With the quarter drawing to a close on Friday, we asked the gang as well as some Fast friends for the best ideas going into Q2.
Here’s what’s on their radar:
Janney Capital analyst Adrienne Tennet likes Gap in part because she thinks the retailer is in the sweet spot when it comes to the latest fashion trends.
“Gap is an optimistic brand and when we have color and trends you shouldn’t bet against it,” she says.
Trader Patty Edwards agrees. “I’ve been looking at the stores – the fashion is better – I think they’re dangerous for their competition going forward.”
Dennis Gartman sees another tailwind. “Cotton acreage has been increased dramatically and that will pull down cotton prices,” he says. “Lower cotton should have a material and positive impact on Gap’s bottom line.”
PVH Corp (formerly Phillips-Van Heusen)
Patty Edwards likes PVH as a play on the success of their brands and the recovering economy.
“They’re experiencing strong growth, especially in their Tommy Bahama and Calvin Klein brands,” she says.
“And with employment picking up men will need to buy more dress shirts and ties. PVH Corp is the leader in the space. My price target for this company is $108.”
Zach Karabell recommends Verifone as a company that's in the thick of a sea change.
“The whole trend of mobile payment will be the most significant trend of how consumers transact most things in their lives,” he says.
“And Verifone will be the center of all of it.”
Short 10-Year Bonds
Dennis Gartman suggests shorting 10-Year Treasurys on the belief that the US economy is recovering on its own, and as a result, Fed intervention is less likely.
Looking at the Fed’s latest stimulus, Gartman says, “Operation Twist has run its course.” (Operation Twist refers to the Fed’s program of selling short term bonds and buying 10-year notes.)
With the Fed stepping back taking demand out of the bond market, “I wouldn’t be surprised to see the yield on the long-end go higher. It’s a good time to get short bonds,” he says.