Skip to main content

tv   Fast Money Halftime Report  CNBC  May 3, 2022 12:00pm-1:00pm EDT

12:00 pm
intel, it was able to lean on data center and hyper scalers. to what degree can amd do the same, how does it match up with investor expectations for the stock. we'll see. >> and the fed meeting will steal attention tomorrow as we give a press conference tomorrow afternoon. almost noon in the east. let's get to the judge carl, thanks welcome to the halftime report true state of stocks, whether the correction has run its course we ask brad gerstner, and also with me for the hour, the investor committee stephanie link, jim levinthal, and i will take you to the wall. show you where we are 12 noon in the east green across the board trying to put follow through together from the violent reversal late day yesterday. dow good 190
12:01 pm
there's the nasdaq positive. russell good for 1%. ten year backing off, 3% 293 where that note yield is and looking at the vix which was at 35, now sits just north of 30 >> dramatic backoff on the vix, scott. that's something you look for, we talked about is it a tradeable bottom, this and that, did you get that sort of ka pit la tori swoosh to the down side. since we're in nba playoffs, i'll use swish, scott. and we did was that enough, was that the last one i am not saying that at all, but i am saying thursday and friday were so ugly, and yesterday during the session prior to that turnaround, that was all pretty ugly and the vix does reflect exactly what you thought it reflects, that is that people aren't as
12:02 pm
pessimistic. i took off my tlt puts, i had them on weeks and weeks. i removed those because a lot of the short term, short term down side for bonds, up side for yields is priced in. we'll see whether or not the fed really decides to slam very hawkish tone or whether they say we gave you 50, likely to move again on the june meeting by at least the same amount. that i believe is priced in now, scott. if they go beyond that, then it could be anything. >> josh, doc tees up the perfect question he said it himself was that enough. have we experienced enough pain in the market, down big yesterday. we finished awful friday, down big yesterday. had a nice reversal. jonathan corinne ski says not yet. we're getting closer, he says,
12:03 pm
because metrics like percentage of stocks above 200 day moving average put call ratios, defensives getting hit are level for the s&p, 400 of sub 4k means it came close, but we haven't felt that get me out of any price type trading he says we're close to a bottom, but not quite there for the capitulation moment, if you will what do you think? >> we're in a bear market and one of the things bear markets do to you is they grind you down with inter day reversals, green days, these days where the hardest-hit stocks are up 11, 12%. they draw people in off the sidelines who had been waiting for the moment because they think they're going to pick the bottom they force people to average down into positions that they otherwise wouldn't because they say oh, no, i was right on the stock after all. i better own more cheaper.
12:04 pm
it screws with the psychology. the market isn't satisfied until everybody loses. i want to point everyone's attention today to what we are seeing in two areas that if we've seen enough pain, and if we're really going to avoid recession, two areas that should not be doing what they're doing today, one is travel and the other is consumer discretionary. expedia had actually earnings report with revenue doubled up 100% year over year. for whatever reason the details weren't good enough. that stock is now acting like all the rest of the technology stocks, despite the fact that literally the hottest category of all of consumer spending now travel and this is the company that most accurately represents the trends in that space it is not a hotel but has hotel exposure not an airline but has airline
12:05 pm
exposure, et cetera, et cetera expedia had all good things to say, even on business travel and are crushing it. look at everything else, booking, marriott, hilton, mgm, caesar's, on and on. airlines not as bad. consumer discretionary is the underperformer nike down 3%, chipotle, starbucks down you can't have those stocks not working if you're saying that we've had enough, the market had enough those are stocks that have to catch a bid here and they might they might but really and truly if the consumer doesn't hold up, the whole shooting match is over we're seeing signs that at the edges there's hesitancy to pay prevailing prices, not the best thing to see now. >> be careful how you read into some names as mike santoli flagged for me,
12:06 pm
minutes before we came on the air, expedia, live nation, josh, that's a you stock, data dog, cody, hilton, those are melvin capital stocks which we find out that fund is down a lot year to date there are some questions about what the future of gabe plotkin's fund will be maybe they're going after some names in anticipation of him liquidating, i don't know, but that's part of the conversation around those specific things >> not big enough. that's a side show i got it last thing >> be careful how you read some activity in some of the names, given how people come after those kinds of names at times like this. >> sure. last thing i think there are two categories of stocks now. the ones that i'm interested in, the ones working currently, one of the trades i gave on the show
12:07 pm
i am personally doing, ita, defense and aerospace acts well, looks great now. the other ieo, energy producers, also very close to 52 week highs, looks great that's what's working now. second question, what's the pitch created by the volatility. and i have to tell you, i really feel it is biotech the biotech stocks have come down almost as much as the rest of the nasdaq and growth stocks. the difference is they're not cyclical the science of shrinking tumors is not effected by whatever jay powell decides to do this week so i think that's going to be the fat pitch. i still think it is too early. at a certain point, you ask what flush do i buy, you want to look in that area, life science, biotech, huge winners. >> steph, the question of whether we had enough pain, whether there's too much pessimism in the market, edgar denny asks that today.
12:08 pm
and comes on the heels of a conversation yesterday in overtime with eric johnson says you're going to get a violent move higher in may the whole thing will come in may. 8 to 10% in the s&p. interesting call you match that against paul tutor jones, you can't think of a worse environment than where we are for financial assets. you don't want to own bonds or stocks you have cross currents all over the place. >> you do. you absolutely do. you have a push, pull going on on one hand you have pretty good economic data. look at the ism, pmi, factory orders how about job openings, at a record we now have more job openings than unemployed people the economic data has been solid. earnings have been solid actually 75% of the s&p 500 have beaten by 8.5%. and estimates are going higher only by a little bit, but they are going higher on track to do 12.5% in earnings in the first quarter
12:09 pm
and probably about 9 or 10% for the full year, right those are the good things. bad things are things that we've all been talking about ad nauseum, the fed, inflation, war. the fed is going to try to engineer a soft landing and don't have a good track record of doing so. that led to multiple contraction, even in the face of earnings going higher. we're now at 17.7 times for the s&p 500, down from 21.6 times earlier in the year. can we get to the average? we sure can. 16 is the average. could we go lower? yes, we could. it is impossible to know we are going to be in choppy range for the year in my opinion. may have a nice rally in may, that's great we are going to be data dependent, watching the fed all year long. that's going to be a problem for equity i want a more balanced, diversified portfolio. i own energy, materials, financials, but the latest purchases have been on tech and
12:10 pm
health care. i am trying to find ideas and opportunities and staying patient. >> lastly, to you, farmer jim, steph points out a lot of good she points out bad, too. the question is, most important question in the market is the bad too much for the good. is the fed going to ruin the good because of what it has no choice but to do the task at hand of what ken griffin talked about out west, more uncertainty or the most uncertainty since the gfc, global financial crisis. >> and scott, i think this is a question of what steph just said can the fed engineer a soft landing. as she points out, there isn't a good track record from the fed ultimately think about what the fed mandate is max employment, they've got that, price stability which they're working on some indicators indicate price stability is closer than we
12:11 pm
think. ism survey showed market decrease in prices paid. freight costs are coming down, inventory to sales in corporate america picking up, all of which should put lower pressure on inflation. if this friday you get a good pickup and labor force participation rate, could be another signal inflation has peaked not is peaking but has peaked. that's what i am waiting for we know what the fed is going to do earnings have been shot for this quarter, there's still some coming in. what i'm paying attention to is next week's inflation. if there's wind that comes out of the sails of the aggressive fed, the market will rally again for reasons that stephanie pointed out, the effect is on multiples. right now, trading 16 and a half times next year's earnings if you get ease off from the fed, that could pop up to 18, which would be 10% rise. >> even if it has peaked, still high
12:12 pm
40 year high have to bring it down. >> that's not what matters it is the direction, not level >> let's take a break. we'll talk about the markets with brad gerstner what does he see now we'll find out next. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
12:13 pm
at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. as a business owner, your bottom line designed to help you keep more of what you earn. is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile.
12:14 pm
flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ our headliner today, stocks
12:15 pm
were primed for a big pull back, he was right where is the sector heading. welcome back brad gerstner from the conference in los angeles. good to see you. welcome back >> hey, great to be here, scott. >> i always feel like when you're with us, we're either in the storm or trying to figure out when we see the sun start to shine again. i mentioned in the intro, the call in october when you were with us about what you expected to happen to higher valuation tech within the nasdaq let's revisit that and talk on the other side >> if the nasdaq were to correct, growth multiples were to correct to january 2020 levels, precovid, nobody thought multiples were too low when you look at the distribution of probabilities, playing from home or whether you do this for a living, you need to leave open the possibility
12:16 pm
that as rates begin to move up, as the world normalizes, multiples will normalize >> i am not sure it looks like a hoodie this time sometimes stay the same. down 22 and a half percent 22 and a half percent from nasdaq highs you said 30. i mean, that's close enough. are we done? >> well, i tell you, i like my beard game better from last year, too. hard to believe that was only october 19th, we were here at milkin 22% doesn't really tell the story. growth stocks are down 50 to 80%. and so we now retraced below the five year average i referenced in october certainly when we were talking in october i wasn't anticipating war in ukraine or concerns of hyper inflation, energy
12:17 pm
inflation, food costs that we have now seen. we've overshot averages. now i think is the time whether playing from home or professional investor, you have to find opportunities to buy you know, it is notable that berkshire after having 7 billion in net sales in 2020 and 2021 deployed over $50 billion first quarter of this year they don't know and i don't know when the tradeable bottom is in. we know we're closer today than last october if you're an investor investing in one, two, three year, find your best ideas, put money to work. >> you have to find opportunities to buy it is a stark contrast to what paul tutor jones told us today hard to find a worse environment than where we are for financial assets what do you make of that >> i'm a huge fan of paul. i watched him this morning
12:18 pm
i encourage everybody to go to robin hood.org and donate, but if you think of four things that paul talked about, interest rates, direction of inflation, ongoing war, increasing concerns aboutslowing global growth, those are well known, at some level are priced into the market do we have more to go, paul doesn't know, i don't know it is more asymmetric to the up side today i listened to jim and steph talk about being data dependent, looking at the cpi print on may 11 i think inflation is already rolled over. i think there's already tremendous amount of demand destruction occurring in the world. the fed and what the fed does in terms of rates over the course of the next six months will determine the path of multiples. i think it is at least even odds that that direction will be up from here because so much has come out of the market from a growth multiple perspective. >> more asymmetric to the up
12:19 pm
side does that imply in any way, is your gut feel this is a bear market rally or start of something longer lasting as we perhaps face peak inflation and market anticipates, understands, can come to grips with what the fed will do in meetings ahead. >> yeah. well, it is a great question i don't know what a bear market rally is that's the domain of traders what i can tell you, i try to find excellent companies that compound capital and earnings and revenue and earnings over a long period of time. i want to buy them at fair prices if that is the case, and if it is also the case we're going to live in a world with inflation around 3%, rates around 2.5, 3%, that's the world of the last decade, it has been pretty damn good for growth stocks and markets yaenl.
12:20 pm
if you believe we're going to live in a world of hyper inflation and interest rates that will be 5 and 6%, now is not the bottom you have to have an opinion on that from my perspective again, we already see growth rolling over. the fed hasn't really even raised rates tomorrow is my birthday, may 4th. they'll give us a 50 basis point birthday present tomorrow. but fact of the matter is the market is already pricing it in. the mortgage rate is now over 5.3% we're already destroying demand for purchase of new homes because people can afford less home we see used car prices rolling over that's part of the challenge for carvana, car max we see evidence that the components of cpi are already being impacted by the expected direction of rates. >> you think the market is overdoing it on expected direction of rates, both markets, bonds and stocks?
12:21 pm
>> i don't know if i look at the ten year at 2.9, might the fed push us that direction i think that 2.5 to 3 makes sense to me. but anything above that i don't think is sustainable, given level of growth and given level of economic vitality we're on the verge of recession in europe. china has dramatically slowed. china accounts for 25% of economic growth. and there's been dramatic slowing. we see slowing across the board in the u.s that's why people are concerned about fundamentals we see single digits growth out of a lot of internet companies hearing talk of layoffs, hiring freezes out of companies when you start hearing all of this, when you start to see used car prices come down, you have to wonder where we are i think jim pointed it out well, that we may have in fact already peaked on inflation and if inflation comes back down below
12:22 pm
4 by end of the year, i think we'll be in a situation that's highly investable. >> jim, i want you to get in look, this view matches with yours. you articulated on this program, i tested you on it, you have not wavered one bit, jim lebenthal what do you have >> brad, good to hear your thoughts, good to hear we're in synch. here's what the other side is saying smart people say the fed doesn't care, if inflation does moderate, fed is hell bent to raise rates. i find it hard to believe but i would love to hear your thoughts on that. you heard me earlier, dual mandate, if they meet the mandate, why rate rates. the other side is saying they're raising. and by raising i mean to 3% in the near term on fed funds rate. >> well, jim, let's be clear
12:23 pm
the bond market is already there. like that's what the world is saying the ten year is trading between 2.9 and 3. i think the surprise has already been delivered to the market the market understands we've gone from 1.6 to 2.9 on the ten year i don't think that's a surprise out of the fed i think you would have to be well over three to be a surprise to me taking the other side of the argument, of course. you heard me say on the show many times it is all a distribution of probabilities. you have to leave open the possibility that inflation will run hotter and rates will be higher i promise you when we hear from the fed tomorrow on may 4th, they're going to be hawkish as they've ever been. and the reason for that is they don't want the market to back off from rate expectations then we're going to get may 11 cpi print. i believe we're going to see it lower month over month i think it will happen in june
12:24 pm
and july i think we're going to see further signs of global slowing. i expect by end of summer to early fall you'll hear from the fed that they accomplished their goals with rate hikes, 50, 50, 50, that inflation is starting to roll over, and now they're starting to think about the balance between growth and inflation. they certainly don't want to throw the economy into a deep recession. remember, we just had our first quarter of negative gdp. another negative quarter of negative gdp, we're inecsi reson territory. >> sit tight we'll get into the portfolio when we get back s! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there?
12:25 pm
we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together. ♪♪ ♪♪ ♪♪ ♪♪
12:26 pm
(all): all hail, caesar!
12:27 pm
pssst julius! you should really check in with your team on ringcentral. oh hi caesar. we were just talking about you. yeah, you should probably get out of here. ♪ ringcentral ♪ welcome back to the halftime report here's the cnbc news update at this hour. the leaked draft supreme court decision overturning roe vs wade is authentic according to john roberts. he stresses it does not represent a decision by the court or final position of any members on the issues in the case roberts ordered an investigation. before heading to alabama,
12:28 pm
president biden told reporters if the court throws out protections for abortion rights, it would be a radical decision he warns other privacy rights like access to contraception and same-sex marriage could be called into question the draft opinion is prompting calls from some democrats to drop the senate filibuster rule that requires two-thirds majority to pass most legislation. that would clear the way for democrats with majority in both chambers to pass a bill protecting abortion rights and have it signed by president biden before the november elections. tonight on the news, shepard smith in washington to report on developments in the national abortion debate. scott, back to you >> thank you so much. we're back with brad gerstner, joining us from lo angeles. i want to get inside the portfolio like we always do with you, brad. you're always so transparent with viewers can you give them an idea where you stand today from a positioning standpoint, if you
12:29 pm
do believe asymmetric risk is more to the up side, what your net long is? give us an idea. >> sure, scott you and i talked on the overtime or on the close a couple weeks ago and i told you we were fully invested we remain fully invested but we're not using a lot of leverage now is not a time in the market you need to use leverage you can generate great returns without a lot of leverage. the position continues to be snowflake, uber, facebook, microsoft, and the thing i want to point out that connects the dots on each of those positions is not only do we think those are companies that will continue to compound double digits for years to come, they're also generating free cash flow. it is about balance and profitable growth. the thing the market is penalizing the most, josh pointed it out earlier, the market doesn't want anything to do with unprofitable growth.
12:30 pm
i think these companies are iconic, they're market leaders, doing things to improve business and they're businesses we want to own. >> notable are the ones you don't want to own that you used to own that obviously don't fall into the category of balanced and profitable growth, i don't know shopify, you're totally out of that uipath those are cathie wood names which are ironic and interesting, those are the names that she continues to bet on while you say i don't need this. these aren't the kinds of stocks appears to me the investors want to be in now. >> scott, you and i talked last october and december and i said we were lightening our load. we were lightening our load in those type of names and our concern was as the market pulled in on the risk curve, those would be the first names penalized in the growth sector
12:31 pm
and they were. those names are down 70, 80, some cases 90% not saying they're not investable, but i don't think you have to go that far out on the risk curve for terrific returns for yourself and for your investors so it is about your appetite for risk but you're right, we consolidated i told you this in march consolidated around our best ideas because i don't know if the market is going to have an appetite to invest in three weeks, in three months, whether this will take 18 months for us to work through the inflation and rate concern during that period of time, if you want to ride volatility, you have to know you're in a business that will be worth more in the future because of fundamental things that are happening in that business so we consolidate into the most confident positions. >> i don't want to put you in uncomfortable position to have to pile on cathie wood, but when
12:32 pm
you see what's happened to that fund with some of the names you used to be in, and the way you just articulated why you're not, i'm just curious what you make of all that. >> listen, i don't know much about her research process, you know, but i know it is effectively an index fund on stuff i view as part of the highest risk component of the growth sector, and i'm not sure if and when the world is going to want to return to that level of speculation bill gurley and i talked last week, he sent out a tweet i agree with you can't anchor yourself to prices that the most risky companies were trading at last year the fed taking rates to zero forced everybody out on the risk curve. what you want to do is own quality companies that you know are going to compound top line, that you know will compound bottom line, be worth more in the future
12:33 pm
i don't think you have to take that speculative risk today. clearly she has a research process she believes in. i think i told you at some point last year that we had shorted a basket, we were short indexes like ark to hedge outgrowth risk in our own portfolio, but that's because it represented the riskiest part of growth curve. >> you mentioned one of the best ideas, remains one of your best ideas in the portfolio, one of the larger positions, meta you're adding to meta. what do you have for brad gerstner, a week off the quarter in which seemed to relieve some investor concerns that have been around that name what have you got for brad >> hi, brad. great to have you today. the biggest question everybody has on meta is can they monetize reels and how long will it take to monetize reels, can the stock work if they don't
12:34 pm
>> well, stephanie, i heard you talk about it. i happen to agree with a lot of your position on the name. let's take a step back on meta for a second generating $25 billion in free cash this year, bought back $9 billion of stock in the quarter. generated 8.5 billion of free cash in the quarter. in a quarter that they had almost everything that could go wrong go wrong, right? whether it is idfa, lapping some of the hardest internet comps because a year before everybody was sitting on the couch, surfing instagram, this q1, everybody was out post covid doing things, they had a lot of natural head winds even in that tough quarter managed to generate over $8 billion in free cash on top of that, i think they articulated something that's extraordinarily important which is facebook for the better part of the last decade has been a friend or social discovery engine
12:35 pm
they showed you content that your friends recommended they made massive investments in the last couple of years to turn themselves into an artificial intelligence discovery engine. that's the secret behind tiktok. investors, we know a thing about why they have been successful targeting customers. as mark said on the call, when you make that transition, you go from being able to recommend from 2,000 pieces of content to 2 billion pieces of content. we think they're in the early phases of an engagement expansion game and obviously reels is a key component of that. 25% of instagram usage is already reels. they aren't monetizing it that much but there's no reason. we think they have the best in the world, they won't be able to monetize in the back we think growth accelerates.
12:36 pm
doing it with a company with a disciplined approach to free cash and buy back. we feel like you have a protected down side and a lot of optionality to the up side. >> let me ask a question it plays off this conversation now. the faang acronym that some suggest is dead that you can't invest in the basket like you used to. netflix has obvious issues you gave us your view on meta, facebook what's your view overall on that in has faang run its course, is it dead? >> well, set aside faang a second think about the hyper scalers. if you talk about amazon, google, facebook, microsoft, et cetera, they gave incredible prints in the quarter. the clouds themselves now 40, $50 billion in scale that are
12:37 pm
growing over 40% scott, just three years ago people thought growth rates would be mid to high teens and are growing over 40% single biggest area of investing in the public markets and venture markets is in the shift of all enterprise work loads into the cloud we saw a massive acceleration into the quarter that's not going to abate anytime soon we think it is a decade long investable trend, highly profitable businesses. we saw a lot to like in the quarter and you get to buy it at a fairer price than last fall. i think that at the end of the day is the most important take away, which is buy stocks you have been waiting to buy now, hold them a year or two, and they'll exit higher. a lot of people said i'm going to wait. felt like they missed the last year, i am going to wait until i have a correction. i said once you have the correction, it will occur at a moment in time with a lot of
12:38 pm
uncertainty. by definition, when the correction occurs, nobody wants to buy anything, that's why you get market resets. >> not put off amazon didn't have an incredible quarter. revenue growth almost across the board, not for every one of them for certain, was slowing it was a standout from a number of names that revenue growth is slowing from where it was. maybe that's because you're in a pandemic and you're doing some top line growth that you can't repeat to that degree, certainly sequentially i don't know tell me what you think. >> scott, not to interrupt, but come on. 40% growth in a software company off a $50 billion base these are extraordinary growth rates which just a few years ago nobody anticipated and what it demonstrates is secular power, the shift of all enterprise work loads to the cloud is way more powerful than impact of inflation, slowing growth, increasing rates
12:39 pm
what you want to do to protect yourself from inflation is find growth assets with durable secular trends and great margins. and those businesses all have them. >> another quick break back. final segment with brad after this break y? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire
12:40 pm
thanks, paul. matching ymy fellowescription. xfinity customers!
12:41 pm
the biggest week in entertainment is here! watchathon week presented by xfinity rewards! with free access to stranger things from netflix, the boys from prime video, starz, hbo max, and peacock. and we'll make this a national holiday. nay. holi-week. just say watchathon into your voice remote to watch now. there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security. and you choose fiber solutions with speeds up to 10 gigs available to more small businesses than any other provider. the choice is clear: get unbeatable business solutions from the most innovative company. get a great deal on this limited time price with internet and voice for just $49.99 a month for 24 months with a 2-year price guarantee. call today.
12:42 pm
back again with brad gerstner josh brown has a question. i am looking that you sold out of crowdstrike, one of his favorite names nonetheless, give him the question to you. maybe he can react to that, too. >> brad, back to snowflake, one of the names you're most bullish on this is a stock with market value of $160 billion last fall. now it is about $54 billion. it was a price to sales forward 73 now it is 27 if you own it at both valuations, aren't you saying de facto i don't care about valuations i think growth is enough to overwhelm those.
12:43 pm
give us an answer as far as how you think about a company like that there are many stocks that this would be apropos of. >> you're right, josh. it is loud here, but i am tuning in on snowflake, fact of the matter as i said to scott last october, november, december, we had a lot of growth hedges to hedge out some risk in those positions so it is not fair to just look at 13 up and say that's the economic exposure as you well know for those playing at home, exposure did change over that period we distributed to our lps over $6 billion worth of snowflake stock last year. so it is not as though we did nothing in the face of high multiples. at the same time, we have extreme confidence that snowflake is going to revisit prices in years ahead. i like to think about it not as a multiple of one year sales but
12:44 pm
let's think about what they're doing from free cash flow perspective. they're going to have 15% free cash flow margins at 100% revenue growth they said they're taking that free cash flow target higher at investor day later this year we think it will be 30 to 40% in fullness of time so yes, that multiple like all multiples, were too high in october and november i was very open about talking about that but when i look at the valuation today, please don't look at a one year forward sales number. it is highly misleading for a business growing at 70, 80, 90%, particularly when they generate free cash. it would be one thing if they have unproven business model, spending hundreds of millions a quarter, burning hundreds of millions a quarter to generate that top line. you know, in q4, they signed $1.4 billion in annual contract value. that's as much as total revenue
12:45 pm
last year. we think it is one of the biggest beneficiaries of shift of all data work loads into the cloud. that's why it is the biggest position in the portfolio. we still like crowdstrike and others, but we're consolidating these prices into better ideas. >> lastly, i have to let you go. steve weiss photo bombed you in the back crowdstrike, i joked about it, why did you get out. josh is in and he talked about it a lot on the show. >> listen, crowdstrike is an excellent performer. a lot of the security fears associated with the war in ukraine, et cetera, as a portfolio manager, i have to look at things that have been hit harder that we like. maybe more on the margin, and we rotate dollars into those things it is a great business, will continue to grow, but we had a better idea. while we're on the topic, josh
12:46 pm
started the segment by talking travel stocks, i will tell you peter and expedia had a print today. the travel stocks outperformed all other internet stocks. if you look at the multiple on expedia or on booking, it tends to be higher than the multiple on something like facebook i think what you see today is people are just giving back because they're trading multiples. and a lot of other stuff in the internet sector. >> thanks for your time. you're a favorite of viewers especially a good amount of it brad, talk to you soon >> we'll take a quick break. what the committee heard from brad and what they think jon has unusual activity we'll do it next
12:47 pm
the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.
12:48 pm
12:49 pm
to the panel you heard that asymmetric risk is to the up side at this moment your reaction? >> i think he is right, scott, because of the investor survey we talked about last week, because sentiment is so negative that doesn't mean you load the boat, wait for up side pop, but i think gerstner is right. as far as travel stocks, i thought that the expedia numbers
12:50 pm
were horrible, by the way, josh. i don't think they were good at all. they lost three times what the street was looking for and they missed on revenue, too. but you can look over travel, tzoo, you can't just they were expecting 25 so, that's why it's down 15% it's not down 15% because they had blowout numbers. i can tell you that. but travel zoo t-z-o-o had great travel numbers i think brad is right to still bet on some of the travel stocks >> speaking of numbers paramount. farmer jim, you gave us your view going in. you were bullish i'm wondering what your view is now. i know, based on your twitter feed, you're still bullish but tell us why you're so bullish and the stock was off 6%
12:51 pm
off the print and it's cut those losses at least in half and it's not down 6% anymore. >> scott, it might bow helpful if i just explain why it's down today. if you listen on the earnings call, you would have heard the analysts and their questions, which were incredibly negative and short sighted. questions like how can paramount out perform when netflix is losing ads or subscriber additions and how much is paramount going to have is to spend to keep up with content? most of those missed the larger point. that paramount has added 11 million subscribers to just the paramount plus, let alone pluto tv, while netflix has been flatlining here. and on the spend, and this is is important to why i'm bullish there's positive free cash flow. a large cash balance legacy properties and content that will generate more positive
12:52 pm
cash flow that enables them to invest in the business they're clearly on target for their two-year ahead titles in streaming. and 9 billion in revenue this is a a clear case of the analyst community, come is out there with, after the call, telling all their institutional clients they don't like it it's a clear case of short sightedness on their part. they'll see it as an excellent opportunity. >> and unusual activity coming up next. (vo) verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more.
12:53 pm
(vo) this is more than just a building. you get up to 10 times the speed at no extra cost. it's billion-dollar views. perfectly located. an inspiration. and enough space to start an empire. loopnet. the most popular place to find a space.
12:54 pm
12:55 pm
all right. let's do unusual what to you see today? >> scott, fxi. so, the big china index. 18,000 of the july 31 strike calls were bought, bought, bought they were slight laein the money because the fxi was 3120 when they bought them second trade, proctor and gamble this is a down side trade. puts they were buying the june 165 puts with the stock trading 155.70 says to me, this shrinking the package to keep the price isn't working and maybe they're going to have to eat some of that, that they're putting out to consumers, rather than passing it along finally, let's look at the lithium battery play they bought 7,000 of them, made
12:56 pm
15 calls in just two and a half weeks, they think they could have a nice pop >> again, we'll do final trades next
12:57 pm
♪ ♪ bonnie boon i'm calling you out. everybody be cool, alright? we've got bonnie right here on a video call. we don't take kindly to video calls. oh, in that case just tap to send a message. we don't take kindly to messages neither. in that case how 'bout a ringcentral phone call. we don't take kindly to no... would you can it eugene! let's just hear her out. ha ha ha, i've been needing a new horse. we've got ourselves a deal. ♪ ♪ ♪ ringcentral ♪ this is not the stallion i was imagining. when my genetic reports told me about my heart health, i was able to take action.
12:58 pm
and i got a kit for my mom, too, so she can get her own meaningful health info. this mother's day, start a new health journey together with mom with $50 off every kit. we have big earnings in overtime giving a a new play it is book, not revealed until our program the stock was 164. it's now 90. are are these the numbers that
12:59 pm
get the stock back on track? you'll have to tune in to see the number and we lift some of the other big names that are out. stephanie link, you're up first. >> diamondback energy, great quarter, beat revenues and in line oil volumes and cap x but they increase the dividend and offered a special dividend as well their are returning cash to shareholders, like i like to see. >> and a reminder jeffrey is going to be with us for fed today. dr. j, geahead >> norwegian cruise line's 1950 puts that expire next week puts that expire next week >> paramount global. sflirlts the best trade i see right now. maybe that's because top gun maverick comes out later this month. not sure only eone of many reasons to own paramount. >> and again, it's well off its lows of the day.
1:00 pm
josh brown, what do you have >> carlisle group had very good earnings 300 billion in total assets under total management and the fee income on those assets is growing despite the lumpiness of dist rubougz i love this name 2.7% dividend while you wait >> i'll see you in the o.t "the exchange" is right now. thank you, scott hi, everybody. and the sharp rebound from yesterday's lows continues today. with the fed decision only 25 hours away a half point hike is widely expected one of my guests says don't rule out a 75 point base point hike down the road. and where you can find opportunities in the meantime. and housing affordability is at really bad levels historically as rates surge, riskier, cheaper loans are making the comeback. how will this effect the market and econom

92 Views

info Stream Only

Uploaded by TV Archive on