tv Fast Money CNBC July 10, 2017 5:00pm-6:00pm EDT
everyone wants to sell to him. >> i'm not surprised, if buffett is on one side, you're on other, you don't want to be. >> do you want to be the one paying much more >> history of the company, the bankruptcy wooe we're out of time please, everybody, join us tomorrow that does it for "closing bell." "fast money" starts now. live from the nasdaq market site i'm scott wapner in for melissa lee. tonight, on "fast" one of the big est bulls on wall street getting more bullish tony dwyer just raised his s&p target for the next two years. he'll explain what has him so excited. plus, is tesla about to ge its groove back? the chart master who called for the pullback now says it's time to buy and after you see his charts, you might be buying, too. and later, blue apron making a comeback today after a tough
debut week following its ipo, but if history is any indication, you might want to sell. first, we start with the wrath of amazon, prime day kicking off in four hours. the kpaeccompany has been takino prisoners especially in retail spice as it continues to dominate retail stocks feeling the heat, sinking 2% today, hitting their lowest levels in three weeks amazon announced its own version of the geek squad, costco falling after a downgrade from bmo, says sales aren't enough to combat the amazon effect walmart under pressure and the department stores like macy's, well, they're department stores like macy's. you look at costco, look at best buy, if you are a value investor, guy adami, do you nibble on any of the names that got smacked around and banged up today? in absolutely great having you the one name out of all the
names is costco. they have the ability to raise membership prices 90% retention rate if i'd go anywhere, it would be costco macy's will be interesting karen can speak to that, at a certain point, just their real estate holdings, alone, are probably worth macy's a look we've said it all along, amazon is killing everybody i don't think nearly to the extent we want to talk about look at these stocks for example, american express. 52-week high today or thereabouts. the stock has been on fire for the last two we discussed that. mastercard, visa, that's the why you play retail. i'll throw one more name out there, home depot which hasn't traded well the last week, week and a half if there's anything that's ham d amazon proof, it's h.d. >> many people thought costco was the amazon proof if 6% comps aren't good enough, what is? steal the stock reacted poorly. >> underlying fundamentals which seem strong and the stock reaction which is a much more
transitory thing.sive to me. maybe a little expensive going in when i think about who can take on amazon, walmart has the wherewithal to do it, they seem to want to do it now, whether or not they'll be successful i don't know at 16 and change times, it's not that crazy expensive at all. >> but i think walmart, to me, is such a head fake for people people thought they got their e-commerce game down and people, in fact, the stock was up 23% before pulling back effectively on the day they announced the whole foods acquisition. walmart is having trouble getting two-day delivery meanwhile, amazon, everything they're doing is getting there faster an faster you're at a place where you have the entire space of consumer retail, staples especially, where you're overstored, you have a pace where i think walmart to me at 16 times, i think you get a lot cheaper, actually i think today is closed on the lows, closed before the lows set on the amazon whole foods day. i think people who have thought they can pull off e-commerce have to spend a lot more on
capital and i think, again, walmart, to me, is the target on its back. >> speaking of retail, we have a news alert tonight on jcpenney making executive changes courtney reagan has that news back in our newsroom court? >> hi there, scott here just crossing after the bell, jcpenney announces itses cfo is stepping down from his position effective july 11th. he's going to stay on in advisory capacity until august 7th until a permanent replacement has been named andrew drexler will step up to fulfill the cfo duties on an interim basis. ceo marvin ellison thanking him for his work, been with jcpenney as cfo since march 2014. also saying the timing of his departure coincides with the demonstrated sales performance improvement in the second quarter. we continue to expect or report cig kachbtsignificantly improve results this quarter versus the first quarter and look toward to sharing more details on august 11th that was slipped in there at the
very end of this resignation announcement back to you, scott. >> court, thanks so much let's continue this retail -- >> you mean you want to stick jcpenney all together? >> consequential, but i think it's sitting on a lot of debt. >> yeah. >> billion three market cap and $4.3 billion in set, $12 billion in sales the last 5 years. it speaks to what's going on with amazon. >> i can bring up sears if it makes you feel better. >> here's a company that should have gone away five years ago. that's what amazon's doing right now when you think about how they're bing to force consolidation. you know, you guys talk about costco, think about their membership fees. i mean, there was news in the last week, amazon's got 85 million possible prime accounts. that speaks exactly to what that mote was at costco for so long and why it traded at a premium multiple to the space and to the market for so long so when you see a stock like costco come in at 17.5% in a month, month and a half or so, the ground's moving below investors' feet right now and happening very quickly
i'll just mention that, you knows, think about this today. i mean, i know morgan brennan was out, prime day's tomorrow, you know, prime air, all the different industries that amazon's disrupting is going to disrupt payments, going to disrupt delivery that sort of thing right now we're focused on the demise of jcpenney, that sort of thing. it's going to seep its way into a lot -- >> it's so funny, karen and i before the show looked at each other, i said, why didn't amazon buy fedex? karen was thinking of u.p.s. or the other way around >> it was a crazy line -- i mean, it wouldn't be so, so shocking it's a very big deal, either of them north of $100 billion for u.p.s. and $70 billion or so at current enterprise value i don't know, would you wake up and be shocked if that were to cross the tape >> yeah, no, i don't think a lot of people would. >> those two companies are good businesses that trade at a market multiple. >> yeah, so think about this yeah, so think about -- if amston were to buy them, amazon
trades at, whatever, and they trade at a reasonable multiple. >> fedex has never been more on top of their game. these guys are creating earnings, becoming more efficient. tnt acquisition means their margins are doing better i think they're better equipped to tackle the amazon world could they resist one? who knows. >> part of the point here, if you look at the costco move, as you pointed out, the doubl double-digit slide the stock has taken then the downgrade, if you're going to buy one of these retail stocks, you better have boxing headgear on you're going to get smacked. you're going do bet smacked around even a name people love like costco gets hurt. >> i agree with that, scott, you go back to a name like restoration hardware which has fallen on hard times but o'er t over the last month and a half, rallied 50% in about a month we had a long discussion about the opportunity back then in r.h. point is, a lot of the retail names are going to give you an opportunity to buy them and trade them i happen to think macy's at this
level might be one of them. >> to me, home restoration is bidding in the home improvement space. i think that's the one place that has a defensible quality clearly about it we'll see where it belongs from there. retail's troubles aside, our next guest raised his target for the s&p to more than 2,500 by the end of this year tom dwyer is the man behind the call good to see you. >> good to be here. >> you told me your forecast for this year and next were in your words, conservative. today you pulled the trigger >> yeah, we did statistics the show, i'm hearing a discussion about the yield curve, how it was flattening and saying something about the markets. we did a study, when the yield curve flattens initially in the cycle to where it did a few weeks ago, 100 basis points using the six-month and ten-year spread and look at it from that pointto inversion, you get and credible rally you get over 20% you get a really good rally.
historically, i brought the stats so i can make sure i them right. opinion's not as good as -- you get a median gain over a year and a half of 11%. 34 34.7% until the end of the bull market the idea that the bull market is over because the ten year's coming down and the yield curve's flattening is totally inappropriate. >> what's going to take us to the targets? >> earnings. earnings here's what we have. we've had 2% to 2.25% gdp growth over the course of this cycle. the reason, we'vesynchronized gl recovery that happens every cycle they're pulling away the punchbowl. the earnings sidekicks in. to timmy's point earlier, if you want to look at a business segment that's ramping, it's construction. >> but, so, i agree with everything you're saying the global synchronized recovery is very encouraging for me at all, but if anything, the central bank's activity the last couple weeks means the yield curve is not flattening. it's steepening. in the last ten days, that's
been pronouchnced moves for markets to digest. central banks have said, you know what, party's over. >> timmy, that's a great point we expect upside volatility with upside action on stocks. if you look at past cycles, the last part of the cycle, you get spikes in volatility because of central bank tightening and fear that the business cycle is over. >> right. >> and then it takes that weakness and just ramps. that's kind of what i think is going to that over the near term listen, going up to 2510, our new target, isn't exactly a monster move it's really next year we're focused on, 2800,s on the back of better economic activity learning to better earnings and ultimately that's what the market correlates to. >> let me push back. i'm long bias, so i hope you're right. even if you have rates moving p up, you have come frepression o market multiples, have to only get there through earnings >> karen, what i found that's interesting, we come out with all these silly statements about what the multiples should be historically it trades at 19
times, sub 3% core inflation environment. that's the history of it but it's -- the trend is more impression than the actual valuation levels so you traded higher in valuation, with higher rates, for most cycles because at the end of the cycle, the fed is always raising rates so, in the last cycle where i made a mistake, was i was expecting a higher multiple than took place the whole time. the multiple was trending lower the whole cycle. this cycle it's the on sit. >> where are we in a cycle where the fed is normalizing not raising rates because the economy is overheating >> you've got to have a lot more evidence of inflation and inflation expectation suggesting the economy's overheating. it's not quite there yet. >> when do rates become a problem? >> rates become a problem well after they invert. >> a number? >> it's not an absolute rate level, scott it's about what creates a credit shutdown which is inversion in the yield curve. >> that's not necessarily true from a sentiment standpoint, if rates start to push higher to a point where they make people uneasy both from a business
sentiment standpoint and consumer sentiment standpoint and everything else, you could get a anythinegative impact on e stock market long before you have an inversion of the yield curve. >> not the peak in the bull market every single correction in the history of my career that is outside of a recession, post-inversion of the yield curve, was to be bought. you can buy it early, i can buy is down 5%, goes down 15%. ultimately just like the trump decline, just like the brexit decline, just like the fisal cliff decline, the taper tantrum decline, you buy it until you invert the curve and shut down lending. >> how much of your 2018 target, so 300 plus points between now and then, has trump agenda built into it and what happens -- >> zip. >> zip >> zip powe p orzippo. not because of donald trump, it's a non hillary clinton trade. >> 400 s&p points with no tax reform. >> let's forget my opinion because who cares, let's look at the data if you get trump's -- if you get a 20% tax rate instead of his
proposal of 15%, i'm pressing zero tax change. if you get 20%, according to thompson reuters, that brings earnings up 9.4% next year that changes the valuation argument and the fundamental backdrop on a tick if they do it this year, retroactive, it's 9.7. the animal spirits are alive not because of politics, it's because small businesses and large businesses are now convinced that you're not going to have higher taxes and more regulation every time i give a talk to the public, or to clients, i ask them, raise your hand if you want more government intervention and higher taxes. i've never seen a hand go up that's the animal spirit that's why the nfib small business hiring index has stayed near a historic high it's because they know they're not going to get hurt worse. it's seven or eight years into the cycle, they have money to spend and they're starting to do it. >> tony, good to see you >> you bet >> tony dwyer. who's a buyer in this market ty
>> tony makes a good point continuing to need to buy, something we talked about, the industrials tim led the show with, two names specifically, look at boeing, all-time high today. federal express, tim mentioned as well, honeywell on fire over the last few years so despite what i think about the economy, we can go back and forth, if it's strong/weak the industrials are telling you a story that seems to be intact. >> transports? like the transports? like the -- >> i'm long -- >> i love the transports here. transports you get the best combination of cyclicality and sensitivity to the yield curve which i think is going to continue to go up. i think rates will go up somewhat you have valuations that are very easy to defend in a market where people are very concerned. it's interesting to look at a caterpillar and deere which i don't think are the best ways to play this but i think some of the shippers look very interesting. the airlines, delta air lines is a name i stay long i think the airlines have outperformed and a lot of room to run on valuation. >> seems to me, i've been gone for about 10, 15 days, seems like there's a level of complacency, near euphoria
i'm not saying on this desk. complacency, positively biased the range the s&p is in, tony just said, 75 more points this year, the next 6 months, the s&p, fine, flip a coin, that could happen in one day, right i don't think his 2,800 target is ridiculous for the end of 2018 you're talking about another 10%, 12%, something like that from current levels. to me, just don't understand how we can get to both of those targets without a meaningful correction to shake out some weak hands we've had i think the biggest decline since the election on any period has been, like, 3%, 4% or something like that to me. so, i just think at some point -- >> he kind of said that. he basically said, look, you know, those have been pulled back to buy and he's not concerned about this until we're at the end of the cycle. soy ha so i hear what you're saying i don't think markets have been kp kpla ste kplas sen complacent >> the volatility we've seen,
currencies, fixed income -- >> you tell me there hasn't been volatility in the nasdaq in the past two wreeeks i don't know what beach you were on maybe they don't have internet. >> the range has been 1.5%, tim. >> well, there's been -- look at the charts on the top five megacap names in technology and they've moved around relative, it hasn't been a straight line higher i think people have been feeling some sense of tension and anxiety over whether actually this market where they've been going to defense of big cap names that have growth they should stay -- >> the question was, who's buying here today? the risk/reward is kind of one up/two down in my opinion at this point we've been basing now, u.s. equity markets now, it seems like for months. there hasn't been this impetus to take them up very high. to me, you have the potential for an august 2015 sort of decline coming very soon i think every other asset class is telling you that there's fear there and there doesn't seem to be in equities. >> certainly hear more talk about the prospects of a summer rally than a summer, you know, correction is there more risk being in the
market now or being out? >> look, like dan's awareness that there are some things out there that are not in great shape and there's reason to be concerned. look at credit markets, they're not telling you they're that concerned. we have brent or crude, what you're looking at, almost break down a few times real exposure on the books to guy s who don't have balance sheets masz i agree, there are plenty of things to worry about with valuations where they are. coming up, nvidia soaring as more analysts jump on the chip maker's bandwagon. with the stock up 200% in the past year, too bullish on this name plus, tesla has been under pressure the chart master says the stock is going to make a big turnaround, and he did call last week's selloff. in honor of the major league game, it's fast pitch. the traders are getting ready to give you their top stocks all week long. first up guy adami pitching a
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nvidia jumping 5% today after two price increases from wall street top trades tonight the bulls have reason rushing to this stock ubs and citigroup upping price targets in the beginning of june bank of america following suit the next day p p pac crest upgrading it as i mentioned two firms jeffries upping their targets on the stock today. this is aing to that's up 200% in the past year, so is wall street simply too bullish timmy, on this name >> maybe >> also mentioned that jeffries downgraded intel to a sell today. what do they mention in the note nvidia. >> well, it's interesting because citibank had an update. data coming through right now is very, very strong. we're out of place where even if crow have an inflection in the auto cycle, people are counting on them for this space as well so, i mean, you pick your kind of key growth area certainly i think in gaming. data center especially there's reason to say these guy
have all the things at their back except the valuation. i do not chase the stock at these numbers. i think the stock is very interesting. to say they have the lion's share of the space, no. >> who wants to play this? >> i understand valuation -- probably trades close to 45 times forward earnings their earnings growth does not justify that 100 p 100% they talk about the collaboration with toyota. all this learning we talk about that i don't understand but this -- >> the machine learning. >> the machine learning. all this stuff if they get half of this right, we said it before, it's a $200 stock, guess what the price target they put on it today, $200. >> $200. i think it's a bit of a goofy call to downgrade intel. listen, i said this a few weeks ago -- >> and raise nvidia. >> the stock is down maybe 5% since then this company spent $33 billion on three acquisitions, three big ones over the last two years, they bought altera for $16 billion, they're trying to buy mobile eye for $15 billion
they made a small acquisition, which is a.i. chips for about $350 million, $400 million last year you think about the acquisiti acquisitions, they're not going to miss the next tech cycle the way they missed mobile over the last ten years that's the value play. it's got a great dividend yield, near 3% or so. to me, i don't know why you would be buying inminvidia -- >> would you -- >> i would never short a stock like nvidia. for whatever reason, it's the anointed one greater the market cap of texas instruments, and it's got half the sales. now, you can say, it's growing at this. it's actually expected to grow in the low teens next year sales growth to me, this one's going to cool out at some point. >> i almost feel like this stock almost in and of itself is somewhat of a proxy on not only the nasdaq, and tech, but of growth tech. i know fang gets all of the play, but whenever this stock does really well, the nasdaq goes up, and whenever there's worry or someone comes out with a negative note or commentary about nvidia, it goes lower. then people start to question -- >> i think it's probably higher,
turbocharged, i think you're probably right. all right. still ahead, snap closing below its initial offering prize of $17 a share for the first time ever between snap and blue apron, has ipo become a four-letter word? i'm scott wapner you're watching "fast money" on cnbc first in business worldwide. in the meantime, here's what else is coming up on "fast." the man who called the top in tesla -- >> i think at this point you take profits >> -- says now is the time to buy. he'll break it down. plus, guy is serving up the pitch. pounding the table on a cloud stock that's up 40% this year. >> we're going to be awesome for you right now. >> it sure will be aso awemend we'll give you the name when "fast money" returns
welcome back to "fast. money" live at the nasdaq market site here's what's coming up. snap and blue apron have been a dissaster. if history is indication, things won't get better any time soon we'll explain. plus it's the one surging stock that guy adami says will knock it out of the park in the second half of the year. can he convince the other traders? he'll deliver the fast pitch. first all eyes on tesla after ceo eelon musk released pictures of the anticipated model 3 over the weekend a string of developments for the electric car maker let's get to phil lebeau in chicago with the very latest phil >> did you see elon's tweets this weekend >> i did not. >> well, let me show you what the car looks like they finished it on friday they took the pictures, sent them out on saturday and immediately they got a lot of
likes and retweets all the other stuff that goes along with putting something out on social media when you're elon musk this is the first of the model 3s remember, 30 of them are going to be delivered on the 28th of this month the first one has been built they'll start increasing production from here as you take a look at shares of tesla, it's been a rough month, guys this stock is down 13% in the last month and it's not hard to find people out there who are saying, are we sure that sales haven't plateaued? the latest headline, which is fueling this discussion about whether or not sales have plateaued involves tesla sales or deliveries in the month of april in hong kong now, hong kong has just instituted a new ev tax. actually, they took away an incentive for electric vehicles, so if you are purchasing an electric vehicle in april, you were not getting the same incentive you were getting in march and as a result, they had zero, zero deliveries in april tesla says when the hong kong
government reduced the tax exception for electric vehicles and increased the cost of our cars by nearly 100%, it is to be expected that demand will be impacted in the period immediately following the change particularly because of the large nucmber who bought prior o the change being implemented how many people got in before the end of this incentive to make sure they had a tesla delivered before april 1st look at this chart from the "wall street journal", about 3,000, a huge surge before april when they had zero deliveries. so, scott, this is one of those headlines when i first heard it, i said, what's the backstory here the backstory is not unusual if you're familiar with what happens in china when it comes to tax policy incentives, et cetera, especially for electric vehicles so, while this was one of those headlines that a lot of people looked at and said, a-ha, sales are plateauing, they're slowing down in china, the backstory really shows it's too early to
know, you can't extrapolate from one month whether or not there's a slowdown in sales over there. >> phil, thanks, phil lebeau in chicago. >> you bet. >> is the bloom off this rose now? >> it's off the stock for the moment. >> was in bear market, right >> it was. maybe it's a little bounce i don't know if you can say -- >> popped out, but -- >> i don't know, 30 deliveries. is that enough to keep the market happy and then 100 and i guess by the end of the year -- >> it's not the auto company why do we even care? seriously, why are we having this conversation? >> i'm not -- >> i know. i know i can't get onboard here i think maybe a stock -- as a valuation of a company, i can't get onboard here. >> been a rough -- it has been a rough couple weeks a move from 385 down to -- i think it traded 303 today. to your point, it's a significant move carter is going to speak to this i don't want to jump the gun here but the stock had double tops at 285. if it gets down there again, you buy with both hands. personally i don't think it's a good -- i think the reversal was
pretty interesting. >> our next guest called the top in tesla back in june. let's take a listen. >> tesla's not in the s&p. if it were in the s&p, doesn't matter if it's s&p, tesla is up here yes, number-one performing stock bar none i think at this point, you take profits or if you've got a little courage, you go short. >> seemed to be a good call at the time now, though, our chart master, c carter worth, is changing his dune what changed your mind >> thanks for showing that nice one. i appreciate the lead-in let's talk about it. so, obviously this is a -- i don't think it's a valuation story. we know that we don't -- it's just a dream. and if you have a dream, you can put any valuation you want on it so we have to spend all that and talk about the chart i think what we do know, if you look at the one-year chart, one thing we could do is draw a line like this so what this represents is a clear break-in trend which is to say, we reacted to this line
several times and now we've broken that line you could say, so why would one want to be bullish after an aggressive break like that, actually a 21% decline, you often will get something of a throwback back toward a trend line and actually fill that gap that was left behind. so, a 20% decline after doubling off the lows of last december. and now it's already up 4% 5r%,% as guy said, it reversed well today. i'm looking for a 10% sort of mover. let's pull it back and look at other pictures here's the long-term chart guy also who looks at and understands and appreciates charts referred to this. watch this this well-defined top from which the stock broke out, so we know that if you are in a range for a long, long time, and then ult t ultimately you do break out, often a stock after breaking out will revisit the point from
which it broke out a little bit of a pivot. that is a lot of support the presumption is you will get some sort of rebound any time here so, let's keep going here is the chart since the ipo. i think you could draw the lines like this. and you could see the tension. there's the break-in often breakouts have a little bit of a stutter step. that's what i think this is. i think you're back to a critical level my hunch is you're going to get a bounce let's end with where we started. here is the break. it's clear and i think you're going to get more of a throwback. 4% off the low now i think you can get another 10% out of this. >> come on over here, carter we'll continue the conversation. it's hard to sort of gauge where the ultimate, or an ultimate cold stock is going to trade it may get a technical bounce. what does that say >> all it was was a technical selloff. in principle, there is no valuation and it is a dream. for instance, i don't own the car, never owned the stock
say, who wants advice from you has anyone here ever owned the stock in number one performing stock. >> obviously i haven't. >> you have? >> i have not. >> oh. point being, a lot of people who don't believe -- it's not about believing. can be any valuation you want. something has changed clearly. this is the man who did it long term, does it end up being kodak or xerox or polaroid possibly can you play this for a bounce technically i think you can. >> what's a bounce, what do you consider -- >> 10% it doubled off its low you gave back 20%. you got a lot of support often when you do break a trend that's that clear, you will, like, revisit it to the upside then maybe that's the end of it. but i think if you want to be long or short here, i'd rather be long than short. >> you're also speaking as, you know, to a nimble trader who would want to, you know, get in for a 10% bounce. >> for "fast money." >> yeah, versus a long-term investment like a ron baron. >> right. >> the ultimate bullish long-term investor. >> long-term investor, want to
put this away and watch it become the kodak. >> where would that level -- that's a really good question. to me, you go back and look at the last four years, there's been four, almost 1one a year, 30% to -- >> we just had 20. >> is that enough, "a" for the quick bounce you want to play for back to that trend line, but what about the long-term inve investor the stock was at $200 in december >> expensive. >> they'd love to see this thing as $250, get overdone to the upside, just -- excuse me, to the downsize. >> do you think they'd be buying the 250? i don't. >> if you're buying the stock right here, think about this, they produced one of the mass market cars that's not going to sell for the price they say it's going to sell for. it needs more to the downside. listen, i usually love your calls. i would have loved to have seen the stock back at 290 tomorrow that's your point. that's the prior high it broke out from i think it may be almost prematu premature. >> a lot of support coming up right away to be fair, support is not a plywood board or concrete floor. it's a mattress top.
>> love that love that. >> ultimately find support, right? >> you don't think that the cult of elon musk would pile into that thing at 250? >> no, i don't after -- especially those guys that came in late in the game and got taken out, i think they're going to think what a lot of people think, oh, my goodness, there isn't a lot there, why is it traded down to -- i'm telling you the emotion -- >> it's all technicals >> i'm not sure that it is if you see the nasdaq break down, there's no stopping this thing from going down. the correlations here are enormous so it's going to go a lot harder and it's a name that i don't think that that guy, that long-only guy is going to want to touch it's a lot easier to say that now than to be in the trenches and stare at 250 with the stock market going down. are you going to buy it because you think tesla is going to deliver on everything they told you today? >> i don't look at this as part of my process -- you guys have the machine in front of you. what is the short end? >> mid 20s. >> i looked the other day. 1.1%. >> that has to be considered. >> except the fact you know who owns 22.5% of the stock never
sold a share, mr. musk. >> he's not going to sell it. >> that's paring off the short interest this is my point, insiders who are able to sell and long onlies that are flenever going to sell. when they see 380 and see 300 and see 250, they're buying more they're not thinking about it a couple years they're thinking about five, ten years. a company that sold 100 cars last year. >> what's that >> maybe there's some notable shorts we're never going to cover. >> that's true. >> they'll eventually have to. going to wait, because they're steadfast in their belief. >> carter, thanks. carter worth. still ahead, a battle between billionaires warren buffett and paul singer is brewing over the acquisition of utility giant oncor. we'll hear what the oncor ceo told jim cramer about the brouhaha. plus guy made his way to the plaza, warming up to pitch the one stock he's calling a home run for investors in the second half and the stock is already up 40% this year.
utility giant oncor. here's what the ceo of the company told "mad money's" jim cramer moments ago about the potential deal. >> we know elliott well, they're great folk, our largest creditor. >> right. >> at this point, it's a conceptual -- we haven't seen any specifics. they're fine people. all i know is what's in front of us is buffett so the berkshire hathaway deal would be great for this company i don't know enough about elliott yet. >> you'll catch the full interview with jim and the oncor ceo robert shapard on "mad money" right after us 6:00 p.m. eastern time. shifting gears from hard ball to baseball, the mlb all-star game is tonight or tomorrow night, so in honor of america -- i was thinking the home run derby in honor of america's favorite pastime and our favorite segment we're doing a special all-star edition of the fast pitch. each day this week one trader will pitch a stock they think is worthy of a buy and the traders on the desk will vote on whether they're buying or selling that pitch. guy adami, you're up first. >> i appreciate that, scott. what better night than home run
derby night? >> that's right. >> here's the stock we talked about a long time, the name of the stock, going to pull it up right here, is red hat the symbol, rht. this stock has been an absolute monster and people will knock this on valuation and i get it, but you know what, they have a tremendous partnership with amazon web services. that in and of itself is worth buying the stock but revenue growth has been off the charts last year, 19% revenue growth year over year that's coupled with double-digit revenue growth over the last five years and the last point, increasing demand, what does that mean? all these i.t. infrastructure firms need to upgrade their infrastructure and where they're going, they're going from antiquated systems to a cloud-based system and where are they going they're all going to red hat look at last quarter see what they did. over 40 contracts, well over $1 million with each company. that continues to grow with an existing base. so, valuation is crazy, but the stock keeps continuing to move to the upside. we're not nearly near the
all-time high, we made probably in '99, 2000 this is a stock despite valuation still has room to the upside why? they're pretty much the only game in down, judge. >> the pitching coach over here -- >> guy, look -- >> -- has a question about your stuff. >> i'm a little concerned the government could throw red hat a nasty bender, if i may, or curve ball. >> explain how they're goingcha. >> i think they're very reliant on government sales which i'm not sure is something they can count on for the future. >> not nearly as reliant as they were a few years ago, you make a good point that number has gone down instead of go up which is a good thing. look at their customer base, anywhere from ibm to intel to microsoft, customer base continues to grow. so i guess the government concern is well founded but not nearly to the extent it was a few years ago. >> let me ask you something else, so we're seeing pricing pressure, how about these guys are they seeing pricing pressure as well? >> it hasn't shown, karen n their margins.
if you look at last quarter, their margins continue to hang in there is there potential for pricing pressure to them probably, yes, but i don't think that's going to happen for a while. there still seems to be a mote around their business. now, that mote might close up very quickly, but i don't see it in the foreseeable future. >> all right it is time now to cast your votes. they are in. timmy? do we show at the same time? is there a big reveal? >> everybody big reveal or just show mine. i've got to sell whoops by the way, guy, i think you went heavy on the spray tan tonight. maybe that was just your vacation look, i think you're right, i'm more worried about valuation you said this. i think it's tough to defend it even though you have the growth. i think their best days are behind them. >> karen >> much to my surprise, just because valuation is usually the ultimate point to me, but i do like the growth. it's a buy >> in you go. >> danny
>> so you have mid-teens revenue and earnings growth. i think you sell it here it had the really big -- where am i going right here the really big gap it kind of consisted with what we talked about with tesla. >> amen, sister. >> i think you're going to get checkbacks to prior support levels and that's where you buy a stock like this, you don't buy it when it's kind of in the midst of that checkback. >> guy >> fall into that support. >> checkbacks. nice tan, though. >> that's two sells, one buy one can of spray tan. >> let me clarify something there, party boy there's no spray tan here. this is the real thing week at the beach. just so we all understand each other. >> extra bronzer. >> you should take a wipe and just see what happens. >> 100% natural -- >> did you go with the accelerator? all right mooerps the questi all right. here's the question.
was guy's pitch hot enough to make you want to buy the stock go to twitter, vote in the follow cnbc "fast money." we'll reveal the results later in the show. plus the two biggest ipos of the year are imploding snap and blue apron are below their ipo prices we're going to tell yowh iu att means for other ipos for the retail investor. much more "fast money" straight ahead. ant to end alzheimer's disease. but what if, one day, there was a white flower for alzheimer's first survivor? what if there were millions of them? join us for the alzheimer's association walk to end alzheimer's. register today at alz.org/walk.
welcome back to "fast money. two of the most highly anticipated ipos of the year are both struggling. snap closing below its ipo price of $17 for the first time today and blue apron tanking nearly 20% since going public on june 29th how do they stack up to other dis appoiappointing ipos? let's get back to courtney reagan at headquarters for those details. >> reporter: hi there, scott, rebound in blue apron shares has investors wondering whether the meal kit company is a buying opportunity. as of friday, shares declined almost 23% since its ipo june 29th today, though, they're up more than 5%. if we look at history as a guide, ipos that plummet one week out of the gate don't tend to succeed in the long run blue apron ranks 12th for worst one-week performance with a decline of 11.6% through july 5th. sure, there are exceptions facebook, for example, is ranked eighth worst for its first one-week performance since its ipo, we know it soared
over 300%. however, of the other top ten worst performers, only two are higher than their ipo price, carvana and gaslog the rest are trading lower sunrun, terraform global, fmsa, vivint solar are less than half of ipo prices. king, maker of candy crush, was acquired last year by activision blizzard for less than its ipo price. sfx entertainment filed last year for bankruptcy. it's likely going to take a little more than a one-day jump to change investors' minds about blue apron long run. in the meantime, though, you might want to stay out of the kitchen. scott? >> all right, court, thanks so much facebook thould hashould have as by it. >> to me, the amazing thing about blue apron, not how much it was down, amazing they got that deal done at all. how they were able to get that out the door right after the amazon whole foods deal was announced, cutting the price that much, so much competition expenses going nuts. i can't believe they got it
done. >> does it mean anything for the pipeline obviously you have marquee names waiting in the wings whether uber, air bnb, lyft. >> people will have trepidation next time they get into some of these names. the pipeline, to your point, i think it's intact. these names specifically, we said it for a long time, snap to me, i don't know if it's single digits but it's going lower now. >> maybe the high-risk names -- >> i think that's a good question, we just had a bunch of names up there on the board, lyft, airbnb, these are really disruptive companies with real -- we were, too, with real valuation shares a billion and a half market cap, blue apron, expect ed to do. maybe if they continue on this run rate, $1 billion in sales over the next year, this is not a marley disruparticularly disr company. a lot of competition this was mispriced there's a price for this thing it's probably lower. they have to prove themselves and prove there's a path to profitability. >> how much, dan, you're close to this community, how much do
you think people held on too long >> the cooking community >> i wasn't going to say that. i was going to say the silicon valley community in other words, tech companies that have a tremendous both pipeline and certainly a lot of money behind them to say we're not going public because we think we can do better, i bet if snap had gone public sooner, you might have had more wind behind the sails. that's if their business is truly slowing. >> i would say this, if you look at this company, this is as close to the web 1.0 things we saw go public in the late '90s some of those things did survive or at least the concepts this is a great example of a company that doesn't need to be public i'd much rather stay back, fix some of the issues -- it could be clearly -- >> guy did a great job that one afternoon with the shrimp cacciatore. >> it wasn't shrimp cacciatore. >> what was it >> it was fusili with spinach and shrimp >> there it is the video there, wise guy. >> that's the onion. >> is that literally a blue apron thing? >> blue apron on, shirt, everything. >> that looks like a flowery
apron. >> with the ipos being a disaster, snap is still at its ipo price. not a disaster yet. >> you do an apoptions action, right? >> options started trading today on the blue apron. >> we are running out of time. >> they did. calls for four times that. interesting on the first day out of the gate, like courtney said, the stock's down about 20% from that ipo price the most active options today were the august e-calls, they traded 650 times for about 44 cents. that's about a 5% break even from current levels. that seems like a reasonable way if you want to play the first earnings event that's going to come in mid-august. >> all right for more options action, check out the full show friday 5:30 p.m. eastern. up next, there's still time to vote on whether you're buying guy's pitch for red hat. go to twitter @cnbcfastmoney and do it now. we're going to reveal the results right after this i'm here at the td ameritrade trader offices. steve, other than making me move stuff,
what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade. time's up, insufficient we're on prenatal care.es. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns. and rising costs, wipe that smile off your face. we're coming for you, too. for those who won't rest until the world is healthier, neither will we. optum. how well gets done. you myour joints...thing for your heart...
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we're back and it is time to reveal whether or not you at home bought guy's pitch for red hat. the drum roll, please. >> now let's cue toni braxton because -- >> oh, no. breaking your heart. >> looks like guy struck out this one. >> i love that t.b. is now a regular on our show. >> 37% said yes. 63% of you said take your pitch and leave. >> this might be one of the five worst songs of all-time. >> i was going to say something else -- >> say it. what were you going to say >> can't do it. >> i got time for t.b. >> do it afterwards. let's do final trades now. you? >> oh, me first? >> i'm sorry i'm sorry. >> i won't break your heart, ebm, malaysia, cheapest currency in the world emerging markets. >> going emerging markets also em large cap around the world.
>> we can kill the music now, right? >> until the bitter end. >> for all the reasons people like it -- >> american express will get you done there, scott. good to see you. hope to see you back tomorrow. >> i'll see you tomorrow. >> i'm scott wapner. catch "fast money" my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. so many people, so many people simply do not believe in this market
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