tv Fast Money Halftime Report CNBC January 19, 2016 12:00pm-1:01pm EST
they do have earnings tomorrow, though. interesting move. >> big blue. netflix. >> we're going to get a long way towards the tech narrative. we've got a growth company reporting and non growth company. >> that's it for us here at post nine. let's get back to headquarters. scott and "the half." ♪ >> let's meet our starting line-up for today. joe is here along with stephanie and john and pete. our game plan looks like this. the netflix download. can the top stock of the past two years keep the momentum going? we've got your trade ahead of tonight's numbers. calls of the day, the street weighing in on apple, mcdonald's, shake shack, and more this hour. now our experts decide whether the analysts got them right. we begin with an attempt at bounce back for the bulls. days of selling giving ways to gains today as investors react to that china data and the state of the global economy. there's your picture at this hour. dow well off its best levels.
still up about 100. s&p, nasdaq positive. crude remains the big story. was positive. rolled over negative. sits there by nearly 1%. comes down to this. is a recession in the cards, or is this really a growth scare soon to subside as earnings pick up in ernest? pete, is now the time to buy and believe or sell and protect? >> i would say more on the buy and believe, but i don't think right now is actually the time that we actually have to make execute on that, and the reason i say that is i look at where volatility is trading, and volatility itself is very extremely high. 26. we hit 27 today. you look at the ovx. on january 11th we were trading closer towards 49, and here we've been trading ever since then between 60 and 65. there's enough volatility out there right now, scott, but i think you can start looking around. everybody is looking around for opportunities, but i don't think you have to just dive into the market because there's been too many times where i think people have been fooled. is this the bottom? is this the bottom? if you listen to richard anderson today over at delta, he was talking about just how
strong that quarter was, but not only the strength of that quarter, but one of the other things he mentioned was the u.s. economy. everybody is pointing back. you listen to these bank -- jamie dimon talking about the u.s. economy. there's strength here globally. that's what the issue is right now. oil pulling us down. >> joe, david bianco over at deutsche bank shows us the following. we have the graphic made. we expect the next five plus percent s&p price move to be up and soon. we reviewed our s&p target eps and valuation models and find that only a 50% -- a 50 point cut to our 2016 s&p target of 2,200 is warranted. 5% plus move next is up. and soon. you agree? >> possibly. i think at times perfectly with the car dar turning into february and getting the buy back. that has been talked about. february 5th, 75% of the s&p will have reported. the buy backs will return once again. i think it gets boring when you talk about a particular
strategy. i think everyone on the desk and others as part of the show have done an excellent job talking about it, about being patient, about being -- you have said all along you want to be in domestic. s&p 500 companies with the domestic orientation. outperforming international exposure by 500 basis points. it's a boring plan. it's been telegraphed. wait until buybacks come. back drop. you still -- i still hear, you know, larry fink saying on friday stocks could go down another 10% nor. >> it will be important to see
how companies respond and react to good earnings. today is very encouraging but it's one day. united, delta, even the returning to some of the quality banks like a wells fargo or jp morgan, those are reporting good things. people are rewarding it. >> it's barely holding on to a 100 point gain, doc. why can't we sustain any sort of bounce? >> in tremendously oversold conditions. >> well, we know we're well over supplied in crude oil.
>> this isn't something they can put off. they don't have the dollars coming in from the sale of crude oil. you would have to start selling. >> that's a good sign like mr. fink said last week, and i acknowledged that he is a very smart investor. he is not saying the odds are that we go down another 10% from friday. he said there's a chance, which is a different scenario than, say, odds are we're going to be down another 10%. i think -- >> he said there's not enough blood yet. >> i agree with him. >> and i still do. >> probably another 10%.
>> he thinks we need more blood in the streets. >> are you buying stocks, though, today? >> yes. i bought delta, johnson & johnson, micron. i bought stat oil and marathon. mro. >> marathon. >> i bought those because of the dips and because of unusual activity. i like the opportunity that today presented, and i like that crude oil after trading through 29 came back up. now, again, they still need to tap that bank, though, somewhere. pressure will still be on that bottom. >> do we feel like we're getting closer to this uneasiness and worrisome selling? >> i bought a little visa today. if i listened correctly to jp
morgan last week and to bank of america today, the credit card trends were pretty good. they benefitted from the fuel cost savings. i was buying a little bit of procter & gamble. i'm doing a little a little defense and offense and trying to find best in breed where the expectations have come down so much. maybe they have tail winds from some of the macrosituations we're seeing. >> i think the best trade again right now is no trade. i think when you look at the tape right now the decision isn't so much that you trade here. i think it's warranted, but the question comes when do you buy with more aggression? when do you get more aggressive in terms of what your strategy is. i look at the tape today. what's leading the market once again. consumer staples and utilities. that's not the formula where it suggests to you it's a time to get more aggressive. you need to see technology. you need to see energy. >> where is morgan stanley and bank of america? let's throw those up today. earnings, good, right? >> yep. >> surprised the stocks aren't
getting a bigger -- >> especially after the beating that they had already taken. yes. you would expect to see a little bit more. morgan stanley and bank of america, and that coming on the heels of somewhere p morgan last week. the numbers were better than everybody expected. you see some of the numbers when some of the different folks are able to ob the top and bottom line and the share buy-backs. you can buy all these various things that are going on in the financials. you would expect more. it is disappointing. it's why right now -- >> isn't that emblem attic of the market itself. you have good earnings. you can't even get a decent pop out of a place where you think that these stocks are cheap. >> i think there's two things going on with the banks. i think there's a lot of concern about their energy book and their exposure, and you listen to bank of america, that was a real call-out, though, for bank of america relative to the others. i think it's very cheap. the second thing with the bank is rates. if you don't think that the fed will go much more than one or two times this year, it's hard for the yield kufsh curve from steep --
>> literally coming up moments ago. morgan brennan has those headlines. >> hey, scott. the america association and reading of tonnage showing demand for freight increased 1% from november. that's seasonally adjusted. it's up 1.1% from a year earlier. it's an index reading that is just a hair below last january's all-time high. much stronger than november, and that's good news for the holiday season and all the trucking companies exposed to that. ata chief economist bob costello still noting that it wasn't a great year overall with high inventory levels overriding any strength for consumer spend and housing. he expects more pressure on truck freight volumes over the next few months, and here's why this matters so much. with nearly 70% of goods moved by truck, tonnage is an early indicator of u.s. economic activity. according to abigail partners, donald -- over the past 40 years had t has with a lead time of two to five quarters predicted every single recession and recovery of the u.s. economy, so recent readings are suggesting slower growth. also, possible deceleration in
earnings for names like night transportation, somewhere b hunt, warner enterprises, and the trucking stocks release their numbers in coming weeks. back to you. zoog thanks. steph, some people have been looking at the transports and saying this is a leading indicator. you need to pay attention to it as they've gotten demolished. >> well, we've seen the truck tonnage numbers decline for a very long time now. look at the rails themselves. they just have been anallated. down 8%. i think there are the have's and have-not's. i just mentioned delta. carnival crews. i also think that if you look at some kind of best in breed in transports, if you want to go to the rails, union pacific is very interesting. it's yielding 3%. trades at 13 times trading estimates. i think the stock will pop. i'm saying patient. i still own it. i'm staying patient. >> airline etf. down 13%. united is down 20% year-to-date.
>> that one i think is more based upon the ceo and some of the concerns and some of the fact that not everybody has a full understanding. when you look at the delta quarter, the one thing that really stands out for me, scott, that no one is focused on, how about the fact that labor now is more of a cost to that airline than fuel. is that amazing? it's always been about fuel, fuel, fuel. now you are looking at -- they're talking about 120, 125 in terms of fuel. those numbers were 125 a year ago and the fact that they made $3 billion. she they saved $3 billion. these trade at such inexpensive multiples. i think that they are what we need to have in the portfolio. >> i don't think i trust looking at the transports and the overall direction of the economy is going. we're not a vault economy anymore. we're not about shipping massive things on trains or on trucks. the economy is much different. it's about services. it's about consumer technology. it's about apple. totally different. i have looked more at apple, okay, and say why is apple down today when the tape is higher? >> all right. >> chrw. stock up 3% year-to-date.
logistics, not just trucking and not just delivery, but logistics, and that stock is up when you look at jb hunt, which morgan just spoke about a minute ago, that stock is down 10%. it depends which area of the delivery system you are in, and this is a good one for chrw. >> coming up, shopping for bargains. the four stocks analysts say you should be buying right now from apple to shake shack. our calls of the day are coming up next. plus, why oakmash's david harrow thinks the global selloff is a buying opportunity for true investors. what's he doing with his large position in the commodity giant glencore? we will ask him coming up. as we head to break, a look at the major averages. look at the dow. was up more than 200. now it's only up 65. you're watching cnbc, first in business worldwide. there's a lot of places you never want to see "$7.95." [ beep ]
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>> give you a look at the s&p sector heat map. led today by telecom and utilities, staples, discretionary. energy and materials, the weaker sectors today, wti was positive. now trading at $29.19. apparel down 1%. sales increase from all day breakfast. ure long mcdonald's. >> long mcdonald's. not buying it here, though, because we were buying it under 100. i think that a lot of good news
is in the stock. i like what they are doing in terms of restructuring. i like the fact that there's a lot they can do in terms of overhead, expense cuts, and ceo and what he is doing. i think at 116, a lot is priced in. i'm just holding in. >> goldman says the apple pullback is a buy. >> yep. and as you know, josh and i bought it live on air last friday. we got a little bit cheaper than goldman. goldman was responsible for a nice pop early on, but as that faded today, we saw the -- as crude oil came off the breaking through 30 and then breaking 29, apple was hit along with the rest of the market as people got owed. i like it. i'm long calls in apple, long calls in mcdonald's in the portfolio as well. >> you have a thought on apple as well? >> i'm surprised where apple is trading right now. again, i think it's a patient strategy that you are going to have to have. i wouldn't sell it, but i think the buying opportunity will be later in the year. >> p & g is up -- you just mentioned you had been buying it as well. zi like the call.
i think it's under owned by a lot of portfolio managers. that's one reason, by the way, i bought mcdonnell's way back when. you have a very good balance sheet. you've got a 3% yield. you've got a new ceo. i think most importantly, margins. there's a lot that you can do on the operating margin line. as much as 200 to 400 basis points. >> the stock has been bludgeoned. it was traded down towards 30, and here we are above those numbers. >> because whaf we started with, which was mcdonald's, and it's actually taken the market share. >> when a burger franchise comes
out with a fried chicken sandwich, aren't they acknowledging that there was a problem? >> wasn't that the thing at the beginning, right? hey, we just do burgers. that's all we do. we're coming at everybody. mcdo notted's has too much on the menu. blah, blah, blah. suddenly you come out with the chicken sandwich. when is the fish sandwich? >> shake shack. >> never? >> no, no. >> i'm not having a fried chicken sandwich. of course, i would go to shake shack. i'll have a burger. i'm not having a fried chicken sandwich. really? at shake shack. >> it's probably great. again, it's an interesting thing that they're moving in that direction. right? >> all right. >> coming back. >> coming up, king of the s&p. netflix, the best performer of the last two years. analyst rich greenfield now says it's still a must own stock. some of the traders, though, are getting altitude sickness. we're going to debate netflix ahead of its earnings report. plus, we have the best
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session lows right now for stocks. yes, the dow and the s&p are still in the green. not nearly, though, as strong as they were when the session started today. in fact, the nasdaq is even now gone negative. earnings in focus this week. netflix reports today after the bell. that stock up more than 125% over the past two years. can the company get the momentum back? can it keep it going? let's bring in btig rich greenfield. he has a buy rating on the stock. $136 price target. rich, welcome back. jo thanks for having me. >> what's the quarter going to hold for netflix investors? >> there is no doubt that investors get very nervous around netflix quarters because small changes versus expectations. the company does give one quarter forward guidance, and any deviations have sent the stock in both directions pretty substantially in prior quarters. i think the reality is what investors need to be looking for is the belief that this company
can continue to grow subs robustly in the u.s. meaning five plus going forward on an annual basis and that overseas subscribers, especially now that they've launched everywhere in the world other than china that they can grow ten million, 11 million, 12 million subscribers. that in terms of the guidance internationally is going to be the focus. >> best performing stocks in 14, best performing stock in 2015. up 600% over the past three years. why shouldn't you take money off the table? >> i think you have to look at the size of the companies this they are hurting. we started a _#called good luck bundle. the traditional multi-channel video bundle is under attack, and i think consumers are finding a very unimpressive price value relationship. we asked investors -- we asked consumers recently in a survey using civic science what percentage of people would opt out of espn to save $8 per month, and 56% of consumers said
they would like to save the $8 a month in return for removing those two channels. i think what netflix is teaching consumers is that there's a much better price value relationship to television than they get through the cable company. i think that is a much bigger idea than the $50 billion market cap the company has today. that's why your viewers shouldn't sell it today. >> everything you said could be right, okay? the fundamental story could be right. what happens in a market environment where a stock some call the mother of momentum stocks and that group in and of itself fall out of favor? doesn't that hurt netflix as much if not more than any single stock out there? >> you know, look, there's no doubt that if the market pulls back, there's risk to every stock we cover. >> i mean, some more than others. that's my point. >> sure. on the other hand, there's a lot -- you know, the price value relationship of netflix as a
service at, you know -- most people are paying between $9 and $10 a month for this service. maybe even more overseas. that price value relationship if the economy is weaker, if the market is weaker, you could make a pretty strong argument that the $80 bundle that you are watching less because you're now using things like netflix and amazon more, that the bundle, meaning the actual mvpd's are more at risk, and the true beneficiary is actually netflix, amazon, hulu. services that are offering a far more compelling price value. the stocks could overreact just given the market momentum, but from an underlying subscriber acquisition standpoint, i think you could make a strong argument that a weaker economy will actually push people more to think about the value that netflix offers. >> rich, you talk about the weaker economy. this dovetails into what i want to ask you about globally. how does the expansion look at this point in time to you? where is the biggest opportunities right now for netflix as you are looking out
globally? >> well, you have to think about markets that are really english speaking. you remember, when they just announced the global launch, they didn't localize in every market. they didn't go in and launch with a local language version in russia. they didn't launch with a local language version in poland. if you look at markets, i think if you think about the world, what are the big markets that are english speaking primarily where netflix wasn't available? india, pakistan, saudi arabia. those are really big opportunities. they just launched in south korea with a korean version. i think, you know, if you think about those three, four markets, those are tremendous opportunities, and, look, i think they've self-admitted that japan is going to be the hardest market they've ever gone into. they can get japan right with well over 40 million broadband homes, that's a huge long-term opportunity. it's still really early days for them overseas. they started off five years ago in latin america. they really struggled because of credit card and payment issues, and now they're up to six million, seven million subscribers in latin america. it's going to be a long fight to get subscribers, but the
opportunity is obviously very large in some of the countries i just reeled off. >> rich, lastly, if you weren't as negative as you are on disney, could you be as positive as you are on netflix? >> i wouldn't just put it on disney. i would say the whole sector. we've gotten increasingly negative. we downgraded from buy to neutral. we should have gone to sell. our mistake. we should have gone to sell on discovery and viacom back in june of 14 when we took them off our buy list. i think if you look at disney, we just think that's the one stock that really hasn't cratered the way the rest of the sector has kralterred. i think if you take a more negative view of the entire traditional media, the legacy media sector, i think if you didn't have that negative view, it probably would be a lot more difficult to be as bullish as we are on netflix. we just think that there's a value transfer from traditional companies to netflix, amazon, hulu. >> premier of house of cards,
and that's in april when they reported in april. that's when the street kind of got caught off sides with netflix. that's when the reverse really took off and had the momentum in 2015. i think the potential is there for it to happen again. >> are they going to look back at what's happening last year and the expectations up a little bit. >> you still -- you don't even own it anymore. do you? >> no, i don't. >> what's a positive sign i guess, judge, is that there is so much fear. rich spoke to it in terms of the customers being concerned. the $20 out of the money puts are still trading for 80 cents. these puts expire on friday.
>> there are betting to the up side, but stocks up $2 today, and they'ring nervous. >> $28 billion worth of advice on the stocks he thinks you should own right now, and why he still is a believer in glencore. plus, macy's shares jumping after another investor reports a stake. should you be buying that stock as well? traders will weigh in on that story right there. macy's up 4% on that news. we're back after this. in new york state, we believe tomorrow starts today.
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>> i'm sharon eperson, and here's your cnbc news update this hour. the congressional budget office is estimating that this year's budget deficit will rise to $544 billion due to tax cuts and spending increases passed by congress last month. this after six years of declines. the cbo also sees the economy growing at a slower pace this year than previously forecast. a greyhound bus rolled on to its side during a rainy commute in northern california, killing two people and injuring 18 others. the bus was traveling north on highway 101 in san jose. authorities are investigating the cause of the accident. former chief -- twitter
chief dick costolo says he is starting a new company with -- he tweeted that they are building a software platform that reimagines the past to personal fitness. a record 19.7 million tourists visited japan last year. nearly 50% increase from the year before. it's about $30 billion into the country's economy. relaxed visa rules contributed to the record rise. that's a cnbc news update this hour. back to you. >> thanks so much. >> steadily declining off the best levels of the dow. trying to get a little bit of that back. up 70 points. all three of the major averages are in the green. one stock is selling off today. tiffany. cutting guidance. cutting staff. we call it a sales. stock now at the lowest level that it has traded in three years. or thereabouts since 2013. with global markets, rebounding slightly today. how should investors be looking to navigate the rock where i start? joining us live from chicago,
david harrow, he overseas the oakmark international fund beating 95% of his peers over the last ten years. david, welcome back. it's good to see you again. >> thank you for having me. >> i read recently where you said "true investors are presented a buying opportunity in this global selloff." what are you in the market buying? >> well, we're in the market buying things that their prices have overreacted to some subdued macroeconomic data out of namely china, but when this data turns negative or we have less growth and you see equities in stocks getting slammed, it becomes an opportunity. you look around you year-to-date. most much the stock markets are down at least 10% or around 10%.
>> can you find data points and play this politico and macroeconomic news. if you are an investor, you are measuring the value of a business based on the present value of future cash flow streams. that value of the business doesn't move around anywhere near as close to the rate of change as share price. share price has dropped. it wasn't just the beginning of this, of course. it was already starting in august of 2015. share price is significantly weakened, and it's hard to see that intrinsic value most good well run businesses this weekend providing an opportunity for
investors. >> this is an example of a business that's price does not match its fundamentals. one of the key disconnects. there's a couple in glencore. one is people assume that copper is the same as iron ore, is the same as every other commodity. copper is one of the key moderateties. as is coal and zinc. each one has different cost curves. number two, the financial robustness of glencore was questioned at the end of the year. even after they took steps to stricken from the balance sheet. i think as we're going to find out in the next month or two, they're clearly in very sound financial footing. you have a company that really
is being misrepresented in terms of their balance sheet strength. it's in much sounder condition from a price perspective than what you see in other commodities supper as iron ore where you have real flat cost curve. >> you could have a european banking crisis if the carnage in commodities continues. you hold credit suisse and pariaba in your portfolio with rather large positions. is that at all on your radar? >> well, you have to look at
their exposure and their lending book, and for both those companies really there's very little exposure. these are companies that -- they are companies that have broad exposures and where they lend. >> everybody will be hurt, but as we know, everyone consumes energy. i don't know for some reason we're ignoring the fact that a lot of consumers of energy are going to be a lot better off and the way it's going to be like a tax cut. you can't have it both ways. it just can't be negative or just can't be positive.
there are both sides to the story, and the market today is just focussing on the negative. >> i think we -- >> there are positives. >> i think, frankly, we would be more believers in the positive side of that story if what you say actually showed up in the data, but when retail sales haven't been all that great, yes, auto sales have been fine, but when the data hasn't really shown up to prove that consumers are actually spending the money that they're saving at the pump, one clearly questions the supply demand paradigm and where it's going to go next. >> they're clearly getting more money, and you bring up a good point. are they spending it all? where are they spending it? this changes. of course, we're having structural change in retail. let's not forget about that.
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coming up on power lunch, take a look at the market. stocks are still higher, and they are giving up their gains. despite a recent selloff, there are housing stocks moving higher. the housing trades to watch in this very volatile market. plus, legendary bond investor bill gross joins us. we're going to get his take on what to buy or sell right now, and then going from the hunt for yield to the hunt for value.
we have some buy star stock picks just for you. now, back to scott. >> mcc, thank you. here's a look at some of the stocks hitting 52-week lows today. murphy, hess, conco, and devon. crude oil on fears of over supply. jackie deangeles at the nymex has more. >> do you think we get there and hold? >> in the march contract we're at 30. what is interesting to me is that below 30, the s&p wants to be unchanged. again, this is in the march contract, which is really the most active delivery contract for crude oil right now. the stock market is taking its cue from crude oil, and i think the s&p will get back to
unchanged if we spend any time today back below $30 in the march contract. >> all right. only because i love you, i'm going to give you the impossible question here. where is the bottom? >> great. thanks, jackie. i appreciate that one. i see a lot of pressure on this. let's talk about it overall. it's not just a supply situation that you and scott talked about, but it's also demand situation right now. when you look at the gdp numbers for the fourth quarter in the u.s. and what's coming out of china. you know, i put out $25 as the bottom. we could see $22. >> we're going to talk more oil on the on-line show. we also have two biggests today. mike witner and why we could be looking at $40 oil pretty soon. maybe a contrarian view to take into account there. also, we've got peter bookfar. he will talk to us about today's move in the stock market and despite that, why would he be going any lower from here. back to you. >> jackie, thanks. we'll see you soon. coming up, frefr the fang stocks. the best performing tech fund since the dot combust has never owned facebook, amazon, netflix,
or google. that's right. find out what that fund manager has been buying instead. plus, a rough start for stocks. the halftime portfolio challenge is underway. how are they managing the volatility, and the stocks stephanie just added to her portfolio today. the reveal next. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
>> i.t. svrss portfolio is the best performing fund since the dot combubble. the catch? it doesn't own apple or any of the fang stocks. kyle weaver is the fund's manager and joins us from boston. kyle, welcome to cnbc. it's nice to see you. >> thanks for having me. >> so, i mean, it's an i.t. services portfolio, so i guess we wouldn't suspect that you would own those kinds of stocks, but what is that a statement of, i guess, that you have stayed away in any capacity from the facebooks, amazons, netflix, google, et cetera? >> sure. well, i.t. services tends to be a hodge podge of idiocincratic stocks. they're businesses that help other businesses and usually operate behind the scenes. sort of outside of the main focus of other competitors and other investors. >> visa, master card, ibm towards the top of your holding list. a lot of talk about that one lately. just given what intel had to say and expected earnings from ibm.
what is your own outlook for that company? >> sure. well, ibm -- ibm has been a difficult stock over the past several years, but it valuation compressed a lot. i'm always looking for the best combination of growth and value in a portfolio. while ibm is not a growth company yet, it has become a value stock. and we're hopeful that management can execute it to be a growth company. >> a full quarter of your portfolio is dedicated to visa and mastercard. so you're a huge believer in those companies. tell us why. >> sure. the fact is that those companies have grown into that position simply by growing their earnings and their free cash flow over time. they started out smaller positions in the fund. but each company is in the middle of a multidecade secular trend from cash to electronic
payments sitting in the middle and collectsing a little bit of money each time you swipe a card. so those are really continue to be good stories and they remain core holdings in the fund today. >> stephanie link is here with me. >> on visa, i'm curious when you think you'll see the synergies from visa europe, is it going to be this year and will that be a catalyst for the shares? >> not trying to dodge the question, but i don't really think about the investment that way. i'm looking for good companies that can double or triple their value over a three to five year time frame. i think visa fits bill. the beauty about visa is that they're going continue to crease the earnings and value per share whether they bought in visa europe or not. and that's one of the reasons that i continue to like this stock. >> what's the most recent add or addition you made to your portfolio and why? >> well, i can't discuss anything that's not in the most recent disclosure. but, look, i'm always looking for reoccurring revenue companies that have a stable and
growing franchise, operating marge thanz ains that are going capital allocation that is responsible and in the best interest of shareholders and trade in reasonable evaluations. i can't get more specific than that. >> understood. i appreciate you coming on and talking about your portfolio. we'll see you soon. >> thank you. >> all right. kyle weaver. coming up, john and pete picking up some bullish activity in a health care name plus a look at all the big earnings including goldman sachs, verizon, starbucks, amex. there's the calendar. you both have a
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♪ itswhen you're engineeredct to literally to drive circles around the competition. want to check the leader board now in our halftime portfolio competition. let's be frank. it ain't pretty. here's the leader board. are we looking at it? we don't even want to show it. >> i don't want to show it. >> i don't want to show it. >> we can't show it. how fortunate. steph, you are making some --
>> yes. i'm in last place. >> moves. >> sure. well, yeah. >> steph is making moves. >> i'm shifting some things. >> what are you doing? >> i'm shifting around some things. i've been talking about the consumer a locht. i think there are pockets where you want to be. i talked about before, carnival cruise is a name i think will benefit. i think you're hearing strong demand. they have good growth in china. i'm just trying to reposition. i think, you know, my uri position i sold out of. i think i was early there. i do like that storey. maybe it's a second half of the year kind of story. for now, i want to swap it where i think there is more momentum. >> it's a long competition. >> it s. >> right? >> yeah, painful. >> follow all the action at cnbc.com/pro. all right. let's spend the time we have left looking at the earnings calendar. ibm? pete? >> after we just heard, i'm not ready to jump in there yet. the reason i'm not ready to is when i look at ibm, where
everybody continues to wait on growth, we haven't seen that represented just yet until we start to see it, i don't think you have to be the first one in. >> goldman sachs has been very, very weak lately. >> goldman sachs -- >> why? and will the earnings turn it around? >> let's see what happens with fic. fic was very strong at bank of america, very strong at citi group, not so good at morgan stanley and chase. i think on a comp basis goldman sachs lines up the fic to be a beat. let's look at the business model of goldman sachs. let's find out if anything transformational is happening there? are there going to be offerings in the asset management business, consumer things? goldman sachs is interested. >> and the stock down 13%, 14% year to date. >> that's what i mean. the stock has traded very poorly. >> double the loss of the s&p 500. >> to be fair, it's not a goldman sachs story. it's an overall financial story. >> yep.
>> unusual activity? what do you have? >> johnson & johnson. we had strong activity on johnson & john, jnj. i bought calls in. there someone stepped in and bought 7,000 of them like that, bang. they're up about, i think eight or ten cents from where they bought them. the earnings are the 26th, i think. i'll be out by then. >> pete? >> i'm going to give you a quick trade school. you see a lot of paper on cisco. the february 25 1/2 calls. very, very active. 15,000 of those trading, obviously you want to jump on these. absolutely not. they're selling those. so what you're seeing a great example of something we talk about all the time. take advantage of the situation. if you own cisco somewhere on the levels and you can get a premium, a much higher premium with higher volatility out, there the applied volume tilts, someone wants to use that to their advantage, selling 15,000 calls today against a long position, very, very smart trade. >> okay. starbucks earnings thursday after the bell. who owns it? >> it's in my portfolio. >> it's in your portfolio and
mine. >> i don't own it in the real life yet. >> i own it in real life. >> continue -- >> yeah. i was very encouraged with the ceo about china just last week, week and a half ago. i think the setup is well. i think this is a digital technology story. i've been saying it for a couple of months, quarters now. i think that moment will continue. they may just guide in line. that may be good enough. >> we heard people saying great things about visa and mastercard. american express? joe? >> no. >> earnings thursday. >> no touch. >> no dice? pete? pete learned the hard way. >> john and i talked about this the other day. what is the management strategy? are he had going to offer a fried chicken sandwich? >> i'd eat it. >> that saves everything, right? no fried chicken sandwiches athe starbucks. >> i like the chicken sandwich. >> that's all i'm saying. check it out. >> good stuff.
>> i'm not kidding. alaska air? >> i love that one. i lot of regionals. i think this can surprise more than everybody's anticipating. i think the stock goes higher like the hawaiians of the world. i think the regionals are positioned well. >> we're going to eat now. "power lunch" begins now. >> scott, thank you very much. welcome, everybody to "power lunch." i'm tyler mathisen. stocks higher but giving up those gains. let's take a look at the dow, nasdaq and the s&p 500, shall we? we look at the numbers. where are they? there they are. there are the gains. up a little bit there for the nasdaq at this point. i mean the scantest gains. industrials up 60 points. they were up higher earlier. s&p 500 up 4.6%. >> one thing i noticed in this market was