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tv   Fast Money Halftime Report  CNBC  April 24, 2015 12:00pm-1:01pm EDT

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>> yeah. and they're saying it's still the first inning of the cloud and there are a lot more innings in a baseball game. >> it will be fun to watch. what a week and more as we get set for apple and twitter and go pro and visa next week. have a great weekend. that does it for "squawk alley," let's get to melissa lee and the half. ♪ ♪ >> welcome to the halftime report on this friday, i'm melissa lee in for scott wopner. jim lebenthal. josh brown, and najarian brothers and our game plan looks like this bezos delivers, amazon is making it rain in the cloud and the stock is surging to an all-time high. cutting the cord, no deal for comcast and time warner, what's the cable trade now? we'll break it down.
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and look at the markets, the nasdaq is just three points off of a new high. a record high. these four stocks all reported earnings last night. dr. jay, how far can we go with support like this four major stocks of the nasdaq 100 coming in with better-than-expected earnings surging on the back of them. >> take look at microsoft. of those that reported i thought this was one of the most impressive. microsoft trades at a 17 pe. when you're talking bubbling and whether or not it's a bubble. this one looks very attractive to me, probably into the low to mid 50s. in other words, breaking through 52-week highs, i'm not saying today, but this year, think the stock has 55 as the target on it. >> did we reset on microsoft? the expectations going in were so incredibly low, they warned in january about slowing revenue growth for the rest of the year and here we are. >> well melissa, this is about expectations and i think expectations across all of what
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i call old-line tech are very low so you've seen outperformance after earnings from microsoft. from ibm and you know, qualcomm after what was perceived to be a very lousy quarter climbed back. a think you're seeing a lot of investors see the value in old-line tech, despite the growth rates are not what they were 15, 20 years ago. i like the valuations i see there. the only thing i get concerned about is in my own portfolio i think, is there too much concentration there? i think we need to look further afield than just old-line tech. >> are you a buyer of old-line tech? you seem like a new-tech guy. not just old-line tech. >> i'm both. i agree with jim, he made a key point. you need a lot of skepticism in order to produce the types of fireworks that we're seeing on a day like today. it's a great day for billionaires, schultz, bezos, page and brem, bomber, gates, these guys are seeing massive
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increases in their net worth since the market opened this morning. the reason for that is low expectations, this is the second best day for amazon since 2009. 1400 some-odd trading days ago. the best day for microsoft since the market bottomed in april of 2009. you don't get it without a lot of people saying give me a reason to be in these names. now i think the conversation switches it becomes give me a reason not to. i don't have one. >> rob, how are you feeling about technology and valuation, especially on a day when we're looking at 5099 as the intraday high in the nasdaq? >> technology still trades at a discount to the market. it's a hugely disruptive force. it's unlocking economic potential in no way that we've ever seen before. so we're big believers that it will continue to do so. it's one of our favorite sectors, we think can you stay long. >> let's get more on one of the stocks posting good earnings yesterday, amazon. the cloud seemed to be parting,
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the street likes what it is seeing. we have an analyst at janney capital market and joins us on the phone. you like many other analysts really pinpoint aws, amazon web services, aka the cloud business as the reason why you like amazon so much. if you look at amazon share price, how much of that price do you think is cloud versus the core old-line retail business? >> thanks, melissa, thanks for having me. it's pretty interesting if you look at it that way. you know the cloud business in that, we've got more detail. could be worth something about maybe 60 billion, 80 billion in total valuation. but honestly, the upgrade today was really on three points. to the north american retail margins were improving. even though they were lower than we thought, they were improving and strong growth in the third-party marketplace. on top of the aws profitability.
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>> in terms of the improving margins, a lot of that is just recovery from the spending free sprooe that amazon did with the firephone and the results on that not coming in too well. are you confident that bezos won't ramp that up once again with other project? or other device, that he wants to sell to consumers? >> i mean that's clearly a risk. they might come back in on the phone. but we're seeing good productivity gains. and you can see it in fulfillment and we talked a lot about teva and talks in productivity. from the core business we see the retail market sim proving. we'll keep an eye on some of the new technology products. >> sean, we're going to leave it there, sean mill, who upgraded amazon. jp morgan is one that upgraded, was neutral for two years and decided today that it would upgrade. >> well melissa, i feel a little like an idiot myself because i've been neutral for the last
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two quarters, i thought last quarter was a head fake. now we're seeing it clearly is not. amazon is primed, pun intended to make money from all of these initiatives beyond just plain retail. i don't see anything to interrupt the upward trend of the stock right now. while i don't own it and i don't like buying rising stocks like this, i think it is something comfortable to own. >> i feel like a lot of this is because of the cloud business, aws. what if you wanted to invest in cloud, but did not want to buy into amazon? >> then you buy markt because of the growth in their cloud business. sacha nadella is knocking it out of the park. the growth on their cloud business is immense, that's the delivery vehicle for all the product. >> comcast time warner deal, we go to amon jobbers in washington, d.c. >> the timing of how the comcast time warner deal fell apart in washington. the key take-away is that staff
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briefed attorney general eric holder some weeks ago on the recommendation they would like to block the comcast/time warner merger. accord together doj official i talked to, staff went to the attorney general and said if we go in this direction, will you support us? and the attorney general said yes, i'm with you according to this source. and earlier this week at the meeting wednesday, that attra attracted so much attention, it was 3:00 on wednesday, not at the major doj building, it was at a separate facility on 5th street and that's where the department of justice officials told comcast executives that they did not think the deal was going to go forward. they offered comcast executives be a opportunity for a follow-up meeting in washington, d.c. with doj officials. that would have been part of the process that comcast was entitled to. but by late last night. they say they got a call from comcast, requesting a conference call early this morning. that conference call happened at
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7:30 this morning. and that's when the department of justice i'm told got the official word now that comcast was backing out of its time warner deal. >> amon, thanks for that. we'll have more on the comcast/time warner story next with david faber and is netflix the big winner out of all of this? and a top analyst who pritoppeds price earnings target. and a tractor supply bull, josh will defend his position. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro.
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no deal for comcast and time warner cable. our david faber is at the nyse with the latest on the story. david? >> you know the focus now is what all the companies do, now that the deal is no longer happening. nye reporting is focused on time warner cable to large extent. which did expect to no longer be independent. right now it is independent and perhaps will be for some time. although it does appear that charter communications is very much interested in continuing its halted pursuit of time warner cable. that pursuit continued until comcast agreed to acquire time warner cable in february of 2014. and it very well may pick up yet again. it's not expected to be a public offer of any kind. but privately, the expectations are, or i should say
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expectations are that charter will privately explore whether or not there's a deal to be done for time warner cable. time warner cable for its part will say let's see what the earnings are like next week first of all, they have more cash in their balance sheet. hence you could use more leverage to acquire it the comcast deal was worth about $170 a share at the time warner cable investors at the 275 ratio. expectations are they're going to want at least 170, if not more, will charter be in a position to pay that? that remains somewhat unclear. given the move up in that stock price since the last offer, it would be worth 150 based on t terms of their offer back in january of 2014. my expectations are that things are going to move rather quickly here. and that if in fact charter as i believe is interested in acquiring time warner cable, it will make those inquiries rather quickly. the question always comes down to price and in the past time
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warner cable has shown it is amenable to doing what it thinks is in the best interests of its shareholders. it thought selling to comcast at 159 at the time all in stock was in its best interests. now it's got to figure out what it wants to do from here. back to you. >> david faber with the latest. let's talk about time warner cable, josh. it seems like in almost scenario of the bunch this one will emerge the best. because it is in play. >> it's in play. it's got incredible assets that can't be repeated or replicated elsewhere. and it's got a great business. if nothing happens. soy think the market is telling you that. i'm sure some people would have liked to have seen a deal get done. but it looks like they'll accept any deal at any point down the road at this point. a and they probably might get a better one. >> breaking news, jane wells moore on the wynn saga. jane? >> elaine wynn has lost her seat on the board of director, a seat she's had for 13 years at the
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annual meeting at the encore they've tall idea a preliminary vote. it says that the board prevails, the board had wanted two current board members re-elected. they wanted elaine wynn not on the board any more. she managed to nominate herself. why did the board want elaine out? because she filed a lawsuit against the company and steve wynn a few years ago to try to get out of a divorce settlement she has with steve wynn, so she would be able to sell more shares if she wanted to. she owns about 9% to 10% of the company. she staged a fierce proxy fight. it was amazing, the letter going back and forth to shareholders, at such a point that institutional shareholder services said don't vote for any of these people. but the two current board members put up by the board, ted vertu and jay hagenbach have been re-elected the elaine wynn has not. the for the rank and file, individual shareholders, many of them supported elaine wynn, they feel she's the only person on the board who could make steve
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wynn do anything. they have lost out. that was her argument. she also pointed out she was the only woman on the board. and the board of directors has promised that by the end of the year, it will add a board member who is not a white male. that's the latest from now, elaine wynn loses. back to you. >> jane wells, thanks so much. we have a conference call every morning ahead of the halftime report. you guys do. we ask who owned these stocks. all of you said we do not own them. there's got to be a reason. why? >> you know, i mean it's not the reason you might expect. it's not an industry that i personally want to get behind, gambling. i'm not going to temperize or moralize, i don't want to be involved with it. >> josh your reasons? >> a guess a little more simple than that. it acts terribly. it goes down on good news, it goes down on bad news, it's been in a down trend since the beginning of 2014. i'm happy to re-evaluate it but it's not cheap despite the fact
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that it's come down this much. i don't have a problem with the company or its business, it's not a good stock. >> you throw into the mix corruption allegations, smoking bans to take full effect by the end of the year and you have a potpourri of bad fourses against the sector. >>. >> right now nothing really percolating with it. coming up, tech on a tear, the nasdaq continuing to climb higher. apple reports on monday. the trades on the tech giant coming up. plus, potential coca-cola acquisitions, the word from chairman and ceo muktar kent is next. woman: it's been a journey to get where i am. and i didn't get here alone. there were people who listened along the way. people who gave me options. kept me on track.
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even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. it's josh's jam for this friday. after kraft times can we expect more consolidation in the food and beverage industry? sara isen joins us from atlanta with more.
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>> one of the most bullish and buzzy stories when it comes to coke is the recent investmentses in monster energy drinks and green mountain. i asked the ceo why he didn't just buy the companies outright. >> coca-cola is about power of partnerships, that's the best way to describe the coca-cola system around the world. power of partnerships with our bonding partners, all our retail partners and with great technology partners, like curing, green mountain or energy partner like monster. >> now speaking of partnerships, another one that a lot of the executives here at coke are talking up as the joint venture with fera life. new premium milk, expensish, high in protein. so of course the question is who's next. who going to be partnering with coke, where does the m&a speculation coming in? a lot of talk revolves around whitewave, which makes the
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almond milks, alternative milks, this is now a $6 billion company. they wouldn't mention it by name. or speculation, that's one that a lot of analysts are pointing to, especially while coke has been talking up fairlife and the very story. coke is investing heavily behind these growing brands to offset some of the declines in soda. tea is another hot growth category, melissa. a lot of talk about its two golden tea brand, groelden tea brands and of course the honest tea brands and the growth they're seeing there, next to the slower growth they've been seeing in the soft drink business. >> it's interesting he said he's behind partnerships when they have done big deals in the past to get away from the carbonated business, they did the smartwater acquisition and they were pilloried for making such an expensive one. but that's one that turned out well for the company. here he is saying partnerships are the way to go at this point
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it sounds like he's hedging. >> a little bit. you're right. and they're still getting the benefit and the cash flow from the investments in some of these companies and they're accessing the growth and the technology. so this new idea of a big bet in equity stake seems to be what is in favor right now and what muktar kent is focused on. another name to throw out there that people in the industry talk about is arizona iced tea. which has 24% of the ready-made tea category in the united states. because there's been a big put over the two founders of arizona. it looks like in the last week or so it was settled and one partner is going to buy out the other partner. could potentially put arizona in play from one of the big beverage makers. the executives here don't talk about the speculation and the brands, but tea is one of the fastest-growing drink categories. >> sara eisen, thanks for that. the exclusive with mukt ar kent. in terms of consolidation, where do you go, jim? >> talking about the big soda companies buying the little
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niche-y products, i don't see any of these acquisitions moving the needle for something like coke. coke is a good dividend play, other than that i don't see any upside to it. >> rob, what do you think about the consumer products area? there's a lot of consolidation within this area if you look more broadly. such as at the food companies. >> i think you're seeing consolidation across all the industries. look at the m&a activity. it's driving anything. we're going to do $3.7 trillion in deals estimated this year. we're going to be back on pace, if not very close to 2007 levels. think that continues to support and drive markets. there's a transition happening between macro impact in something that rich pzena talked about yesterday, which is valuation and selectist. there's dispersion across asset classes in terms of growth and return. what you're going to see is opportunities for stock pickers to get in there and make a difference when the absolute level of growth is low. >> so in terms of stock picking, buy or sell coca-cola? >> i think you continue to own
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it. i don't think you buy it here. just like a dividend play like jim said. this thing has a volatility level of like a bond, about a single-digit volatility. what it means to me it's a great cover-writing candidate, but not a great investment. >> four stocks maded headlines, american airlines beats street estimates. >> you've got good passenger growth. good capacity utilization and fuel oil is down. the problem here is i don't know that anything else gets any better for airlines. i've owned airlines over the years, this is as good as i've ever seen it. i don't like owning it any more here. >> 3-d systems drastically lowering guidance into earnings, josh brown? >> stock is a train wreck. do this every quarter. they have a real problem with giving guidance and then meeting it. i don't think they'll make the full-year. they're coming out and blaming oil and fx, which is hilarious when you consider what the
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company is and if you look at a chart, this has been in a down trend it kind of looks like the career of iggy azalea. peaked early in 2014 -- >> you don't think oil is going to impact the cost for the stuff which you stick in the printer, which is primarily plastic. >> this is a growth company. that should not matter. if you have fast-enough growth you can weather things like fx and oil. this company is not able to weather anything. i don't like it i would not be a buyer on this. >> biojen is a miss on the top and the bottom. >> product sales are up 24%. you would have said blow-out quarter. but people's numbers and estimates were just too high. so biogen is taking a breather. one of those rare breathers. >> will you buy the breathe centre. >> i would like to buy it. i would like to buy it in the 370s, but it got down to 395. it bounced back up over 400.
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if it took another leg down, i would buy it. >> 50-day has always been support on this. ten-year yield taking a big dip today, rob? >> it's all about policy. policy is all about the data. the data was weak in the first quarter. we think that was transitory. it's going to come back. and we think you're going to see rates tighten to 2.2. it's time for lift-off. i don't think it ultimately matters. one of the interesting stories here is that persistence, persistently low rates are bad for the economy. companies will not spend, investors will oversave as a result. and so i think as rates rise and normalize you could see an acceleration in the economic activity. and that's an interesting story on the other side of this. coming up, a top apple analyst joins us ahead of the tech giant's earnings report on monday. plus today is the day the apple watch is ships to customer who is preordered and text chek out west hollywood store, maxfield
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one of the first luxury retail stores selling them. and the cnbc app for the apple watch is available now for download. use kers can get all the data rt on their wrists. stay tuned. thank yoand my daddy. sailor, thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them. our world-class service earned usaa the top spot in a study of the most recommended large companies in america. if you're current or former military,
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hi, everyone, i'm sue herera, here's your news update for this hour. dozens of migrants rescued at sea by the italian coast guard arrived in sicily. the group of 84 disembarked italy. they expect as many as 5,000 my grach grants a week could arrive from west africa. washington dismissed russian warnings that it could be destabilizing. the pentagon announced 300 u.s. army paratroopers had begun long-planned training for the ukrainian guard. think you're having a good day? check out amazon's chief jeff
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bezos. his holdings rose by about $5 billion today. now worth more than $37 billion. which is more than the individual market cap of three-quarters of s&p 500 companies. wow. the hubble telescope turns 25 today it took almost three years to repair the early problems, but now it is sending back spectacular pictures of outer space. it orbits the earth once every 97 minutes. happy birthday, hubble. and that's your cnbc news update this hour. back to you. >> thank you very much. to am and the apple watch. expected to be delivered to some of the first customers who preordered the watch today. it's also available at exclusive luxury stores. one is maxfield in los angeles. analysts estimate apple's preorder sales are close to one million watches. what do we think of the rollout so far? dr. j, i know you're going to say it's a piece of -- >> no. >> you said it in the past. >> i did.
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but i'll be nice they are time. there will be millions of people that will buy this watch and wonder why they did i think a lot of them wandering around will be made fun of, much like people wandering around with google glass. however the next iteration is what people will really want, mel. the first one is anybody here on this desk going to get one? >> no. but let me take the handoff from you on that. i think what you're make something a good and elegant point. the estimates for the watch keep going up. and for somebody like me who is an apple owner and has paid little credence to this moving the needle on the stock, it is now reached a threshold where actually i'm starting to pay attention to it it now becomes important to the apple price target. and that's a change. so i think you got to get behind the stock. >> do you think it sets up for disappointment. do you think the estimates are moving higher for good reason? >> i think they're moving higher for good reason. i think what dr. j is saying is that the next wave to come after that this is a reason to get
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behind apple stock right now. >> i think that this is so much bigger than the watch. this is even, even if the watch is not a megaseller this is the first step in wearables, apple is always the company that takes something that other people are trying to do and does it perfectly. we may be able to do it here after we watched google glass flop it doesn't matter how many watches are sold in the first week, month, six months. this is going to change behavior in the first adopter community and i think the second and third watch will be much bigger. >> what's interesting is how many devices, rick reader does a study on how many devices the iphone has been able to replace, hugely disinflationary force in our economy, this watch, right? account watch do as much for that segment as the iphone has done for other segments. cameras, tremendous disinflationary force. >> from the watch to an apple
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price target upgrade. sanford bernstein raising estimates. the analysts behind that call joins us, top-rated hardware analyst. upped his price target to 142 from 135. great to speak with you, from reading your note. it sounds like you believe that wall street is vastly underestimating the leverage in apple's model because of the iphone. in my favorite part of your report is that the stat you have for every one million units sold, iphone units and for every 100 basis point moving gross margin, it moves the needle on revenues and eps in a pretty sizeable way. >> yes. good afternoon melissa. so we, we do think there's a lot of leverage in the iphone. and it's the dominant driver of the economics for apple. and we continue to see the iphone 6 cycle as being pretty robust. you know one of the reasons, an additional significant reason for why we raised our estimates
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and our price target. is that we have a more optimistic view of the average selling price and the margins associated with the watch. so just following on, the previous conversation, think estimates for units for the watch are going up. i'm not so sure there's been enough attention paid to what the margin potential of the watch could be. and we believe that it could be very significant. and apple stock historically, has really moved on gross margin when the stock struggled a couple years ago. it was when there what is was gross margin pressure and everyone got worried. app sl a hardware company. margins are going down. what we see that's encouraging is the watch as well as some other forces, being able to actually push up overall apple gross margins going forward. which we think is underappreciated. >> you're looking at 39.8% in gross margin versus the street estimate. which is 39.5.
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to get back to the stat i cited, for every one million iphones on reported basis, that moves revenues by approximately $630 million. or about three cents a share. to take the other side of this toni, though, margins can improve because of the iwatch. but the overall, what happens to the overall revenue especially as we come on a year anniversary of the release of the iphone 6 and coming up on much tougher comps? >> absolutely. think those are the trade-off issues in the stock. which is, there's going to be a really tough comp. we do believe that the iphone 6 is effectively pulling forward replace mtsz so a that certainly runs the risk that when we anniversary that in the fourth quarter, calendar quarter of this year, that apple revenues could go down. now, on the flip side, you know watch will be all new incremental revenue. and we believe that you know, watch margins, gross margins could be 55%. which is higher than the mid 40s kind of gross margin that we see
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on iphone. and the company overall is about 40%. if you start adding new revenue at 55% gross margin, a, the revenue may be able to beat enough to offset you know, a tough year-over-year comparison in the phone but more importantly there's very rich margins associated with that. and investors care a lot about margins. >> toni, got to leave it there. thank you for your time. we appreciate it. toni saganacci raising his price on apple. it's interesting the way toni walks through the impact of the watch on margins as well as revenue and helping apple offset tough comparisons once we lap one year on the iphone 6. >> i think frankly in my opinion his price target is lower than i would have expected for all the qualitative positives he said. but comps lap quickly. as you get further into the year, it becomes less and less
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of a problem. >> into earnings, options activity saying what? >> there's not a lot of speculative activity yet. it's after the bell next week, on monday. but right now, mel, they're all just basically trading the 130 strike that's expiring this day, today. >> and next week they'll set up that one. >> let's get to the market flash desk for what's moving. >> perigo rejecting mylan's offer made in cash and stock that would have valued the over-the-counter medicines maker at $32 million. perrigo said the offer is below a prior proposal based on unaffected mylan stock price and that shareholders are strongly advised to take no action in relation to the offer. getting all of this as mylan itself is trying to fend off a takeover bid from teva pharmaceutical, which recently made $43 billion for mylan. so shares of perrigo down 3%.
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shares of mylan down 2.5% and shares of teva up 1%. >> a quick note that the m&a activity in the health care space and the biotech and pharma world continues apace and that's why for all of us talking about a bubble or lofty valuations in biotech, that's why they stay at these levels. m&a activity. >> enough to own something like an ivb or -- >> that's a great question and it's a different question. no, i would not be buying these here at these valuations, but i'm just explaining why they haven't come down. after months, many months of us talking about this. coming up, debating tractor supply, the company beating wall street expectations, but is now the time to get into the stock? bulls versus bears. actually josh versus the desk. that's next. but first, a look at the s&p 500 hitting a record intraday high for a second day in a row. [ male announcer ] we know they're out there.
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coming up on power lunch at the top of the hour. the four horsemen of tech, all of them with different growth sto stories. if you had to buy just one, which of these would you have your bet on? and no more half-naked models, abercrombie and fitch announcing a major overhaul of its image. dialing back on the sexy. will they still be able to stand out in a crowded teen retail space? and the apple watch launching today there are already knockoffs on the street. we're going to show you. now back to melissa on fast money halftime report. see you later on "power lunch." let's check the markets once we have mentioned this before, s&p 500 hitting a new intraday high. a second day in a row and they're just about three points, on this day your firm moves to the side on u.s. stocks. >> i wouldn't say to the side.
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we're neutral, still constructive on risk assets, because there's simply no alternative out there. the tena acronym. i think it's naive to not to acknowledge we're in a bit more mature phase of the market as it relates to pricing. 17 times, two times the long-term average. not sailing it's expensive. saying if you want to have better opportunity for return you're going to need to look elsewhere. >> and you're looking at europe. rbs is looking at europe. >> ubs, me, looking at europe. i think you're seeing an environment of accelerating growth. supportive policy. in the earnings cycle is in a much different place than we are here in the u.s. in the eurozone they're trading at 22 percent below peak eps in 2008. we're 26% above. it makes more sense for getting higher returns in the eurozone. >> you know people used to say why fight the fed, why fight mario draghi. same argument, right? you're going to go where the
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assets are going to be inflated. >> i think that's right. but melissa i'll tell you in our firm we've had a long debate about whether we should overweight europe and international developed markets in particular. we've decided that the opportunity isn't great enough to merit an overweight. that doing so would be market timing in our opinion. having said that, all of these things together, rob your comments about this is just a prudent thing to do in the mature cycle, phase of the cycle we're in right now. it speaks to having a strategic asset allocation, josh, you've said this many times before. you're supposed to have money in american stocks, you're supposed to have money in european stocks. and other asset classes as well. it's not a time to tactically overweight one of those versus the other. >> neutral, u.s. stocks, josh? >> so we run a global asset allocation model. in our equity portion we're usually 50% u.s. stocks, that could change with market activity. that gives us room to own things in europe and japan and that
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trade is going gangbusters this year. and so efa is up 10.8% looking at emerging markets. you have emerging markets, small caps up 14%. there's huge money being made there a lot of different ways to go at this trade. but last year at the end of the year, you come off of like two or three years where outside of u.s. and japan, nothing was working. a lot of people threw in the towel. that's when we were talking about this being where the puck was headed. thankfully that's playing out so far, four months into the year. >> let's get to a stock we don't talk about much, why not? tractor supply beating earnings estimates. should you be betting the farm? i had to get that in. or is it about to get stuck in the weeds? we're lating the traders pick the debate. today is josh brown's turn. he picked tsco, the ticker. >> having grown up on a farm in new york city, i -- no, so -- >> upper west side? >> new york city we had a little
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tract of herbs in central park. river once in a while you come across a company where everything is heading in your favor. and that is absolutely the case with tsco, this is an under-followed, under-appreciated name. it's been on the radar of a lot of technicians and a lot of small and mid cap analysts but that's pretty much it. we don't talk about it on the show, we probably will in the future. it's become the home depot of rural america and they've got a lot of good things to say about how the year is shaping up. they opened 41 stores in the first quarter. they're on track to open 110. q 1 same-store sales up 5.7% this is with no benefit from any kind of strength in farm incomes or agricultural commodities. once that kicks in. that's like a whole another leg to the story. this is just them building out on their own volition. they're not getting the tail wind. when they do, it's going to make it bigger to people who haven't paid attention just yet so it
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broke above 91. i think it's at least a $100 name. and i think any entry on weakness, it's down a little bit today i think this is the type of environment you want to own names like this that have their own growth and don't need the economy to help them. >> are you worried about the impact of the avian flu, you have minnesota declaring a state of emergency because affecting however many chickens, 34,000 turkeys in iowa are being affected. if there's a major bird kill that's going to impact the demand for feed. >> i'm always worried, look at the bags under my eyes. there's always going to be something to worry about. sometimes the orange crop freezes in florida. and sometimes there's a scare as far as hoof and mouth disease. you're never going to be in the space and not have some kind of issue. but the beauty of a company like this is they're not just catering to one subset of farming. they're doing everything from commercial to the hobbyist farm like my friend jim, who likes to
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ride on tractors. i think there's enough diversity. >> that i get from tractor supply. >> they sell cowboy boots as well. >> they sell bird killers. >> it's a great company. i love these stories. >> you are a gentleman farmer. >> i am a gentleman farmer. i have a 38-horsepower tractor. that's a big difference, josh, between a 300-horsepower factor found on an industrial farm that would care about hoof and mouth disease or avian flu or any of these things. why am i pointing that out? not because i want to talk about the size of my tract. i want to talk about the fact that tractor supply caters to people like me, not big industrial farms. >> big tractor, big farm. >> we need to learn from our mistakes, but that's okay. drove the distinction here, it is not selling 300-horsepower john deere tractors to people. it's a good name, where you go do buy lee jeans and cowboy
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boots. >> you like tsco? >> i love the stores, but this is pricey. >> you want to shoot against it? jim's bringing up the point of pe of 33. josh does mention the the poina p/e of 33. 31 new stores. >> multiples earned them in this market. >> and growing and the economy -- >> people that have bet on them when they were at a lower price have benefited all the way up to here. >> so you like it? >> i can't pull the trigger and buy it up here at 91 bucks. >> that's why josh is alone on this one. coming up next, the battle for the top trader continues in the halftime portfolio challenge. josh brown has the best trade of the week. stick around to find out what it is. halftime is back after this.
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time to take a look at the leaderboard in our halftime portfolio competition. some of the best holdings for this week. josh comes out on top. your starbucks holding is up 9%. >> i did that, all by myself. >> yay, josh! big boy! >> how about that? >> what do you do with this? >> i hold it. i've set the rules in advance for the way i'm going to participate in the fantasy portfolio this year. so 20% gains, i'm taking. i've only had one with etna. starbucks, i think i'm up 14% from the beginning of the year. and if i see 20, unfortunately, i'll have to part with it. i don't think in real life, i would, though, but that's kind of how i'm playing it. the thing is, there are other names that are coming through my
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screen that i think have more upside potential. but i'm really happy to be in starbucks and thank you, whether schultz. >> ibm's up next here, up 4% after earnings this week. this is jim's holding. >> and it's one i've believed in for quite some time. jenny and the whole team there a undergoing a multi-year transition. i think what you've seen this week is people paying less attention to where we've been and more attention to where we're going. so less attention to the revenue decline year over year, much more attention to the growth and strategic initiatives, like cloud, like big data, like watson. and i think it continues higher. >> coming up next, just three hours left in the trading day. we've got your game plan for the second half, coming up. plus, here's a look at the earnings on tap for next week, big week including apple, twitter, ford, exxon, and many more. halftime back right after this. legalzoom has helped start ] over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom.
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if legalzoom has your back.s, over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here. halftime is almost over. here's your game plan for the rest of the trading day.
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>> what are you looking at for the second half of the trading day? what are you focused on for next week? >> as i said earlier, the watch for apple, i think it's just going to continue to gain momentum. i think if it begets momentum, people hear about us. they want to go buy the watch. i'm getting behind apple as a long position here. >> jv? >> i'll reiterate my comments on tractor sly. i think it's a buy on red and i'll cede the rest of my time with dr. john najarian. >> rio tinto is what i'm focused on, rio. take a look at some of these mining plays lately, they're looking kind of tasty. >> the iron ores in particular. >> great call by you. so this one, unusual option activity. so we were here, most of our subs have bought it. i haven't got it yet, because they raced to have me on it. so i'm trying to get i it. >> we are intraday on the s&p 500, nasdaq, new highs here. >> i'm going to go across the pond, though. >> how far across the pond, rob?
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>> pretty far. >> like a 20-hour plane ride far. >> yes. so it's time to nibble on em. the risk of being underweight in asset class that is underperformed, looks cheap, is clearly turning and is volatile is just too great. it's going to move from the chinas and the russias, which have led year-to-date, and on to the indias and taiwan, which are more exposed to reform and recovery abroad. >> so when you're talking about to clients about, how, this has performed really poorly, it's time to amp up our exposure, that's counterintuitive. i think it's about the time being right. where's the inflection point? and so i think you've seen a lot of negative earnings, we all saw what happened in the taper
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tantrum. that was pretty ugly. it's different this time. rates are going to be controlled. fed's going to be pragmatic, and i think it's time to nibble on em. >> guys, good to see you this afternoon. >> thanks again, mel. >> that does it for us here on halftime report. "power lunch" begins right now. the nasdaq surpassing the closing high and closing in on the all-time high. the index is up 22% in a year, since the 2009 bottom. check that out. up 300%, so time to buy or time to sell. no deal, comcast, our parent company, dropping its bid for time warner cable, in the midst of a major regulatory road block. will there be other buyout targets and what's next in the m&a sector. and a big change for abercrombie & fitch, changing its look, literally! he

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