tv Fast Money CNBC April 12, 2010 5:00pm-6:00pm EDT
with the breadless sandwich. the fast food chain is unleashing the double down today, featuring bacon, cheese, and sauce all between two fried chicken breast fillets, which take the place of a bun. wow. look at that. the sandwich weighs in at well, yeah, finger-lick 5g 40 calories. 32 grams of fat. and nearly a full day's worth of sodium. 32 grams of fat. yeah. let's take a look at the markets as we wrap it up here on wall street. the dow jones industrial average higher although just by a fraction given the fact the market did give up much of an earlier rally as we approach the earnings from alcoa. the numbers came in in line in terms of earnings, but the top line was a little short. the stock was down initially, and it seems to be trading better right now in the extended hours. the dow industrials today at , 11,005. alcoa is flat on the session on the heels of those earnings.
it's a busy week for earnings with jpmorgan as well as general electric later on in the week. that'll do for us on "closing bell." thanks for being with me. i'll see you tomorrow. "fast money's" up next. have a great night. live from the nasdaq marketsite, this is "fast money." i'm melissa lee, and we are off the most crucial earnings season in years is under way with alcoa. dennis gartman is on that conference call. when it starts he'll bring us the very latest. now, remember last january alcoa results kicked off the start of krax, but pete, maybe the consumers save this rally, maybe it will be different this time around. >> it really depends on whether or not the consumer can lead us out of this. they have helped along the way, we've seen a lot of, that but it's been these mutual fund mondays and when we lean on that expression, go all the way back to september, you start to get the idea that money flow that's been coming in to the markets over the weekend coming in on monday morning, that's really what's been propelling us, that is the retail investor coming in and showing us that they want back in this marketplace. right now what i look at and
focus on the very most is i look at the volatility index, i see the s&p 500 trading right around the 1,200 level, i see volatility trading right around 15, it looks to me like people are getting a bit overconfident. it's a great opportunity to be a very proactive trader. if you like this market, you'd better buy put protection because now more than ever this is cheap, this is the time to buy it. j welcome back, mel. >> welcome back to you and to pete. we were all on vacations together -- not together but at the same time last week. i don't want to cause any rumors out there. >> you just did. you just did. >> it is great to be back, right? >> it is great to be back. >> and pete makes a great point. you can't debate the data out there, folks. mutual fund monday has been a force. in fact, bespoke also elaborates on that saying year to date without mondays we would actually be down year to date. so at the same time, though, can we actually say it's the retail investor that's pulled us through? >> well, you know, if is a big word. if the queen had -- there's a whole saying about that. >> oh, boy. >> it's true. the mondays exist. the reality is, though, alcoa
earnings, as maria just pointed out, eps in line but revenues in line. if you look at total shipments, 1.175 metric tons this quarter, 1.404 million in the last quarter. i don't know if that's a seasonal thing or not i think alcoa should have been a lot better given what's going on in aerospace, especially some of the autos. wasn't great. the stock's probably fairly priced right here. in terms of the tape i've said it many times, i'm bearish but i won't fight it because the market continues to want to go higher. >> of course we always talk about alcoa, it is the first dow component out of the gate every earnings season but at the same time, karen, what do you think is the big tell this week? because we do have a full slate of earnings, we've got jpmorgan, we've got a lot of the consumery type of financial names out there. >> i feel like alcoa there's always some story, some excuse why the earnings should have been better but they're not. o'so i don't put much stock in alcoa. for me the banks are very important, not just because i thoenl but because they will really signal i think how well the economy's doing. i think if we could start to see some meaningful credit loss improvement that will be huge. the one caveat, though, the stocks already reflect a good deal of optimism for those
numbers coming in. it wouldn't be so shocking to me to see a pretty good number from jpmorgan and have the stock kind of do nothing or even trade down. that's okay. i'm in it for the long term, though. >> i agree with karen. i think the banks clearly are the focus this week. whether we are or not it can extend the market higher. it's an acknowledgment that a u-shaped recovery looks more like a v. the names that have been underowned through 2009 is the names everyone wants to own right now, that's what the mutual funds are chasing after. they're not chasing after the quality names in 2009. the banks themselves -- >> i've got to debate you on that for one second. >> you do? >> intel, hewlett-packard, ibm, qatar pil, those are quality names in my mind, and all of those names are near the highs -- >> not ibm. >> well, ibm's right near the high. i know it's not on the -- >> let's rephrase that. what they are are underperforming relative to things like consumer discretionary. >> okay. >> so right now there's this underperformance in things that you would think would be quality
in this type of recovery. but yes, i agree with you that some of those names are performing well. the transition is what's key to me right now, and you're going to get that with the banks this week. or you're going to see that with jpmorgan move higher. i think jpmorgan can. i think a lot of what happens in the first quarter, in january, let's not forget january 15th jpmorgan reported. january 21st you got that financial regulation reform. that's really what knocked the financials down. so i think being just okay is going to be good enough for the banks. >> to joe's point real quick, when you look at alcoa, that's an underperformer because of the fact that that is not a quality name. that's a terrible name. constantly they come in, they always disappoint. everybody's expectations are high. they always disappoint. they virtually disappointed again in my mind. this was an opportunity for them to come out of the gate and bang us. the stock is not even near the year high. it's not even close to the year high. and yet you look at the market, the market is screaming higher. alcoa's not been participating. look at freeport, look at all the different names we talk about in the material space.
50-some-odd percent of their revenue come from the u.s. that will be the -- >> we'll go deeper. we'll check in with dennis gartman in just a couple minutes on alcoa. meantime let's bring in gary kaminsky who's standing by in englewood cliffs, that magical place we know as our headquarters. >> e.c. >> e.c., gary kaminsky-u heard joe and pete asparring a bit but my question to you -- >> first thing is welcome back from the vacay. and second thing is pete, that's an awesome tan. and third thing, karen is right. i've been -- for 20 years alcoa has always had an issue. you talk about every market cycle, it always has an issue every quarter. >> all right. so is this different this time around? >> it is. >> the last earnings season alcoa really started the start of some sort of a market correction. do you think we're going to see the same sort of trading this time around? >> i do not. and if you recall back in january, melissa, i thought that the nasdaq was ripe for a correction right after earnings season. if you remember, where we were this time january, you had good earnings, bad stock action, and then you had that nice nasdaq correction. the difference right now between
now and january and that the capital markets are functioning quite well. we did not have m&a then. we have it now. we did not have an ipo market. we had no syndicate business. we have that now. so that's the difference. you may say what does that have to do with earnings? it doesn't. but it means the markets are healthier right now and i don't think we're going to have this sell on the news as we did in january and april. >> so time to get -- are we going to see a market rise? what sort of trading would you anticipate? >> look, i don't think that the averages are going to have -- you know, we're at this point right now where you're starting to see this tension between -- in terms of the averages and the performances. but if you're in the deal stocks, if you're in the companies that are exceeding expectations, you're having huge relative outperformance. so while the s&p's done one thing for the first four months of this year, there are many managers who are up mid teens, low 20s already because they've been in the right names. >> all right. let's actually talk about some of those deal stocks because there are so many reports in the news, so many rumors, a lot of chatter, certainly a lot of
options activity about some of the deals out there. we had actual deals. we had a merger of equals in the energy sector. we also have a lot of talk of deals here. but let's first start on the talk because that's sort of interesting here. palm. palm traded like 20% higher because finally people in the market are saying you know, what maybe they are going to sell themselves because they've hired catalyst and goldman sachs here. this is what the market already knew, that they were going to do something because they had to do something. >> and listen, we had jon on the desk last week. jon najarian. and he pointed out properly that you are seeing the activity in palm. and that's why jon got on board. but with palm here trading six bucks for me i don't care if palm goes to 20 bucks. i want no part of this trade right now. the reason i want no part of this trade is you're basical basically -- you're not investing in something. you're placing a bet that possibly someone's coming in and they're going to pay way beyond six bucks. to me you've got a better chance basically at caesars palace. i want no part of it. >> it would be interesting to see what whitney tilson has to
say. my sense is shorts were adding to positions today. palm might get bought, but it might get bought for $3 a share. you've heard of takeovers. well, this is going to be a takeunder. who knows? but i think this was an opportunity for shorts to layer in some more positions. >> we've seen this 234 palm before and we had no bid in the market so you've got to wonder if someone's going to step up at this time now that the stock has actually run and whether palm will run out of options at some point especially you have shorts like whitney tilson in the stock saying, what, $2 or so? >> i think he said $1.50 for what's left of the carcass, something to that effect. >> the problem with whitney right now is a lot of those shorts started taking it off in the last couple weeks. when you look back a month ago or so, it was more than 70 million shares were short. now it's down to close to 65 million shares as far as about a month ago, and a month ago that was the stock at about 5 1/2. when it pulled back to 4 you just wonder did a lost these shorts start to cover? >> gary, you want in on this combo. >> when companies go out and they hire bankers to explore
strategic alternatives, as they say, i think -- and this is not a not scientific thing, but i will tell you that many times these are the companies that have problems. they're the companies that are not able to execute. and that's why they do this. they try to get the stock price off and they try to find some kind of buyer. this is a dangerous situation because the only ones who really win are the bankers. because when you hire somebody who explore strategic conservatives you pay a retainer fee whether or not they're able to find anything as opposed to when i do an ipo or go out and try to sell a division you get paid on whether there's a transaction. so remember to be very careful exploring strategic alternatives is a red signal that things aren't that great. >> let's talk about the bankers for a second. blackstone, for example, first time i think it's above 15 for quite some time. that's a name they're talking about here. i think that stock if you're looking for a play in this m&a world blackstone might be an interesting place. >> roger mcnamee of elevation partners-f you're out there and want to come on the show and talk about this stock, you are
most welcome. 30% stake in palm. they started buying up palm shares in '07, '08. we should note the stock was about 8.50. they were in it in convertibles, so we don't know what the damage is for someone like a bono, in elevation partners. but roger-f you're out there and you want to come on -- >> or bono for that matter. >> do you know any u2 songs? >> i could sing. do you really want that? i'm very good. >> i do not. >> a little skynyrd, a little zz top. >> i don't think i want to know. but i do want to move on to -- >> you brought it up, not me. >> power producers merging, merger of equals. karen, at the beginning of the day on our conference call at 9:00 a.m. you said you're sniffing around rri and mirant. and then you decided not to. what is compelling and what made you not pull the trigger? >> what is compelling is this has not been the place to be, the independent power producers haven't done well this year,s haven't done well for quite some
time, and i love that you have an industry that may be at the bottom. and a merger of equals is often done because one of the companies is afraid that they're going to be taken over. not always, but often. and so that to me is interesting. it's compelling, the merger. there is some cost synergies. but i think you're paying not a lot of money right here for maybe the chance that something else will happen or even that sentiment will change in the industry. that often, just a catalyst like a merger of equals being announced, is enough to get people to focus on the industry. so there are a lot of reasons here. as i talk about it, i should have stepped in even though traded a little higher than i wanted it, both sides today. i would be a buyer of both. >> cs did warn maybe it's a short squeeze going on that's helping the stocks move higher. >> i'm intrigued. >> there may be another day. >> there's smoke there. >> we want to squeeze some n. some breaking news here, head back to mary thompson at headquarters. mary. >> for years washington mutual engaged in fraudulent lending practices to build its subprime securitization business. these are the findings of the senate permanent subcommittee on investigations. it released its findings today.
it is probing subprime lending's role in the financial crisis. and in its report it alleges through high-risk lending, lax controls, and destructive pay practices washington mutual infected the secondary mortgage market with billions of defective loans. it did so in pursuit of profits generated by selling these loans to wall street firms that in turn repackaged them and sold them to investors through a process called securitization. now, among the allegations, washington mutual's subprime lender long beach consistently bought and resold mortgages that didn't meet wamu standards even though wamu senior management knew about it but did little to improve those practices. within its own prime lending operation employees at wamu went so far as to cut and paste bank statements from current clients to create files for new borrowers so they'd be approved for new loans more quickly. while loans generated by one office in california were so defective aig stopped writing insurance on them. subsequently alerting the fdic and the california insurance regulators of these problems. now, the subcommittee is holding
a hearing tomorrow. the key witness will be the firm's former ceo, kerry killinger. he was fired back in september of 2008, right before the fdic took over the thrift in what became the country's biggest ever bank failure. we'll be listening here on cnbc. melissa, back to you. >> certainly will. thank you very much, mary thompson. just to put this in context, karen, do you think this is at all an overhang for jpmorgan? is it something that jamie, your boyfriend should be concerned about? >> jamie, he doesn't know he's my boyfriend. let's clarify that. >> no? >> apparently not. but i don't know, it could be a day or two of bad press but at the end of the dawe i don't think this matters to the jpmorgan story at all. >> let's go back to our dealmaking conversation because that certainly was a big story of the day. joe, you're looking at sinopec. >> absolutely. i think there's a trade here. we talked about it last week on the show. it's the jungle book trade. and forgive me for saying that. that's because i have a bunch of little kids. but it's all about the bare necessities. look what the chinese are doing. they spent $32 billion last year acquiring energy and material assets. they want the basic necessities.
now they're going up to canada, they're basically taking a 9% stake in sincrude, getting it from conoco phillips, they're now in the alberta sands, which petrochina is. this is a theme going forward. you have to look at the simple bare necessities, energy, materials. you've got to be in it. >> if they're playing for oil sands wourks go into a suncor? >> it's part of that consortium. i think suncor's a great trade, great place to be and i do think it's underperformed relative to everything else. >> walter energy, i think it might -- well, it didn't print 100 but it got very close and we've been saying for a while look for this to print triple digits. it did. but to pete's point buy put protection now. if you've been in this stock for any period of time you've made money. now is the time to take some protection on it. >> i think in these coal names particularly today was an opportunity to sit there and look at these names and realize hey, look, we've had a huge run. and the run has been absolutely stellar for the last couple of weeks, couple of months. maybe it's time if you don't want to take it off you'd better
buy puts. there's been a little more volatility there than the rest of the market. you can sell some calls to the up side. a name like tech resources is something i've done that in. i'm going to get taken out. that's okay. when that stock pulls back that will be an opportunity to invest in it again. >> gary, what are your plays here? >> i just want to say one thing about joe's play on suncor. i used to spend a lot of time there, i was up at fort macmurray, and this was a deal in the works pronl five years ago. it took five years to make this thing happen. and i will tell you this. the chinese have been up there for some time, the chinese have been all over that place, and i think had this will continue. this is the beginning of consolidation up in alberta, not the end. >> we also want to do a quickie touch on best buy. we had the analyst from fb now who upgrade the stock sending the stock to a new 52-week high. after we had him on the halftime report he said an acquisition of radio shack is highly probable. but here is the kicker. if it acquires radio shack at about $30, $31 a share it could be accretive to best buy earnings by 30 cents in year
one, 50 cents in year two, which is a tremendous leverage. >> that would be a huge boost to best buy's earnings. i'm a little skeptical of the deal. i don't think they need to do the deal. but if they can do an accretive deal like that, that's great. >> and best buy's doing so'll over in europe i agree. i continent know that they have to do this deal here. they already have explosive growth going on over there as well. >> okay. got to move on here. ten-point game on dow jones industrials not doing it for you? well, take a look at some of the big gains under the radar. in the chemical names specifically dupont breaking out, up 10% in the past month, and pete, this is on your radar. >> you look at these names. in the ag space we oftentimes focus on these chemical names, but it's the chemicals, the diversification of those. those names like dow, those names like dupont, those are the names where they've got exposure to the ag space but then on top of that they've got the rest of the economic recovery story, and that's what's pushing these stocks. you look at the beginning of the year to now, you're going to see a lot of these names absolutely exploding to the up side. eastman chemical's another one of these names. but across the board those chemicals, not necessarily the ages like we always talk about,
those chemical names, they still trade relatively cheap, and you look at a dividend yield in something like a dupont at a little over 4%, that's attractive as well. they're going to pay that. they're going nike some strong earnings and today their earnings estimates were raised. >> we talked about eastman kodak for a while. it traded up to 67 today, did close lower on the day, but they just recently said they're going to see 20% eps growth this year, probably about 15% out to 2011. i mean, it's probably fairly valued. trades about 14 times forward earnings. nice dividend. a name i still like, pete's liked for a while. yeah, it's probably long in the tooth now but pullbacks on this name are buying opportunities. >> if you think oil is going higher, though, do you not want to be in those names? traditionally you see oil go higher and those are the inputs for a lot of these chemicals and you don't want to be in these names when that happens. >> that would be probably the one area where you have some nervousness, especially with it getting closer and close yes to that $85 or $90 number. at some point that would be a real pain for these guys and start to hit into their earnings but right now demand is high enough across the board. and they mostly have gone into the specialty chemical area. that's where they're making the
money. that's where the margins are. >> if the economy is what's making oil go higher, those businesses, the chemical businesses, the way the business model works, they're is so levered that you're saying especially chemicals, their costs move a little bit but the price can move a lot makes them wildly more popular. >> and i've unfortunately played that theme in the airlines and the consumer discretionary, and it's not working right now. >> okay. we do want to go to dennis gartman. he's got the latest from the alcoa conference call. dennis, what's the latest news here? >> it's actually quite a boring conference call. there's not much going on. as you can see, the stock is down a little bit. i hate to tell you that. >> come on. >> but what are we seeing here? talking about the fact that there's a decline in housing that they're concerned about, that's going to continue. there's a change in, let's see, some of his -- housing has been offset by other areas. airlines are down. they're concerned about that. productivity, however, seems to be picking up. they're very consent with what they're seeing going on there. and they spent a lot of time talking about the problems that they have, their exposures to the aussie dollar. that's their biggest exposure as
far as currencies are concerned. on balance, however, it's a very boring conference call thus far. >> all right. try and stay awake with that old-fashioned phone of yours. i haven't seen one of those in i don't know, a decade. does it have a dial? did you have to dial into the conference call? >> oh no, no, no, no. actually, smoke signal. smoke signals. >> all right, dennis, we'll talk to you a little bit later on. the alcoa move today was kind of interesting. was up as much as 2% midday. a bounceback perhaps from that jpmorgan downgrade on friday, when us three weren't around. >> exactly. >> but then gave up the gains going into the earnings report today. >> fcx pulled bake little today. alcoa using the aussie dollar as a tail end to their exposure. notice alcoa you can hedge your aussie dollar risk believe it or not. i that when they start using currencies as an excuse for anything. >> it will be interesting to hear what if anything they have to say about the current quarter we are in because the first quarter only saw a 3% rise in aluminum prices and this quarter we're seeing about an 8% rise. that will be a real boon to the alcoa earnings. call it's i just got to have it
trade, americans spending big once again at the mall, at the drive-thru, even in las vegas. consumer discretionary stocks leading the next leg of the rally. peter boockvar says maybe not so. we'll get to peter in just a moment. but we've been noticing -- hi, peter. >> hi. >> well two, names come to mind. >> here on the desk first. >> 25 today, new 52-week high. we've been on that forever it seems like since basically jon and i were in vegas in august. it's really hard to get on board now. frankly, now is the if you're in you should be buying put protection like pete says. if you don't want to do that now is the time probably not to get in. ubs just recently downgraded the stock but raised their price target from 20 to 24. so it's all about right now. tiffany "uss a name we talked about since it was trading 42. that went north of 50 today. again, it's sort of that barbell retail trade that probably is a little long tooth but tiffany's is the name i like out of all of them. >> oppenheimer today upgrading their market exposure to consumer discretionary the large cap as well as the small cap consumer discretionary. and joe, you're out now of that
short. >> you're killing me, guys. i'm officially out. o'so consumer discretionary can now go down. i've been playing it from the short side, obviously. everyone knows that. and i'm wrong. >> karen, are you still in some of those retail names? >> some of those names i like, t.j. maxx is one i've had for a while. i also like best buy. those are our biggest exposure. and aro. american eagle. >> peter, you're still worried about higher rates. you're talking about the consumer, wall street's getting more bullish consumer discretionary of late after the stocks have had monster runs so far this year. why are you raining on this parade? >> well, typically, in recessions you purge at the excess of the previous expansion. and we did that in housing. but inning ayegate debt levels we have not because of the a debt the government is taking on. so as we're further on in this economy interest rates are still heading higher in a still very leveraged economy, i'm very concerned about the double dip implications from that because higher rates raising the cost of
capital not only at the corporate level, it's going to izz rat cost of capital at the consumer level, at the same time commodity prices are going up, at the same time income zbroeth very sluggish, job gains are very sluggish, and i see this recovery in the economy more as a mean reversion rather than the foundation of a multiyear sustainable bounce. >> peter, it's karen. let me ask you, what would you need to see to make you become bullish on equities? >> comfort that the economy continued to recover without a big rise in interest rates. to me interest rates hold the key to equity performance in 2010 because this recovery is not going to continue in a vacuum. it's going to be brought with higher interest rates. and i'm concerned the u.s. economy, because it is still extremely levered, that it's not going to be able to handle well much higher interest rates. >> peter, we've got to leave it there. sorry we're short on time. peter boockvar, miller tabak, we appreciate your time. got to take a break now. more "fast money" is up next. to get ahead of the tape you need to go behind the numbers. and "fast money" has a 360
degree setup ahead of one of the biggest banks' reports. from the technicals to the trades we've got you covered. plus, they make the pitch, you make the call. tonight, the negotiator putting his money where his mouth is and making the case for a speech software company. but lu be buying from this guy? all that and more when america's post-market show continues.
welcome back to "fast money." alcoa numbers are out. so earnings are officially under way. and this season we're giving you the setup from three angles -- fundamentals, technicals, and options. it's called "fast money" 360. the first stock in our sights, jpmorgan. take a look. >> jpmorgan's my favorite stock heading into earnings. we're looking for 59 cents a share for the quarter. trading profits improve significantly from the fourth quarter. credit quality improves as the year goes on, which should help the stock hit our $54 target during 2010. >> let's get the technical setup. jpmorgan, well-defined tops over the period of a year, year and a half, from which stocks more often than not break out. a well-defined cup and handle formation. move to the up side. get long. >> the options markets are not expecting a very big move out of
jpmorgan. we've had big moves in the past. not expecting it this time. i tend to be bullish right here. but don't expect a very large move from jpmorgan. >> who was that handsome man saying don't expect -- >> hard at work. >> that's a good takedown, too. >> don't forget moshe. he's handsome. >> jpmorgan. anybody playing that? >> i think jpmorgan sets up nicely. a lot of people are look at what happened last quarter and the same thing happens this time. i think the introduction of financial reform was the big problem for jpmorgan. i think the stock goes north of 50. >> karen? >> i think expectations are being built maybe a little too high. but i like it for the long term. credit's obviously going to be really important. i think the trading environment may not be quite as good as it's been. but i love this story long term. this is a still a good place to buy it after earnings. >> the numbers were great last time, and i think they'll be
great again. i disagree with you again. sorry. but my disagreement this time is i think what disappointed people was they want the dividend addressed, they didn't get it. this time if they get it then i'm going to be wrong. the move's going to be substantial to the up side. either way i think it's bullish. but i think either way i like bank of america as more torque for this -- >> so what did you disagree with? >> well, you talked about what the -- the cause of them to drop was. i think the cause of the drop was that they didn't address the dividend. everybody wanted them to address it, they didn't. everybody was looking for them to raise it. they didn't. the cfo, everybody was looking for them, and when he didn't see it that's when it -- >> well, remember, it's a week where banks went lower before the whole financial reform thing came out. jpmorgan was head lower before that, but to joe's point that was definitely the wind in their face. i think, you know, banks, a lot of these banks are right up against those october 52-week highs. they'd better knock the cover off the ball or you could be setting up for one of those good enough but not good enough sell-off type situations. >> let's talk bank of america now because that is one that you're watching as well. bank of america. what are you expecting out of them? >> i mean, it's the same. i think that the same story.
for them it's much more of a credit quality issue i think than jpmorgan, but i think improvement will happen over the course of the year. i don't know if this quarter will be enough. i do like bank of america. it's our biggest bank position by a fair amount for the long term. >> let's also talk about intel. that of course one of the big tech earnings reporting tomorrow after the bell. let's take our positions today. we did see some strength. nice turnaround actually intraday. and the semiconductor index. we had a cs upgrade of texas instruments and that sent that stock higher but eventually by the end of the day all these stocks were up nicely. >> intel's been a fascinating stock every earnings period since april of last year when they reported what was a pretty good quarter and the stock went from 16 down to 15. remember, that was sort of the sell first, ask questions later mode that people were in. stock subsequently rallied pretty nicely. as recently as the last quarter they reported a pretty significant quarter but the stock again failed at 22, actually traded down to i think 19 or so. intel's one of those stocks you have huge volume on earnings releases. my sense is they're going to
have a great quarter. the knee jerk will be to take the stock higher. if we see a big volume day the next day, which you probably-l that will be your chance to get out, take profits, look for the pullback to get long. >> and i think actually intel speaks for the entire perspective. i don't think it's an intel trade you make here. i think you look at some other names, look at a name like teradyne, lan research, those are the names you want to be long if intel gives you what you want. gary talked before about the performance of technology at beginning of the year. if this rally's going to continue, you've going to have to see the baton passed to technology itself. >> and they have that enterprise spending. 60% of their revenues come from that side. so i think you're right, but -- >> i'm right? >> but intel does tend to be one of these serial disappointing stocks. like guy says. gets that big pop, then sells off. i think the names under the raid thar can still go higher are national semi, marvell. i think those are the names that can actually ride along intel and actually go higher. >> when we had you guys agree, i wish we had a big smooching sound. >> i can do that. he came back ornery.
>> just different opinions. >> we're going to take a break. more "fast money" up next. we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. hey can i play with the toys ?
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money." by now you have seen the turnaround, the infamous domino's ad campaign in which the company concedes their pizza tastes like cardboard but that they're on a mission to make it better. well, the jury's still out on the pizza itself. the stock has had an undeniable turnaround, up more than 50% since the campaign's debut. here to set the record straight is patrick doyle, the boss over at domino and is of course a friend of "fast money." patrick, great to speak with you. you reported earnings at the beginning of march, patrick, and at that point morgan stanley said this is the early stages of a turnaround. your stock is up 50% since the campaign started. give us some hard numbers as to what sort of sales you've seen since the start of the campaign. >> you said the jury's still out on the pizza. it definitely is not. people love the new pizza. we're getting great trial of the pizza and repeat when they have it. and we know if we get people to try this new pizza we win. >> how much do they love the pizza? give us some numbers, patrick. it's about mid-quarter for you guys. so that's fair.
>> yeah. well, we're actually -- we finished up the first quarter, but stay tuned, may 4th we'll release the numbers. but as we've said previously, we're very happy the consumer response has been all that we had hoped for. >> so no order of magnitude, nothing in terms of the sales boost from the campaign? >> all that we'd hoped for, i can hope for a lot, melissa. all that we'd hoped for. >> vague man. let kaminsky at him. go get him, gary. >> that's a takedown, by the way, patrick. but gary, you have a question. >> when we spoke to you in february there was a discussion about input comments and whether or not they were rising, falling, or how that was going to impact the second half of this year. can you give us a sense now if there's a potential earnings upside surprise as a result of input costs as opposed to the upside revenue surprise? >> yeah, commodity costs have really stayed very consistent with where they were. cheese was down a little bit. it came back to kind of its historical averages. wheat has actually been trailing off a little bit. we're actually in very good shape on the commodity front.
>> so just to follow up, you had probably had some sort of forecast earlier this year, late last year. so it sounds as though if anything you're going to beat on that forecast if things continue to stay stable. >> yeah. i think we're in line to maybe slightly better than where we'd expected to be. >> hi, it's karen. let me ask you something. there's a bit of consolidation going on in this space. i know it's not exactly the same as you, but california pizza kitchen seems to be up for sale, carl car cher's had a number of bids. why is that happening in your space, and would you ever jump in to get involved? >> i think the space is attractive. we're certainly not a buyer. you know, we're a one-brand company, and we're going to stay that way. but it's an attractive space for people. we throw off a lot of cash, and it's a reason why bain bought us, you know, 10, 11 years ago, and they still retain about a 15% stake in us. and you know, it's an attractive space. we throw off a lot of cash. and i think as you're seeing the
categories start to get a little bit better, you know, investors are coming back around. >> so you're saying definitively, patrick, no domino's pizza kitchen? >> no, absolutely not. >> okay. pat-r great to speak with you. hope to see you soon. patrick doyle, the boss at domino's pizza. anybody like the company or maybe the pizza? >> i like where karen was going. february 26th the deal with cke restaurants, thomas lee partners announced, we said that day jack in the box is the play. couple downgrades later the stock's up about 25%, and i still like jeck. i think that's where you go. 13 times trailing, 20 times forward earnings. i think there is consolidation in this space, it gives all these names a bid. >> domino's made a 52-week the other day, but understand if you're in this i think you're buying the international story. same-store sales were up 3.9% internationally. big expansion in india. so it's about the global theme with domino's. >> and don't forget about yum. yum's not only in india, not only in china but that south american component as well and the options have been fantastic. and their earnings are later on this week. so that should be interesting.
>> all right. quick to gary here, did you buy what patrick was telling you about input costs? and i'm thinking maybe the food costs have remained stable but having gas prices gone up? >> yeah, but i think -- and gartman touched on this last week. i think he was probably forecasting higher rising input costs. so i think if anything he just endorsed the fact that they may see an earnings upside surprise later this year if this stays the same. >> karen, was that the same read that you had or -- in terms of the m&a activity did you think there was more activity to come in the space? >> well, i think there is cpki, but i am actually intrigued by domino's. i want to take a look. i love free cash flow. who doesn't? you know. really. >> okay. keep us updated on that trade. patrick made a good pitch, i guess. >> he made one pitch. vague, vague, vague. >> that is very true. we'll keep you updated on what karen does. time now for the greatest single stock stories in america, and that of course is "pops and drops." we kick it off with a pop for manitowoc.
up 7%. pete. >> this stock traded nearly four times the normal average stock volume today. the options were outstanding the stock hit a 52-week high, a lot of people out there, a lot of chatter. right now we just know the stock's going higher on just a lot of talk. >> royal caribbean was a pop as well, up 1%. joe. >> sanford bernstein raised the price target from 31 to 40. this is -- again, coming from me who's been short consumer discretionary i don't know why you would listen. however, i would not be on this trade. i think it pulls back to around 32 first. >> you've had a lot of other good calls, joe. >> absolutely. >> i'll focus on the bad ones. >> pop here for st. jude. it was up 3%, karen. >> i know how you feel, joe. i'm out of st. jude, which is an opportune time for both jefferies and goldman sachs to upgrade st. jude. melissa, back to you. >> and as we progress we're going to make you feel a little worse. >> celgene was a drop today. down 2%. >> downgraded jefferies. the ceo's talking about his retirement plans. the stock off about 8% the last week and a half or so. i still think rev la mid-'s a huge drug for them i would buy the weakness. >> metro pcs was up 2%.
welcome back to "fast money." we are live at the nasdaq marketsite in new york city's times square. alcoa conference call under way. let's check in with dennis gartman. dennis, anything new from that conference call? >> i think the only thing to come out of it is the fact that they're very bullish on china, continue to think that the chinese stocks of aluminum are readily -- they're not out of control. there's no problem there. and they continue to talk about growth in china. i think that was the best thing that came out of it. looking at tomorrow's newsletter, i think that the big concern i'm going to be talking about is the same thing i spoke about this morning. the euro and the problems that are attendant to greece. and one other thing, we just had a discussion from the gentleman from pizza hut. you've got to like the restaurants because input costs are in fact declining everywhere. gary talked about it. i talked about it last week. i think that's important. >> that is a good point to make. dennis, thanks so much for monitoring that as you call it boring conference call for us,
making sense. got to move on and talk some biotech here. 72 million. 72. that is the number of americans who are obese or overweight and they haven't had access to a new prescription diet pill since the '90s. that is unbelievable, and that is about to change. cnbc pharmaceuticals reporter mike huckman has been covering biotech's dash to deliver a safe and effective new drug to the market, a race that's coming to a close. mike, which companies are going to be out first? >> of course you all remember fen-phen. that's what melissa was referring to. it was taken back market in '97. wyeth had to play 20-plus billion dollars to get out from underneath that. so now this could be a really fat year. fat profits -- >> no pun intended. >> of course it's intended. and a bad one at that. but yeah, there's three companies, three biotechs, kind of baby biotechs, vivas, arexigen and arena that have now filed for fda approval of individual prescription diet drugs. two of them are set to get a decision from the fda in around
late october time frame of this year. arexigen may have to wait until early next year. but the first one goes before an fda advisory committee in mid-july, and that's vivi suchlt. j are these event stocks where they get approval and they rally or don't and get crushed? >> correct. and not just approval but they're going to have to clear the fda advisory committees first because there's no way, given the history of fen-phen that we talked about and also with sanofi-aventis a few years ago that got to an fda advisory committee with a diet drug, got shot down and killed because it had psychiatric side effects, there's no way the fda's going to let these things just sale sail through to market. they're going to go through the data with a fine-toothed comb to check side effects. vivus, and this doesn't get much attention because everybody's talking about the diet drug side of it. vivus has an erectile dysfunction drug. people say we've got levitra, viagra, do we really need a fourth one? >> apparently. you. >> you tell me.
apparently you don't. >> you say you tell me and you point at guy? >> i'll be twittering with you later. >> okay. so vivus has this -- >> here's what differentiates it. it takes effect, you guys, after 15 minutes, and it's faster out of the body. >> 15 minutes? >> quick onset, faster out. >> there's no safe place to go. >> that is just too -- >> what's the trade then since we don't want to go too far out on that one? >> there's one other company i'm concerned about, mankind. it's sort of in this whole space. >> sought space you're talking about is what a lot of people call diabesity because obesity and diabetes are so interconnect a some people call it diabesity. they have this inhaleable product about the size of your finger. it just got a delay from the fda. skeptics are saying it's dead in the water, defenders are saying no, al mann, the guy who the company is named for, mann kind,
he's got a solid track record in the business, if anybody can get this done he can get it done. >> mike, thanks so much for joining us. we appreciate your analysis. we were talk about a lost these binary event type stocks, very volatile but if the volatility is too risky for you you can play the index, which is the the ibb. one share of the etf 92 bucks. solution, options. we bring in mike khouw, who is u.s. director of cantor's equities derivatives business, of course also an "options action" contributor. mike, what's the trade here? >> what we're taking a look at is the september 90 calls. you can pay about $5.45 for those. this is a bullish bet but it's a hedged one. one of the things you were just talking about is how volt sxl binary these events can be in the individual biotechs. by buying this you're effectively getting all of that. and the benefits of diversification. and of course because of that diversification typically the options cost a whole lot less. that's one way to make a bullish bet in here but be hedged to the down side. >> karen, ibb is something you've been in.
would you be in it and would you play the options side for a fraction of the cost? >> i'm not so concerned about putting up the $92, and i want to be in it. so i haven't played it flu the optio options. i have the xbi and the ibb. i like the dynamic and i like the consolidation story. >> mike, thanks so much for that trade. and of course you can catch mike and me on "options action" at 5:30 p.m. eastern time on fridays live on cnbc. of course. more "fast money" up next. bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.
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all right. dealmaking continues to grab headlines in this market. one of the many deals that closed before the financial collapse, wireless tech play aeroflex filed an ipo last week, that company was taken back in 2007. gk. ski, why are you watching this one? >> while we're talking about ipos let me give a shout out to a good friend "fast money" who keeps us in this loop, dick biva. this specific deal, this happened right before the world was starting doum to come to an end. you hear a lot of chatter about goldman trading against clients, this is a situation where goldman stood up to the plate,
helped this company through the crisis, took a big hit on its own books in terms of the bridge financing and now will be coming back with an equity participation in this ipo. it's a good business. it's an interesting deal we're going to pay attention to. wireless, semiconductor, telecom in the right space at right time. >> net net, though, gary, my guess is goldman makes a profit on this one. >> this could be tight because while they're make money on the underwriting fees and equity participation they took a big hit. people will be talking about this deal specifically melissa as it relates to the fact that goldman stood behind its clients as they say they've done many times. >> i think it's good for the market we're seeing ipos that can get done and i think we may actually see lbos that get done soon too. >> if they are able to off-load some of those portfolio companies theoretically they'll have more money to spend again. >> that's the plan. >> this is a sign -- just again, this is a sign of healthy m&a and a healthy ipo market. it's not frothy. it's healthy. and by the way, i'm sitting here in jersey. i'm jealous. karen's talking about moshe. karen's talking about jaimie
dimon, boyfriend. i'm feeling very left out out here. >> you're cute, too, gary. come on, look at that face. >> you guys have a contest going on for the best tan. >> cute and cuddly. >> we've got to move on here because it is time for the segment that has taken america by storm. you know the rules. 30 seconds, one stock, one trader to make the case or the dial tone. guy adami today gives us the pitch. and the clock starts now. >> you're a harvard lady, right? yes, you are. so if i were to say to you a subtle variation, distinction, what would you say? >> nuance. >> nuance! of course you would. you're a smart lady. speech recognition, folks. that's apple products, speech recognition, blackberry products, and medical records. a huge industry. these guys are the leaders in. valuations historically at the low end, 13 1/2 times forward earnings. great growth prospects. and i hate to use this. there's a chance that these suckers get bought out. i like nuance, trading around 17 1/2. somebody just slapped a $21
price target on them. i think it goes there. sorry. >> oh, just made it. and we should note it had been rumored to be a takeover target by google. >> a-ha. >> and many others. perennial in the chatter there. time for the poll of the day. are you buying guy adami's pitch? are you saying no, thank you? a is no thanks, you get the dial tone, guy. or b, yes, i am sold. log on to fastmoney.cnbc.com right now and cast your vote, yea or nay to mr. guy. final trade right after this. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
time for the final trade. let's go around the horn. joe. >> long amex. >> guy. >> yum. >> aeo. >> yum. >> whoa. >> our thanks to gary kaminsky on the prop desk. see you tomorrow 5:00 p.m. eastern for more "fast money." . >> announcer: next, the anatomy of a takeover. dr. cramer's on call. can you cash in on fuel without getting burned? jim's got his eye on an undervalued stock. "mad money," next on cnbc. first in business worldwide.