What to Do About Yahoo? - Fast Money Recap (5/5/08)

by: Miriam Metzinger

Recap of CNBC's Fast Money, Monday May 5. Click on a stock ticker for more analysis.

Microsoft (NASDAQ:MSFT), Yahoo (YHOO), Google (NASDAQ:GOOG), Cisco (NASDAQ:CSCO)

Jeff Macke would sell Yahoo after its merger deal with MSFT fell flat, and would get into MSFT, although the company has to rebuild confidence. Guy Adami said the best way MSFT could accomplish this would be to buy back stock. Finerman sold Yahoo on its surprising strength and Pete Najarian noted MSFT didn’t rally, and therefore he suspects the deal might go through after all. Finerman thinks Yahoo shareholders may turn nasty and the Yahoo Board is in trouble. Google jumped on the news and Najarian thinks tech stocks are back. He added that he thinks the Cisco report will be positive because of bullishness sin the wireless sector. Macke would sell the stock on a 8% gain and would buy it back lower. Adami thinks CSCO will give a good report, but may be vulnerable to bad news.

Bank of America (NYSE:BAC), Citigroup (NYSE:C), AIG (NYSE:AIG), Countrywide Financial (CFC)

Financial stocks BAC, C and AIG took a hit on Monday, and Finerman discussed doubts about BAC’s offer to buy CFC. Adami doesn’t see an upside for CFC.

Sprint (NYSE:S), AT&T (NYSE:T), Verizon (NYSE:VZ), Deutsche Telekom (DT)

Macke would sell Sprint, even though it is proposing to spin off part of the company, because he thinks the move will not help. He would buy T and VZ. Najarian said DT would be the top telecom if it bought Sprint.

U.S. Oil Fund (NYSEARCA:OIL), Alpha Natural Resources (ANR), Walter Industries (NYSE:WLT), Joy Global (JOYG), Bucyrus (NASDAQ:BUCY), Cleveland-Cliffs (NYSE:CLF)

Due to unrest in Nigeria, oil jumped to nearly $120. CNBC’s Addison Armstrong said Monday’s rally didn’t inspire confidence because of low volume, and he thinks those who believe oil has further to go should short the airlines. Macke is bullish on USO, while Amrstrong would short refiners, since the rising costs will hurt margins. Adami likes JOYG and BUCY, and Najarian would buy CLF on a pullback.

Marvel (MVL), Hasbro (NASDAQ:HAS), Disney (NYSE:DIS), News Corp (NASDAQ:NWS)

Macke is bullish on DIS as a long-term investment and likes the company’s diversified revenue. Najarian is bullish on DIS because of ESPN and summer movies and notes the price-to-earnings ratio of 16 is a plus. Adami praised the company’s valuation and operating revenue. Najarian is bearish on NWS.

MVL climbed 9% on the successful opening of Iron Man this weekend, but Macke is puzzled that HAS has yet to see an upside, since stores are sold out of Iron Man toys.

Wal-Mart (NYSE:WMT), UPS (NYSE:UPS), Hewlett-Packard (NYSE:HPQ), McDonald’s (NYSE:MCD)

Steven Cortes, head of Veracruz Research discussed his thesis that the American market is becoming a value asset and is bouncing back as war spending is stabilizing and the Fed is slowing its rate cuts. He predicts the dollar will be back and he would invest in companies such as WMT and UPS with significant domestic exposure. Adami reiterated his prediction that the dollar will recover in the second part of the year, but Najarian said it is too early to buy into a recovery. Macke said Cortes’ theory, if true, will be bad news for HPQ and MCD.

Trader Radar: Pfizer (NYSE:PFE) traded at unusual volume on Monday.

Cemex (NYSE:CX), American Movil (NYSE:AMX)

In honor of Cinco de Mayo, Tim Seymour said bullish housing and energy reform are driving the Mexican economy and would buy CX, a cement company and other Mexican infrastructure stocks. He likes AMX. Macke prefers Wal-Mart to either of these stocks.

Final Trade: Macke: Hasbro, Adami: Anheuser-Busch (NYSE:BUD), Finerman: ValueClick (VCLK), Najarian: AT&T

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