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tv   Fast Money  CNBC  October 17, 2017 5:00pm-6:00pm EDT

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join >> it's like a hybrid public/private market. >> i think the only way to scare people off of this is to use the word "tenure." that does it for "closing bell" today. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," another day, another thousand-point milestone as the dow touches 23 grand. if you missed the move, relax, we've got the biggest bull on wall street and he'll tell us what he's buying right now ibm jumping, the conference call kicking off now will the results be enough to get ginnie rommetty off the hot seat first, a deal on capitol
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hill to save obamacare eamon javers is in d.c. with more >> reporter: hi, melissa the white house is trying to work through whether or not it's going to endorse this deal that we saw on capitol hill, it's the alexander/murray deal named after the two senators who sponsored it the key is it would extend those cost sharing reduction payments for two years. those are the payments that the president blocked last week, saying that insurance companies were getting an unfair deal, a political payout under obamacare. he blocked those payments. this deal would put those back in for two years the president was asked about that in the rose garden earlier today. he appeared to suggest that he liked the deal, at least that's the way many people took it. listen to what the president said >> lamar has been working very, very hard with the democratic -- his colleagues on the other side, patty murray is one of them in particular, and they're coming up and they're fairly close to a short term solution the solution will be for about a
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year or two years. and it will get us over this intermediate hump. >> reporter: a lot of people assume that was the president briefing this deal to put the payments back in for the insurance companies. but then the white house issued this statement saying no, they're not endorsing the deal they said, we are willing to work with congress to reach a legislative solution we will not provide bailout to insurance companies until we provide the american people with relief from the obamacare disaster they're saying those csr payments are bailouts to insurance companies and they're not going to do that until they have an overall obamacare deal so the white house seems to be then backing away from the deal at about 4:00, an hour ago lamar alexander was asked on capitol hill whether he thinks the president is going to endorse his deal here is what senator alexander said >> it's up to him. i know that he encouraged what we're doing, and that's very helpful with republicans, to create an environment in which
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we can succeed >> reporter: lamar alexander saying ultimately it will be the president but that the president encouraged some of the deal making process on the hill not clear whether the white house is going to do a full embrace of this deal or reject it all together or a partial embrace. i'm told, melissa, there's a possibility we might have additional comments from the white house before the night is out on this. as of this minute right now, not at all clear where the white house is going to land on this >> all right, eamon, thanks for that wrap-up, eamon javers at the white house for us with the temporary safety net for obamacare in place, will this already hot trade get even hotter take a look at the interday stocks we saw huge pops in the likes of tennent health care, life point. >> on the cost side, very solid.
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utilization in the sector not overly frothy, that's very good. we're in the middle of earnings season, we haven't gotten into the teeth of it, but the health care sector even two quarters ago, the health care sector is one of the places where you're getting high teens, eps growth you're getting reaffirmation from a couple of folks the washington overhang, you can stay here. >> we've seen it in pharmaceutical names, we've seen it in health care type names those numbers are outstanding. when you look at the earnings growth they put out, unbelievable 13 to 16% growth i look across this sector right now. i know this is a political hot button, is there going to be a partial braembrace, that was tad about just now there is negotiation going on, that's a good thing. i see these names moving higher, valuation, as you said, tim, and they've got growth >> we talked about unitedhealth last night specifically.
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pete pitched this stock a while back we had a conversation about this, are these stocks in trouble, we said no, they're not. don't be surprised if unh is very good tomorrow morning unitedhealth trades 19 times forward earnings, that's a cheap multiple, should be closer to 20 one of the analysts put it at a $240 price target. in '09, this was a $20 stock it's now a $200 stock. maybe that's not all that slow but it's certainly steady. i think the stock continues to trade higher >> this is the first quarter for the new ceo, what a way to start the year >> when you look at the news today, the stock is at a new all time, humana bounced off 235 the other day, made a short double bottom aetna had a bounce off 150 if you have a similar set of results, i would expect these things to move back toward prior
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highs. >> and i'll tell you, nobody moves around the mothership. i do mean j&j. these guys in terms of devices and on the pharma side, j&j is really giving you the best exposure, 23 times, nice dividend, not cheap, but some of these cases the earnings give these guys a chance to trade at a premium. >> and growth, we're always pointing towards growth, i'm always focused on that when you look at pharmaceutical up 15%, and the other side, the consumer, that's expected to be. the consumer brands are only up about 3% that's okay. when you looked at the difference in the numbers there, the numbers are toward the pharmaceutical >> this is all about their cancer pipeline. >> yes they added with the $30 billion in acquisition on this big pop, i said i'm out, i'll wait for a pullback in j&j. >> we have the performance in big cap pharma, we've got aetna, humana, unitedhealth, they all have a hold on the exchanges and they're pretty good performers we've got a sighi of relief
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because of the aca, we have biotech. all together, what does it mean for the health care sector >> it continues to go higher again, last night we talked about the president's rhetoric is now at a point where the stock -- we used the phrase diminishing returns. the president's words are falling more on deaf ears, the stocks are telling a much different story. valuations are reasonable. j&j, tim mentioned, it is trading at 23. >> trailing. >> forward earnings is 18. if you like a name like procter & gamble, in a lot of ways johnson & johnson, when they bought pfizer's consumer products business nine years ago, they transformed themselves based on that alone it deserves a premium multiple >> one other thing about this, it seems like the president got caught off-guard about the details of the compromise. what's important about today is it's very clear that the president needs congress a lot
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more than congress needs the president. if they can't get done -- if they can't get the president to really lead these legislative kind of processes, then they're going to have to do it, they'll have to cut deals and they may make some progress why that's important as we get close to the budget and some of these other negotiations that we know are going to be very important towards the end of the year regarding tax, this could lead the way a little bit if congress werable to separate themselves from the president's supposed legislative agenda and start doing things for the people >> there are names in the biotech industry that still have all kinds of upside. you saw that upgrade today, biogen got with a 400 something target, 415, unbelievable. it's not really unbelievable when you look at the pipeline and the potential there and where they're trading at right now along with gilead, along with celgene, they got the upgrade as well. i don't like being in etfs, they don't give you the same bang for the buck, i would rather be in individual names biib, that's the name i'm looking at right now i would love to see any
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pullback >> in terms of the subsectors of health care, which do you like the best >> i like biotech. i like it because i think people say that biotech has these massive multiples. they don't they don't if you look at the top four or five names which we can all rattle off, pete just rattled one of them, those are valuations you can buy with rationality to the upside. that chart looks great >> they're not really biotechs gilead, the stock didn't take off until it bought a biotech stock. >> even better >> i know, but what i'm saying is they're trading like pharma stocks anyway. >> amgen is one of those as well, trades more like a pharmaceutical >> is that a bad thing or a good thing? >> gilead wasn't getting the proper valuation until it went out and made a more expensive acquisition. >> which we waited on for years. >> we waited on it for years, it's a good acquisition, it's self therapy, and other people will follow them in. that's not a bad thing, especially for someone who is a cheap valuation and a lot of
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cash despite all the drama in washington, our chart master called the rally in health care stocks way back in june. >> the principle is that this is a heck of a setup and it has all the elements of what should be not the end but the beginning of an important catch-up. >> where does he see it going now? carter worth is back at the plasma to break it all down. >> if you look at the attributions of the s&p 500 health care stocks it's almost 85% tied to earnings the number one largest stock chain and number three are up on earnings unh and j&j. they think there's others. my favorite is amgen let's look at the health care first and then get to the stock. one year chart, two lines, they speak for themselves no under or outperformance, health care has simple been a market performer okay let's look at the sector itself. one year chart same as the last now, one way you can do the lines is as follows. if after breaking out you fall
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back to the point from which you fell out, pivot, hold, and go again, that's a heck of a setup. the presumption is that you get a new breakout another way to draw the lines. the tension here would suggest that, again, we're going to make a new high or just look at the one-year chart. and what we know is this yes, a well-defined trend line the aggregate has bounced off the line over and over and over. and the presumption is, is that we're going to go yet again and get to the top of the channel. all good nothing not to like. all right. amgen. now i've got a really long term chart here here is an asset that we know has done nothing for the better part of three years. i think that's the opportunity it's the leading health care stock in terms of biotech or pharma, whatever you want to call it, with the exception of j&j. the presumption is a powerful
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breakout the more authority the level has, the more authoritative the resolution it's been here for three years, projects well over 200 i'm a buyer. >> carter comes over, right? >> come on over, carter. >> he's in the top 12 of the top three. >> he's certainly in the top three. >> top one in my book. >> amgen may be your favorite. are there other biotechs that have similar charts to amgen >> so the common word on biotech is they've been beaten up and are in the process of bottoming out. the ibb itself amgen is at the highs with prospects of a break at the new high something that's bottoming and something that's about to break out, each is a good setup. >> let's talk about health care versus the market. the title of one of your charts, today health care was up 125 bits a lot of the market actually had
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trouble today. higher rates are a concern is this the next direct? >> if you were to think of what investing is, this is might be the purest instance of it. for the first time in 15 years, the s&p is trading above an 18 four multiple. most sectors are trading above their average multiple health care is at only 16.8. i think you have your cake and eat it too in the sense if your market were to get in trouble you have the defensive elements of health care and if the market continues, the assertive part of health care can kick in. >> growth at a reasonable price. >> there's laughter in the studio >> let me point out, amgen for example, trades at 14 times forward earnings, cheap. and if you look at the stock yield over the last three years, it's been in this range, 140, 180, as carter said, breaking
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out above it history suggests it sells off post earnings. that's what everybody is waiting for. i'm with cbw and garp. >> was this a good movie >> are you kidding me, i thought it was fantastic >> a dramatic turn for work. >> absolutely. >> that means you. >> are you familiar with this q-tip thing? >> i was here. >> he is no longer adami, he is q-tip, just so everyone knows. >> some of the devices are more idiosyncratic. image care, that's really garp type pricing >> carter, thank you carter braxton worth coming up, it is still the 22nd quarter in a row of declining revenue. we'll hear from the c suite
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later this hour. what's the matter with goldman sachs? could be in danger of losing another battle with its rival morgan stanley later, one of the biggest bulls on wall street, jonathan golub of credit suisse, explains what he's buying right now ♪fly me to the moon
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welcome back to "fast money. goldman sachs and morgan stanley both topping earnings estimates this morning but trading in two different directions goldman down nearly 3% this as morgan stanley finished the session up slightly. check out these stocks over the past year. morgan stanley up 55%, goldman up 40% p/e ratios of 12 and 14 times respectively here is a would you rather, pete, goldman or maorgan? >> we all knew trading was going to be bad for everybody and it was. jp all the way down, today those numbers were terrible. but when you look at other areas and you see the growth they're getting out of wealth management and the amount of money they've got, in the trillions of dollars, it's absolutely
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incredible, quite honestly they're both trading at 1.2 times, versus book value they're about equal. i think that sideways it towa s towards -- >> goldman sachs had terrible price action >> traded up to 255, sold off in a meaningful way, made another push, sold off again i'm in the pete jamminajarian c. ask yourself this. what is the right multiple in this world it's not where we were eight or nine years ago, two and a half, three times, but it's not less than one it's somewhere closer to 1.8 gets you close to a $300 stock yes, the price action today was lousy. but we've seen that historically post earnings from gs. >> does it have to do with the fact that these guys are less levered to the rising rate
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cycle? every time that gary cohn goes out there, he's the worst walking advertisement for goldman sachs. he was supposed to be the second in line to take over >> hold on a second. goldman sachs has 45 guys in this administration. >> he's by far the least impressive the way he's been touting this tax reform, is that the way they used to operate at goldman sachs? >> there's a lot of dysfunction in washington. i don't think gary cohn is at the root of it a lot of people believe he's a guy that is providing some semblance of sanity. >> semblance there was massive disorder in the way they rolled out this tax reform bill. >> and that's gary cohn's fault? >> i understand, i get it. >> part of the reason with morgan stanley is goldman sachs has lost some of the intellectual property they had to this administration
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because of that -- >> because they lost gary cohn >> right he and i do not see eye to eye and all that gary cohn may not be great in front of a camera. he's great in the boardroom. >> did you see the yield curve today? smallest in about a decade >> we're at almost nine-year highs on the two-year note any chart with nine-year highs is something you should take a look at. ultimately it's telling you the fed is one or two rate hikes from pushing us over the edge. i don't think that's the case. but the bond market is usually smarter. at some point you get a 2% two-year note, that's going to suck money out of the equity market >> one trader just made a more than $4 billion bet against this group. >> in the xlf, that's the s&p financial select etf, when the stock was trading at 2016, there was a buyer of 146,000 of the january 2018, 25, 22 put spread,
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about $4 million in premium, breaks even down about 5.5% from the trading price with a max potential gain of $2.70, down 22 bucks. if the stock was down there, that's down 15.5%, that trader could make up to $39.5 million we have a chart, the way i see it is that september low in the xlf was about $24. looks to be a little bit of an air pocket, down to the breakout level from late 2016 after the election so possibly some protection against a book of bank stocks here this thing has been moving around a little bit. it was a nice new high it made here and it held out decently when you consider the bank earnings we had in the last week or so. this is a dollar cheap way to make a pullback, round tripping the whole move from post election >> it wasn't me, but i would
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tell you that's a really smart trade. we talk about volatility index >> but how far out you can do that until the cows come home. >> right >> what's your timing on that? because it costs you a lot of money to be protected forever. >> i love the trade. >> i'm asking the option guy >> so the thing about options is really cool, there's usually an expiration >> why is his voice cracking, peter? >> it's protection, and you're buying the protection as the volatility index is trading near ten. that is a cheap way to protect a great position >> when it's time to change. >> great one >> yes, of course. [ simultaneous speaking >> check out the full "options action" friday at 5:30 still ahead, we'll tell you what was just said on the ibm call, that has investors hitting the buy button i'm melissa lee, you're watching "fast money" on cnbc, first in
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business worldwide i mean time, here is what else is coming up on "fast. >> jonathan gallup is the biggest bull on will street and he'll tell us what he's buying now. and tim is pitching one tech stock that's served 70% this year and he sees evemo tn reo run. the name when "fast money" returns. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
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welcome back to "fast money. the dow hitting a big milestone today, breaking 23,000 for the first time ever. let's get to bob pisani at the new york stock exchange for more hi, bob. >> reporter: it just took ten weeks, melissa, to go a thousand
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points as is typical with rapid moves in the market, a few stocks contributed to the massive gain. boeing was responsible for the biggest gain, 163 of those points caterpillar, 147 there you have two big industrials contributing goldman sachs was 119 of the thousand points, that's a financial. home depot was 103 of the points, there's a consumer discretionary. a hundred more from chevron, an oil stock. those six stocks accounted for 700 of the thousand-point rise in the last ten weeks in the dow. there's a broader trend going on here the dow has gained 5,000 points in the last 18 months. an amazing move up that's been powered by three distinct phases first, the earnings recovery face earnings growth had been negative through 2015 into 2016. we called that the earnings recession. then turned positive in the second half of 2016 and stocks took off second after the election came
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the trump rally, that's what we called it, the belief that lower tacks and higher infrastructure spending would boost spending. finally the reflation trade characterized by an expanding global economy, hope for tax cuts what are the roadblocks to another thousand global growth could cause an earnings recession tax cuts could fall. a global crisis, north korea, iran, could erupt. the fed could get overly aggressive by raising rates too fast many traders feel this so-called policy error remains the biggest threat to stocks melissa, right now it's sort of impolite to bring that up. at this rate, dow up to 25,000 by the spring of 2018, that's the path we're headed on >> bob pisani, thank you earlier today on "power lunch"
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we talked about the goldilocks market there appears to be a bias with the seasonal boost >> if it you didn't have a very big variable in terms of multiples standing in front of you, otherwise you've got tremendous etf growth. 2.5% ten-year or less, historically very low. >> are you worried the multiples -- >> i'm worried about the fed the fed is a bigger deal in 2018 than the markets >> that's sort of the same thing, though, if the fed is raising interest rates, the multiple becomes much more of an issue. >> it sure does. >> i took math in college, i know it's hard to believe, but -- >> one thousand points >> the move from 9,000 to 10,000 -- >> is much bigger than -- >> the percentages if we get the 99,000 to 100,000, you see what i'm saying. >> it's significant, but you understand what i mean >> i understand what you're saying names we did mention, people
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will knock them on valuation the home depots, the boeings, the triple m's, i still think they're relatively enspecificity. our next guest as 2800 on the s&p 500 for 2018 jonathan golub is credit suisse's credit analyst. >> 2875. >> even better what's your earnings estimate for next year? >> we're expecting something like 7% earnings growth next year about a dollar of that is easy comps on energy. the underlying trend is about 6% to point on this valuation thing, i think the valuations will push much higher. before the cycle is over you'll look at multiples of 20. we'll worry all the way throug the kind of numbers we're talking about. >> isn't that historically high? what sort of underpins that, what breaks through? what allows investors to say, you know what, i'm comfortable
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with a 20 pe? >> first of all, you guys have been talking about lower volt. lower volt means stocks are less risky. that pushes valuations up. the second thing, in the vast majority of years, when recessions are not in your face, pes move higher and recession risk is low. i think you're right, the fed is going to surprise everyone by probably doing more than people think. i think the market is going to say renormalizing, getting back towards normal conditions, i don't think it bites the market. >> we were just talking about low volatility does it concern you that in the last year we just haven't had a selloff greater than 3%? wouldn't it feel a lot better if you had the sort of selloff that put fear into investors again and make them think twice about how they price risk? >> we all talk about wanting that selloff as a buying opportunity. then when you get it, everyone starts to get concerned. i'm going to get to this issue,
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you talk about taking college math when you have low -- there you go, right? when you have low volatility, it means you have much smaller dips the average day is moving under 20 basis points a day. it's hard to accumulate enough down days to get something meaningful >> when we look back to the move last year off the lows in the 10-year yields, when rates started to go meaningful higher towards the end of 2014 to 3%, we had a serious selloff in equities i think that's what tim is getting at >> i sort of agree if the fed is pushing the market is higher rates and the market is not ready to handle it, the market is going to have a temper tantrum. if on the other hand you have an economy where gdp is grows in the twos, not in the ones. all these economic indicators like ism are all coming in strong we talked about earnings are pretty good. the market can handle a 2.5 or
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2.7 ten-year without blowing up. eventually the fed is going to be the enemy of this thing but i don't think the next couple of moves will be there. >> how about airlines? how about, what else do i have written down here, media, energy there are secretaries whetors we multiple is going lower. >> the one group, you guys talked about it in the earnings today, these industrial names. with the economic data coming in this strong, they should be ripping, and they haven't been either one of two things will happen either there's something broken with these things and they're going to get cheaper when the data gets less strong or these things are going to catch fire when i see the market is being led by these things, when i see names like boeing or granger, you know, delivering good numbers or the stock market appreciating what they do, that actually is more encouraging to
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me but yeah, these deep cyclicals should be having their day in the sun, and if they're not, that's where i'm cautious. >> you avoid financials, technology and discretionary, health care, and staples >> energy is an underweight, valuations are high, earnings estimates just keep going lower in the sector. i think that's going to be a weakness >> last question, 2875, if we get any form of corporate tax cuts, what could that add to 2875 >> i'm counterconsensus. i think the market right now, and if you run this, these are not leading the market the market is going higher but the highest tax rate companies are not. i don't think the market is anticipating this tax thing. i think it's a double edged sword. we're running 4% unemployment. you put more pressure on that, wages go up, it's going to force
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the fed to get involved, the market will run too hot. i would be weakening my number >> so you think this is the goldilocks market. >> i think it is, actually >> jonathan golub of credit suisse pete najarian. >> i end up always being the bull and i get criticized for it by the guy over there. if there's growth and i look at present valuations, i think there's still plenty of upside i'm talking about financials, i'm talking about technology i agree with what jonathan is talking about in terms of energy we're not seeing the growth there. that's what's kept me away from that area. there's all these fits and starts but it's just not there. you look at the semis, something in the technology space, that's where growth is. cloud specifically if you can find that growth and those valuations are even close to something palatable, they're going higher ahead, check out shares of ibm, up 5% in after hours, the second worst performing dow stock this year. we'll tell you if it's finally
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welcome back to "fast money. two words that we have not put together in the same sentence for a very long time, "ibm" and "higher. let's get to josh lipton with the very latest from the conference call. josh >> reporter: no surprise, the big focus the strategic imperatives, artificial intelligence, analytics, cybersecurity, cloud $8.8 billion in the quarter, up 11%. the cfo addresses that in the conference call. take a listen. >> up 10% to $34.9 billion and represents 45% of ibm. we're embedding cloud and cognitive capabilities across our business and our strategic imperatives are a signpost of the progress we're making in helping enterprise clients to extract value from data and
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become digital businesses. >> reporter: builcloud was up 2% looking at through the different business lines, cognitive solutions, that includes watson, that was up 4% global business services down 2% the biggest line, technology services and cloud platforms, that was down 3% importantly, looking at ahead, ibm did maintain its full year guide, calling for $13.80, and said free cash flow would be consistent with last year. melissa? >> thank you very much, josh lipton pete najarian, you mentioned cloud businesses and technology that you really like could ibm be embarking on a turnaround >> they could be >> that you would invest in. >> well, i own the stock, but i'm not all that fired up because i'm up a little bit from where it is right now, because of this big jump tonight if that holds. we'll see. their competition level is brutal they're going up against oracle and microsoft, s.a.p., whoever that will be a problem, it will
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be competitive but there is growth there. they've been investing in cloud for quite a while, they're finally starting to get something there. they still have this issue with revenue. did they beat? yeah, they beat this quarter, they beat on earnings as well, but they still continue to decline on revenues. >> so did hewlett before it split, i think that's the path of these companies they have these emerging technologies, strategic initiatives, that's how you'll unlock value they know the competition, they have to tell a different story to investors and highlight the faster growing portions. these companies that split, ebay, paypal, they both performed really well. we're in a market right now where they don't care if you're ibm or ge. >> the higher growth engine was the one in some cases that underperformed >> if this 5% sticks, i suspect
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people sell into it. there's nothing that compelling, they need some sort of strategic initiative to change investors' minds. >> how does mainframe refresh a strategic imperative it doesn't sound like a new business for these guys, doesn't sound like something that's going to move the needle ibm is one of these companies that could have a ge moment, they could say, we've been trying this for three years, it's not working you're expecting $2.30, .40 earnings for the next three years. that could change but i don't see it changes now >> meaning a huge break lower? when you say lower >> that it's not working and we're going to try it again. >> take a look at the valuation on ibm this is comparable to an apple, right. the dividend is lower than an apple. you've got to think to yourself, what are the opportunities you give up by being in ibm. >> yes, what are the opportunities you give up.
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[ simultaneous speaking >> pete mentioned 22nd straight quarter of revenue declines, that's significant, that's a trend headed in the wrong way. what's the right multiple for that business? if you think they're turning it around, maybe current multiple makes sense. if you think this is sort of a fool's rally, you could make a compelling argument that the multiples would be closer to 12. >> the only way to unlock that value from this machine learning ai, from the stuff they're doing in blockchain, is going to be to spin it out and highlight that business in my opinion >> they'll change at the top >> i thought that for a while. >> you stayed long in the stock. >> i am long it because i would think warren buffett remained there. he took off a portion, not everything >> why didn't he take it all off? >> if he wanted the ceo to change -- >> it's not his style. that's something that could happen in the future ahead, the nfl tacking key social issues at its annual meeting in new york today.
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how will the league's national anthem decision impact struggling ratings and a number of media stocks. tim is stepping up to the plate with stocks he says are about to e mege higher, it's already up 70thna when "fast money" returns.
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most american homeowners would be shocked if they knew just how rich they were. the average american home value has increased $40,000 over the last 5 years. but many don't know you can access that money without refinancing or selling your home. with a home equity loan,
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you can pull cash out of your house for anything you need- home improvement, college tuition, even finally getting out of credit card debt. come to lendingtree.com to shop and compare home equity loans right now. because at lendingtree, when banks compete, you win. listen up, heart disease. you too, unnecessary er visits. and hey, unmanaged depression, don't get too comfortable. we're talking to you, cost inefficiencies, and data without insights. and fragmented care, stop getting in the way of patient recovery and pay attention. every single one of you is on our list. at optum, we're partnering across the health system to tackle its biggest challenges. welcome back to "fast money. back in december, tim said that pulte group was headed for a breakout
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>> this is a case where you want to start fade into housing stocks as the cycle really just starts to takeoff. take a look at this one, valuation, free cash flow, 2% dividend yield it's been out of favor i think it's a nice time to buy this >> well, it was a nice time to buy pulte because the stock has soared 48% since that call tim, what are you doing with pulte? >> you stay there, these guys have been more aggressive on growth they're growing. >> so you've got the hot hand, head over to the plasma. >> let's do it i'm going with a name, a stock i've owned for a long time, it's paypal while this is not necessarily a new story for people who have been following the outperformers of the markets, you want to own paypal for the following reasons. first of all, in this new age of digital payments, we want to get access to the millennials, emerging markets we want a company that's doing
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deals with baidu, with samsung, with chase these guys are obviously one of the easiest ways to play it. when we see what's going on in digital payments and bitcoin the asset monetization is happening right now. venmo and venmo pay is the crown jewel of the company if you listen to the cfo, another way for them to leverage what is really a social networking platform in addition to a digital payment strategy venmo is another way to get the merchants. it's got 6 million more mobile merchants on their platform this year it's grown over 103% they may be selling their credit portfolio, the asset light strategy very good more financial leverage. it's a company that can go with what they have to come forward ultimately on paypal, this is what should concern you. this move -- let's try drawing
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again. let's not. this stock has been up like a rocket we talked about this, is the multiple at 30 times worth it? you know it is it's growing faster. >> is everything you said priced into earnings this thursday? folks at home looking at 40 times forward earnings, is there still room to grow into that multiple >> again, the venmo part of the business is growing over 103%. earnings are growing north of 20%. at a time when you can see how quickly the market is looking to adapt. the race for digitization of payments is going. these guys have a massive head start. they deserve a premium they're going to get a bigger premium. >> time to vote. are you buying or selling tim's pitch on paypal? pete najarian? >> valuation, tim can show you, that chart looks fantastic, especially some of the drawing you did on there but i can tell you this, it is an unbelievable company, they're doing a great job. i go with venmo, in other words
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paypal it's going higher. >> he's been all over this >> sell. >> he makes a great pitch. but the stock is up 70%. i think the story has -- it's got a beautiful balance sheet. this thing has got a $76 billion enterprise value at some price, i see somebody coming to make a move for them when you think about the market cap of visa and mastercard i would be a seller at 666, a buyer at 10% lower >> you see how this whole space is overbought. how do you flip the switch on this when in fact it was expensive probably five bucks ago? >> it feels like your sloppy seconds, brother >> hey, hey. let's wrap up here guy. >> there are young people watching at home >> it's all about venmo. >> it's all about the venmo. my bad but -- and i admire tim's courage in pitching this two days before earnings that's what i call courage
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what gives a musk rat his musk >> courage >> damn straight >> your opinion is most important, though. you want to go vote in our twitter poll @cnbcfastmoney. the nfl addressing player protests today but is it too late to prevent media stocks from getting sacked? nt. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts. introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. while maintaining a level of protection in down markets. so you can head into retirement with confidence. talk with your advisor about shield annuities from brighthouse financial established by metlife.
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welcome back to "fast money. the nfl hosting its annual fall meeting in new york city today where player protests are being addressed front and center eric chemi is at the hotel with more hi, eric >> reporter: hi, melissa roger goodell has just walked into the room to talk to the media. the owners and players did not come to any conclusion around the national anthem. they said they would have more conversations going forward about social justice and economy. but that hasn't helped ratings which are down this year fox and cbs, double digit declines credit suisse said it's so bad, it will meaningfully affect their earnings in the upcoming quarterly release. monday night football ratings, only 6.1% of tvs available were tuned into that game, a low for the season, down 3% from a year ago this same week
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real numbers pointing to real declines you could say it's the anthem, you could say it's a lot of other things like tv cable subscribers in general for sure ratings are not going up and the nfl needs to deal with that. that's been the main focus of the meetings today morning and afternoon. they'll continue tomorrow, melissa. >> thank you, eric chemi, at the annual nfl meeting what do you make of all this, the importance to the networks >> it's an absolute concern. roger goodell has been way behind on addressing this. it should have been addressed a year ago and unfortunately they haven't. this has continued to escalate when you see the snowball effect, and there are multiple other things, he mentioned that as well, but this protest has become something that everybody's got a side, everybody's taking sides one of the sides people are taking is we're just not watching people are not showing up. that's killing the ratings it makes any nervous for espn, for my disney position there's a lot of concern i have for all the media stocks >> you have to wonder if this is going to filter into other seasons of other sports, maybe
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even to february in the olympics >> i think it will and i think you're going to see some controversial rulings by leagues or by the ioc or whatever, whatever back to the nfl, you had health issues, player safety issues were affecting the sport on a grassroots level i don't think things get better for the nfl. >> i still think there's a chance disney hits 91. it doesn't trade well. 98 currently next, are you buying tim's pitch for paypal someone out there is, the stock is up a percent in the after hour session vote in our poll @cnbcfastmoney. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country.
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discover how we can help find your unlock. drum roll, please. time to reveal whether you at home bought tim's pitch for paypal nobody puts timmy in the corner. 54% of you buying his pitch. that means tim is having the time of his life ♪ the time of my life >> i don't know what to say, mel, this is a big moment for me i've been toni braxton for most of the pitches i miss toni. >> final trades. >> microtechnology musk rat says paypal >> yankee basically right now, sonny cray will give it six strong
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also that carter worth was talking about. >> amgen >> i'm melissa lee thanks so much for watching. see you tomorrow at 5:00 for more "fast money." "mad money" with jim cramer begins right now test . 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 "mad money" starts now hay i'm cramer, welcome to "mad money. welcome to cram america. other people want to mike friend i'm trying to make you money my job not just to entertain by educate and teach. call me at 1-800-734-cnbc or tweet me @jim cramer

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