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tv   Street Signs  CNBC  October 24, 2013 2:00pm-3:01pm EDT

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under some very heavy selling pressure as they try and figure out what to do with the stock as we get closer to the close. so nq mobile, take a look at that chart, down 57% on the trading session. so that will do it for us on "power lunch" as we close out this trading session. ty, up to you. >> sue, see you when you get back to the ranch here. "street signs" begins right now. and welcome to "street signs," everybody, your hot topics today. apple shareholders are loving carl icahn with a $400 million paper profit, though, in just a couple of months, is it fair for the average investor about these tweets? we're going to dig into it. how saudi arabia essentially guaranteed the u.s. oil boom will continue. boone pickens is here to discuss what i'm calling the saudi paradox. and while you twist and stuff yourself into a coach seat seemingly built for no real-sized human being, the airlines are raking it in.
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perhaps, mandy, we should call this the plane pain game. >> i think we should. well, with today's gains, we are now back on track for three straight weeks of gains for both the dow and the s&p. and by the way, how has the market done since the d.c. deal to reopen the government? well, since october 16th, the s&p 500 has risen over 3%. well, as brian said, carl icahn is at about again. he's once again trying to stir things up over at apple. he had had a lot to say on "fast money halftime." jackie is here to wrap up all of his greatest hits, shall we call them. >> good afternoon, mandy. well, another colorful carl icahn interview with scott wapner after his letter to tim cook was made public this morning. in the letter he said he upped his stake in apple and reiterated he wanted to see a bigger buyback through a tender offer to the tune of $150 billion to show his commitment to apple. he will not tender his own shares. meantime, icahn argues that apple has much more cash on hand than it's going to need to fund
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its business needs. take a listen. >> shareholders didn't buy the company. if they wanted to buy it back, they could have bought it back. you don't keep $150 billion around. but even if you do keep it, the simple way to get around the repatriation is to borrow money. i do think that on the board, there are, as far as i can see, no one that really has financial expertise. >> now, while he said several times how much he likes the company, what a great job tim cook is doing to lead the company, he was critical of the board, and he also said that he might consider a proxy fight. >> i think we would test to see how the shareholders feel, and if we should do a proxy fight. and we would judge that at that time. if i felt that i could win one or two seats on the board, i would certainly do it. i have no compunctions about doing that. i think many more proxy fights
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should be fought in this country. >> he also said that the next time he thinks he'll speak to tim cook is after the company reports earnings. shares closing close to $530. icahn telling cnbc he bought his stock at an average price of $440 per share. that means he's made about $430 million on his apple bet so far. that's about $6 million a day, not including any dividends that he might have received since he started buying stock just a few months ago. guys, back to you. >> jackie, thank you very much. well, certainly apple's shareholders are happy about those icahn tweets, but some who perhaps are not on social media like twitter may be frustrated as well. it's new, it's a hot topic and one that is certainly open for debate. so let's debate it. here now is our own dave faber, herb greenberg and will power on the apple fundamentals. herb, first to you. okay. obviously, back in april, the netflix decision, the s.e.c. said social media, perfect acceptable for dissemination.
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we're in the dissemination business. that's what we do on cnbc. but when a single tweet can move a stock and enrich somebody by hundreds of millions of dollars, do you think that it passes the smell test? >> actually, i think it does. and i think this is -- >> does or does not? >> it does because this is not like an officer of a company going out and effectively saying, you know, giving dissemination in an arena that is not necessarily known for dissemination as was the case with netflix on facebook or twitter. anybody can go out and say anything as long as it's not perceived as insider information. >> is it leveling the playing feel? many feel you press the button send, suddenly you make millions of dollars, right? >> can i have that button? >> i want that button, too. what if you are not on twitter? it's a small sliver of the population. >> carl's figured out a way to game twitter. >> he really is. is he changing the roles of activism? do you think we'll see other activists jumping on the twitter bandwagon when it seemingly
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seems so easy? >> you know, listen. i think being an activist investor means communicating in any form you possibly can to get your message across. carl has always been extraordinarily good at getting his message out there. whether it be through print, through television, through interviews, and now through twitter. he's embraced it. he kind of came a little late to it. i would say maybe not late, but certainly has only embrace it had over the last couple of months, as we know. but why not? you can't blame him for using that as another tool to get his message out there. and the fact is that anybody who saw that original tweet, when he took the apple position -- >> yeah. >> -- and bought some stock is probably up right now on that. >> david, and certainly listen. we're not picking on carl. you're right. he is arguably the most powerful person on twitter right now. it's not ashton kutcher because ashton's not moving stocks to the tune of a couple hundred million dollars on twitter. but if you're a hedge fund manager, herb, not carl icahn, why not -- you know at some point, somebody, not icahn,
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somebody else lower down the chain is going to try to utilize this, and who knows if they're selling while they're sending stuff out? >> well, hedge fund manager is in a different position. icahn, his lawyers and all -- >> let's get icahn out of this. we're talking about the medium. >> you get out of there. you do find people who will take advantage of it and think they are he. and then you're raising a great point with that. >> but there are lots of fake handles out there, by the way. when you first started tweeting immediately sprung up i'm carl icahn. >> his hair moves stocks. >> it does. and this is your idea, brian, giving you fill credit, why not just have rules where you can only tweet this kind of potentially market-sensitive data or information outside of market hours? >> if you're bigger than 5% shareholder. we were debating that internally today. >> david, what do you think? >> you know, i do wonder whether like any new medium, remember the internet chat boards, herb? i know you do, when they started, and the abuse that took
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place or can take place. certainly there will be potential abuse here of twitter. but it's also got to be buyer beware. you know, we'll see how it develops. it's an effective means of distributing information. we all use it for that. and so does mr. icahn and i assume many others will follow. >> and will, we haven't forgotten about you, buddy. we'll get to the apple fundamentals in just a second. thanks for your patience. enjoy the dialogue. david, you've been at cnbc 20er yoos. >> fu f years. >> thank you for reminding me. >> you started when you were 8. you remember the day when a ceo would say david, we're going to beat earnings expectations. regulation fd put a clampdown on that for the benefit of investors 37 thatinvestor s. that's what it did. >> we were under reg fd. you were allowed to do that. reg fd stopped you from doing that after a meeting and saying to a number of money managers, we're going to beat the quarter. >> technically, but you also know -- but it stopped.
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i mean, ceos during the middle of the day, they're not saying this stuff anymore. press releases are before market or aftermarket, it changed the way we communicate. i hear your technical point. i'm just wondering if april, though, the s.e.c. with netflix basically said social media's fine. and we all know it is because social media's only going to get bigger. it's not going away. do you think there needs to be tweaks? >> i would assume that there might have a need for tweaks as time goes on and we hear about more people perhaps being taken advantage of or claiming that they were. but, you know, we'll see. right now i think it's -- herb and i, i think i agree with you, right, herb, on this one. perfectly legitimate. >> on this one. okay, will, because we have not forgotten you, i want to ask you because carl icahn believe if he gets what he wants, and that his $150 billion buyback, we could see apple stock take out the $700 record level and over the next three years go to $1250. do you agree? >> well, no, we're not forecasting that at present. i think a buyback would be
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appreciated by or at least a larger buyback would be appreciated by investors. and there's probably middle ground. i'm not sure they're going to go to $150 billion on top of the $160 billion they already have pledged. that's a lot of cash they can still put to work in probably more significant ways than they are today. >> what is the next driver? ipad air looks nice, will, right, the iphone 5s has an extra letter on it. that's cool. i'm a big apple user. are those really going to move the needle by your channel checks? >> yeah, our checks are somewhat mixed. and i think consistent with what some of the others have suggested, demand for the 5c has been somewhat lackluster. we'll see as they talk about the quarter next monday and provide guidance for the december quarter. supply has been constrained on the 5s. we think demand there has been good. coupled with the ipad mini launching later than expected, i think the upside to the september quarter guidance is limited and there's potentially some risk there. that's ultimately what's going
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to drive the stock is the ability for them to really start to grow this company again and improve the profitability again. >> and you have a $525 price tag which is 5 bucks below where it is right now, will. thank you very much. herb, we'll see you later. david, thanks for jumping in as well. still ahead on "street signs," america's most loved and hated companies, plus some sky-high hope. and america's power play rolls on. boone pickens is in the house. we're going to talk about what i'm calling the saudi paradox. have we ensured a u.s. oil boom because saudi arabia needs to keep oil prices high? it's a debatable topic, and boone's got it. there he is. we're back right after this. >> how you doing, sir? nice to see you. (vo) you are a business pro.
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all right. let's roll on with now "america's power play." we just got back from our road trip in midland and williston. one thing is sure, higher oil prices are good for those towns. maybe the biggest risk would be in oil prices fall. but saudi arabia needs oil prices to stay relatively high to fund all of its government programs. so is saudi arabia in some ways assured that the u.s. oil boom will continue? joining us now, boone pickens, founder of bp capital. we've also got the 40th anniversary of the opec oil embargo. >> that's right. >> in the united states. a lot to talk about. i don't know if i'm making sense in my thesis. >> you're pretty excited about your trip up there to williston, i know that. >> i had a good time.
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it was a lot of travel. don't go into what we just talked about. has saudi arabia essentially trapped itself because it can't have low oil prices which then furthers the u.s. boom? >> they are going to have lower oil prices. they've told you -- real simple, i got all the credit for predicting the price of oil and everything. all i did was listen to naimi from saudi say what he had to have. he'd say we have to have $100 a barrel to meet our social commitment. he isn't lying. i just waited two weeks to say the same thing he did. they said gosh, you're great. >> i didn't say that. >> no kidding, he tells you what he has to have. >> well, i mean, that's a point well made. it's in their best interests to keep prices around $100 or more. didn't you say you have to be 60 to 70 barrels for it to be profitable for all those oil wells and all the investment in the drilling? a lot of them need to be at $60 to $70. is that, do you think, nonetheless the biggest risk?
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because you know i come from australia. i cover commodities. you've been in the commodities world forever. we all know they go boom and then they go bust even if it's only a short time. is that a risk? >> sure, they go bust when you go oversupply. oversupply. >> oversupply, price goes down. >> you need 1 million barrels a year. you're up to 90 million barrels a day in the world. ten years ago, you were 80 million barrels. >> but if they keep on pumping, is there enough demand to keep the price high is the question? >> oh, sure. you're going to have -- don't worry about that. opec will adjust supply to keep price up. >> which then ensures our boom continues because we need slightly higher prices to produce. >> well, focus on what we use every day. 18 million barrels a day in the united states. world supply and use, well,
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supply and demand are in balance. 90 million barrels a day. so we're using 20% of the 90. of the 18 that we get are using, half of it is produced in the united states. now, here's something to focus on just a second. we are importing about 8 million or 9 million barrels a day. that we can eventually absorb with our own production if our production gets high enough. so we have plenty of room. we just crowd those people out of the market. >> every president since richard nixon has said -- literally every president that we will end our dependence on foreign oil in my term or soon, right? >> never had a plan. >> never had a plan. and we've gone up. and this is republicans and democrats, right? never -- we've actually gone up in our imports since nixon said that. >> absolutely. every one of them. you take every one of those guys running for president, they said elect me and we'll be energy independent. >> well, energy independent is
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different. we keep hammering this point. energy and natural gas which you want to promote for transportation, we are independent. oil, we're still not. do you see a day soon, years -- a couple years from now where we will be oil independent? >> if you take the heavy-duty trucks out of the picture, then that is 15 -- that's -- just a second -- that's 3 million barrels a day. and we're importing about 8 or 9 million, yes. you can bring it down to where, if you use all your resources, you could be independent. but you don't want to do that. what you want to do is bring canada and mexico in to a north american energy alliance. and now we don't need anything from anywhere. but the unbelievable point is you are -- there's 17 million barrels in the straits of hormuz every day. how much of that comes to us? 10%. we get 1.7 million barrels. and we have the fifth fleet there. so the fifth fleet is making all
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that safe to move out of there. why? for china and europe. we're nuts to do it. >> 90% of the security costs, 10% of the oil. >> i'm going to put you on the spot because we're currently sitting around 97 for a barrel of the black stuff. what's your prediction of where prices go from here in the next 12 months? >> 12 months. okay. i'll go for that. >> yeah, go for 12 months. >> you're going to keep a differential between -- between brent and wti. and right now today it's $10. okay, i'll hold the $10 and say that -- you're saying a year from now? >> yep. >> is that the question? >> a year from now. >> i think you very likely -- it will be -- it will be at today's price or higher. how much higher? you now have 2.5 million barrels a day offline. that is high.
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and you have it from about five different sources. usually you have one source. so it's a little bit harder to get everybody back on. you've got oil off in iraq. you've got oil off in libya. sudan. and brazil's down 100,000 barrels. and i've forgotten what the other one is. it's an array of suppliers that are down. yeah, i think -- i'll say it will be $10 a barrel higher on brenton or c. >> it sounds like you just convinced yourself live. >> you could almost see the math going up there in the sky. >> i think about this stuff all the time. >> i'm sure you do. >> i'm long brent -- >> who's brent? that was a joke. you're long brent crude. >> that's why we ask you the questions and get the answers, boone. always a pleasure to have you. >> my money's on the line. okay? remember this. '46, i was roughnecking. 1946. >> i saw those guys roughnecking
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now. it's quite the world. i've got newfound respect for you, boone. not like i needed it, but there you go. >> i was 18 years old. >> that's why you're successful, boone. thank you. we're going to wrap up our "america's power play" series with something very cool and different from what we've done so far this week. mandy, i don't want to give it away. you know what we're doing, but here's the clues. >> i'll pretend i don't know. >> there you go. it's a result of the gas boom not directly part of it. we're going somewhere that's within driving distance. i'm going to get in my car and go. and it's got to do with an american industry that's struggled over the past number of years. do you have any guesses? try to guess on twitter. tune in tomorrow. it's a really cool feel-good story about the gas boom benefiting a different industry as we head into the weekend. okay. sounds exciting. can't wait. it's all going to happen tomorrow, by the way. also, still ahead, sneakers, pills and loose change. yep, they're driving the earnings scene today. we're going to bring you the earnings squad next. and later on, winning losers and america's most loved and most hated companies. "street signs" back right after this. capital to make it happen?
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we dissect the stories everyone is talking about. i'm melissa lee. joining me, dominic chu and herb greenberg. 41% of s&p 500 companies have reported so far. 68% beat their eps targets. 12% have met estimates and 21% have come in below forecasts. got to start off with decker. the company set to report third quarter earnings today after the bell. and two words, guys, replacement cycle. >> oh, there we go. >> a replacement cycle that is going to hit the company. also margins are going to improve because costs should start to be lower in the third quarter and fourth quarter. >> how long do uggs last? do they got to be replaced every couple years? >> i don't know because i don't own any, but apparently somebody here does. >> somebody here does. i have some uggs slippers that i've had for a number of years. but i keep them in a shoe tree because if you don't, they will wear out. i don't want to participate in the replacement cycle. >> deckers do not like you. they want you to buy new uggs. >> the other thing they have going for them is this pure wool
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line where they treat wool to make it seem like that fur. so that's going to help with costs as well. so a lot of these things are hitting in the third quarter, the fourth quarter and next year. so expectations are pretty high for the stock going in. we should note that the stock has been up, a good performer, 44% so far. we'll be watching that one after the bell. meantime, express scripts also set to release earnings. you've been watching this one. >> there is a tremendously great story right now on the current issue of "fortune." take a look at it. an investigative piece looking at the pharmacy benefit industry industry and looking at the margin, what they make on the drugs and really raising great questions. in the past i've talked about the industry looking at cvs, wondering if there are conflicts of interest. nobody seems to care about the industry. it's so arcane, esoteric and difficult to get your arms around. but this story raises significant issues. it will be interesting to see if anybody on the call has taken time to read this piece and actually ask questions about it. >> well, the basic tenant for
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this whole business is they buy drugs in mass quantities on the cheap and then try to -- >> save you. >> try to pass those along to clients. >> saving you money. that's the whole concept. this story shows how actually there may be some questions about who's really making and saving money on it. but again, the "fortune" piece, spectacular. >> let's also talk about outer wall scheduled to report after the bell today. herb and i have spent some time on outer wall in the past making fun of the name change from coinstar to outerwall. >> not even redbox. kiosks, everything else, we already know the activist hedge fund. they're pushing for change, for reorganizati reorganization. while the machines are doing okay, but also remember, they're in direct competition right now with netflix. they're starting that streaming service as well. >> sure will. that's it for today. if you want to join the
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conversation, #earningssquad. back with more tomorrow on "squawk on the street." see you tonight on "fast money." coming up next rs t, the wi and losers high in the sky. herb is all caffeinated up, he is back and raising a big red flag on your cup of joe and no doubt, mandy, to gloat because herb is finally winning ai bet with me. >> he is. he really is. >> i just saw him taking his shirt off. it's unbelievable. oh, there he is. hi, herb. sorry about that. we're back after this. [ male announcer ] once, there was a man who found a magic seashell.
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it is "street talk" time. first of all, we've got the stock which is currently plummeting by 25%, and it is called fusion io. ouch! >> you know, this company employs steve wozniak. >> he's the chief scientist. >> flash storage drive maker. reported a 27% loss in fiscal first quarter. revenue forecasts also well below expectations. and the cfo saying that he is going to be leaving the company. a lot of pain around fio. >> a lot of pain indeed. we've also got akamau technologies providing a poor outlook and really it's all about the guidance and outlooks. >> it's all about the benjamins,
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baby, as well. that's the case here. another big tech tanker, quarter guidance came in below consensus, renegotiating an expiring contract with one of its biggest customers. it did not name said customer. although, mandy, cowan and company trying to defend the stock. not working today. down 11%. >> absolutely not working. underarmour trading lower despite reporting q3 earnings that actually beat estimates. what are people focusing on here? >> i'm sure if you're a shareholder, you're frustrated as all get out. they beat the street by 2 cents. sales were better. they even raised the forecasts. the problem, they did not raise their forecast by enough. how many times has old herb said this? >> the street always wants more. dunkin' brands reporting a nice increase in revenue, up 8.5%. but the stock down. >> coffee and doughnut chain citing strong sandwich sales growth. net income -- >> i go there for the doughnuts. >> they're rolling out these egg
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white flatbread things and even lunch. they're not bad. $40 million, 37 cents a share as well, but dunkin down today. >> dunkin is also raising a red flag on k-cups during its conference call. that really is the area that herb greenberg is the big expert on. >> this is where he's going to gloat. >> i will not gloat. >> go ahead, big boy, gloat away. >> you want to gloat first or give the information first? >> i thought you told me he took his shirt off. he's standing here fully clothed. i'm disappointed. >> the gdx is above -- believe me, they're not disappointed. the gdx -- >> my mom is disappointed. hi, mom. >> the gdx is now above the cafe, or the cafe etf. and so i'm currently in the lead there, but that can swing any moment, as we know. listen, here's the deal with the k-cups. dunkin said on their call, they said we continue to see increased competition in the k-cup category with major brands offering products at a discount to grocery channels.
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significant discount. compare that with what they said just a quarter ago when they said k-cups provide a critical boost to unit economics in our strategic markets. that's a big change. that's what we're seeing as we get to the green mountain part of the story. >> right. >> when green mount. comes out, there's an analyst today who lowered his forecast based on -- continued concerns over k-cups sales. >> before we run you off, okay, i will say this. and i'm pained that coffee is going down in price. that was our bet. but as you would say, and by the way, this has got to be good for starbucks, dunkin branldds. what i don't hear is hey, we're lowering prices despite clearly their input costs going down. >> and green mountain because there's one less headwind. but -- but not sustainable. >> okay. thanks very much, herb. delta, southwest, alaska air and jetblue are all hitting new 52-week highs today. let's get to phil lebeau. phil, it's been an incredible run. keeps on going higher. is it all sustainable? >> well, if you look at the number from the third quarter,
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the airlines would say it is. take a look at how much the airlines have made in the third quarter and compare it with the third quarter of last year. their earnings, over $3 billion. by the way, those profits up 60% compared to last year. and that's for all eight carriers who have reported so far including three today. let's start first with southwest airlines. and we want to show you this stock because you've got to go back to 2006. that's the last time that shares of southwest were trading at this level. today they reported earnings of 34 cents a share. in line with analysts. but the revenue per seat mile up 5.1% in the third quarter. fuel prices down at the same time by more than 5%. and that's what has ceo gary kelly optimistic about next quarter and the following quarter. >> if you look at our fuel price per gallon for the first time in i can't remember when, we had two quarters in a row of very stable fuel prices. $3.06 a gallon in the second quarter and the third quarter. so let's start there. for the fourth we're looking for
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another stable quarter in the fourth quarter. >> let's move on to alaska airlines. it beat the street, reporting an earning of $2.21 in the third quarter, also moving up to a new 52-week high. and then there's united, the outlier of the day. united reporting third quarter earnings of $1.51 a share, falling short of estimates. united struggling to boost revenue. in fact, on the conference call with analysts today, the ceo said, quote, we're underperforming financially. guys, the bottom line here with united, they sold too many seats for too low of a price, too early. and you can't do that, especially when your competitors are all waiting a little bit longer and getting a higher price. that's why you see shares of united not performing as well as the rest of the airlines stocks. back to you. >> talking of those competitors, delta, year to date up 122%. unbelievable. phil lebeau, thank you so much. >> gotta to go. i'll tell you why, though, united airlines, put wi-fi in more of your planes.
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i'd move more to delta simply because you've got to work wi-fi everywhere, it makes a difference, united. listen up. the airlines move from being just a trade to being an investment long term. novel concept. let's start "talking numbers." senior managing director of u.s. equity on the fundamentals, mark lichtenfeld at the oxford club. mark, let us start with you. long-term real turnaround for the airlines? because they have been a capital destroyer for generations. >> yeah, you're right. i think you have as much chance of making money over the long term in the airline industry as you do of getting out on time out of newark. with an on-time departure, it's just not going to happen. this is a sector that has been a capital destroyer for years, especially for shareholders. airline stocks have been down for the most part over the past ten years. the airline index is at the same levels as it was in 1995. and it's not hard to see why. you've got variable costs that are extremely volatile. obviously fuel costs are a big
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part of that. you've got labor costs with heavily unionized work force. and not an historically good relationship with those unions. it's economically sensitive. and now you've got a customer base that really hates the product. it's like, you know, driving or riding in a greyhound bus with wings. it's something people don't enjoy doing anymore. and every time that they come up with a new way of making revenue or growing profits, it ticks their customers off with these fees and smaller seats. so this is not a place i would invest any money in for the long term. >> dave, the airlines index, the one we showed, is up 69% i think it is year to date here. big run. would you be a buyer at these levels? >> i wouldn't be a buyer, but i definitely wouldn't be a seller. i'd wait for a pullback. if you look at the chart i sent you guys, you look at the 150-day moving average, 150-day moving average, it's going directly through the center of the chart. it's up 17% from there where the stock is trading now.
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so it's a little above where we'd want to buy. i'd wait for the pullback, the horizontal line going through the middle of the chart i sent you guys. why i wouldn't chase here, the chart is breaking out like the gentleman said before you, the stock's a little -- the index is a little bit ahead of itself. i'd wait for a pullback. it is breaking out. that's why i would not short the index here. needless to say, i twentily do not think i would short the index here because there's less competition here in the airlines. there's only four major players in the united states now. in the past there was all these major players. now there's four huge conglomerates. less players. now they can charge you for baggage, charge you to do anything they want. what do you call it -- alaska airlines reported this morning, ual was a little disappointing, but it's right at support at 32. like i said, i would not jump in. i'd wait for the pullback, play the 1r50-day moving average, wait to the 62.50 level and that's where i'd jump in. >> indeed, already been good gains. thanks for joining us.
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be sure to check out the online version of "talking numbers" in partnership with yahoo! finance. still ahead, when is a loser actually a big winner? when they don't post a profit? we're looking at one stock that is absolutely soaring but you'd never know by looking at its bottom line. america's most-loved and most-hated companies. quite possibly the most-loved man in america. what's coming up? >> two hours ahead. dunkin's sales surging last quarter. we'll find out what's driving the growth when we speak to the ceo, nigel travis. plus, former national economic white house adviser larry summers. and we'll also have instant analysis of those profits from microsoft, amazon, zynga, all that and a lot more on "closing bell," top of the hour, folks. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading.
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thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future...
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by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. before the break we asked you, when is a loser a big winner? well, dominic chu has the answer to that seemingly strange and paradoxical riddle. dom, give us answers. >> well, mandy, you don't need to make profits to are your stock to go higher. we've shown you all kinds of
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examples. remember just in the last hour on "power lunch," we showed you about boston scientific and chesapeake energy. two companies that in the last 12 months haven't made profits but have shown stock price improvements. well, our mystery stock for this show, "street signs," is one that's about 77 bucks a share. it's up 56% over the last 12 months. so a healthy return yet, yet, it's posted nearly $500,000 in losses in that same time period, and the industry, if you haven't guessed who it is yet, it is in the pharmaceutical and drug business. so the company that we're talking about is vertech pharmaceuticals. this company specializes in rare diseases, things like hepatitis c, cystic fibrosis. still, they haven't made money. yet their stock keeps going higher. it's all about the anticipation for how this company will do in the future and brian, that's the reason one of the big reasons why these companies do pretty well. and coming up on the next show in "closing bell," we've got one
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more for you. and for this one we're going to tell you all about that talking baby and what he's doing for this particular stock. back over to you guys. >> good hint there, dom. thank you very much, buddy. just moments ago white house press secretary jay carney told reporters the white house did expect some hiccups with the launch of but not on the scale that we have seen. but here on "street signs," we like to find opportunities. so we're looking at the best ways to perhaps play the rollout and maybe even some of its flaws, and we're hitting this from two sides. sheryl covers hospital stocks at crt capital group. sara james covers insure stocks, wedbush securities. sheryl, let us begin with you. hospital stocks, beneficiaries here? >> well, they can be. especially if they happen to be fortunate enough to be located in the states where the states are rupping the ex-changes or where the governor has opted into medicaid. >> why is that better than the federal exchange? >> because they're working. >> ah. >> let's start there. >> zing. >> they are working.
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and if you're in california where california was fortunate enough to get $900 million from the federal government to run its exchange since 2010, they are actually signing up and enrolling beneficiaries. tenet health care, for example, has a very significant presence in california which wasn't always good news for them. so what was bad is now great. >> mm-hmm. >> in addition, they were smart enough to have just recently purchased vanguard health services systems, which is a company that bought detroit medical center. they are in arizona. they're in illinois. they're in massachusetts. and it expanded the number of states that tenet operates in that will accept medicaid. medicaid's much easier to manipulate in terms of getting enrollment. if they show up, they're presumed to be eligible. and as soon as they're presumed to be eligible, the hospitals can get paid for those services. if they're dependent on the federal exchange, that's tougher. >> tenet health care is also in mandy's mavericks.
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sara, with regards to the insurer impact, which particular insurers are going to be the winners out of this? >> i think a great way to play this is to go for a high-quality name that happens to be trading at a discount with very little exposure to the exchanges. something like a united. it's traded off 10% in the last week after two of the bellwethers, united and wellpoint, reported a great quarter but disappointing guidance due to pressures on medicare margins as well as exchange concerns. but this is a company that's got very little exposure itself to the exchanges with great long-term growth, 13% to 16% long-term growth earnings rate with plenty of levers for upside, trading at just ten times. so it's an opportunity for investors to step in, take advantage of this uncertainty in the market, and get a name that's best in class management and balance sheet, 1.6% dividend yield. it's best in class in largest product offerings, largest market shareholder for multiple products. and an innovative medical costs management system that's
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generating 50 to 100 basis points savings over its peers and undervaluing segment that could generate $1.5 billion in earnings growth over the next year or two. >> but we have certainly heard we need the young and healthy to sign up for the private insurance exchanges. we've heard perhaps that's not to the extent they want yet, although it's very early. a long time to go. we've also read articles that many people that have been able to sign up have been opting for medicare instead of the private insurers. do you have any data that would back up what we're hearing, and also whether or not that does pose a risk? you need the young and the healthy to sign up. >> yeah, i think that is a concern. we've always wanted to get more of the young and healthy into the system, but i think insurers were realistic going in. they knew that this population was going to be sicker than the average, and that's why the federal government enticed them in with the three "r," which is a way to cap their down side losses. and i have seen the same articles that you have, showing that people, you know, in the pre-medicare areas are very attracted to the exchanges.
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and i think that when we look at some of the media advertising, it's very geared towards the healthy people trying to draw them into the system. but with the individual mandate or the fine being so low, it's only 95%, that's not much of a motivator. >> yeah, a lot of people are just saying i'll pay the penalties. i'm afraid we've got to leave it there because we've got some breaking news now. it's coming out of tesla. phil lebeau, what are we hearing? >> mandy, tesla is making a big hire. hiring a gentleman named doug field who will be the vice president of vehicle programs for tesla. where is he coming from? apple. he was the vice president of mac hardware engineering at apple. so he clearly has a background in the tech industry. but he also has a background in the auto industry. prior to apple, he was an engineer with the ford motor company. well, now he has a new job in the auto industry. he is the new vice president of vehicle programs for tesla. exactly what that will entail in terms of development of new vehicles, it doesn't say in the release from tesla, but clearly
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going outside the auto industry to an extent, hiring executive away from apple. guy, back to you. >>, this dovetails into a discussion we have had here on "street signs" as to whether tesla is an auto company or a tech company. >> that's a big hire right there. >> big hire. thank you very much, phil. still ahead, america's most-loved and hated companies. and why wall street loves them and main street hates them. that's ahead. (vo) you are a business pro.
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steve liesman joining us now with look at how america views some of the nation's biggest companies. >> we were looking at the all america survey. corporate awards. simple favorability. on a scale of 0 to 100 how do you rate the company? let's start off with our most loved company. the runner-up is ford with 67 out of 100. the winner is amazon. 68. that was the highest score of all the ones we got. let's move on and take a look at the least loved. not a big surprise here. we asked about four banks. jpmorgan the second lowest of the banks. you can imagine who the lowest one was. goldman sachs. none of the four banks we asked about rated highly at all.
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ho how about the most average. gm and walmart tying. i think that's where they want to be, 57. average companies moving on the most -- biggest split between men and women, microsoft enjoying for reasons unclear to me a nine point advantage between -- of women. the winner is facebook. which has an eight point advantage -- sorry. a ten point advantage of women over men. moving on. how about class clash. the biggest difference between those with higher incomes and lower incomes. runner up, amazon. winner, you guessed it, apple is the one that has the biggest difference between higher and lower income. an interesting one we looked at. wall street, main street. those who have stocks and those who don't have stocks. and we had a tie between apple and walmart. where apple enjoys an advantage among those who own stocks and walmart has advantage of those who don't own stocks. guys, interestingly, of the four banks we asked, even though some of the performance of these banks has been quite good, we
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don't have any advantage among investors who prefer the banks any more than they do the general population at all. no advantage there among investors liking the banks. here's your awards here. most loved, least loved, most average, biggest difference between men and women, class clash and wall street and main street. mandy? >> interesting findings. just because main street loves the stock it does not mean that wall street's on board, right? let's ask bill conlin, president and ceo of -- and our own herb greenberg. do you feel, bill, the retail investor, i.e. main street, has something they're currently using, something they know, something they've heard about in the media? is that the case for you? >> i think when you look at the big stocks, i think the media has a lot to do with it. >> we're to blame. >> take it easy. back in may on this show, i tweeted it out. i said, the market to me was starting to smell a little funny. starting to stink.
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i've been wrong. we've gone higher. don't act like everybody's rah, rah, rah. i've been very concerned about stocks for a few months. >> if you think of the most liquid names it starts with apple. if we throw the etfs out of it. if you think of apple and then these other names like facebook, facebook is not nearly as possible with the institutions as it is with main street. >> why? >> i think -- >> how do you explain that? >> i think there's a lot of hunch by people who buy what they like. i think you got it. and the institutions are looking at it, they've got a fiduciary. is this something they can make money with? >> they buy and hold. they're in for the long haul. tesla motors, i think, is a great example. tesla in the world is about the fifth ranked most liquid stock. but among institutions, it's in the 300s. the institutions aren't buying tesla like the individual is. >> yeah. you know, and i can understand
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the blame on the media. right? but at the same point -- no, no. i get it. i totally get it. it's fair in some respects. highest frequency trading has gone up. you've got websites devoted -- the speed of the community has also increased. like the speed of the trading. >> it has. i think -- i think the speed of trading hasn't done anything for the institutional marketplace. i think for an individual that you can now buy 100 shares electronically through your broker is a great thing. but for the institutional marketplace, things like the liquidity of the stock you're about to buy is much more important than the speed. the speed, to me, gives some players that shouldn't be in the market, they come in at the beginning of the day flat and go home flat. it gives them an opportunity to make money in a high speed fashion. real investors need to buy millions of shares of stock. >> not necessarily a level playing field. got to leave it there, bill.
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thanks a lot for jumping in as well, herb. coming up next, the rich are popping bubbly in the hamptons. are they brewing up a big housing bubble as well? the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪
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for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. welcome back to "street signs." i'm robert frank. hamptons seeing the best third quarter since 2005 with total sales increasing a little over 31% year to date. the average sale price in the third quarter rising to 3%, rising to $1.4 million. that's the average. now, if you look at the top 10% even better. the average sales price jumped
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30% to almost 7 million bucks. the number of sales also increasing 26% year to date. now, let's take a look at what you get for your money. this two-story ocean front property, that was the most expensive sale in the quarter for $11 million. there are some signs of caution here, guys. inventory in the luxury space more than doubled in the quarter over a year ago. a lot more houses for sale. one of the mansions that's still on the market, guys, this 12 bedroom, ten acre south hampton estate. the price? 45 million bucks. things looking definitely a little bubbly out there, guys. >> thank you so much, robert frank. thanks for watching "street signs." going to be a secret location tomorrow. >> shh. secret location tomorrow. in amagansett at that house. hi, everybody. welcome to the "closing bell." i'm maria bartiromo coming to you from the ubs wealth management conference in new york city. stocks back


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