Icahn on Yahoo's Shenanigans - Fast Money Recap (6/5/08)

by: Miriam Metzinger

Recap of CNBC's Fast Money, Wednesday June 5.

Tech Tear: Intel (NASDAQ:INTC), Broadcom (BRCM), Juniper (NYSE:JNPR), Apple (NASDAQ:AAPL), Research in Motion (RIMM)

Although the Dow fell, tech rallied, giving some the hope that consumer confidence is rising. Pete Najarian says the move now is out of energy and commodities and into tech, and he thinks BRCM, INTC, CSCO and JNPR are going higher. He also noted strong performance by Apple and RIMM. Guy Adami would buy Intel. Jeff Macke agreed that the commodities trade is over.

Lehman Lemming: Lehman Brothers (LEH)

There is concern that Lehman might be another Bear Stearns story as it sells off risky assets and cuts proprietary trading. However, shares rallied on news Loomis Sayles has been buying Lehman’s debt. Najarian would wait to get into financials because of increasing volatility. Finerman thinks Lehman needs to earn back The Street’s confidence. Macke thinks ratings agencies like Moody’s are preventing a comeback in financials.

Dang Yang: Yahoo (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT)

Carl Icahn blames Yahoo CEO for getting in the way of the proposed merger between Microsoft and Yahoo. Jeff Macke thinks Icahn is going to get his way. Najarian says the fracas over Yahoo is obscuring the strength of Microsoft, and thinks MSFT is undervalued and is a buy.

Crude Gets Kicked: Tesoro (NYSE:TSO), Chesapeake Energy (NYSE:CHK) SandRidge Energy (NYSE:SD)

Crude fell for the second day down to $122 on news of rise in inventories, decline in oil stocks and lowered demand as the consumer tires of paying high prices at the pump. Adami likes refiners like Tesoro at $25. Najarian says insider buying in natural gas stocks such as CHK and SD is bullish news. Macke can’t see a long story for oil as the government cracks down on oil trading.

Steel’s the Deal: Nucor (NYSE:NUE), U.S. Steel (NYSE:X)

Steel looks strong, and although Adami says he isn’t liking NUE’s price action after its secondary, the stock is a better value than X. He expects NUE to make an acquisition.

Heat in the Kitchen: Williams – Sonoma (NYSE:WSM)

Willams-Sonoma’s profit fell 42% this quarter and it lowered its 2008 revenue forecast. Macke says WSM is the wrong place at the wrong time.

Peanut Butter, Jelly and Coffee: J.M Smucker (NYSE:SJM), Procter & Gamble (NYSE:PG)

Procter & Gamble shares jumped on the news J.M Smucker will buy PG’s Folger’s coffee. Smucker bought the Jif brand from PG in 2002.


On news that trading volume in May was the lowest so far this year, NYSE shares fell, but Rich Repetto, Sandler O'Neill exchange analyst, thinks this trend will reverse and suggests long-term investors buy NYSE at these levels. He praised the company for cutting costs and says he likes the business models and the lack of credit risk at the exchanges. Repetto thinks CME will seem cheap a year from now. Finerman noted NYSE’s loss of market share and Macke is still looking for a growth signal for the exchanges, which are priced like growth stories.

Icahn Speaks

Billionaire activist investor Carl Icahn continued his criticism of Yahoo’s board in a letter saying the company’s costly severance plan drove up costs and prevented a potential deal with Microsoft. He says he doesn’t understand the lengths Yahoo has gone to interfere with the deal, and doesn’t think a hybrid alternative deal will be good for the company. “I believe Yahoo is a very strategic and important acquisition for Microsoft and eventually I believe (the deal) will happen,” said Icahn. He added acquiring Yahoo is the only way Microsoft can compete with Google. With the “shenanigans” going on at Yahoo, Icahn comments, a new board might be the best way to get the deal done.

Trader Radar: Bob Evans (NASDAQ:BOBE) was one of the most actively traded stocks ont eh Nasdaq on Wednesday.

Is Lehman a Lemon?

While Fox-Pitt Kelton securities industry analyst David Trone is bearish on Lehman, he doesn’t see another Bear Stearns scenario happening. He added, “They seem to have troubled assets and there could be a scenario in the second half of the year where commercial credit rolls over. That’s the second shoe that could drop." While he does see a potential trade in Lehman, Trone says the panic factor is worth considering.

Drought Plays: Monsanto (NYSE:MON), Lindsay (NYSE:LNN), Pentair (NYSE:PNR)

The group discussed how to play a potential drought. Najarian said MON has had a big run and suggested LNN which produces equipment for irrigation. Although it has some housing exposure, Adami thinks PNR might be a buy.

What Are the Options? Alpha Natural Resources (ANR), Peabody Energy BTU), Starwood (HOT), Marriott (NYSE:MAR)

Stacey Gilbert of Susquehanna Financial Group discussed options and says there has been heavy call activity in ANR and BTU. She prefers BTU and Najarian prefers ANR. She added HOT and MAR have increased call activity on rumors of a potential merger. She prefers HOT and Najarian likes both.

Final Trade: Macke: Disney (NYSE:DIS), Adami: Starwood, Finerman and Najarian: Microsoft

Seeking Alpha is not affiliated with CNBC, or Fast Money