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With Einhorn in Seagate, Buy the Pullback: Fast Pros

Thursday, 5 Jul 2012 | 7:01 PM ET

Spooked by the after hours sell-off in Seagate? The Fast Money pros aren't; they see it as an opportunity – a big one.

Shares of Seagate slipped more than 5% in extended trade after the hard-disk-drive maker cut its revenue and gross-margin expectations for its fiscal fourth quarter.

For the quarter ended June 29, the company now expects revenue of about $4.5 billion and adjusted gross margin of 33.6%. Its prior view called for revenue of at least $5 billion and adjusted gross margin of at least 34.5%.

But trader Joe Terranova, chief market strategist for Virtus, says don’t get scared off by the headlines. They’re still talking about a more than 30% margin growth,” he says. That's significant.

And he reminds that the stock has climbed more than 50% since the start of the year - in other words he thinks the stock was due for a pullback. Terranova suggests putting the stock on your radar and seeing if it stabilizes.

If $21.70 holds – the 200-day - Terranova thinks the stock is a buy. More likely than not, the sell-off provides “an attractive point of entry,” he says.

June Jobs Numbers: Hot or Not?
Michelle Meyer, Bank of America Merrill Lynch, says non-farm payrolls will increase 100,000 in June, a modest pickup from the prior two months. But, will a strong jobs number take QE3 off the table? The Fast Money traders discuss.

Trader Pete Najarian, co-founder OptionMonster.com, says much the same. “The stock is currently cheap and their 2013 projections are still very strong as they gain market share," Najarian says. Seagate recently boosted its share of the industry with its purchase of Samsung’s hard-drive business.

“Around $22, I also like it,” says Najarian.

Marc Chaikin of Chaikin Stock Research likes Seagate too – but for another reason all together.

David Einhorn is a buyer,” he says. "Anytime you’re trading along side David Einhorn you’re in a good spot. I think this is a buy here.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On July 5, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long USB; Joe Terranova is long TCBI; Joe Terranova is long SBUX; Joe Terranova is long MNST; Joe Terranova is long NKE; Joe Terranova is long AAPL; Joe Terranova is long UPL; Joe Terranova is long WFM; Joe Terranova is long EMC; Joe Terranova is long NXPI; Joe Terranova is long LPX; Steven Grasso is funds long ABX; Steven Grasso is funds long CUBA; Steven Grasso is funds long GERN; Steven Grasso is funds long J[Q; Steven Grasso is funds long HSPO; Steven Grasso is funds long MU; Steven Grasso is funds long NYX; Steven Grasso is funds long PRST; Steven Grasso is funds long VVUS; Steven Grasso is funds long XRX; Steven Grasso is funds long ZNGA; Steven Grasso is funds long CVH; Steven Grasso is funds long GM; Steven Grasso is funds long NYX; Steven Grasso is funds long TBT; Steven Grasso is funds long WLP; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long BAC CALLS; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long TJX CALLS; Pete Najarian is long NFLX CALLS; Pete Najarian is long MOS; Pete Najarian is long PCX CALLS

For Michelle Meyer
Nothing to Disclose

For Brad Lamensdorf
Brad Lamensdorf is funds short FOSL
Brad Lamensdorf is funds short JCOM
Brad Lamensdorf is funds short COL

For Scott Mushkin
Jefferies Group, Inc. makes a market in the securities or ADRs of Whole Foods Market.
Jefferies Group, Inc. makes a market in the securities or ADRs of United Natural Foods.

For Mark Chaikin
Nothing to Disclose

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