 months.

Stifel, Nicolaus & Company, Inc. makes a market in the securities of Sprint Nextel.

AT&T, Inc. is on the Stifel Nicolaus Income Opportunity Ideas List. This Income Opportunity Ideas List represents our Stifel Nicolaus analysts’ best yield ideas, however is not intended to represent a model portfolio. Each stock is on the Buy List, and offers what Stifel Nicolaus analysts believe are companies with solid fundamentals, a favorable valuation, and a current dividend higher than that of the S&P 500 Index. Stifel, Nicolaus & Company, Inc. makes a market in the securities of AT&T, Inc..

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