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tv   Fast Money Halftime Report  CNBC  March 14, 2017 12:00pm-1:01pm EDT

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the headlines that saudi arabia would try to comply more with these opec production cuts, but, clearly the worst of the session beginning to see a ramp here mid-day. >> tesla looking good. up 2%. in the meantime, let's get back to scott wapner. >> welcome to the "halftime report." the valiant crash. the stock tanking today. sells his entire position. that stock now down a stunning 95% in two years. the trade going down is one of the worst in hedge fund history. telling me yesterday during an exclusive phone interview that he made many mistakes with valeant starting with not selling 18 month ago and starting the stock on its long and painful slide longer. he didn't understand how bad things were with that company
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until he got on the board that he tried to leave the company in a position to recover starting with securing that financing deal last week. he told me he thinks they have excellent management and now an excellent board and that the investment was simply taking too much time that if shares could double t wouldn't move the needle enough to remain in the stock. our josh brown was up tweeting about what he called the valeant depockal. what do you make of this story as we watch it unfold? >> anyone who runs money will tell you the market gods do not like it when other traders take joy in the pain or the misery of someone who has just blown up or had a bad trade. i feel people who are in it and i'm sure they will be fine and it is a really, really bad loss. it is a debacle of a stock. it has been for some time, but, obviously, that's accelerated.
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>> some will say as we look at this and ackman told me yesterday he didn't understand the issues at valeant and others say the writing was on the wall and if you simply listen to jim's own point of view over the years and remember ackman himself had a look at his research back in 2014. it was sent over to him. he read the whole thing. and he basically said chanos didn't know what he was talking about on valeant. let's listen and react on the other side. >> he sent me his 26-page analysis of the company. i went through every word. i had inside access and, unfortunately, jim does not have valeant right. >> look, hindsight is 20/20, obviously. when you listen to that and i
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went through his research again today just before the show and he laid out pretty clearly what he thought was going to happen to this company. too many deals at too big of a price. too much leverage and here we are. >> right. so, first, if you ever see me on the other side of a jim chanos trade, make sure to throw a pail of water at me. a couple quick things. the first is, ackman was not alone. this is one of the most crowded "hedge fund hotels" that really anyone has ever seen. you had at least two or three dozen major funds involved in this stock on and off going back to 2014. because it was a moneymaker. it was working. the second -- and by the way, not just hedge funds. sec sequoia was in this. the only hedge fund anointed by warren buffett. this is not fly by night some
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shady thing that only one person was involved in. you had a lot of time as an investor to get out of this. this is not the same as long-term capital management which blew up, i think they lost $4.6 billion in less than a couple of months. and that was against the backdrop of a collapse in russia and asia. nothing like that was going on here. you had years to decide this is probably not going to be the next berkshire hathaway, which is what ackman once said. he said a platform could be worth $330,000 a share. the whole way down you had ample opportunity to second and guess that thesis. so, i think, you look at $9 billion at and you look at long-term capital management and those were very sudden. this was not. >> josh, appreciate you coming to the phone. we'll talk to you soon. >> yep, talk to you later. >> josh brown. bill ackman has been on cnbc
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many times over the years talking about his investments. here's just some of what he said. >> when you understand the operating fulosia philosophy an into the mold of an investment. that's what got us interested in valeant. >> this is not a good thing on your resume. i'd go find another job. >> i think the best name management team under famed railroader. this is his third turn around. the most profitable railroad in north america and he's done an incredible job in a very short period of time. burger king was far, far behind mcdonald's call it four years ago when 3g bought the company. or 4 1/2 years ago and now they're making enormous, enormous profits and mcdonald's is playing to catch up and just shows you the power of a talented management team. >> leslie picker has been looking at ackman stock picking
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history and big hits and big misses. >> with valeant people look at a deja vu and those losses were about a tenth the size of the ones he is taking on on valeant and change management that didn't go as well as planned. but from there he moved on. and a lot of people point to some of the winners right after he moved on from jcpenney, namely canadian pacific. that's a stake that he exited this year. >> $2.2 billion that he had made allergan. as you say, look, we lay out the good, the bad and the ugly. and over the years there has been much good, right? i mean, i just made a list. mcdonald's, wendy's, tim horton's, general growth and
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mbia, a long saga that paid off incredibly well and allergan and canadian pacific. and the mow more recent issues that have people focused on that side of the ledger and clouds the overall picture for some. >> that's what you get with an investment like bill ackman who takes these extremely concentrated bets. you'll have these high rewards and then the, of course, valeant situations with the big losses. in recent years, you've seen incredible losses and net returns on his portfolio. but in 2014, you did have that big 40% gain largely from when allergan sold itself way back when he posted a $2.6 billion gain on that. but it's hard not to forget the losses especially in times like these when you look at how the s&p 500 is performing relative to his good years. >> with us for the hour, john and pete are here, carrie firestone is here and courtney
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gibson is the president of luke capital and with us today, as well, from chicago. doc, you just e-mailed me something. tell the viewers what you just told me. >> sure. obviously, i'm just like josh, i'm not going to rip on ackman. i feel bad for him and bad for the investors. when you define your bet as much as leslie described as ackman does routinely, you need to have some sort of floor under that bet. a lot of people do it exactly with the products behind me. with an option and an insurance policy. if you don't do that and you ahave a really concentrated bet, obviously, you can make a lot, but you can lose a lot really fast. look at our friend carl icahn. carl basically buys upside calls and he did this in urbal life judge, as you recall. he brought upside calls and that's exactly the opposite of what i'm talking about, of course, because that's really ramping up the amount of risk
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you want to take, rather than cutting it. so, carl does that because he's somebody very smart, but also he's willing to accept the consequences of being wrong and seeing that trade go against him. mr. ackman probably could have hedged and lost 5% or 10% on this trade, rather than 95% and that would have been a much smarter trade. but it's hindsight at this point. >> carrie, for those managing their own money and own portfolios and many viewers do that for them selves. we had conversations as to whether people are better off managing their own money than putting it with somebody else who may not perform as well. this really is a lesson in not only risk, but emotion when it comes to trading. a stock that was up at 263 and now it comes all the way down to 11 with an investor falling so far in love with a company's model and its ceo and here we find ourselves. >> well, you know, it's easy, of
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course, to take shots at bill ackman because of this trade. i apologize for my voice. it's the blizzard outside. but, remember, this is one trade among many and he has made a lot of money for his investors who are sophisticated investors. the average person doesn't take $10,000 from their 401(k) plan and give it to purshing square. that is not happening. these are people who have a lot of money and institutions that are deciding to allocate some to a person with lots of experience. >> sure. but let me just stop you there. whether you have $20 invested in a stock or, you know, $2 billion or whatever, the lessons are the same. it doesn't matter who is investing in what fund when, where and how. >> totally. i was just putting the backdrop in place. he made a bet that was too big. he did not -- if you asked him, he would say, i bet too much.
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i went overboard. i fell in love with it and he recognizes that. this must be a terrible situation for him. and he took the risk in a way that he shouldn't. he was too oversized. i wrote a book about risk taking and i wish i hadn't done it for his investors and for himself. we never owned valeant but we made plenty of mistakes. we just try to size it correctly. >> courtney, do you pick up on that. the lesson for the investor here or the money manager for that level is what? >> be discipline. at the end of the day we can all sit here and as everyone said very invested investors. people take risks, they take calculated risks. i think it was calculated. he is very, very sharp investor at the end of the day. but like you said, people do fall in love with names and stocks and at a certain point you have to be disciplined and
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you have to say, this is what my ce sell signal is and this is what my buy signal is. at the end of the day the one lesson here is being disciplined and knowing when to cut your losses. this is 20/20 hindsight. at the end of the day, people do this, you make mistakes and hopefully you learn from them and as someone very bright told me once, i've gone to that school, learned that lesson and i don't plan to pay tuition twice. >> wonder as you move forward it sort of changes the overall dynamic of the way hedge funds operate and josh brown made the point of valeant was a hedge fund hotel among, if there ever was one. and whether this sort of changes that whole feeling. i mean, the blow up in valeant caused deep pain for the industry, give an number of names that were in it. >> and they're still experiencing the -- as you see
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activist investors pile into certain names. do the mistakes of certain activists and all the decisions and influence they have over management, do they spill over and do you get this group think mentality that is not good for the stock at the end of the day. >> pete, how do you view this? >> scott, we talk all the time about discipline. i heard that word used multiple times by the panel so far. let's be honest here. when you look and you're analyzing where you are going to allocate your money, you have to know exactly what that fund is going to be doing. for instance, part of what we do back here in minneapolis is 5% allocation is the biggest that we will go. so, as long as people understand that the concentration levels and a lot of people fall in love. it was brought up 2014. a 40% return. people fall in love with that return. what they don't fall in love with is when they see the other side of returns like in this valeant case where it's 90% to the down side. the concentration amount is really the problem here.
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and you've got to know exactly how people are allocating the money when you put money into a fund. as long as you understand that, you understand the risks. you have to understand there is the highs and the lows. by the way, you never marry a stock. i'm married to my wife. there's not a stock, including apple, as much as i like it. not a stock that i'm married to. if something changes. if the story changes, if something within it fundamentally changes, you've got to change with that and that did not happen in this particular trade. >> yeah, leslie, good having you today. thanks for joining us. what all this means for bill ackman and what it means for valeant itself. let's bring in the analyst who called the sharp fall. david maris. welcome back. nice to talk to you today. >> good afternoon. >> what is your big take away? what does this mean for valeant itself? >> i have to disagree with some of your speakers before that there has to be restraint and also responsibility.
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if you own a lot of stock. it's one thing. one thing to go on every tv show and tout it to people as this is why you should own it, also. so, i think that's where people should have been a little bit more responsible. where does valeant go. an insider on the board is leaving. ask you to wonder, does he know something about the outlook? does he have a perspective on what near term investigations are going on and the market is reading it right. someone who is closer to this than anyone can be is walking away. and it's probably not a good sign. >> he made the point to me yesterday, david, on the phone that, look, valeant can double from here. not out of the realm of possibility. just not worth our time any more. is he wrong in believing that valeant from this very low level can right the ship now that it has the financing in place to recover to some degree? >> look, i can't speak for
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whether he's truthful or not. i know that's probably what most people scripted would say. what should you say when you're leaving? i think it could double, but i'm leaving. the fact is if you think it's going to double, even if it's a small amount of time. don't spend any time on it and just sit on it. >> so, at what level, though, would you recommend people buy this stock or how much lower do you think it could possibly go. we're talking about a stock that is under $11. >> since november of last year the fair value based on what we can see is anywhere between $10 and $1. you want to buy it at a discount to that. give on the last quarter that they reported, you probably want a pretty big margin of safety. we also have been saying that we think there is a greater than 50% chance that at some point they enter a restructuring. the recent debt offering kicks that down the road a couple of years. but, look, the outlook is bad and the base business and some of the key products, the prescription trends do not look good. so even after the ackman goes
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away and all the other dies down, you still have a base business that is not performing well. >> david, let me ask you before you go and put this in the big picture perspective. a stock that goes from $263 at its high to $11. i gather you've never seen anything like this in your career. i'm just curious about your thoughts of how this whole thing has unfolded. >> i had two other big short calls. this one is the same exact thing. it's a big, fat pitch. it was easy to see if you spent time with management and dug through the numbers. in my opinion, people just didn't have the courage to call it for what it was and, to me, this was a big fat pitch down the middle. >> it's amazing when you say that and you realize the ackmans and the bill millers and the value act who had board representation and some of the smartest money or perceived smartest money around missed it.
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>> but, it's not that surprising, right? we're all people and we all make mistakes and get tied to our own stories of why we like something and why we don't like something. but, again, you have to be the best dispassionately and then they set limits and then they say, you know, when this hits, when this news happens, i'm not going to change my thesis. i'm going to stick to it. do i really own this because mike pierson's a great guy? if i do and he leaves, then i should sell it. if you don't keep that discipline, that's where you start to get into trouble. >> well, david, we appreciate your time. we'll talk to you soon. >> thank you. >> leslie, thanks for being here, as well. tomorrow on the half-time report we want to remind you, as well. an exclusive interview with the bond king jeffrey gundlach. we'll discuss the fed, the market, so much more, as well. up next, free agent banking
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mike mayo. today it's a pie. a pi symbol on it. you know what today is, march 14th, 3.14. we get it. we'll talk more about the bank trade with mr. mayo, when we come back.
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welcome back to "halftime report." a picture of where the market stands. the dow down 57 points. s&p, nasdaq down 0.5%. vic vic's at its highest level and break below the 50-day moving average, too. that's what people are certainly watching today on wall street. they're always watching the financials, as you know, especially in this kind of market that we had. free agent banking analyst mike mayo joining us now. nice to see you, again. >> thanks for having me. >> when are we going to stop saying free agent? soon? >> i hope so. two weeks of being unemployed and i think my wife is ready for me to go back and get a full-time job. is. >> we're hopeful for you, as well. i should certainly say that.
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what's with the pie? let's just cut right to the chase. when you talk about jpmorgan -- >> owning bank stocks is as easy as pi, p-i. the margin is 3.14. this has been the biggest decline in that interest margin in 70 years. this decade, the net interest margin is down one-fifth and it's turning and more interest rates make a difference. if we get two or three interest rates -- >> we're going to fix your microphone real quick. you were so enamored with the pie, your microphone fell off. the financials have had such a great run. right. we thought the regulations were going to come off. dodd frank was maybe going to be rolled back to some extent and, obviously, with rates. but pick up the thought that you had before that you were making. the 3.14 being the net interest margin for banks to really make
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money. >> it's 3.14. declined by about one-fifth this decade. that is the biggest decline in 70 years and it's turning. higher interest rates will turn the net interest margin. two more rate hikes this year, that's fantastic. we're looking for more than three rate hikes. maybe 3.14 rate hikes. but even without rate hikes, you have accelrerating revenue growh and the strongest balance sheet in a generation. that's a unique combination. >> would you sell any banks here given the rally or add to the group. >> to you and others it is a fair question. look at the rally since president trump got elected. >> i go down the list. xlf is up 23%. i could go down even individual name which is more impressive than that. morgan stanley at 35 and the other, bank of america is up 47%. how can you not ask that
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question. >> i think it's a fair question. i will concede a speed bump with the trump bump. in other words, a lot of investors are owning the bank stocks for the possibility of the big tax reduction, even higher interest rate increases. the infrastructure investment and likelihood something doesn't go right. i look at it over the last 1 years. over the last 17 years, the bank index hasn't changed a whole lot. so, what we're talking about here is a structural break out for banks and the bank stocks and everyone is looking over the last ten years. look at the evaluations, they're expensive. i go back over the last two to three decades and they're still inexpensive given the likely higher returns. >> pete, you don't own jpmorgan because i brought that up as a lebron james of banking, according to mayo. would you buy it or no? he makes the case. you almost buy any stock in the group. >> right. yeah. no, i agree with most of what mike is talking about. when you're talking about the
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banks in general. jpmorgan, i wish i owned it, scott. i have been participating in the bank of america run. i still think when you break it all the one name that has the most torque and i want to know what mike thinks about citi. when you look where it comes from valuation perspective, does that have the most torque right now? jpmorgan has reacted and i like and i still think those names can go higher. what name in the banking industry right now has the most torque behind it and most upside from here? >> i agree with that. citi group still restructuring. they still have single digit roes and they're still in the right direction. having said that, i don't think citigroup is moving fast enough and i blan to go to the annual meeting to ask the ceo and the chairman. why didn't you have a greater sense of urgency and moving
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faster? we see them improving the roe more than any other large bank. >> you're still all over citi? you're still going to knock the door down at the annual meeting looking for action from the others? >> it's a fair question. citigroup has a worst in class return on equity. the question is, why isn't it higher and when will you make it higher? it's a fair question for me. it's a fair question for -- >> stock up 42% in a year. at what point does the question get tired? >> with our pi theme, citigroup also got down to 3.14 and less. it's still, look at it over the last 10 or 20 years and they have lagged some of the larger banks such as bank of america and goldman sachs recently and some of that is because they're half outside the united states. the other reason is because they aren't improving as quickly as many investors would like to see. >> do you think the recovery in other parts of the world will then help citi what has been a
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curse becomes a virtue for the company. >> you know, my view on the banks. i don't need much higher interest rates and i don't need a trump bump. the point here is the greater resiliency of citigroups and the banks should be enough. what citigroup is doing. they're a lot more delevered. they're avoiding the big blow up. you talked about another stock and a big blow up. the stock is not in that stage right now. in fact, i think citigroup has one of the least risky balance sheets it's had in decades. so, once you have to downside protected, the upside takes care of itself. >> court, do you have a thought? >> of course, i do, scott. pete mentioned he didn't participate in the jpmorgan run up but vma. i did, obviously, buy jpmorgan. i've been a huge fan, as you know. since jamie decided to put his money in it where his mouth was, i guess you could say.
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look, if the ceo is putting money behind it, i wanted to get in, as well. innothing like the leadership from the top saying i am with you in this and i'll continue to be in it and continue to be with the team. i'm still a huge fan of jpmorgan and my discipline won't allow me to buy here. i still think it has a tremendous way to go here. >> the last and most important question, did you actually bake the pie? is that your new thing in hiatus? >> i have a lot more time now to have other hobbies. i can't take credit for this pie, but in my unemployed state, i'll pick up some new tricks around the neighborhood. >> we thank you for coming in. we do wish you well. we hope you have a firm next to your name soon. mike mayo the free agent banking analyst. hi, sema. >> a cautious tone among traders as we await the fed meeting and
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dutch parliamentary elections that take place tomorrow. seen as a bellweather for this wave for the far right yielder is campaigning for antiimmigration and border control. he did see his popularity increase after president trump's win in november. traders i speak to, though, seem less concern about the dutch election and the french election and the german is seen as a safe haven for investors and the prospect of the ecb slowly exiting rising inflation and the german bond trading at a 14-month high. another big talker in europe is the pound. how low can it go? took a big step forward to approve the article 50 bill. the mechanism that begins a two-year countdown to britain's exit from the european union. the german bond has been largely seen as one of the safe havens out there. i also want to point out energy stocks focused not just on this
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side of the atlantic, but across the pond, as well, under significant pressure as we look at oil continuing its move to the downside. back to you, scott. >> seema, thank you so much. now to blizzard 2017, if we're still calling it a blizzard. nbc meteorologist angie lassman is here. >> we are continuing to actually call it a blizzard because some areas, well maybe not new york city or any of the big cities along that 95 corridor still dealing with the blizzard conditions. here's a look at what our radar looks like. all the heavy snow continuing to move north and west. we do see that line of sleet and rain and a little bit further to our south and east. that is the big differencemaker as far as the accumulations go over from the new york city area dealing with 22 inches with now closer to those single digits. as far as what we're talking about as far as the wind gusts. this is another big story. the coastal areas kind of skirted out as far as the high
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amounts of the snow and not as far as the high amounts of winds go. 33 mile per hour for philadelphia and 35 for new york city. the good news is we're starting to see the storm shift in areas like philadelphia, new york city, d.c. are actually going to start seeing quieter conditions. on the back side of that system a couple other snow flurries here and there and, really, we'll start to see those coming down. not the case for those of us to the north and west. we actually see areas of albany dealing with 18 to 24 inches. heavy, heavy snow on the way for them. continue to watch for power outages and travel delays. this will last into the evening hours. scott? >> angie, thank you so much. now to sue herrera who has the latest headlines for us. hi, sue. >> hi, scott. here's what's happening at this hour, everyone. up to two feet of snow as angie just mentioned expected to fall on parts of connecticut as part of that nor'easter that is slamming the northeast prompting that state's governor to issue a travel ban. >> this is new england. we're used to handling snow, but
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when you get predictions of 18 to 30 inches with, you know, potentially four, five, six inch snowfall in an hour is when you have to act. >> tokyo electric power company using a robot to locate melted nuclear fuel and reactor unit one at the power plant. the task today involves inserting sensors inside the center. toshiba citing accounting problems at its american subsidiary westinghouse. the power unit is expected to report a $6.3 billion loss for the period. you are up to date. that is the news update this hour. scotty, back to you. >> sue, thank you so much. ahead on "half-time report" the brothers have their latest plays based on unusual activity. plus, disney shares they're up 13% in a year.
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now, guggenheim upgrades the stock. we have that analyst and the traders debate it in the call of the day. that's coming up. day. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential
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more on stella the storm and when business and flights will get back to normal in the northeast. "half-time" gang talking about valeant. the single worst trade of all time and is this the end of bill ackman's investing career? an estimated one-third of unemployment is called by the skills gap. should companies train and not complain? we'll dig into that, as well. the "half time" report is back right after this. 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.
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welcome back to the "half-time report." let's talk inflation. producer prices coming in higher than expected and with another read on inflation, the consumer price index tomorrow at kensho show us which stocks do best as inflation rises. measured 32 periods since 1981 where cpi was between 2% and 3%. cooper companies rose on average 14%. and amphonal around 12.5%.
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scott, back over to you. >> seema go to a double dose of unusual activity. doc, let's start with you. what have you got today? >> take a look at the activity in weatherford. wft. the stock literally right out of the gate was moving to the downside. as it fell, somebody jumped in and said, hey, i'll take an upside shot in that one. to find their bet, like we were talking top of the show. they know exactly how much they could lose and they were paying 40 cents up to about 50 cents for the six calls in april. it's that far out there four weeks into the future. i'll be in these two to three weeks and i bet they're betting on a pop out of crude and these calls could double pretty easily. >> pete, what about you? >> looking at the airlines, scott. talking delta today. the reason i'm talking that one
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is i find it interesting you got that buffett stock and pulled back 10% after those highs after buffett jumped in there. the big four, actually. but it's really interesting today because the june calls. they sold the june 55 calls against them. it's costing them a dollar. i participated in this trade myself. i like it because the risk reward sound good and it buys me some time. i will probably be in this trade for a couple months looking for that bump back up towards that buffett area. maybe somewhere around $51 a share. >> airlines, obvious laerx ly, focus. pete, thank you. let's talk about deizisney. the firm says the company's new content offerings and park attractions will offset cable weakness. michael moore is the analyst behind the call. michael, welcome. >> thank you. >> you feel the little late on
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this? >> sure. i mean, it's hard not to feel late when the stocks move from 90 to 110. if you look at the performance at disney compared to the rest of the media really outperformed from its lows last october. so,er we would have liked to catch the beginning and other ideas we like better and as we look forward, we're incrementally enthusiastic about disney relative to its peers. >> are investors fully able to get beyond what you may call the espn overhang? >> no. they're not. and that's why there's opportunity in the stock right now. we think that investors will get there gradually over the course of the next one to two years. we think the fact that espn has been included in all of the new skinny bundles. these over the top offerings that have come out first with sony's view, with sling and with hulu and now most recently with the googp youtube tv product. i think that will help mitigate
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the fear that there is an incremental leg down for espn subscribers a core of all the new offerings. >> now you're looking for $128 bucks as a price target. that's about 15% from here. >> that's right. yep. that's our 12-month price target. that's correct. >> how much of your positive view of this or where does succession of bob iger factor into this? >> bob is a very unique leader. he's certainly steward of this company through a tremendous period of growth. very savvy acquisitions and integration of those accusatio accusations. i think he will be with the company for a bit longer than, you know, the kind of 2018 deadline that we have out there right now. i think that he's still very much involved in the business and will be there and it gives the company some time to try to find another leader. i don't think he's completely irreplaceable, but certainly
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leaves big shoes to fill. >> how much of your view of the stock have a direct effect of him staying open past that 2018 deadline? >> you know, it's not a big part about what we're thinking about on the stock right now. i just think that it is, like i said, crucially important that you have great leadership of this company. these are great assets. a team that has a deep bench. a team that has creatively done incredible things. with the oversight but a tremendous number of talented individuals at this company that has made it happen. so, we're not, we're not going to say that he's not an important part of what makes the company great. but we're also comfortable being along the stock here give on the time frame we see for him and the bench strength the company has. >> michael, thanks for coming to the phone. appreciate your time today. >> yeah, thanks for having me. >> doc, why don't you trade this? >> sure. still love it. been in it for several months because we've seen unusual activity at least three or four
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times in the last quarter. i think this moves higher because we're not talking about it and not as big a deal and not keeping people away from theme parks. they're taking over euro disney and blockbuster movies. how do you not see upside from here because of all three of those? >> court, do you own it? >> i don't own it personally but my analyst has had a bye rating on this stock since we initiated it back in august of last year. it was well below $100 and still very high and we continue to see growth opportunities from here. we have a slightly lower price target right now, but who's to say it can't blow right through that in the next 12 months. just ahead, nike, walmart and fedex. we'll talk about those stocks and the headlines and the trades are next. before a break, though, let's get a market flash from seema. >> paypal shares are moving lower. they are able to send or request money with anyone including those who don't have a gmail
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address. recipients can have it so the money they go directly into their bank account and no fees are involved. shares of paypal down 1.6%. the half-time report, we'll be right back. ♪ we're drowning in information.
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so wherever your retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence. this just in. 50 million customers' data was not compromised this morning in a security breach that didn't happen. wall street, not rattled... at all! no. sir, sir. what went right? what went right? everything. we have a brief statement on this non-breach. we're happy to report there's nothing to report. my dad's company wasn't hacked today. cool. it's time now for the blitz. first one credit suisse raising nike price target to $67. courtney, you own the stock. >> i do, i do. and my good buddy and i talked
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about it when it bounced below 50 and you had to dwrgrab it at that point. nike, the marketing machine is back. you look at what they're doing right now with airmax and if yo stands for, google it. but nike is back and back with a vengeance. >> pete, walmart goes to bofa's u.s. one list. >> yeah, and i think the primary thing they really are pounding the table on was the e-commerce growth 20% to 30%. that's incredible and expanding in the marketplace and a lot of reasons suddenly to like walmart and this is just one, e-commerce is what they're pounding the table on. >> what do you think about this call on fedex to outperform at wells? >> i like it, but it certainly feels like it wants to test maybe breaking through 190 and going to 185. that's the way it looks and
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feels based on how things are trading. i do like the call but i think you'll get a chance if you're patient to buy it under 190. maybe even closer to that 185 level so i'd be patient. >> good stuff. oil is down big in case you're not paying attention to that. in fact, the xle hit its lowest level since november the 7th. we'll talk about that next. first a sector check. there you go. discretionary at the top of the down list. energy is a drag today as we just said. more on oil right after this quick break.
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welcome back to "the halftime report." i'm courtney reagan. crude oil plunging more than 2% and hitting its lowest level since late november, not far from $46 a barrel. this comes as supply continues to increase. brian, oil has just broken down from its range. looking for more down side from here? >> well, i think the drop that we've seen is probably been enough to maybe shake some people out and at least drop the supply production that's going on. we need to see that decline in order to get prices to stabilize. certain the volatility in oil is starting to trickle over into the broader market and seeing heightened volatility today so certainly watch this $46 mark for me that's a price point we
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need to hold for to keep the up trend. >> that's brian's price point. jim, hovering above that $47 a barrel mark today. what are the critical levels you think investors should be watching? >> well, you mentioned the range, the two-month range that dated back to december. what we've done is we swapped that out for the longer term rage if you look at the three-year chart the bottom of that range comes in right around 47. i think we need a bigger -- something bigger fundamentally to knock us out, 47 will provide support for now looking for a bounce up between 49 and 50 initially. >> thank you both, gentlemen. keeping the commodities conversation going on futures now today plus joined by tony dwyer and tone crescenzi at at the top of the hour. back over to you, scott. >> thank you so much. courtney. president trump is meeting with the deputy crown prince of saudi arabia. let's get to eamon javers now
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involving business confidence which is the highest level, eamon, in a number of years. >> we saw this tape playback. the president, we'll talk about that for a second meeting with the deputy crown prince of saudi arabia. there you see the pictures which we just got from the white house a few moments ago. the president here is all about creating jobs in the united states. but he shares that in common with the deputy crown prince of saudi arabia who has said that one of his major efforts is going to be to move saudi arabia's economy off of its oil dependency and diversify and find employment for a lot of young saudis so we'll see whether there's economic stuffer for the to to talk about but also, of course, national security as well, scott. we saw h.,mcmaster in the room for that meeting. clearly u.s./saudi alliance so critical in the middle east particularly in the fight against isis but as you mentioned a new study out and we can talk about that if you would like to talk about that as well. >> yeah, the president tweeting
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about it about 45 minutes ago saying great optimism in america and the results will be even better. he's referring to that business roundtable index optimism amongst ceos at the highest or biggest increase since 200 12k34r9 that's right. the business roundtable says their index jumped 19.1 points from 74.2 in the fourth quarter of last quarter to 93.3 in the current quarter, the largest since the fourth quarter of '09 and reflects what the trump white house is talking about, the renewed animal spirits of capitalism over the past several month, they're enthusiastic over the idea of ceos feeling like the economy is really pumped right now and willing to hire. they're willing to make cap ex expenditures to create jobs and that's signature for donald trump and what he campaigned on and really what he'll be judged on politically in his first year in office. >> thanks so much. once again the bond king jeffrey gundlock will be here
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tomorrow. we'll discuss a whole host of issues from the fed meeting that is ongoing despite that snow in the nation's capital. fed getting together today, tomorrow and rendering a decision which everybody will pay close attention to including mr. gundlach. final trades, guys. doc, why don't you start us off? >> judge, i like delphi here. dlph stock absolutely breaking to the upside. doesn't mean you shouldn't take profits if you have them but i think this is part of what's going on with the excitement over the automotive space with intel making that big investment by taking out mobile i so watch this to go higher. >> pete. >> well, you know, you had mayo on there so jpmorgan being essentially deep down underneath all that pi discussion i think he was talking about, again, lebron james, so i look at jpmorgan. don't own it right now, a name
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i'm looking at on any kind of pullback. not much today but keep an eye on financial, any pullback i think is a buying opportunity. >> kourt. >> before the show i hit exxon, hit a 52-week low. exxonmobil did and may dip more but i'm comfortable buying here and i think it has some runway to keep going up here at some point very soon. >> i'm glad you went there because i was going to bring up before we got out of here this move we've seen in oil which they were talking about on futures now. i mean, kourtney, what do you make of this, under $48 now and as crude, if it continues to move lower, i wonder what that would mean for the trade you just got into. >> i'm not worried about it. as you know i buy stocks for the long-term and i think the company is good. i like the connection with our wonderful secretary of state, whether he's out of it completely as he says he is but i'm sure he has friends still there and would want to see them do well, i'm sure. i think with crude dropping where it is due to opec and
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other things, it eventually will come back. it's oil. it's a natural resource. it's going to come back and exxonmobil took a hit that maybe it shouldn't have and i see it coming back. >> good stuff. thanks to all of you guys. see you back here on the set. kourtney, thanks, john, pete, as well. "power lunch" now. >> thank you. >> three, two -- >> welcome to "power lunch." this is the snowmageddon edition of "power lunch." maybe it was not the big snow event that a lot of people in the northeast expected. but it is a major disruption of travel, travel, highways, there's a lot of ice coming down. >> well, that's why we're playing this song. by the way, the commute is impacting millions of people all up and down the eastern seaboard but we know a lot of you have suffered but you got to be smart and this just in to the cnbc newsroom. tyler mathisen making his way to work today. that is tyler skiing or maybe not on that snowboard.


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