Fast Money Recap. 3/7/08: Oil Will Reach $378?

by: Miriam Metzinger

Recap of Fast Money, Friday March 7. Click on a stock ticker for more analysis.
Market Overview: Burlington Northern Santa Fe (BNI), Google (NASDAQ:GOOG)

Friday’s selloff saw the Dow stumble 1.22%, the S &P fall 0.8% and the Nasdaq trading down 0.3%. Guy Adami says the market hasn’t bottomed yet, but continues to like railroad stocks like BNI as well as natural gas. Najarian noted Google’s spectacular $40 drop and said the tech horsemen need a rest. Jeff Macke wouldn’t buy stocks unless they fall on a panic. The group looked at the Volatility Index and Najarian said when there is a big move in the VIX, it will be time to buy.

Financials: US Bancorp (NYSE:USB), Goldman Sachs (NYSE:GS)

Adami isn’t worried about the volume of put buying in USB, and says it is still a buy. Najarian agrees. Macke would start buying GS.

Oil: Baker Hughes (NYSE:BHI), United States Oil Fund (NYSEARCA:USO)

Crude oil broke its record level and reached over $106. Najarian explained the reason for this jump was the number of shorts on oil at $100. Adami is bullish on BHI and Macke prefes USO.

Tech: Oracle (NASDAQ:ORCL), Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT), Yahoo (NASDAQ:YHOO)

Adami says Oracle’s announcement of an earnings date without a mention of its quarter is an indication the company will beat estimates, and he would buy the stock before the earnings report. Macke is bullish on Intel, and Finerman said MSFT is cheap here, and she predicts a deal for MSFT and YHOO over the weekend.

Dennis Gartman, The Gartman Letter with stocks Penngrowth (NYSE:PGH), San Juan Basin (NYSE:SJT)

Dennis Gartman said the bear market will continue along with hard selling. He would look at natural gas stocks PGH and SJT and would buy gold, which should continue to rise as the dollar falls.

Buying Bears: Schlumberger (NYSE:SLB), Sprint Nextel (NYSE:S), Amlyn Pharmaceuticals (AMLN), Eli Lilly (NYSE:LLY), Fannie Mae (FNM)

Buying hated stocks is always a good strategy, as long as the companies are sound. John Najarian presented of his list of recently pummeled stocks, led by SLB, which has fallen from $100 to $85. Adami said there is no reason for this drop and the stock is cheap. Sprint, which taken a dive from $27 to $7, was next on the list, and Najarian discussed rumors of a takeover. AMLN may also be an attractive target for LLY. Finerman’s favorite hated stock is FNM because of its long-term put options pricing in a 30% chance of the stock reaching zero.

52-Week Lows: Lehman Brothers (LEH), Citigroup (NYSE:C), Anheuser Busch (NYSE:BUD), Sara lee (SLE) and Tootsie Roll (NYSE:TR)

With the selloff, many stocks are hitting their 52-week lows and when sorting through fallen stocks, Macke suggests looking for collateral damage. Macke points out LEH, C and GS are at their 52-week lows, but he would only consider buying GS. He also likes BUD, SLE and TR.

Dick Bove: Citigroup (C)

Punk Ziegel’s banking analyst Dick Bove said Citi is the best buying opportunity he has seen because it is a top franchise, has unit growth and expanding margins. Market capitalization is close to revenues, and C sells at an 8% discount to book values. He predicts C will rise to $55 in a few years.

Matt Simmons, Chairman of Simmons & Co

Matt Simmons forecasts an oil price of $378, citing declining U.S oil fields and the difficulty producing oil from Canadian oil sands.

Trader Radar: Orbitz (NYSE:OWW) jumped 17% on over three times average daily volume.

Pops: Applied Materials (NASDAQ:AMAT), American Axle (NYSE:AXL), Tyson Foods (NYSE:TSN), Ciena (NASDAQ:CIEN), Big Lots (NYSE:BIG), National Semiconductor (NSM)

With AMAT up 5%, Najarian commented solar is working for AMAT. On AXL’s 12% pop, Macke prefers it to auto makers. Tyson reached 10% and Adami would by the stock at $15. Najarian noted CIEN, up 8%, has a great 2008 forecast. Macke would buy BIG, which jumped 24% on a pullback. Najarian would use NSM’s 10% move as a selling opportunity.

Drops: Korn/Ferry International (NYSE:KFY), Google (GOOG), Flowserve (NYSE:FLS)

Finerman would be cautious about KFY on a 7% drop. She would consider GOOG a good value play if it falls further from its current 8% dip. Although FLS fell 7%, she would hold it.

Picks that Paid: United States Oil Fund (USO), Genentech (Private:DNA), Bucyrus (NASDAQ:BUCY), Apache (NYSE:APA)

Macke’s bullish call on USO paid off as the stock rose 6%. Adami also saw a sharp rise from his pick DNA. Najarian’s BUCY’s call was followed by a 14% rise. Finerman was right about Apache, which jumped 8%.

Misfires: GAP (NYSE:GPS), Cepheid (NASDAQ:CPHD), Cree (NASDAQ:CREE), Da Vita (NYSE:DVA)

Macke was wrong about GPS which dropped 6%, but he still likes the stock long-term. Najarian also continues to like CPHD, although the stock tumbled 26%. Adami admitted he was wrong about an upcoming short squeeze for CREE, which fell 16%. Finerman would stick with DVA, although it has toppled 10%.

Final Trade: Najarian would short Materials Select Sector SPDR (NYSEARCA:XLB) because of the volume of put-buying. Adami likes Alcoa (NYSE:AA) at $37. Finerman remains bullish on Microsoft (MSFT).

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