tv Fast Money Halftime Report CNBC April 11, 2016 12:00pm-1:01pm EDT
know, we decided to come early. and, yeah, you know, did some double checking in making sure she was all right at home. and to come out clear-minded to try and do my job, i guess. and i guess it all worked out pretty well. >> danny, i think a lot of golfers who watch our network for sure want to know from you, how you held it together mentally when things were starting to work in the last part of yesterday. what were you telling yourself? >> yeah, we were just -- you know, we were just going through processes. we were going through, you know, it's very cliche, but one shot at a time, stay focused on the job you've got to do. and had some good shots. and like i said, one of those things that if you're going to win major win golf tournaments, you've got to get quite fortunate at the right times. and, you know, regardless of
what we did, we needed help, obviously, from jordan and he gave us that. >> what was the feeling to have jordan spieth standing next to you and draping you with your green jacket, knowing what he must be feeling as well? >> yeah. no, it must have been tough for jordan, you know. but he had a bad bit on 12. and, yeah, just, you know -- it's obviously fantastic to be able to stand there in front of all the patrons and all the augusta members and have jordan put the green jacket on me. >> callaway is a sponsor but you're going to get a lot of phone calls this week. i wonder, what kind of machinery do you have in place to field all of that interest? >> we're just going to -- i'm letting the guys sort that out while i have a bit of time off and enjoy just, you know, what we've achieved. >> what is the victory lap look like, danny? augusta is not a bad place to celebrate. but i imagine there are a lot of friends and family back home in
england that are awaiting your arrival. >> yeah, that's the one, really. we had a nice get together last night. and now it's just a case of trying to get on the plane and get home as quick as i can. nick and zach and walk in the door and just enjoy it between ourselves. >> finally, in terms of what you're doing for the uk, first champ since faldo, in '96. you must be especially proud of that. >> yeah, it's astonishing, really, there haven't been more english winners. so, yeah, you know, very privileged to be alongside nick, you know, as a masters champion. >> our congratulations to you. you made a lot of people happy who would like to watch golf this weekend. congratulations, danny, on the tournament. >> thank you. >> and as kayla said, new dad. danny willett, masters champion for 2016. that does it for "squawk alley." let's get over to scott wapner and "the laugh."
carl, thanks so much. welcome to the "halftime report." i'm scott wapner. the masters melddown, not for jordan spieth but underarmor shares. one firm doubles down on its controversial sell call. with us today, joe terranova, steve weise, josh brown, pete najarian by phone making his way to t to the studio. under armour, a wall street darling, calling out the company's growth, dropping last night right along with spieth's hopes for another green jacket. josh brown, what do you make of another epic 50-page or somewhat note from this morgan stanley analyst? >> they could be on to something. and if they are, the question is how much of what they've been saying negatively has already been visited upon the stock. you've got a recent split, the charts a little bit wonky as a result of that.
but at the end of the day, it seems to have found support today at a rising 50 day. 200 day flattening out. not much momentum for two quarters and earnings on april 21st. the real issue for a shorter term trader right now is what's the hurry? why do i need to be in this a week before earnings that, quite frankly, could represent the company's chance to say, all right, you're right. you know, women's apparel a little weak. footwear a little weak. >> let's talk history. january 10th of this year, is when this analyst over morgan stanley put out another, you know, 50 or somewhat page note, questioning all of the same things that were questioned today in large part. january 28th, under armor knocked the stuffing out of the ball. and the stock rose almost 20% that day, throwing shade all over the negativity that was surrounding the stock. it was a tremendous buying opportunity the day that this gentleman put out the note before. why is it not today? >> gave it back. the short answer.
people are worried about the bigger picture, not last quarter. >> the stock is fairly valued, right in the middle. the question becomes -- he puts a $32 price tag on it, i completely disagree w. you talk about the earnings in january, footwear up 95%. consensus looking for 60%. earnings coming up april 21st. the problem is not -- i think josh mentioned before -- it's not the company that's the problem. it's retail that's the problem. q4 was lousy for retail. and under armour did well in that environment. do you know under armour has only missed one time in 4 of 2006. if you're worried, i completely disagree with a $32 price target. i don't see the catalysts out there right now. because the sneaker business, the margins are so low. to get it back to 53. but 40, 45, you can't go wrong. that's where it belongs. forget about a $32. >> pete, you're listening in. do you agree with this call? a long-time supporter of the stock. is it right to throw a double bogey, if you will, on under
armour here, or do you jump right in? >> i don't know that you jump right in. i think i would have to agree with what josh was saying, that maybe there is no hurry right now that you've got to jump in and a little bit of time to wait. maybe wait until april 21st date. but, you know, the problem right now for under armour is, they are seeing that great growth. joe mentioned the 95% quarter growth year over year, just this last quarter. the problem with that is, it only represents 17% of their business. and we heard for so long, scott, that lululemon was getting beat up and everybody was coming after them. well, if you look at the way lululemon has traded in some of the recent numbers out of them, it seems to me they're doing very, very well, and they have consistently been able to bring themselves back from what was considered to be a grave. now it's up for under armour. the morgan stanley note talked about losing market share. i don't know whether or not that's absolute fact. we're going to find out pretty soon. but the previous quarters haven't shown anything like that. so this is a very, very big call. >> this gentleman, steve, says
they believe that under armor q4 same store sales negative. they think running footwear sails trends are decelerating. they criteria a slow down in growth of the women's business. under armour would say look what we delivered and continue to deliver. we're investing in the future. we're doubling down in the investment in technology already paying off. and as kevin plank has said in the past, we're just getting started here. what's the street missing? >> so i don't know if the street is missing anything at this point. when you take a look at the stocks that have had good run-ups, and under armour had one, back where it was, as josh pointed out. you have a stock selling at a premium to the market multiple and substantial premium -- >> always probably will. >> unless their growth slows dramatically. so i look at it as others are looking at it. there's no rush to get in. i mean, this brennan is basically saying look, i didn't get it right last time, long-term story right. so it's curious he puts out this
report at this point, where all eyes are going to be object him. either you get it or don't. so i like the story. i don't like this price. i open he's right in terms of the quarter. because that will provide a great buying opportunity, because markets are very unforgiving if you miss. >> totally agree with that, by the way. if they crush this name, because of a seasonally weak quarter, and you're a long-term believer that this brand is important to the up and coming generations, which i am, that's where you're a buyer. >> are we discussing that? right now f you're a long-term player, you don't want to buy the stock here. you would rather wait, even if you're not a short-term trader? >> if you don't care. a lot of people care. if you do care, it's probably a higher probability estimation that you'll have a better crack at it if any of the stuff morgan stanley is saying is true. that doesn't mean it's a $32 number. you know. could be 38. >> if you're buying it in the low 40s, you have to believe it's going to the 50s and above. what's the catalyst to get to the 50s when as pete has talked about and josh and steve, there
are head winds for the company. pete is right. i'm talking about footwear. that is a small portion of the business. that is correct. the international side of the business was very strong as well. but, again, that's something that has to be grown in the future. so you want to hear something on april 21st that's going to tell you, okay, this is a $50-plus stock. there is no evidence to that right now. that's ying it's fairly valued. >> interesting timing, pete, wouldn't you say? spieth has the meltdown at the masters. this note drops last night the same time that the golden state warriors tie the chicago bulls for the all-time wins record in a single season. and they've got steph curry, their chief endorser in the nba and selling a ton of sneakers. >> yeah. it is interesting timing. and as you say, spieth unfortunately with that -- just awful day on sunday. but it's not just about jordan spieth. we've got to remember, this is a company moving men's and women's. and they've got all son lee on the female side for shoes and clothing when it comes to golf,
scott. the steph curry thing would take much more center stage. the focus on the nba, the focus on the fact they have tied the chicago bulls with 72 wins have a potential to possibly break that with one more win at the end of the season. a home victory sure would make that nice. and i think that puts under armour in front of people. let's also not forget this. there is a 30% short on the stock. so if there is anything that plays against what this particular analyst is predicting right now in terms of some of the losses, if they actually are able to surprise the street in any way, shape or form, scott, that could dramatically push this stock up and all of a sudden you could see this thing with a five handle very rapidly because of some of the short covering. >> even analyst himself mentions that. i'm quoting from the note. short interest remains high at almost 12% of the float. we think that scenario, if it plays out, could cause a short, if the numbers come in better than expected. if it plays out, cause a short squeeze and the stock to move materially higher. what's more of the risk that
there's a short squeeze and a stock goes up, or is the risk to the down side that under armour misses for the first time in, you know, a blue moon? >> well, we've talked about that for a long time too, scott, about the fact they can't afford to miss. how many times have we talked about you look at a premium valuation. you're always going to be okay with that premium valuation, until somebody misses. and once that miss step comes, forget about it. you can look to the down side further. the best way i would. want to approach this, closer and closer to the earnings date of april 21st. i want some kind of options trade in there, scott, where i'm doing a spread, where i am controlling my risk, i know exactly what i've got on the table. and gives me an opportunity. because if they do surprise with that short interest, we will see this move dramatically to the up side. >> the analyst isn't, you know, saying this quarter is going to be a terrible quarter. >> no, they say this quarter looks good. >> he's talking about the future, so really on the fence on this quarter. he wants to win both ways. because if the guidance is bad, even though this quarter could be good, stock comes in. so i still think you want to
wait until after the quarter, because it's not about this quarter, it's about what they say. >> 21 buys, one sell. >> we've had this conversation season about this particular segment of the retail business. ath leisure, as everybody calls it, is the place to be. is the runway getting shorter? are trends about to it change? >> slow down in q4, no doubt about it. slowed down from the majority of 2015, for sure. company-specific, i think under armour, relative to the rest of the space, is doing okay with it. but it clearly has had a problem here, as we -- >> the other thing is that -- the other thing is that trends like ath leisure, which i hate saying that word out loud. they're not linear for every company that participates. so a company like nike goes through a quarter or two where inventories are too high or pull back marketing spend because they're waiting for something else. it doesn't mean the trend is over. it just means that individual company pulled back on the brakes a little bit for three
months. if you're a serious investor, that doesn't freak you out. bigger picture, probably, people are wearing sneakers further into their life as they get older. wearing them to work. women are wearing workout clothes for the rest of their day. it's not something that turns on a dime. so if you believe in under armour and you believe in the kids' affinity for it continuing, you look for a miss. that's when you want to buy. you're not looking to buy after they blow their numbers out like they did in january. >> pete, we'll see you in a few minutes. pete at the mercy of air traffic control this morning, making his way here. here's what's coming up on the "halftime report." >> still ahead. this is rapidly becoming a house divided. you should all be ashamed of yourselves. >> the fight over pulte group heats up. plus, googling for profits. >> you can google t. it's worth a google. >> alphabet upgraded to buy. why that stock could be headed nearly 30% higher.
and financials in a funk. as earnings season kicks off, is the bad news banked into the banks at this point? we'll debate it. it's all coming up on the "halftime report." there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.
is our partnership with habitat for humanity. pg&e is committed to clean energy and part of that commitment our mission is to build homes, community and hope. our homeowners are low-income families, so the ability for them to have lower energy cost is wonderful. we have been able to provide about 600 families with solar on their homes. that's over nine and a half million dollars of investment by pg&e, and that allows us to provide clean energy for everyone here. it's been a great partnership. together, we're building a better california. welcome back to the "halftime report." the stock market, we are in a green session so far for the major indices. the dow up 76 points, the s&p by
about 6 and the nasdaq up by a third of a percent as well. if you look overall at the markets, off our best levels today. the dow up by 155 points at one point. also checking on crude. oil is on the rise today, an early rally lifted wti crude over 40 bucks a barrel. wti crude touched its highest level today since march 23, overall. one big energy mover today, chesapeake energy, up by double digits, percentage-wise. the nat gas producer said its borrowing limit reaffirmed at $4 billion at a time when most oil and gas producers are bracing for steeper cuts to their credit line. so, again, some interesting stories developing on both the macro, scott, and company-specific front. back over to you guys. >> no doubt. thanks so much. steve, what do you make of the market today? you get out of the gates fast and then come back. >> i think the market is fine. i think it's moving up into -- you know, into the quarter. you've got alcoalcoa. but people want to get on the
right side. i'm assuming the guess is expectation has been taken down so low, why not go in. plus the ten-year trading below 180. where else do you put capital? it's driving you to equities. i c i think the market continues to grind higher during earnings, volatile. volatilities are there. but man, you've got to buy some protection. >> have the risks, joe, decided that had existed, you know, not seven, eight weeks ago? is. >> not necessarily. but i do think the value -- >> dollar has come down? >> dollar coming down. >> oil moving up. >> dollar coming down has helped significantly. i think what's happening here in the near-term, though, is really about folks being very skeptical of the rally and the s&p. a lot of people stepping in, like this morning, trying to short it. which i think is the wrong move. i think the runway still is long. i still think for the month of april there is further up side. >> earnings week. you know that, jpmorgan kicking off a big week of bank earnings wednesday with already low expectations, how bad could earnings for that sector be? let's bring in christine short,
senior vice president at stimmize. good to see you as always. >> nice to be here. >> expectations obviously are incredibly low. do you think it's going to be as bad as people think, or not? >> i don't think it's ever as bad as we think at the beginning of the season. as we know, wall street historically is off by about 3 percentage points when it comes to predicting growth for the s&p 500. yeah, we're entering the quarter with negative 2.5% growth, is the expectation right now. very rarely, though, do you go through the quarter and actually see that number come down, as companies report. so it always ends up popping up a bit. yeah, that's the bad news heading into the quarter. the good news and it's very early, only 20 companies have reported thus far. 80% of those beat expectations and that's our expectations at estimatize. 80% on wall street's expectations. what is the mix of companies that report early on, a lot consumer-focused and consumer discreti discretionarie discretionaries. >> the banks, talking about the banks, a note today from fred cannon at kbw who said jpmorgan
is going to disappoint. >> all of the big banks out this week were, you know, looking for sort of dismal results from. each expecting a decline on the top and bottom line with the exception of wells fargoo, expecting a modest increase in sales of 2%. i think you should expect to see all the same commentary you saw in 2015. weaker ficc trading, investment banking revenues. a challenging interest rate environment. those all remain concerns. but i think investors are really going to want to be focused on comments like what jamie dimon made, energy weakness is going to be worse than initially thought. we're expecting a $600 million hit in the first half of the year. let's see what other banks say about that this week. since those comments were made, we have seen estimates come down. >> bank of america another concern. loans to energy. and space. >> well -- >> not much of a reason to jump in. >> financials, no reason to jump in. they have been cheap for a long time.
i'm still there in citi. frankly, i sold part in the 50s. these companies are worse than utilities. because there's no -- there's no commission. they can go to and say, hey, we need to increase our level of return. so they're just going to be under the onslaught of regulation. they're never going to get the earnings they had before, because capital is so constrained. they are dirt cheap. you're not going to see the move up until rates move up. and we saw that earlier. >> yeah. >> make the case for me, josh, why the banks are not a value trap. because they've proven to be just that. >> i would say that a lot of the time the market is not inefficient and gets it right. and i think in the case of the financials, the market broadly for the last two or three years has gotten it right. rates are not going to rise in any meaningful sense, unless something drastic changes out of nowhere, economic data. is anyone willing to put that bet on in size. number two, they are worse than utilities. because the political headwinds
against them getting any kind of relief. if you want a true utility, every three years they go to the government, the state, and they say, we need to raise the cost, because of x, y and z. they get it granted. and then there is an earnings estimate increase. here, it's layoffs, it's profit margin shrinking. and the third thing i would say, and i think this is really important. yeah, they're cheap. they sell at book value. give me the argument why they should sell for more than book value. they are reticent about breaking themselves up. they have a limitation on how much they can do on the dividend and buyback front. why -- >> you guys are painting a scenario in which the banks are investable. >> not investable, but they deserve to be trading where they trade. >> i think the question becomes, what is it about the banks in the upcoming quarter that gets you excited for you to raise where most portfolio managers are holding banks right now, which is at underweight, move them up to equal weight, overweight. >> rhetoric not going away? interest rates not going up. >> you know where everyone is hiding right now? where there is no rhetoric,
where there is no regulation. canadian banks. look at bmo, toronto, dominion. they're higher for the year. same type of economic structure you see here in the u.s. yes, challenged, yes, rates are challenging. without the regulation, so there are money managers out there seeking to own some banks. canadian financials right now are the best. is that ultimately going to be the best place to be, and where you could allocate a lot of capital, absolutely not. but at some point, the story will change here in the u.s. and financials will be ininvestable once again. i disagree with the premise they are like a utility. i do think they will have owned -- earnings growth as loans begin to grow and rates begin to rise. >> last point to christine. the other issue that could have a significant impact going forward, the commentary will be interesting, is the dollar. >> yeah. >> we've gotten a break on the dollar. >> i think this might be the last quarter we really see -- i mean, look. i said 20 companies reported, half have mentioned the dollar, most of those companies are
either within tech or consumer discretionary. this might be the last quarter that we see the very difficult year over year comparison. if you look forward as the dollar has gone up, expectations for many sectors increase through the second or fourth quarter of the year. this could be the really, you know, last quarter of this huge dollar impact in currency headwinds. the picture does look to be getting brighter through 2016. >> nice to see you. programming note for this afternoon, on the "closing bell" cnbc exclusive interview with the alcoa chairman and ceo, klaus kleinfeld, at 4:00 p.m. eastern time. the gentleman officially kicking off earnings season. coming up, failed ceo, distrous track record. the insults flying over who should run pulte group and who should not. the very public battle for control. and an upgrade for alphabet. why there is a rally ahead for google's parent company.
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alphabet today, raising the price target to 800. our call of the day. pete najarian, welcome to the party. >> hey, thanks. good to be with you. >> narrjarian has landed. >> most of this desk would agree with this call. parts of the notes, talking about the trends and seeing some of the business trends picking up, scott. i think the target is very interesting. they raise that target -- >> they did. >> that makes you wonder about multiples at this point in time. right now, it's talking about a forward of an 18. so if you get to those levels, there's got to be some improvement in earnings numbers, as well. otherwise, that multiple seems like it's awfully high. >> well, it's a market multiple at 18. and if a company deserves a market multiple, it's one that has a great brand, that's got ab unbelievable reach and has relatively little competition in terms of them being the juggernaut. and tons of cash. so i think it deserves market multiple. i think it's a main stay in the
portfolio. >> i agree. i think you buy here and it's interesting. the average heist target, 12 months forward, is actually 920 of all the analysts. the analysts see the same thing. i think the taking the businesses, splitting them up is a favorable thing for the company. the company really for a couple years flew under the radar. it was perceived to be at one point almost a value trap where no one wanted to buy it. you have the lift in early of 2015 that stock got from a strong quarter, and then you've seen the momentum build from there again. i think it gets above 800, the business models are working right now and have actually done solid vesting. >> love fest on the desk. >> google is okay. strategically in the middle of the pack in terms of the businesses that they're in. and the direction they're talking about going. there's no question that they dominate in internet advertising and basically more and more have it all to themselves. but going forward, they're not quite as dominant in cloud computing as microsoft and amazon. they're not quite as dominant in
mobile phones as apple. and i really think that that's a big hole. technically speaking, there is some danger of a head and shoulders top forming here, going back to last november. and i think you're going to hear a lot of technicians talk about it, if and when they challenge the 50-day, which is at 740 now. >> a break on foreign exchange. >> yep, a break on foreign exchange and the other thing i pulled out, the ideanal cyst talking about scale and better and better and better. that does feed into earnings, obviously. and that does feed into the idea that maybe that market multiple up there at those levels he's talking about isn't so extreme as we might think now. coming up, turbulence in the friendly skies. >> i had a dream last night that we went down. yep. it was terrible. you were in it. >> what? >> what united's disappointing forecast means for the airline stocks. that story is coming up. and how low can they go? diana olick on the tumble on the mortgage rates. >> if we were having this conversation six months ago, we
would have been saying get in now before rates go up. but that didn't pan out. we'll tell you why, coming up next. want to hear more from our experts? head to cnbc.com/halftime for exclusive commentary and behind the scenes access. son. trendset, tastemaker, and teenager. watson, you sound like a fan. millions look to you for advice. i know... i can't believe it. i am learning to analyze social media to spot trends and predict demand. sounds like you spend a lot of time online? i constantly absorb online content to follow shifts in pop culture. so... you're learning to think like a teenager? yes. how am i doing? well... uh...
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hello, everyone. i'm sue herrera. here is your cnbc news update for this hour. british prime minister, david cameron, lashing out at what he called deeply hurtful and profoundly untrue claims about his late father's financial arrangements. speaking in the house of commons, he said his father set up an offshore firm for investment purposes, and not to avoid taxes. the justice department says goldman sachs has agreed to pay $5 billion to settle claims it misled mortgage and bond investors during the financial crisis. investors suffered billions of dollars in losses from the securities bought during that period of time. a new study from stanford university says smokers were 24% less likely to find a job than nonsmokers. and those who did find work averaged $5 less per hour than people who did not smoke. the duke and duchess of
cambridge paying tribute to indian soldiers killed during world war i. prince william and kate middleton laying a wreath in new dehli, which bears the names of nearly 13,000 slain indian soldiers. it is their first trip to india. that is the cnbc news update this hour. scottie, i'll turn it back to you. >> sue, thanks so much. the drama at the pulte group taking another turn today. william pulte, the 85-year-old founder, issuing another letter, saying its ceo, richard due ga, quote, must immediately be removed from the company. pretty scathing. goes right after this -- >> it was a great letter. >> value creation concept they have had. he calls it valdes trucks, among other things. basically says, i've never experienced a ceo like this. another direct quote from the letter. >> i don't understand why, if the ceo says i'm leaving in a year, for the good of the shareholders, move on now. just leave. pulte in the letter, if you read the letter, it was just fascinating how he laid it out.
this is not a family squabble. this is not emotional. this is an owner who actually blessed this guy coming in to be the ceo, saying, you know what, maybe i was wrong in having him come in and points out every reason. just move on and put somebody else new in the spot. >> that's sort of the argument that he makes in this letter. my belief that one more year with richard as a lame duck ceo will ensure a lack of direction and clairity for our customers. >> and it's significant. >> stocks way under performing. hasn't gotten hurt. hasn't been a disaster. but you look at the home builders over three years up 20%. this name down 5. there is no value creation happening here. >> okay. we should let you know, we did reach out to the pulte group for their comment regarding this from the founder and group trying to get him out immediately. we did not hear back yet with a comment. but certainly will bring that to you when we do. let's stick with housing.
mortgage rates near record lows. our real estate reporter, diana olick, breaking down numbers. i know you've been following this pulte saga, as well. if you want to have comment here, please do. but really, these mortgage rates are the crux of the story. >> really, the mortgage rates are the story today for us, at least. that debate will go on, i'm sure, for weeks to come. but look, when the fed raised rates late last year, it looked like mortgage rates would follow. some predicted the 30-year fix would head toward 5% or even higher. not so much. take a look. the average contract interest rate on the 30-year already headed -- which was already below 4%, headed even lower last week to 3.59%, according to freddie mac. that's down from close to 4 and a quarter last summer. why? well, a combination of janet yellen spoog spooking the market. the ecb, ongoing low oil prices. take your pick. the drop in rates is boosting refinances, but last week it did nothing for mortgage
applications to buy a home. both home buyers and sellers think this was a bad time to make a deal. that according to a monthly survey from fanny may. even sellers with higher home prices today. more of them now feel it's a bad time to sell than a good time to sell. and that's the first time we've seen that in over a year. and just finally, something interesting. the mortgage gurus who i talk to on a daily basis and continually tell me there is a floor on that 30-year fixed rate, they're starting to make some noises we could break through to a new low on that very popular product. scott snrveths i don't think that would shock very many people. as you said at the top, you bet on these rates going up, for -- >> bad bet. >> a month every month and it has not happened. >> it's not. >> diana olick, thank you so much. winners, losers, record low rates? >> the only thing i can think of is home depot and lowe's, clearly where consumers are investing in their homes, refinancing now, spending their money. they're going there, they're
buying things to fix it up. and home depot and lowe's, the evidence is there to support the performance. >> what about the builders? barrons made a bullish call on tolle over the weekend. what's the play here? >> if i'm looking at the builders now, it would have to be lennar. look at the numbers last quarter. talked about first time buyers, up 30%. they said the price is up 12%. they have a great backlog and the problem now, there's plenty of demand. they actually can't supply to that demand yet, scott. so if i was looking, i know you had mario on just the other day, i think on friday, talking about that same name. lennar b shares or something like that. >> barrons is right. that's not bullish for the sector. the bet on tolle, as they move into the cities and develop more condo and rental properties, that's a function of people not wanting to buy the traditional three and four-bedroom new family homes. so that's not a -- that's not a sector bet by any stretch of the imagination. >> ge came out and said we want
to move our headquarters from stanford, connecticut, to boston, to the city. the reason why, because we can't find the talent to attract. we can't recruit from there. so you're seeing a different move. a generational move into the cities to rent. to me, that's negative for home building. that's why i wouldn't buy the stocks. coming up, car trouble. >> ahhh! >> it's alive! >> see that selloff today? they are both going lower. and another bidder emerging for yahoo!. what the company could be worth and how to trade that. "halftime report" is back after this. the "halftime report," with scott wapner, is the place for market-moving interviews. nothin.
there is this recognition the stock began to sell off. this isn't about hard drives and pcs any more. this is about enterprise, data centers. companies turning itself around. we're seeing evidence of that. this shift takes time. this is not a cyclical shift. this is a secular shift. this is longer-term. 20%, that's a little bit rich i don't know if you're going to get that much out of it. >> okay, josh, the daily mail apparently the latest to consider a yahoo! bid. >> isn't it ironic, scott? don't you think? this is a newspaper company that was supposed to be -- have been put out of business, about to boy one of the companies that was supposed to do it 20 years ago. i think what verizon should do, come in here, put in a bid at 30 bucks. a take under. set the table. this is ridiculous they're going to be outbid by a newspaper backed by private equity. verizon most likely should come in under and let the games begin from that level. not from the high 30s. >> all right. united continental forecasting a
drop in a key revenue metric. pete? >> yeah, they're talking about the drop in a little over 7%. all those usually acronyms. i think what's interesting to see, how the reaction is today in terms of stock. last week we started to see analysts get bullish on the stock. we have seen option activity forever. always seems to be bullish. when you look at the multiple now on ual, very cheap. if they can get this thing together, and the dow or headwinds actually do go to the side, this stock is going to 70. >> steve weise, ugly guidance from hertz. ugly stock chart from hertz. avis down 8%. >> like clockwork. >> the uber effect? >> i believe it is. the uber effect, lyft effect, and car sharing. so it's completely different industry. we were just talking at the desk about all these dynamics changing. it's front and center right here. so despite it being a three-horse race, one private company and these two public companies, they can't get pricing right, because it's out of their hands.
because the capacity -- let me stress one thing with pete. american on the same day comes out and says, okay, our revenue per miles are growing, and the reason why ual is doing okay, as you know, because they've got this campaign. exactly why they're there. >> isn't hertz and avis a big hedge fund? >> i was literally just going to say hedge fund paint. >> no -- >> heard hertz was -- >> i know as many that were shorted and still short than long. >> all right. coming up, the missing link. the online shopping giant, stephanie link is buying right now. she's going to tell us. we'll debate it. and as we go to break, let's look at the dow 30 heat map. dow up 63, was up more than that. was a triple digit gain. we'll take the 61 for now. back right after this.
if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back to the "halftime report." time now for the missing link. stephanie link always on the hunt for value, and she thinks she's found a diamond in the rough. in ebay. steph, tell us why. we're going to debate this one. i don't think the folks here, at least not everybody, agrees with the pick. why do you like it? >> hey, scott, how are you doing? i like that it's controversial. so they've got a very strong business model. good free cash flow. a very sticky network. % market share and online e-commerce. management has actually been changing the way they change their rankings for search, which i think will lead to better gross merchandise volume and better user growth. and then you look at the
valuation, it's down 12% on the year. trades at 13 times forward estimates. margins positioned to move forward. and these guys benefit big-time. if the dollar has like the risk >> josh, take the other side. >> steph, i actually agree with a lot of that. i've been long the name going into the pay pal spin-off and that was the play for me, i took the profit on both pieces actually, shortly afterward. i think the big problem here is wall street's perception that ebay is kind of yesterday's tech company, and now that pay pal is separate, it is hard to figure out what they're going to do in the future to reignite growth. while you're dead right it is a cheap name, and they do have a sticky business model, i don't know if that's going to be enough for this to outperform. what would you say to that? >> i would say $24 and trading at 13 times forward estimates, i think everybody believes what you believe that maybe this is yesterday's story, but what i like is that they actually have done a really good job and in
the process, by the way, of changing the search rankings. and that should really lead to a better user growth, user experience, and that could certainly have a snowball effect f you look at online e-commerce, a trillion dollar business. only 8% market share, one of the largest. they have room to grow. so if management can execute, it is a big if, but i'm willing to take that risk at these valuations. >> you mentioned e-commerce, u.s. e-commerce growth supposedly around 12% to 14% growth this year in 2016, but yet marketplace, which is, what, 80, to 85% of ebay's revenues, the revenue growth is looking only maybe up 1%, 2% for the year. how is it that we could get excited about something that is trailing overall e-commerce growth, so significantly. >> i think you can see 5% ebitda growth, joe. and i think that's one of the reasons is because of the changes that this company is making. and they're working as google
made some changes on terms of their rankings and search. so as they're changing with the times, as they're working with google, and improving the overall landscape, i think you're going to see revenue growth 5%, nothing heroic, but i think that's a heck of a lot better than 1%, 2% growth expectations out there. if this company positively surprises, i think this stock could get up to the upper 20s, i think. >> steve, we'll see you soon, i hope, back here on the desk. >> thanks, scott. have a good day. >> you do the same. stephanie link. under the radar, the cable stock that has steve weiss, he has his eye on and pete najarian, coming up, buying a stock moments ago, unusual activity. he'll break it all down just ahead. people talk about "deals"
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we believe in the power of active management.management, by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management. welcome back to "the halftime report." we told you earlier about a new letter from pulte's founder to the board. once again, sharply criticizing that company's ceo, richard
dugas, saying he should leave immediately. now pulte responded, just moments ago, with a new statement saying, and we're quoting, we are disappointed that the pultes continue to attempt to destabilize the company's leadership and derail our successful value creation strategy through their public statements, their attacks bare little resemblance to the facts. they go on to say that the pultegroup board and management team will continue to stay focused on delivering on the successful strategy it has been execute ing since 2011. let's go under the radar now. some things the traders are watching. you may have missed today. >> cable vision, cvc, this company was to be acquired by altise. the price for the deal is 3490. stock trading at 33 now. financing in place. the only thing holding it up is new york wants to make sure service won't be interrupted. so it is pushed off for a couple of weeks. it will close this half. if it closes in two months at
the 6% spread, that's an annualized return of 36%. so it is my largest position. i think there is very, very little deal risk. some, but very little. i think this is one you got to own. >> going big on cable vision. >> been there for a while. >> it is 33. where does it go? >> 34.90. >> okay. pete. you have -- >> little unusual activity. applied materials, this is an interesting stock, hits every once and a while. when it does, it seems to be big paper. big paper seems to be very correct. they're buying the april 20 1/2 calls for call it around 60 cents. not -- basically these things are right there at the money or maybe in the money depending where the stock is right at this moment. i'm not looking at it. but that hit very early, scott. expect over the next very short period of time, i'm probably in this trade for less than a week, maybe just a couple of days. but i like when we see this paper hit this particular name. >> josh, materials? >> yeah, this is interesting, materials leading today up over 1%, leading over the last week over 3.5 and the last 90 days
frankly up 16 and change percent which we haven't seen to start off the year in quite a long time. the big question now is is this just a short-term dollar weakness bounce or could this be the making of a bottom that is five or six years in the making. my personal opinion is too early, we have been fooled too many times, but materially underweight, pretty much every pm around the world. >> i got it. >> see what i did there? what i bring to the show. >> that's a millennial for you. >> we started the show talking about the financials. >> this guy always calls me a millennial. >> this guy. >> bro. >> financials. we started the show with financials. and end it with financials. and let's bring pete into the conversation. >> does that mean talking a minute and a half? >> to me -- >> it is interesting, when everyone is so negative on financials, we're coming into
financial earnings season, people aren't expecting it, but today we have morgan stanley, goldman sachs up 2%, citibank up 2%. jpmorgan closing in on close to 2%. maybe the street, the sentiment is just too negative around financials. >> we have seen a little bit of paper in there. joe brought me in, i'll go in. we have seen a little bit of paper come into the names of late. morgan stanley late last week, we saw paper come into there. we talked abo ed aboued about j jamie dimon there. i don't know what the pushback is now. half a million shares down there at 53 and haven't been there since. >> one quick positive on the banks. the business trends are all bad. more than any other sector, these companies have so many levers they can pull to pull out a quarter. so many things to do on the expense line, they can shift things to different quarters. so i don't know if i want -- >> need a more meaningful longer term lever. >> might be good enough for this quarter. >> risk reward is probably most attractive in the group i've
seen in a long time. >> best name in the space is what? best name in the space? >> jpmorgan. >> easy. >> i don't think -- visa. >> wells, goldman, morgan sanli. >> you like the whole group? >> jpmorgan. good stuff. pete, thank you for joining us. "power" begins now. and welcome to "power lunch." big breaking news on tesla at this hour. straight to phil lebeau. phil? >> melissa, we have a recall involving the model x, the suv that just started being delivered at the end of last year. here's the details regarding this voluntary recall which was just announced. involves the third row of the model x, the third row latch may fail in some accidents. we'll explain how it was revealed and in what accidents in a little bit. the number of vehicles impacted, 2700. basically those that were built and delivered prior to march 26th. owners of those vehicles are being notified by e-mail right now from tesla. they