Looking for outperformance? Jon Najarian thinks you’ll find it in the social media space.
“Some of the stocks such as Zynga and Yelp that were beaten down ahead of theFacebook IPO – those potentially have explosive upside, at least in the short-term,” Najarian says on CNBC’s Fast Money Halftime Report.
Largely, Najarian believes euphoria surrounding Facebook will extend to these stocks as well.
And as investors become more enthusiastic about the space, he thinks Zynga’s decline, which at the time of writing was 34% for the month -- and Yelp’s decline, which was 20% for the month - will attract money, if only because investors will feel they’re oversold.
On Friday April 20th Jon’s brother Pete Najarian said much the same thing about another social media stock - RenRen. (We wrote about it in a post titled, "Facebook IPO Could Drive Gains in This Rival" )
"This is a stock that people refer to as the Facebook of China, I'm not sure it's at that level, but it's certainly generating interest."
At the time, Pete had spotted a higher than usual volume of May 9 calls trading – which he interpreted as a bet the stock trades above 9 by the third Friday in May.
"Institutional investors appear to be expecting upside," he said.
But both Jon and Pete remind that these stocks are short term trades only and say they should only ever be a very small part of your portfolio.