Morgan Stanley Makes Lehmanade - Fast Money Recap (6/30/08)

Recap of Fast Money, Monday June 30. Click on a stock ticker for more analysis.

Making Lehmanade: Lehman Brothers (LEH), Morgan Stanley (MS), Washington Mutual (WM), Freddie Mac (FRE), Fannie Mae (FNM)

Morgan Stanley recommended buying troubled Lehman brothers and gave the stock an "overweight" rating. Both Pete Najarian and Karen Finerman were surprised by this and did not recommend buying financials. Najarian noted interesting options action in WM and HSBC, but said the sector will not recover until FRE and FNM turn around.

Oil Hits $143: Halliburton (HAL), Schlumberger (SLB), Diamond Offshore (DO), Petrobras (PBR), Chevron (CVX)

On oil's almost consistent rise upward, Guy Adami would buy oil service plays HAL and SLB, even though the valuation is a bit rich. Najarian likes offshore company, DO and Terranova would look at integrated oils PBR and CVX.

Down on the Pharma: Healthcare SPDR ETF (XLV), Merck (MRK), Pfizer (PFE), Teva (TEVA), Celgene (CELG)

With XLV outperforming the market and Merck and Pfizer up on Monday, Finerman thinks healthcare is the place where investors are hiding. Najarian think that the sector is not merely a refuge, but stocks like MRK and Teva have strong catalysts. Guy Adami adds he likes Celgene.

Telecom Calling: AT & T (T)

Credit Suisse upgraded the telecom sector and Guy Adami likes AT &T as a defensive play with a $40 target.

Go Google (GOOG)

Citigroup named Google as its favorite internet stock, and analyst Mark Mahaney says the company is poised to meet its estimates and excel in mobile search and display advertising. He added, "I think there's money in the bank for Google in search if they can duplicate that on mobile," Mahaney says. That’s the homerun for them!" The group was bullish on Google, with the exception of Finerman, who thinks the valuations are a bit rich.

Second half of 2008 plays: Goldman Sachs (GS), Morgan (MS), JP Morgan (JPM)

Sandler O'Neil Securities Analyst Jeff Harte says write downs in financials will continue for the second half of the year, but will slow down somewhat. However, recovery still seems remote. He predicts M & A activity, but mainly among regional banks. Goldman, Morgan and J.P Morgan should be the survivors among the financials. Terranova likes JPM, Finerman owns shares of Citi, but Najarian won't touch the sector.

$200 Oil? Coal (KOL), Natural Gas (UNG), Golar (GLNG)

If oil keeps rising, Terranova would buy KOL and UNG. He added natural gas tends to drop in July, and would use the drop as a buying opportunity. Finerman would choose Golar as a liquid natural gas play and Adami is bullish on oil services.

All-American Stock: United Technologies (UTX)

In honor of Independence day, Adami began a three part series on "All-American stocks." UTX produces a wide range for products, including air conditioners, security systems and military helicopters. The company also helps employees and their children obtain college scholarships. UTX trades at 11.5 forward earnings and has a backlog of $60 billion.

Top 3 for Second Half: Hess (HES) Petrobras, Aecom (ACM) Technologies

According to Dan Fitzpatrick's technical analysis, not many stocks are trading above their 40 day moving averages, and predicts stocks in general will go lower. However, three companies are at the head of the class and should go higher: Hess, Petrobras and Aecom.

Final Trade: Joe Terranova: General Mills (GIS), Adami: AT&T (T), Finerman: Golar (GLNG), Pete Najarian: Elan (ELN)

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Comments

[muley101]

I would not buy financials until the XLF has retraced back above $28. Even then I would be cautious.