tv Fast Money CNBC May 26, 2016 5:00pm-6:01pm EDT
were launching the new show. it's important to have a show like that. when we discuss content with apple and everything else. there is irobot down one-third of a percent. thanks for joining us. susan lee, michael, that does it for us "fast money" begins right now. "fast money" starts right now live from the nasdaq market overlooking new york city's times square oil surging. so why does a top-ranked analyst have a buy rating on nearly every single stock in the group? she'll be here to explain. protests over higher minimum wage erupting at the annual shareholder meeting. could robots be the solution to the chaos. we'll tell you what the ceo had to say and the technician says it might be time to take some profits. he'll be here to explain. first, the story that had traders chantransfixed today.
>> we're lowinger taxes. taxes are going way down. we're going to allow trillions of dollars to pour into the country that are right now outside of this country where people and companies what. to bring it in and we'll get rid of the tremendous numbers of rules, regulations. >> donald trump reaching 12,037 delegates, the number needed to clinch the nomination. the likelihood of a trump presidency is as real has it's ever been. the stocks, the sectors that will do well under trump, which will not? this is a question everybody across america is asking that tonight. >> it's a 50/50 shot. this is an absolute coin flip he could be the next president for better or worse. we talked about this, the potential for him to be president saying how the market would collapse.
my push back would be the knee jerk reaction would be i agree. you talk about funds which exactly is what he talked about, trillions of the dollars coming back put into infrastructure would be bullish. so i think the knee jerk would be lower, when the dust settles it goes higher and defense stocks unbelievable during the eight years under the obama administration will continue. >> that comes right back into infrastructure. >> i do think that's where it should come back. >> i think that's where it goes. i'm curious why that's your natural reaction. the way both candidates will agree is we have to figure out how to jump start policy and buildout is a common safe ground to say there is a lot to do. i'm curious why is that the gut reaction? >> it makes the most sense. politically makes the most sense and puts a lot of people back to work immediately. if i were a politician, that's exactly where i would go. it seems like that's the direction he's going, as well. >> i want to be clear as we proceed with conversation.
this is not a political conversation. it is simply what does donald trump mean for your money? it is not a political conversation, what do you think? >> industrials, energy, he spoke about energy, pipelines. >> he said a transcanada pipeline, absolutely. 100%. >> i think he would go energy stocks would be still probably for them. i would say united rentals. we talked about that stock a lot. >> they build that wall to mexico. that's very good. >> and then cat tractor. that's the theme i would be buying if we believe. >> karen? >> i couldn't do anything because he's sort of like the drunken random walk down wall street. you don't know what his policies would be. they have been all over the map. he's probably going to move more towards the center. hillary may move towards the center and you don't know what they will be able to get done, either of them. to try to front run every turn is a very difficult endeavor.
>> do you think about buying protection or volatility that will ensue because of the unknown of donald trump? >> i do. i mean, you have the donald trump factor is -- that unknown is gigantic but i think that, you know, the vix is not crazy. i like to own my portfolio. i'm not counting on the wall to mexico. i'm not counting on giant infrastructure. i am long still because of that. that's right. >> between mexico. >> so i think you can own your portfolio and some protection. >> i mean, the one obvious thing from what he just said is look, i'm going to cut a lot of taxes. i'm going to try to bring back and repatriot a lot of money i'm not going to tax and therefore, what does it ultimately mean for the credit worthiness of the united states of america? we had a heated discussion. no matter what happens with either candidate you'll get into a place where you'll see people lose faith in the aaa rating of the united states. >> bonds are good now? >> yields can back up and ultimately a case where you're also arguably going to be doing
things that should be reflating. i think there will be some test as to what the budget really means with the u.s. >> what do you think happens to the bond trade. >> it's interesting. i don't know as a quick answer. i'm steadfast in my belief rates are going down. if he talks. the things he talked about would be extraordinary bearish for bonds. yields would go up significantly. the things he talks about. in practice not sure. i think we're fighting this global environment regardless interest rates go down. he's clearly a wild card for the bond trade. >> yeah, we talked about individual sectors but the overall markets, if we had repatriation would that be bu bullish? >> we can't be a holiday. it doesn't work.
if you do it in a more permanent fashion, karen said before we don't know who will be able to pass what. so it depends on if congress stays republican and if donald trump is elected. so there is a lot of moving parts here so then you could see something really change with tax policy and corporate tax policy but until we see that you can't to karen's point trade that. >> companies that have to come the mile. google. these are companies making boat loads of cash and actually have been outspoken to say we're not going to do anything until something changes here. >> the next step would be more mma? >> bring the money back and build factors? >> they will hire people in earnest over the last few years but i think mna is an absolute potential. companies with plants domiciled overseas specifically in south america, mexico are going to find themselves with a giant bull's eye on their back. those are stocks we would look
at to be taking profits and the other names are names like aetna and cigna. maybe obamacare would give them a lift off. >> last comment here with the peter shift conversation, the very heated one putting it politely. there in the market because of a donald trump presidency, let's just say, let's go down that road. does gold get a bid? in trouble, is that the last -- >> we have common ground is gold is going to go higher for slightly different reasons. i don't think the dollar is going higher and gold is a hedge against the currency and global central beck policy. we're in a case where gold production has not been reinvested into. you have supplies issues and industrial uses. gold like commodities is just seeing an uptick in demand. yes, i would definitely be long gold. >> all right. turning to the markets now. banks have led stocks higher this month and you would have seen this coming if you listened
to the next guest. here is what he said back in march. >> this is a catchup trade. what caused the market to rally is huge rebounds and beaten down industrials, metal names, all sorts of retailers destroyed have come back and typically when you get to the end of a ricochet, you get the last to come along and financials clearly is the one group that have not really come along. >> what has happened since that call? the financials are up 5%. a corner stone macro is at the smart board. what do you do with financials? >> what we know is often stocks will start to price in what is coming for instance as an analogy. energy stocks haven't move in a month because they got ahead of the fact oil is going to move and continue to move. the financial stocks are ahead of themselves and pricing in maybe this fed activity coming up in june or july. let's look at the precondition. back in march, the ten sectors in early march we know we were being lead by all these areas.
look who is bringing up the rear. only the point of the time, the catchup trade is financials had had no participation whatsoever, maybe you could play them for a catchup. now to some extend that opportunity has come and gone and we think just as the energy stocks got a bit ahead of themselves, maybe too for financials. this is actually since the march low. what we've seen is in fact that these are now leading. so from march 11th, you got banks, brokers, anyway you want to look at it, even the sector equal leading the s&p. we think to some extent the opportunity is exploited. the financial sector etf if you think back in march, we're down in here and what we've done is in that period we've gone back to a difficult level where overhead supply comes into play. you can look at it this way. here is sort of a before and after for instance. this is the bank index. that's kind of how we looked
early march and what's happened is we've jumped back to the line. so that's the before. that's the after. and/or for instance, the s&p 500 bank and brokering group. back to where we are now. so the thought is is just from my point of view is what was maybe a low lying fruit is not the case, easy money is made so to speak and this may be pricing in whatever fed activity is coming? >> carter thank you. carter worth of corner stone macro. i know your long financials. do the charts concern you? are there catalysts? >> there are. he looks over done. i looked at them having been under valued prior to what happened in the last month but i think we have c car coming up in june which will be important for bank of america most important for bank of america and for city and not so much for jp morgan. i think there is more upside in city and bank of america. >> interesting to see what they
reach for in the last month, though. jp morgan was up 5.5% and bank of america and city was flat. bank america up 2% and goldman sachs couldn't catch a bid. if you see a bid coming back, j.p. morgan is still the favorite in the group. >> as a group. tim talks about this. there is best capitalize as they have been historically and evaluations are cheap. my problem with the banks is how do they make money in this environment? the 210 spread is the narrowest since december of 2007. that is not bullish for banks. >> yeah, but i will just say there is other parts of business doing well and if you remove a lot of capital concerns for jp morgan even though i don't think they have to raise capital, it hangs over the sector. let's get through that. jp morgan clearly best in breed. they are giving you the best return on tangible books around 12%. the best long-term value after a 25% run off.
in the short term, $68 is an important level for the stocks to get through. it's not crazy cheap but at one point, two times the price. this is a great bank to own and very safe and paying you 3%. so i mean, this is a very interesting time. >> i want to be very clear for the audience in terms of c car. c car is basically present their case to the fed. can we pay a dividend, can we not. >> capital allocation question and bank of america having stubbed their toe -- you know, the heat is on for them to come up with a plan that is acceptable to the fed that also delivers value to the shareholders. >> relative value as steve mentioned brokers. that's the way to hedge yourself up. gold man, morgan stanley. is apple about to make a push into original content and which could look to buy? we've got your apple shopping list. plus, record lines for tsa and oil at the highest level in seven months. could the combination spell
trouble for the airlines? the top-ranked analyst weighs in and could robots be mcdonald's answer to minimum wage wars when "fast money" returns. you pay your car insurance premium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™,
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welcome back to "fast money." let's get to susan lee. >> the security technology company and high maexpectations. 50% plus gains when it comes to revenue pretty close this time around did beat analysts estimates but still guidance forward. earnings in line for the quarter but down to a seven quarter low and growth, which is an important metric. despite that, the reaction as you see was mostly to the weak revenue guidance for the next quarter and weaker eps and 50 cents a piece and analysts expected a further slow down, as well and says sales growth going forward and noted slowing demand for palo alto products after doing it's own checks of sales channels fire eye and check point, as well. it's not a cheap stock. it's trading at 65 times near term earnings and 25 times cash
flow. back to you. >> susan lee, thank you. guy, we've been talking about the space for a long time. it's not like there aren't any hack attacks anymore. it's not like that threat has abated. these things can't catch a bid. >> they haven't been able to catch a bid since the middle of last year. let me be clear. we had this story called and fought it for the last six months but she mentioned it. billings growth up 61% year over year. you can understand why people are paying up. the reason why it's selling off is the space is under pressure as you mentioned and the guidance was sort of squishing. >> are they just targets now? >> i think -- hewlett packard enterprises, meg whitman, they freed up cash and balance sheet. a name like fire eye to me is a nice tuck in. there is a place in my palo alto lower than i'm trading here. >> let's switch to apple here. a report saying high-ranking apple executive eddie has raised
the idea of buying timewarner in a meeting and apple didn't enter serious negotiations but the company wanted to spend several hundred billion a year on original content. netflix and timewarner shares rose on speculation they might be an apple target. how likely do you think this is? tim? >> you know, i think they have hollywood ambitions for apple make a lot of sense. i can tell you what i don't think they will do, buy netflix. netflix to me is everything apple has. i think in terms of distribution and terms of really the conduit to get to the people it consumes. makes a lot of sense. to the extent -- itunes was one of the first 4 as. obviously not their own content but apple starting to dominate distribution of music in a way that changed the music industry ink they can change the way a lot of media is consumed by who they are and this makes a lot of
sense. the hardware is the tool. >> if they really wanted to make apple tv a serious contender, do they need their own content and do they have to own it? >> it's not crazy for them to own it. i sort of get it. i was shocked when netflix successfully made that transition. if i think about those, timewarner or netflix, it's a bigger ticket for timewarner and deal but not as expensive in that netflix, the multiple, is there is a lot down the road. >> what content are they getting? i realize there is a couple emmy -- six. >> how about the disney relationship. >> just kicking in now. >> will kick in in september. >> that's huge to me. when you look at the number, tim started off correctly. when you look at the number, apple isn't going to pay that number for netflix, but it opens up a can of worms. do they want to -- >> do they want to send their money -- do they want to own it
or take the risk and they have done it. >> netflix is in a different game. the value -- >> the money. >> but it's the valuations. apple to be looked upon as a netflix is very dangerous for their brand. it's not helpful. >> apple has never done a deal, anything remotely close. >> i know. tim cook said they are going to start looking at big things potentially. >> okay. it's got to be -- >> all right. >> they had -- >> stranger things have happened. >> but in terms of netflix, maybe the way to look at this is this is validation of netflix' multiple, that is actually where the value is here if a company like apple needs to buy and wants to buy content, that's an argument for a lion's gate with great earnings. >> great earnings. >> this is an argument for netflix. >> the exclamation point on netflix. the hulu evaluation, $20 billion evaluation for hulu stands to reason. netflix should be worth twice,
if not 2.5 times that. that's me. that puts you company. you finally have tail winds in terms of the stock. >> as we head to break here, let's take a look at shares of abercrombie and fitch. what has them so worried. i'm melissa lee and you're watching "fast money" on cnbc. in the meantime, here's what else is coming up on "fast." ♪ ♪ >> that pretty much sums up the scene inside your local mall. so which retailers are thriving and which are dying? the former ceo of one of the biggest retail in the game gives us the real tale and tempers flaring over minimum wage. could robots be the solution? we'll tell you what the ceo had to say when "fast money" returns.
welcome back to "fast money." airlines are facing two huge hurdles. long lines led to thousands of delays and cancellations as a tsa struggles to find a balance with a rising number of travelers. they are expecting 740 million passengers this year, up 15% from 2013 and this as oil breaks through the key $50 level for the first time since october. so which will have a bigger impact on the stocks, rising fuel prices or traffic. a transportation analyst is here onset with us. welcome heleen. good to see you. what should investors be scared of? >> higher fuel prices are
definitely problematic because investors definitely expect airlines to raise ticket prices every time fuel prices go up. so for every dollar in oil, they expect a dollar in ticket and it's just not the way it works. it takes about two to four months for airlines to raise ticket prices on every passenger because obviously you're going into any month, 60% sold out so the fuel price you're paid for that time for your ticket within the month is a price that you paid several months ago, since 60% of all tickets are bought within three months of travel and 20 to 22% are bought within the month. >> right. >> so that's problematic. as far as the lines go, they are crazy long lines and insane that you would get to the airport at 5:00 in the morning and miss ankan 8:00 a.m. flight. it's horrible. it's not every airport across the board. i had a united flight in new york and sailed through in less than 30 seconds and a flight sunday night and the same thing, i slid through in a minute.
so it's not evenly distributed. it seems where the big hubs are where the problems are so it's going to be uneven. >> sometimes there is a disconnect between business and stocks. when things are going great and traffic is great and have hedged fuel prices and margins could be good, what do you think is the most important met trick investors look at to decide how to trade these stocks? >> yeah, you know, you have a really good question there and when i was here last time, actually one of the points that you made was exactly that, that there -- >> i did? it was good? >> you made the exact same point. >> she knew to follow up a good comment. >> your point was exactly, you know, there is a major disconnect. investors care about the most is price. that's really it. volumes are huge to 's earlier point. she made the point how many
people will travel this year. we're expecting 220 million people this summer. so we're looking at enormous numbers of people and, you know, all that matters to investors is ticket prices. there is no catalyst and there hasn't been for two years for these shares to move higher. >> okay. so with ticket prices, we have rising fuel prices that could raise ticket prices and we got a number of airlines now saying they will cut capacity. delta kicked it off. that may provide ticket prices. which airlines do you think will benefit the most? >> so delta of usually is clear. spirit airlines earlier this week cut a significant amount of capacity for the fourth quarter. so that's huge. and obviously that will help and the hope is that ticket prices go up as, you know, as seats go down. as oil goes up.
if this doesn't happen with labor costs going up, margins get squeezed and i think that's what you're seeing with respect to the stocks, you're just seeing the concern that margins get squeezed. >> thanks so much for coming by. so these stocks have been trading terribly to karen's point a lot are hitting lows, new lows. >> delta down 15%. american down 22. united down 25. so she's right. if you're looking at price, the best thing to go for is spirit up 7% year to date. the chart looks constructive. it's kept that recent low guarded as support. i would say if you're going to buy the airlines, i think they have head winds but if you buy, go with what has worked save. >> guy? >> spirit had a horrible year last year. so it is bouncing off a low bottom. if you're looking, that's the one to play. peeling back the death of brick and mortar retail. the ultimate tale on which
retailers are thriving and dying plus just one more day until the official kick off to memorial day weekend and our guy is gearing up for his designation in style. >> i wouldn't fly in that. >> by taking to the sky's helicopter style. where is he off to? we'll tell you. >> was he flying? >> yes. >> those people look scared. ang. now she's into disc sports. ah, no she's not. since when? since now. she's into tai chi. she found disc sports too stressful. hold on. let me ask you this... what's she gonna like six months from now? who do we have on aerial karate? steve. steve. steve. and alexis. uh, no. just steve. just steve. just steve. live business, powered by sap. when you run live, you run simple. oa skin transformation that rivals the leading department store moisturizer. revives skin to fight 7 signs of aging. with olay, you age less, so you can be ageless. olay. ageless.
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welcome back to "fast money." retailers struggling to stay irrelevant. but there are brick and mortars thriving. plus, forget long lines at the airport or city and memorial day weekend. traffic. that's what jumps. we're trying out the uber of helicopters or guy specifically is trying to uber up helicopters. demonstrators rallying pushing for $15 an hour minimum wage comes as the fast food giant announces a management change. susan lee has details. >> certainly wasn't a boring
meeting with heated exchanges inside but also outside with protesters surrounding mcdonald's oak brooke headquarters pushing for higher minimum wages. the fight for $15. the group with protesters to descend on the annual shareholders meeting but as they have done for the last few years, mcdonald's points out in an e-mail statement no workers they know of have walked off the job to participate. when asked about higher wages and the controversy of using robots, we got a response from mcdonald's ceo steve easter brooke. >> it may change the jobs in the restaurant because technology is something our customers are embracing through the phone or kiosks, that's a trend. we want to adapt to that but not meant as a labor replacement. we can just re, reapportion that
labor into more service. >> the most important announment, the new chair of the golden arches will be enrique hernandez junior. in the meantime, macdonald's reported higher shares and down to all-daybreak fast as he also noted at the agm. melissa. >> thank you, susan lee. mcdonald's has been tone deaf to the call. they did raise the minimum wage last year at the stores by at least a dollar over the local minimum wage, wherever that store was located. this is pressure retailers are facing, as well. >> it is. specifically mcdonald's better hope this dissipates, this noise. remember when walmart was the target of hostile labor relations. it really affected their p.e. for a long time and they are not -- i seem to not be the
poster child anymore. mcdonald's really does not want -- >> who is more agreeingous. >> i'm not saying they didn't deserve it. it's a question of the perception. >> that's a political debate. it knocked off walmart tremendously trading in the 80s, roughly. >> walmart knocked off walmart. >> the that the debate that knocked it off. with mcdonald's right now, they have a vested interest making sure this debate is toned down to the most minimum because it is a turnaround story. turnaround story so to speak. changing their menu up. they don't want to lose the traction. >> is this a concern for you as a shareholder? >> no, people have talked so much about breakfast. it's a big deal why the base of the same-store sales, the second half will be better. the consumer satisfaction scores are going higher. it's social responsible and affects everyone equally if you look across the space, sell them off equally.
mcdonald's is relative value to me and a better place to play. >> he was talking about technology. it thought about patrick doyle, the ceo of dominos who we had on this show recently and he has really reaped the benefits in terms of the company share price because of technology improvements. >> steve grasso. >> by the way -- >> spinning pizzas. >> he has a less, less of a broad stroke to be effective but he'll be effected like tim said. these stocks will all be effected. they are all concerned with the minimum wage and he is at the forefront of technology but has a very small work staff. >> my extrapolation was mcdonald's embraced technology the way mcdonald's did. can that help them with their business, that they continue -- >> they are starting to. i think there is certainly places that this company made a major step forward. by the way, how do you getuy off your front doorstep? >> pan pizza. >> pay for your pizza.
>> he was only making. >> that's hurtful. it really is hurtful. >> great joke. important. >> still ahead, still ahead from landlord of a number of large retailers gives us the inside scoop who is really thriving. who is barely surviving the retail slump. that's next. shares of abercrombie and fitch are getting crushed today. why more pain is ahead. much more "fast money" right after the break.
welcome back to "fast money". >> ulta is up. the retailer posting strong first quarter results beating estimates at the top and bottom line. sales increasing more than 15%. that is the best growth in the company's history. ulta issuing weak guidance but still did raise the full year look. the ceo points out that the demand in the beauty category, also ulta's format and collaborations among other reasons she says for the strong quarter they just recorded. all t ulta shares up 52% over the past 12 months, melissa?
>> ulta at these levels, new all-time high because it did set an all-time high in the regular session. in terms of this sort of retailer, why is this different from the ones that had so much trouble? >> you know, i'm not 100% sure. i'm wondering if it's because people don't want to spend as much on apparel but do want to buy something. right. yes, that same lipstick -- >> thank you. >> i think that might be part -- they have done a tremendous job, also. >> i think there is less of a mark down capability. you guys would know better than me -- >> really? >> maybe not. >> aren't you more protected with that specialty retail -- okay. [ laughter ] >> specialty retail space. i would think i said this on the closing bell. you have to sell this. when you talk about record profits, it's like a high bar to match. >> well, i'll say this. the health care, beauty, all of that that's related to this segment is doing phenomenonly well. it's why i would be long estee
lauder and high growth, high margin part of the industry. >> but they are in department stores. >> that's true. >> anyway. >> aulta aside, growing online shopping so what are some names winning and losing in this new environme environment. daniel is founder and ceo of a private real else state investment. think of him as a former landlord for many of these companies. you were the ceo of a major retail very recently. dan, great to have you back on the show. >> great to be back. >> we were talking about ulta, you think that's a retailer losing the war. when it comes to ulta and tjx, ross, what is the common theme among the winners? >> in the ready to ware business with ross and tjmaxx and marshalls, the private label guys, you see with abercrombie today continues to struggle because it's not really relevant to the consumer in many respects today, but branded goods are
priced to give the consumer the value they are looking for and the winners in the market are very, very clear. >> is there something else about what they are doing specifically? because you have a number of major department stores with their off price outlets, as well. >> doing well. sacks off fifth is a winner and nordstrom rack has been a winner. macy's never pulled off the back stage but might yet. i think it's very, very telling that the full price retailers are only trading down. they are not trading up. no one is sitting in a boardroom trying to figure out how to come up with a more expensive prototype. tells you people are seeking value in ready to wear. >> let me switch gears a bit. for a long time i thought this desire for retail space, there has to be downward pressure on rent. and yet, because of interest rates or just because they didn't happen, the stocks have gone up. where is that now? is it coming to pass? will we see traffic down as much as it has been in the last
quarter or two? >> nope. >> not coming to pass. >> not coming to pass at all. you'll see some pressure in the bnc malls because that -- they clearly have a problem. they have all private label retailers that are struggling but if you really look at prime space and the real else state the bubble companies own for the most part, average base rents are up and occupancy and with the exception of the department stores, sales are up and balance sheets. this coming in a non-inflation environment. if we sat at 3.5% and 4% inflation, we wouldn't have any of these conversations. >> you think the consumer is fine. isn't this a tale granted we talk they are spending in household goods and certainly the big margin stuff but effectively, you're telling me sales are up. >> sales are up. retail sales in the u.s., whether bricks and mortar or online will go up again this year. the question is are you relevant? are you catching the share of the dollar. it's a game of winners and losers and we know the winners
because they report and we know the losers because they report. >> dan, great to see you. his losers, office depot, sears and gap. >> one of the huge -- abercrombie and fitch. they got a bounce last quarter because they controlled inventory so well. down 5% year over year. that helped margins. they didn't do it this time. sales were down big and they weren't able to control inventories, one of the many runs the stock got obliterated today. develop is interesting. >> back to the notion you can short a read based on this feeling karen, at one point i think your final trade was short, which the etf attracts. do you pull that back after hearing what dan said? >> dan and i talked and probably. although, going up in general than -- >> the only problem is they are m co-ing out of financials and
will be the 11th index. it's been forever. ten. that will create basically from 100 to 200 billion in buying. >> do you think there will be actual funds or something -- >> goldman sachs, exactly. you have to. it's getting carved out. it would be 3% of the s&p and 18% of financials now. so it's going to need to be bought. it's just how much. >> yeah. >> i would talk about the trade and context and what is going on. the trade at this point obviously is to make a play on may sees and if you look at the charts, the balance sheet, the valuation, we know what the trends are but to me, tjx and effectively, all of the discounters are very, very premium priced. in other words, their success is largely in the share price and certainly the positioning. i think being long may scys and short, giving the edge is something i'm slightly involved in. i'm long macy's but i think it's a case where actually some of the stuff is so over done and we
started to see some stocks bottom thing week. >> first to choose, guy. >> is this -- >> say it, please. >> would you rather, three choices. would you rather, rather? would you rather, rather? dan's list of winners, ulta, tjx and ross, which would you choose? >> out of those three? >> yes. >> tjx is positioned to best, i think ulta 30 times earnings maybe at the end of the curve although as somebody clearly pointed out, they seemingly can't be amazoned, interesting. i just saw that on the twitter. >> you want to try the lipstick on right? >> exactly. give me a kiss. a different show, guys. >> as we mentioned before, one retailer that has nln't been ab to get things going, abercrombie and fitch. traders are betting on more pain. mike at the smart board. >> disappointing earnings. seven times the average. not unusual to see options activity after a catalyst like
we're seeing today however, it is unusual to see opening activity. where we saw that is in the june 19th. we saw those trade for about 35 cents. that is a bet that anf could decline 10% or more in the next three weeks and if we take a look at the long-term chart this is going to tell us the whole story here. this thing basically is just a declining story. we had $4.5 billion in revenues back there looking at 3.5 here. we had about $2.85 looking at just over a dollar now. the head wind they are facing is foot traffic internationally. that represents about 35% of the revenue but basically saying whether you're talking about asia, europe, foot traffic is down. the only bright spot is the consumer, which represents probably 25% of the revenue. overall it's a grim picture. >> would you be inclined, mike, to put on a negative trade, bearish trade? >> absolutely. this is trading probably 16.5
times forward earnings estimates and the name that tim just mentioned, macy's is trading in the high single digits. if you think they are both facing similar head winds, why would you be interested in doing this, 11 1 this, 11 100 stores here would have 950 at the fiscal end of 2017. i would be short anf and long macy's. >> thank you, mike. see you tomorrow in "options action". >> i love that show. mike will be here, no doubt dan. >> okay. great. >> what do you mean? that's it. >> i don't believe what you're saying. i do not believe a word you're saying. the uber of helicopters, blade could be the hottest way to travel this summer so naturally, he had to try it out ourselves. see how guy acome me did taking on the shy. you're watching cnbc.
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mass migration to the hamptons. putting blade and uber to the test seeing who can touchdown or roll up to south hamptons helipad first. kate's costed $586 and robert touched down in 40 minutes for $595. naturally, our guy adami needed to get in on the action so guy took to the skies with another destination in mind. take a look. >> hey, it's guy. i'm out here on the east side of manhattan with rob. he's the ceo and founder of blade. we just booked on rob's phone a helicopter 15 minutes later here it is. rob, tell me about this helicopter. >> this is an airbus airbus b 2. >> you see me here. do i have what it takes to be co-pilot? >> i think you have more than what it takes. >> let's go. >> are you ready to go to westchester? >> yes, sir. >> 150 mile an hour ground speed
with the winds. >> let's go. i'm on it. ♪ ♪ >> all right. so tell me a little bit about your business. >> the most important thing is we provide a terrific customer experience. the fastest growing product is the blade-bounce, the five-minute flight to the airport growing 8% a month. >> getting cleared to land at westchester airport, folks. so we're about to get this bird on the ground. we got you here safe and sound. looks like your flight is right behind me. great trip. >> got to come with me. >> let's go. come on. >> you're supposed to be the co-pilot. you didn't look like you were doing a single thing. >> on the foot pedals. there is one guy with the rutter. >> i kept thinking airplane. striker, striker, striker, you're too low, ted. >> there is great people there. if you're going out to the hamptons, rob, christina,
jasmine at blade, unbelievable job. unbelievable job. >> let's extrapolate a bit. the ride robert took in the 40-minute raid, $595. a rental car for the weekend would easily cost more than that from new york city, i would think. >> does it? >> yeah -- >> but then you don't have a car for the weekend. >> but then you can uber it. >> you have to add that on. >> add that on. >> the time savings is enormous, yes. >> yeah. >> well, what we're seeing of usually, we're seeing with hertz, they have a couple different issues. the whole thing with the core business changed. if you look what is going on with gas demand, one of the things that's going to be a real tale on where uber has an impact and where blade and other ride shares, whether it's helicopters or cars will impact the auto industry. you're starting to see if you look year over year gas demand is up. if you take out efficiencies and ride share, it's taken 130 points off.
interesting trend. >> bad for rental car companies? >> i think rental car companies have their own issues. definitely not a tail wind for them. this is a head wind for them. i would say all of this is negative. when you look at a company like blade, there is a limited amount of people to use it. there is probably a wait limit inside that thing -- >> how many people did you take? >> there was six of us in that sucker and we got there pretty in one piece. made it back, too. >> we got guys in the back with cameras. >> guy, we're all counting on you. [ laughter ] >> head set on, that's hot. >> final trade, stay tuned. move like a start-up? shedk it's a question we get from some of our largest banking clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely.
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time for the final trade. >> mceldercdonald's, to execute valuation is fair. stay there. >> karen? >> yeah, it's not the kind of name i normally like but i have been looking at pandora and i think it is really interesting, tons of subscribers, not cheap, though, but i like it. >> grasso. >> sell it into a rate rise. it traded up 16%.
>> guy, do you remember your final trade now? >> ha, ha, ha. elder moment. fire eye if it sells off palo alto networks, sister. >> i'm melissa lee, my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica other. people want to playing friends. i just want to make you money. my job is to educate and teach. so call me or tweet me. when the market has been as spectacular as this one has been over the past week, do you know what happens? people get carried away. they take to heart