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Terranova: Play Best Buy as Takeover Target

Friday, 12 Oct 2012 | 1:02 PM ET

In the battle of the big-box retailers, the biggest potential gain comes from the chance that Best Buy is taken out, Joe Terranova of Virtus Investment Partners said Friday on CNBC.

As Wal-Mart and Best Buy challenge Amazon.com by offering same-day delivery, Terranova sees a play that could bring plenty of upside.

Terranova: Play Best Buy as Takeover Target
In the battle of the big-box retailers, Joe Terranova of Virtus Investment Partners says this name could reap big returns.

"I think you own Best Buy with the belief they're going to be taken private, " he said on "Fast Money ."

Taking criticism from OptionMonster.com's Pete Najarian over the length of such an wait-and-see investment, Terranova clarified that options would be the way to play it: "I would not own Best Buy equity. I would step into your world, " he said. "I agree with you. It's a long shot."

Stephen Weiss of Short Hills Capital warned that same-day delivery would only serve to shrink margins in an already tight business. "This is just going to add cost, " he said.

Josh Brown had a clear favorite.

"Of these names, I like Wal-Mart the best. This is still a company that plays into the hands of what the American consumer wants and needs, " he said.

Trader disclosure: On Oct. 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long WMT; Josh Brown is long DEM; Josh Brown is long HD; Josh Brown is long TGT; Josh Brown is long WFC; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long INTC CALLS; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long WFC Calls; Stephen Weiss is long QCOM; Stephen Weiss is long BAC; Stephen Weiss is long AIG; Stephen Weiss is short RIO ; Stephen Weiss is short AKS; Stephen Weiss is short AAPL PUTS; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SBUX; Joe Terranova is long NFLX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long CVX; Joe Terranova is long COP; Joe Terranova is long SU; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long NXPI; Joe Terranova is long GLW; Joe Terranova is long EMC; Joe Terranova is long SHORT DE. MINI-SP FUTURES.

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