Recap of CNBC's Fast Money, Tuesday February 3.
Fickle CEOs who turned their nose up at takeover offers might be having serious regrets. The Fast Money Group reviewed three such cases of companies that saw severe declines in their stock price after refusing a match. Sandisk rejected Samsung’s buyout offer for $26 a share and now it is at $8. Electronic Arts made a hostile takeover offer of $25.74 for Take Two, which now trades at $6.Yahoo’s rebuff of Microsoft is famous; Microsoft initially offered $33, Yahoo CEO Jerry Yang demanded $37, and Microsoft left the table. Now Yahoo is at $12. Jon Najarian commented “It looks like these CEOs blew the call.”
Everyone is waiting for earnings from Cisco, the world’s largest producer of networking routers. Wednesday after the bell, Cisco reports, and there is uncertainty, because the company seemed to be faring well, but slashed its forecast in November. Fast Money guest Brent Bracelin, analyst at Pacific Crest isn’t expecting a Cisco-led tech rally, since “IT hardware fundamentals appear to be deteriorating faster than expected” and there is a decline in router/switch orders. Juniper’s earnings were a disappointment, a fact that doesn’t bode well for Cisco.
Invesco PowerShares is releasing two ETFs focusing on the mortgage market; one fund is called the Prime Non-Agency RMBS Opportunity Fund, which buys mortgages from those with strong credit histories. The other fund is the Alt-A Non-Agency RMBS Opportunity Fund, which includes mortgages given to those with good profiles. It may seem strange to consider investing in mortgages, but CNBC’s Bob Pisani thinks the sector has been sufficiently beaten down.
Wells Fargo was planning an extravagant retreat in Las Vegas which was to include helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for 1,000 employees. At first Wells Fargo defended this “tradition,” but after criticism from Capitol Hill, the bank, which receives TARP funds, might call the event off.
Karen Finerman thinks the stock market ended higher on Tuesday because partly due to the Republican’s proposed corporate tax cuts. Jeff Macke thinks Obama is going to decide which banks are going to live and which are going to die and pronounced Bank of America and Citigroup as moribund. Jon Najarian said options indicate Marshall&Ilsley and Corus Bank Group might fall. Najarian and Guy Adami think the tax cuts will restore confidence and will mean more money to buy stocks. Jeff Macke says he is sick of having the bad bank stuffed down the public’s throat, and guesses the good bank will be sold to the Chinese.
Disney (NYSE:DIS) Not So Fun
Disney reported a lower profit than last year and missed estimates. Finerman and Macke think the results were not surprising but Guy Adami says Disney may be attractive at $18.50.
Merck (NYSE:MRK) Is Still Healthy, Schering Plough (SGP), Health Care SPDR ETF (NYSEARCA:XLV), IBB (NASDAQ:IBB), PPH (NYSEARCA:PPH), Amgen (NASDAQ:AMGN), Gilead (NASDAQ:GILD), Intuitive Surgical (NASDAQ:ISRG)
Merck and Schering Plough’s excellent earnings were good news for the pharma sector, and Healthcare SPDR ETF is up for the year. Guy Adami would look at Amgen and Gilead and Jon Najarian says options action suggests Intuitive is a buy.
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