Shares of Ford and General Motors jumped on Friday ahead of the automakers' second trip to Washington. Next week they will present plans explaining how they intend to return to profitability.
Earlier in the week Deutsche Bank said the chances of a bailout had improved for the Big 3. "There is growing concern about the risks to the U.S. economy that would be derived from inaction," Deutsche Bank analyst Rod Lache said in a research note.
As you probably know, lawmakers recently rejected pleas from the automakers for $25 billion in federal loans but it’s widely believed they will receive the aid once they submit turnaround plans, which are due December 8.
Lache said he expects the U.S. automakers to present "relatively aggressive" plans to Congress, addressing challenges to both operating costs and revenues.
But speculation over what happens next week in Congress is very different from whether you want to own the stocks. Let's focus on the latter. "I think this is a great buying opportunity,” says Jon Najarian on Fast Money.
"Ford was one of the most active stocks trading on Friday. I’d look at Ford just for volume. And check out some of the suppliers such as Fuel Systems Solutions as a related play. And I’d even take it out to the steel makers like Nucor," one of the largest scrap steel companies out there.
But keep in mind these are short term trades, not long term investments.
"I’d say stay on all of these into that meeting next week, Then, after next week’s meeting I’d take profits.”
You can find our interview with Jon Najarian toward the end of the Word on the Street video.