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Social Media Stocks to Outperform: Jon Najarian

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.

* You can find our conversation with Jon Najarian about 4 minutes into this video clip.



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Trader disclosure: On Apr 27, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long SBUX; Pete Najarian is long INTC; Pete Najarian is long MSFT; Pete Najarian is long HPQ; Pete Najarian is long CE; Pete Najarian is long WLT; Pete Najarian is long MOS; Pete Najarian is long ECA; Pete Najarian is long PFE; Pete Najarian is long MRK; Pete Najarian is long COP; Pete Najarian is long APPL; Pete Najarian is long OPTIONS IN ABX; Pete Najarian is long OPTIONS IN BMY; Pete Najarian is long OPTIONS IN CLF; Pete Najarian is long OPTIONS IN DVN; Pete Najarian is long OPTIONS IN GT; Pete Najarian is long OPTIONS IN MGM; Pete Najarian is long OPTIONS IN SBUX; Pete Najarian is long OPTIONS IN SNDK; Pete Najarian is long OPTIONS IN STI; Pete Najarian is long OPTIONS IN V; Pete Najarian is long OPTIONS IN XCO; Steve Grasso is long ASTM; Steve Grasso is long AVAV; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long NUAN; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long PRST; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA; Steve Grasso is long CUBA; Steve Grasso is long GERN; Steve Grasso is long HPQ; Steve Grasso is long HSPO; Steve Grasso is long MU; Steve Grasso is long NYX; Steve Grasso is long UAL; Steve Grasso is long P; Steve Grasso is long PRST; Steve Grasso is long VVUS; Steve Grasso is long XRX; Steve Grasso is long ZNGA; Steve Grasso is short AAPL; Steve Grasso is short QQQ

For Mike Murphy
Mike Murphy is long JPM
Mike Murphy is long INTC
Mike Murphy is long ANF
Mike Murphy is long SBUX
Mike Murphy is long FCX
Mike Murphy is long PHM

For Willie Williams
Nothing to disclose

For Herman Leung
SFG is a market maker in the securities of Amazon.com AMZN

For Nicole Miller Regan
Piper Jaffray was making a market in the securities of SBUX

For Chris Konstantinos
Pending

CNBC.com with wires.

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