tv Fast Money CNBC June 16, 2017 5:00pm-5:31pm EDT
moment for me. before the brand, ultraperfect. >> boundaries,als, however ironic you feel it is for her to say it the idea is not giving into it altogether. >> listen, you guy versus to figure it out every day. as long as they can watch "closing bell. >> i can now. >> thank you so much >> that does it for "closing bell." "fast money" starts right now. that's right, kelly, thank you live from the new york time's square, i am brian sullivan in for mellissa lee welcome to this furious lat "money tim, kyren nothing feinerman and gorgeous guy adami i'm new. tess lab has been on fire the tech anything that correctly called the brakeout now says, "get out!" apple taking a big step to beef up its tv business s. this netflix's worst nightmare? gene munster says so he is here to tell you how tight
it might be. as you know, many tech stocks have been sinking, one stock traders say can make you money going order, that name is ahead. first. >> i taped it. >> you are welcome we captured main street, amazon buying whole foods, shares of both those companies rising today. but, that deal scared investors away from pretty much every other consumer-related company, from big box stores, the entire ecosystem lost a combined $30 billion in investor value today t. fear is amazon will, well, amazon, it's a trillion dollar industry gorgeous guy adami. >> yes, sir. >> any of the names whacked today deserve another look >> first of all, grad to have you on second of all, i thought target was a screaming buy. it made i think a 52 week low today. you have to say yourself the move is warranted. i can understand these stocks
selling off a little bit not nearly to the extent they did. are these names worth a look yes, i believe they are. the first i would say is wal-mart i think if anybody can combat amazon or play at their own game, it would be wmt. >> the issue is wal-mart had big issues before this deal, the problem is in that space, one of the big issues about half of the guys that sold off today, there is way too much forward space for not enough buyers. you have food deflation. we have food input prices, food prices going down. that's what's been killing kroger as much as anything the competitive space gets worse. that's a big issue. >> that doesn't change i didn't get today, i'll be skeptical the deal, investors like it. you got to listen to the market. a, amazon has been in grocery a while. it's not done great. it's maybe the one seconder they have not remember cosmo.com. >> i thought. >> it was an offer that was an amazon-invested
company. the industry, karen, was already extremely narrow margins you think there the a way for amazon to do its special sauce in this industry >> i think that if anybody can, amazon can, just because of scale. but if you look at, you know, you look at something like unfi, united national food, a distributor to whole foods so this is a terrible announcement for them. the stock got crushed. i'm surprised it wasn't down more they have to be very afraid of their business amazon has to come in and absolutely crush their margins they're not buying what whole foods makes now. >> i assume, though, that dan oomson will have to buy from somebody they don't have amazon farms that i know of >> who are you talking to? >> have a good time. >> they said they have been doing grocery big time.
>> well they probably had a little over $100 billion in retail sales when you think about grocery margins, they're at least higher than most of the retail margins that they're exploring you will have a much more profitable 450 stores in 48 states with amazon there to me, i think it makes a ton of sense for those people who believe the stock deserves to have the and to be at a thousand dollars in a 450 market cap. >> i guess i'm cynical because of where we are sitting. i was sitting here on the nasdaq watching these tech companies transform. i'm not comparing it to the tech bubble but for 15 years it's asset light. great distribution why is it good it's 450 stores >> it's not asset lite it's made major investments in the supply chain they want to be in a trillion dollar consumables market. this is how they eat everybody's
lunch, no pun intended they've doubled their sales that gives them as dan pointed out, right after he was somewhat rude to me. that's okay. i can handle that they're going to revamp those stores it's a much more store space than a costco, it's smaller than a kroger they will be fine there. >> what it is very heavy is connections to the consumer. they didn't have that connection 17 years ago they didn't have the pervasiveness that they do now that's the jewel there >> we're going to get some ideas in beaten up names i'm dense, i'm having trouble >> that was fake self depry indication >> oh, c'mon. >> understanding guy adami is how a company that has 111 times trailing valuation, whatever amazon's is, croaker has it 11
times, how because it's amazon deserves a tenfold valuation gap over one of the biggest grocers eneffective liamson is becoming kind of them >> why does it deserve a premium valuation? maybe amazon is playing this all along. maybe they have been trying to obliterate their rivals. >> to tim's point and grocery stores, it's a new model >> it's high frequency and turnovers, not slow goods, they got to be on the ground. this isn't new for them. this is a strategy it's been booming for years. why did whole foods effectively give up and sell the company >> i would ask you questions, couldn't kroger be, first of all, amazon blows kroger out of the water, kroger is close to
being irrelevant you get to a place, there are so many kroger's out there in a place where six to 7% of staples are being bought out of those stores more than last year >> that will make them even more irrelevant in the future. >> can i get your point? you are saying they are reversing it in this model >> investors are getting to the model. >> in the u.s., i think that last year was maybe 5.5 trillion in retail sales. less than 10% of that was online amazon, supposedly accounts for maybe ten, 15% of all u.s. online sales few think about it, they're barbelling this thing here you would have thought 20 years on from the time amazon went public, more than 10% of u.s. retail sales would have been online it's not. >> i'll ask you a dangerous question which is 92% after all retail sales are still what off line, that includes gas, that's a bit misleading, do you
think mooib maybe online sales maybe not have peaked but are peaking? >> it's possible but i don't think so i think they're starting to see, i think that online and offline are sort of merging. right? they can have customers who do both inline >> inline, all right >> it's just this. >> or that. >> i think it's just they have control over these customers, whether it's to restore or whether it's -- >> sorry >> i mean, ultimately. >> 16 stickers before the show >> that's what i do. >> this explains why people two weeks ago were casing megacap names that were disruptors and trading massive validations for. that what amazon is doing today is every reason why people are chaseing that they are making swatchs of sectors irrelevant i think mondolse, those were overdone it's the organic that these guys
will compete. >> they raised their price targets on whole foods, there is likely to be another bidder coming n. what do you think? >> i think i'm long whole foods, i'm staying long it's above the target the price of the deal. look at that, i actually do have some thoughts. wal-mart has got to be thinking about this right now for a lot of reasons. >> they are buying upscale things at wal-mart. >> it's too much information >> wearing pants would you prefer the opposite? >> but this is important, though, wal-mart has to think about the strategic issue for them amazon buying whole foods i noe it's little larrious, the pants thing. but the other thing about it, though, a lot of people say this is not a crazy price this is not a price that anybody else can possibly compete. wal-mart can compete can you have other buyers compete. >> we are putting you on the spot wal-mart -
>> let me say odd somebody steps in, whether foreign ir, the u.s., i don't know >> nobody else is going to buy this company other than amson. okay >> that doesn't mean -- >> someone else -- >> i will go to "options action". mike ko lives in austin. he probably knows, probably neighbors. >> he's in woods hall. >> on deck, apple making a major push in your living room gene munster says netflix could be in trouble. we'll explain why. nike getting a down grade from j.p. morgan chase. later on, has tesla run too far too fast carter worth, he called the breakout he says you may want to get out. 's here, whole tell you why. d ty just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now.
>> apple is coming to a tv screen near you. not just showing you other people's stuff, it wants to be the creator. josh lipton in san francisco has more on this story josh. >> reporter: well, brian, apple ceo tim cook says he wants to double the size of his service's business by 2020 one potential way to reach that goal, build out a bigger foot
print in video programing to that end, apple today announcing it has now hired two tv veterans, who join apple from sony pictures television where they have served as president since 2005 they were responsible for a roster of celebrated programs like "breaking bad" and "the crown. they will now serve in newly created positions with video programing world wide and reporting to apple eddie q who se jamie and zach are two of the most talented tv executives in the world and have been instrumental in making this an exciting world of television there is much more to come apple, of course, started moving into streaming programing, "planet of the apps" another documentary on collide davis in the next few months and car pool karaoke cakes i kicks off august
8th. they say such original pro rating if successful could be a way to differentiate rivals like spotify, apple music now has 27 million paying subscribers, they say longer term apple with such programing could make a lot with how to make and produce popular content, which would be useful, he says, if cook wants to launch a service to take on amazon and netflix. brian, back to you. >> thank you very much for more on apple's business, what does it mean for the stock and netflix. let's bring in gene munster, apple's got a great business 24 billion of whatever services now, why do they want to go into a world populated by difficulty, high cost and a high chance of failure? >> it's a big opportunity. if you look at jeff bezos, he talks about this as being the next leg for amazon. the reason is the content is seen as a critical -- pardon. >> i thought whole foods was the
next leg for amazon. >> it is, i think that's the irony here, is that jeff bezos has said content is a big piece for where they're going. i think at the end of the day, apple, josh hit it, was that services are going to be a critical part of where they're going and right now, i think that the content offering from apple is off to a slow start, "the planet of the apes" is an exciting target. ultimately, they will spend money and catch up with netflix and compete withthose two players. >> gene, let me ask you something. let's say they get it right t. services business grows, talk about drubl doubling in 2020 how do you value a services stream versus the hardware stream of apple? >> it's going to be probably at a 20% type of a, 20 x multiple it's growing close to 20%. it is predictable. so you typically see a multiple slightly higher than it's dependable growth. just think about that, put that
in the context of what the hardware part of apple trades at which is the low teens this is definitely accretive to the overall multiple for apple. >> if they want to get a bigger services footprint, would it make sense to have 27 million subscribers, spotify have 52 million. why don't they pay 17, 18th, 19 billion for spotify and own the streaming music space and really get a leg up because with a billion ios users right now the fact that they have half as many spotify users is really pathetic, don't you think? >> i think it is disappointing i think the way apple will approach this, is they've made the bet there where beats. i think they will probably not do spotify because they've taken beats on here. i think the way they will do this is by creating better content. the video piece of the offer i think if you look at today people have music offerings and video. this will be a combined offering over time. if they invest in that video piece, i think that can gain
more users from spotify. >> what does this mean for netflix potentially, gone? >> they're in a tough place. to use the theme of what amazon is doing today, i think netflix is like target they're a great company, bup within have you the forces of apple from one end and amson pushing in the other end, i think this contents base will get really choppy. i'd be nervous about netflix. >> you are nervous you think this will damage them? >> absolutely. i think over time, amazon more on the content side. i think apple will keep up the momentum keep in mind, the prime skrooem streaming will be availability on apple tv starting soon. you will see some netflix users say i can get this for free, make that switch and discontinue the netflix subscription to the u.s. >> always a pleasure to get your inside, appreciate that. all right, apple, okay, guy adami. is there strategy? i was thinking the war for
stocks >> strategy is what things we have discussed many times to get away from hardware valuation and get into a service valuation, which will be great for the stock? we'll work on another one in health care, there are a lot of thingsb i want to do netflix, real quick, i understand the competition from amazon and apple that's been out there quite some time netflix has a significant head start and the bet, gene is saying customers will leave netflix. i'm not sure is that will happen. >> the thing about apple, you can debunk this like crazy, dan had disney being a buyer in all seriousness, is there any reason apple should be buying content or going out and buying a company like netflix which is speculated all over the place in today's announcement tells you they will not do that. it tells you netflix is content delivery the value of this company is not their content. it's a portal. >> i disagree. >> that portal, they had streaming success for five years
now is there that came later. >> they starred four years ago with "house of cards." this has been going on longer than you think they've spent a lot of money, probably 20 billion. >> it's going to go up. >> if see pour films make -- seymour films makes a great show. >> maybe now apple, maybe lulu bidding. >> the content goes up. >> in that sphere. >> apple is very late to it. i don't think hiring a couple sony executives fixes anything any time soon. i think my point to gene was that if they really want to expand their foot print, they got to go to things right now where they can make a difference, that's music. >> i put on the man in the hole chasm, high castle. >> whole castle, ret oat -- red oats i love dill. the traders think there is one stock that is a screaming buy. we're going to give you that name in the trade coming up. in the meantime, here's what else is coming up on "fast."
watch unlimited romance. if you are into that. but we also want more like... unlimited hbo. can i stop dying now mark? no can't do mi amigo. it's unlimited. besides you are really good at it james. don't settle for any unlimited data plan. only the at&t unlimited plus plan comes with hbo included at no extra charge.
>> welcome back. nike fueling today, giving j. perform morgan cha is to a neutral rating >> we're sfwnl forward, this north american marketplace is just really in a consolidation mode and from a brick and mortar standpoint, we think nike may be the one that faces the most disruption the year-to-date we had over 4,000 store close years. everybody talks about who discloses the most from a branded perspective, our map is 8 to 39% of those close years have nike product in it. >> all right do you agree or disagree >> if i owned no nike, i'd probably get started on it it's gotten killed it was flat for the year it hasn't had a disastrous year.
but nike has shown again and again they can remake their business and come back as an outstanding team, it's not crazy expensi expensive. >> ethink the earningsened the guidance are as bad as people expect it holds $50, i think the stock will go up i will say something, when you talk about the omni channel, these guy versus done a good job, i get their apps. >> but what i'm saying is it's actually a great experience and they have the flagship stores when you want to see them. i do worry about the foot locker channel, though. >> it has not been a good year as all >> people are buying sneakers somewhere. look at under armour they're amess, people don't want to hear that there has been so much turnover. which company is on sounder footing, it's nike. >> that's clever >> he's speaking tongue. >> most after you know, if you don't know, now you know
father's day is this weekend so in honor of the great palestinian in your life, trades are bringing you some of the best stocks to buy tim, what would you buy for data for stock? >> i always wanted to buypy dad a ferrari. so i'm going with race this stock has had a huge run, tradeing at a multiple some may have a tough time defending, i think the scarcity of their brand, there is a stock that can go higher at great plult millions >> terrible father's day, so sad. >> we'll get together. >> karen, what would you like? >> ply dad likes spirits, constellation brand, to make him happy. i want to say thanks, to our intern, leaving. fantastic. >> thanks. >> sedan, blackberry, everyone wants to talk, they want to get away from wiebes, blackbrry, connected car, that's the way to go. >> get on camera get on camera. where is sydney right now. >> get on the sci-fi network >> thank you she'll be leaving us
maybe 30 minutes ago, but i already miss you. all right, that does it for us on ""fast money." don't move, a special "options action" starts right after the break. your insurance company won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. switch and you could save $782 on home and auto insurance. call
for a free quote today. liberty stands with you™. liberty mutual insurance. looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
>> hey there, we are liveing still at the nasdaq markets on this busy quadruple expiration friday guy is getting ready behind us while they're doing that, whatever they're doing, here's what's coming up on the show. >> cleanup in aisle three. >> that's what investors and grocery stocks are saying today. traders are betting that one may have found a bottom. we'll tell you how to profit plus, how would you like to buy oracle for less than a buck? >> i'd buy that for a dollar. >> we'll show you how to do it for 65 cents. and one of our