Consumer stocks performed well Monday, with Macy’s and Home Depot among those that hit new 52-week highs, but pricing pressures might slow the rally.
Retail expert Patty Edwards of Trutina Financial urged caution, noting that Wal-Mart and General Mills faced such headwinds.
“You need to pick your spots carefully. You want to be more in the high end. You want to be in Home Depot, which is going to be benefitting from the foreclosures being rehabbed. You want to be in something like Costco because as gas prices go up, people will go to Costco to get the cheaper gas and then they’ll go into the store and do more buying,” she said on “Fast Money.”
That doesn’t mean you should also buy Lowe’s, she said, even though it hit a 52-week high of $28.46 per share.
“I think you go with the one that has actually worked and has got the stronger management team here,” she said. “My two cents: Home Depot’s it.”
Trader Stephen Weiss agreed, saying he would avoid buying both home-improvement plays.
“I would take a little off the table on Lowe’s. I don’t think it’s as well-run as Home Depot, nor do they give back as much to the shareholders,” he said.
“You have to believe the housing market has bottomed, and you have to believe that a lot of money is going into rehab. I don’t have that view, so I can’t buy them both.”
Brian Kelly of Shelter Harbor Capital differentiated between a relative value trade or a broader bullishness on rental properties.
“If you’re going on the bigger macro theme, you can buy both of them,” he said, adding that downstream plays such as gypsum-board manufacturer USG might be worth a look.
“You’ve got to look away from some of these names,” said Joe Terranova of Virtus Investment Partners.
Worth a look, he said, were: Louisiana Pacific, Nordstrom, Yum! Brands, Chipotle and Brinker.
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Trader disclosure: On Feb. 21, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long HPQ; Terranova is long MCD; Terranova is long EMC; Terranova is long OXY; Terranova is long SBUX; Terranova is long SWN; Terranova is long MSFT; Terranova is long YUM; Terranova is long TBT; Terranova is long FXE; Terranova is long LPX; Terranova is long LQD; Weiss is long MDRX; Weiss is long DMND; Weiss is long CHK; Weiss is long EUO; Weiss is long CSC; Weiss is long F; Weiss is long BKU; Weiss is long QCOM; Weiss is long NS; Weiss is long POT; Weiss is long SNDK; Weiss is long WLP; Weiss is long VZ; Weiss is short MT;
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