Fast Money Recap - 6 Companies That Make Real Things (3/6/09)

Recap of CNBC's Fast Money, Friday March 6.

Companies That Make Real Things: Dow (DOW), Alcoa (AA), Chesapeake Energy (CHK), Family Dollar (FDO), Suncor Energy (SU), Bunge (BG), Smithfield Foods (SFD), Imperial Sugar (IPSU)

Dennis Gartman thinks the current market is like a five and dime and there are a lot of companies worth buying cheap "because they are the maker of real things," he said, "Thing that if you dropped on your foot, they would hurt. It’s time to stand up and say I want to own wonderful companies that have been around for years and pay dividends,” he says. "And most of these stocks have stopped making new lows."

Gartman's picks are: Dow Chemical, Alcoa, Chesapeake, Family Dollar, Suncor Energy and Bunge. Pete Najarian said he agrees and would add Smithfield Foods and Imperial Sugar

Nearing a Bottom?

In spite of a dismal week, the Dow moved up by the end of the day after hitting 12 year lows. Guy Adami doesn't agree with those who say that this is the bottom: "It has to feel like the world is ending before we reach bottom." Karen Finerman says the rate of decline has not slowed yet, so there is no indication of a bottom. Pete Najarian says the financials need to participate, and his brother Jon says the bullying of Wall Street by the White House is not helping the markets.

Commodities: ConcoPhillips (COP), Exxon (XOM), Vendata Resources

Oil rose 4% to reach above $45 a barrel. Guy Adami would buy ConcoPhillips which is cheaper than Exxon on a valuation basis. Pete Najarian likes Vendata resources for copper.

American Express (AXP), Visa (V)

American Express nearly closed below $10 for the first time since 1995. Karen Finerman thinks that the company may be an attractive buy, and Pete Najarian noted Visa broke levels that had been support. He would own puts in Visa.

Roche Sweetens Offer for Genentech (DNA)

Roche increased its bid for the part of Genentech it doesn't yet own from $86.50 to $93. Karen Finerman thinks there is no good news left in the stock after this, but Jon Najarian thinks this might breed more M&A deals in the sector.

Mr. Doom and Boom: Ivanhoe Mines (IVAN), Novagold Resources (NG), Gabriel Resources (GBU), Gold Miners ETF (GDX), GLD (GLD)

Marc Faber a.k.a "Mr Doom" achieved fame by warning investors to sell stocks a week before the 1987 crash. But this time, he is actually bullish on certain stocks. Faber thinks commodities may be worth buying and would buy oil services. He especially likes gold companies with strong backing, such as Ivanhoe, NovaGold and Gabriel Resources. Pete Najarian reiterated his last week to be long the miners ETF and short GLD.

Exxon spending like there's No recession, McDermott (MDR), Fluor (FLR), URS (URS)

Exxon is serious about increasing production, and plans to spend $29 billion on nine projects that will mean 485,000 barrels a day. Najarian would trade the energy trend with McDermott and Fluor. Adami likes URS.

Seeking Alpha is not affiliated with CNBC or Fast Money

Comments

[APB:]

Obama's anti-domestic oil and gas tax policies will hurt companies like CHK, who, as you point out, make real things. Recent history has confirmed that the president is more interested in givig huge tax breaks to his Hollywood billionaire supporters, than to companies that make real commodities that are the foundation of our economy. Bottom line: You can expect four more years of increasing dependence on foriegn enery sources, including LNG. However, CHK and others are to blame for much of their recent problems, having drilled far beyond any realistic dedmand requirements.

Mar 09 11:12 AM

[Mmarrkk:]

Agree with APB up to a point. I disagree that CHK and others have drilled "far beyond any realistic demand requirements". Now, they have drilled beyond demand, but I'd argue that its not really that far. We consume somewhere between 55 and 60 BCF/day in the US. Most estimates of oversupply these days lie in the 2.5 to 4 BCF/day range. Not sure I'd call that "far beyond any realistic demand". It does show that our markets are very volatile and susceptible to big price swings when demand/supply is nudged just a bit. And that saw will cut both ways when the situation flips.

We have dropped 30-40% of the rigs drilling in the U.S. and new wells are plummeting. Also, some companies are shutting in production. This will quickly (late 2009?) bring balance to the situation. Unfortunately, we won't stay balanced for long and will end up with a shortfall again and higher prices again. Then, we'll do the same all over again, with crashing prices and rising prices.

LNG imports are a problem, though. Oversupply of very low incremental cost LNG (think $0.90 to $2.00 per mmBTU) could flood the US market in late 2009 to early 2010 if world markets don't recover. But if world markets don't recover by then, we'll have plenty of other problems to worry about!!

Mar 09 02:11 PM

[growsmart:]

TYPO-WRONG SYMBOL
Ivanhoe Mines is IVN not IVAN.
Ivanhoe Energy is IVAN.

Mar 10 09:14 AM

[Endo:]

Nova Gold is not yet a producer except for a token project in Nome. Beware. I have not failed to loose with NG. Just look at their chart. Also, their management is determinedly resistant to buyouts, to the detriment of stockholders. Obviously someone is lately working hard to promote the company, which may be good until they move on. NG stock price has made some large and inexplicable (according to the comapny) moves.

Mar 25 05:01 AM