Fast Money Recap: 3/12/08: Will Airlines Take Off?

Recap of Fast Money, Wednesday March 12. Click on a stock ticker for more analysis.

Word on the Street: Bear Stearns (BSC), Bullington Northern Santa Fe (BNI), Du Pont (DD) and Financial Select SPDR (XLF)

Wednesday was mixed but ended on the downside, and Karen Finerman attributed the volatility to concern over liquidity troubles at BSC. Pete Najarian noted the Fed’s action yesterday gave investors more freedom to trade than just a rate cut but noted a remark by Deutsche Bank analyst that we are in the seventh inning of the credit crisis ballgame. Tim Seymour believes credit concerns are not priced in and there has yet to be high-volume capitulation. Adami believes there may either be a rally or a swift decline tomorrow and notes BNI and DD continue to perform. Comparing oil prices to the euro, Seymour said the oil trade is really a currency trade. On the rising price of commodities, Najarian would sell BNI and buy some lower. He would also take profits in XLF on a 10% gain.

Financials: US Bancorp, (USB), Lehman Brothers (LEH), Goldman Sachs (GS)

Finerman said while the financials look bad and writedowns are an issue, she doesn’t feel like shorting financials ahead of a Fed rate cut. Adami is bullish on financials and would buy USB here. Najarian noted the confidence of Bear CEO Alan Schwartz and would look at BSC as well as LEH and GS ahead of earnings. However, he added BSC is still a bit skittish.

Retail and Credit : Mastercard (MA), Target (TGT)

Finerman wants to know if TGT sold the good or the bad half of its credit card receivables. Adami thinks MA is a major international growth story. Najarian would buy Visa before its IPO.

Aerospace: Southwest Airlines (LUV), Boeing (BA), Rockwell Collins (COL)

Seymour would consider a BA Airbus trade on news that SLV had to ground several planes due to mechanical problems. Adami predicts the sector will be upgraded and would buy COL, which trades at only 12. 5 times forward earnings.

Insider Buying, a Lawsuit and Ambac: Crocs (CROX), Chesapeake Energy (CHK), Activision (ATVI), Ambac (ABK)

Finerman noted the Board of CROX recently purchased 250,000 shares at $5 million. Soon other insiders, including the CEO, will be free to purchase more, and Adami likes the stock’s valuation. Najarian noted there is also active insider buying at CHK. The group doesn’t think Gibson Guitars’ lawsuit against ATVI will impact the stock and had little to say about Moody’s rating cut for ABK.

Jeff Degraff, chief technical strategist at ISI Group with stocks Wachovia (WB), Wells Fargo (WFC)

Degraff said the peak in the put-call ratio is a bullish sign, and Adami said the current rally demonstrate investor confidence. Seymour disagreed, saying that a lot of the action was on the short side. Degraff said the advance-decline ratio has spiked, indicating a bull run and says the bounce in the market won’t be reversed soon. Degraff believes there will be a run in financials. Najarian says he is nervous about the sector, particularly GS, WB and WFC, and says a lot of the recent action was just bottom fishing.

Microsoft (MSFT) and Yahoo! (YHOO)

Microsoft is sticking by its guns on the Yahoo bid, and Finerman, who owns stock in YHOO, hopes the company will make a deal with MSFT. Najarian said MSFT is making plenty of acquisitions other than YHOO.

China:China Life (LFC), China Mobile (CHL)

The group discussed the ways in which growing Chinese independence from the West and rise of the middle class in China will impact the U.S. Seymour would take a look at LFC and CHL and doesn’t think a potential slowdown in China would adversely affect the U.S.

Trader Radar: Boston Beer (SAM) traded at seven times its average daily volume.

Kris Jenner Managing Director of Health Sciences Fund at T. Rowe Price with stocks Humana (HUM), Well Point (WPT), Coventry (CVH), Cigna (CI)

When asked how Humana could have offered strong guidance and cut their forecasts a month later, Kris Jenner pointed out that both WPT and HUM miscalculated their costs and the company’s thin margins caused these errors to impact the stocks dramatically. Jenner says this is not a sector-wide problem, and sees an upside in CI, CVH and HUM, all of which could rise 25% in the upcoming year.

Emerging Top 20: Seymour listed the top 20 most influential emerging market companies: Gazprom (OGZPY), Vale (RIO), China Mobile (CHL), Petrobras (PBR), POSCO (PKX), Amer Movil (AMX), Taiwan Semi (TSM), Banco Bradesco (BBD), Cemex (CMX), Tenaris (TSM), Infosys (INFY), Televisa (TV), Sasol (SSL), Tata Communications (TCL), Vimple-Communications (VIP), Aracruz (ARA), Embraer (ERJ), Kookmin Bank (KB) and Minera de Chile (SQM).

Pops: Thornburg Mortgage (TMA), Dendreon (DNDN), Capital One (COF), Cameron International Corp. (CAM), Garmin (GRMN) and Cash America International (CSH).

Drops: Pfizer (PFE) and Tesoro (TSO).

Final Trade: Microsoft (MSFT) [Finerman], Crocs (CROX) [Adami], Chunghwa Telecom Co (CHT), [Seymour] and DuPont (DD), [Najarian]

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