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tv   Fast Money  CNBC  May 1, 2012 5:00pm-6:00pm EDT

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3050 and of course we had a lot of data coming up this week. we will know what's going on. >> that are does it for the closing bell. thank you so much for watching. it's a pleasure. >> maria is back tomorrow. fast money starts now. >> i'm melissa lee and here are the top three trades. should you buy, sell, or hold right now. we are trading all the after hours action. trading the einhorn effect and the capital asks questions on the conference calls. wall street led on the black stone and joins us with the portfolio on stocks. describing why he is a bear. live in the market site and let's start trading and get straight to the rally in december of 07. getting close to a multiyear high. do you buy this?
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>> i think what you have to do is wait to see what you get in terms of job growth. when monday rolls around, you make a tomorrowation on what the federal reserve will do and how that will be the catalyst. a couple of things inside the market today, you can look at it. number one, energy. energy has significantly under performed over the last eight to 12 weeks. that's a place to look to. financials were strong and jpmorgan which i bought last week around 42.75. i don't think you can get overly excited until you hear what comes out on friday. >> i agree. the xoi is a good trade a week or so. if you look at the indeces, the trade here is really that the s&p starts to roll over a little bit. some of the europe starts to rally. the banks would be a major event. i'm not saying it happens, but
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there is a lot of talk that there is going to be a recap for the spanish banks. if that starts to get priced in, that's not great if you are holding them, but that's a very, very good thing for the rest of europe. the trade i think you continue to electric at that started to work over the last few days and it had pockets of working all year. you buy the multinational. the daimler numbers on the u.s. are fantastic. a lot of these are kicking it. great call by you. >> pat harrington. >> mckenzie phillips and know wo day at a time. she took a wrong turn here. let me close by saying i think the move in the market this year, the breath has been so light. 55% has moved this year and come from 30 stocks. you need see this broaden now. that's the place here.
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again, may day is low volumes and most are on vacation. we will see what happens tomorrow. >> bank of america up 2.5% and they cut about 3,000. elite high paying jobs. the spanish banks would be good for the likes of a bank of america and morgan stanley. these banks have traded on the woes and the fortunes of a lot of european banks. >> one of the big problems is it was the worst sector in april. down 2.3%. a big bounce there and a lot of hope as tim pointed out. the volume is nauseously low. a lot of people can pretend is doesn't matter. i think it does. you look at the dow and the s&p down from 14.15 to 14.05. they closed down on the day and if you go back to march 26th when a lot of indeces started topping out, the russell 2,000 topped on march 26th. that is down 4% from the top.
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there is a lot going on. >> i would push back on the volume. it doesn't matter if you are short one share or a million shares f there is one share volume, it's going to hurt equally as much. the volume thing doesn't hold a lot of weight. the options market has proven that. with that said in financials, u.s. bank corp, why we bring it up? it's trading at almost a-year high. this is a bank, folks. pushed up towards 33 today. not the beta name that the others will provide, but slow and steady wins the race. they continue to fire on all cylinders. >> in the financials, they perform a little bit. timmy was lost in the conversation today throughout the day. today is may day. tomorrow morning you are going to wake up and you are going to get the pmi from spain and italy and france. i think most importantly from
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germany which showed signs of beginning to slow. i don't know thaw get follow-through tomorrow, but tomorrow is an important day in terms of european. you got australia at 43.9. that is awful. they cut 50 basis points. you can't wake up every morning thinking the world is just the usa. it is interconnected and i agree that you will have to deal with europe. >> a cap like that, the australian rate cut to me is on the strength of the currency. the aussie dollar is not going down to 95 to the dollar which was a level that was falling off. that is choking and need to cut rates. they are uncompetitive and they love to have the experts that much cheaper for people to buy. this is not as much as the world is falling apart as they are
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under pressure and following the lead that others have taken. >> i want to go to after hours action. >> do it. >> chesapeake is one we are following after a big miss in the first quarter results and after the company's announcement earlier today that the ceo will resign as chairman. a new independent chair min will be brut in and they are searching for the chairman and the participation program will be terminated although not until mid 2014. that started this whole brouhaha. >> what's the trade? earlier today i guess it was announced that karl i khan added. he will be right or extraordinarily wrong. you can open up a colossal can of worms. >> it will still be the ceo. >> still have that. with that said, this is a 30
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handle or a $5 handle. i don't know what the answer is. i don't know. carl is getting involved which is an encouraging signs, but all points to something potentially catastrophic. >> i do not understand why anyone would begin to take a position in chesapeake. carl icahn is in and you don't have his bank account. if you see a significant decline, this is not like it's a solar space. there is other names. >> you don't think there is a possibility of what we saw yesterday with the upgrade and the good price action today is the bp moment in that the worst sentiment is priced in? >> that's a relief rally. you have got the irs and the sec still potentially there.
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50% ownership and chesapeake mid-stream. great play. the pipeline space. again, i go back to the natural gas space. look at the pioneer and the eog. look at the noble. these are the names that have solid balance sheets and you talk about the transition in the space from gas to liquids. why is it that chesapeake is selling off the prime assets of the liquid production. >> time is vice president and has a neutral rating. you downgraded the stock last week. i am wondering why at this point it is not a sell. why wouldn't you want to clear out of a name where the sec has an informal investigation. we are not sure if the shoes have dropped. >> there a couple of issues. can't ignore the quality they have. the clear liquids place in the u.s. and you have to have a base
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line support for the shares and the thesis behind is the headline risk is so substantial and so hard to gain at this point we feel it's proper for investors to step to the sidelines. >> do you have clarity to focus on those if they are based on it at this point. if there is a sub 3 future. >> we stretched our models to 250. we think that the 2013 spending plans are at risk and they will from have to transition into a preservation mode. they found they did not decrease spending outlook for the year. they did drastically decrease their liquid production growth and they increased the natural gas production growth outlook which we found interesting.
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>> we can't get above 2.45 and go back to 1.80, what then? >> they will have to pursue and cannibalize growth over a couple of years to erase any liquidity risk and what we need to understand and what i hope they will address is what is a true capex level and what they can survive on as far as minimum spending. if they end up being wrong and we don't see a return to a gas price environment over 24 months. >> you talk about the underlying assets, but how levered of a company is chesapeake and how concerned should we be? >> the liquidity risk is a 2013 event. they need to sell assets and given a range and baked into that figure is up sized and it's 11.5 to $14 billion this year.
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they need to create some extra capital for the 2013 funding gaps. that's where the issue comes into play. you are looking at a two handle on gas and they don't get the big prints we have talked about. that's where the concerns were. that would spook investors. >> just one last question. at what point will you say it is a buy again. we have seen the hit take place. it's under performing by about 20% since april. at what point is the all clear sounded in terms of headline risk? >> that's a good question and we will know when it faded into the background and i would note that the earnings they released about an hour ago were sharply below my estimate and the consensus. they are showing operational
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issues and making the conversion to liquids and becoming a liquids company. for once we can focus on the assets. that will be crucial to remove attention on the headline issues in corporate governance. that's the liquids growth trash we are getting. >> tim from stern ag. joe, you mentioned that you are scared about this? >> i'm confident that this is not a place that they should be. you have a company that is moveing for gas to liquids. why are you selling off the liquid production? it makes no sense. you are having liquidity concerns and there is plenty of alternatives in the space. pxd. pioneer natural. i mentioned it before. great names in natural gas and liquids.
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>> let's hit more after hours action. they are slightly lower despite estimates. first quarter earnings about 61%. it looks look about in line. john, why do you think the stock is soft? >> i think it's off because of a margin issue in the guidance. it came off the low when is they said they are seeing increased demands and customer interest based on qualcomm's 28 nanometer issue. we talked about it last week or the week before and increased demand and the customers don't want to put their eggs in one basket. the 5 g wi-fi. they should ramp faster. the end device won't get that until next year. >> maybe we can read in lateral
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thinkers. we knew because of apple's numbers that would offset the weakness from nokia. can we get a sense on what looked like destocking that settled in and giving the guys more of an uplift? can we get a read from the customer base on what they think they will see out of nokia? that's the place that the business is running into head winds. >> they did say that their business from nokia continues to be 2 g. the less sophisticated phones expect to continue seeing weakness in the current quarter and they expect 3g, the likes of samsung to make up for it and they expect a stable environment. the weakness and strength from the likes of samsung. >> the conference call. what happened with broad com? it is a supplier and the biggest to apple.
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>> the concern is warranted and broad com had to have the start to derek jeter had. the guy and i had to highlight. they need to hit it out of the park. 13% of the revenues are attributed and you have 35 million iphone. iphone 4s will work off the inventory ahead of the iphone 5. the need here for the chip that broad com provides will be lessened. that's the head wind that broad com faces. the great stock. >> research in motion shares are taking a hit. they are having a lowdown. also coming up, this friday is jobs friday. after the break, we will give you a break to set up the market moves and the vice chairman will be here to release the strategy on radical asset allocation. much more fast money ahead. #
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> let's take a check on trip adviser shares. up 15% in after hours. both the top and the bottom line. a turn around from the fourth quarter when they missed on the top and the bottom line. >> this is a spin off from expedia and you are seeing a lot of the click ad and display ad at 20%. this is well above what the street had been looking for. they ipo'ed back in december. if you are fortunate enough to be long on the stock, this is the sell the rally moment. otherwise i think you have got to wait for a pull back. >> let's move on in more after hours action. spiking with the estimates on both the top and the bottom line. the results were helped in part by mcgifer. >> you asked me to do the remake. >> the contract obligations. >> kudos to jpmorgan and upgrade
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the price target. with that said, great quarter. this is levels we last saw in 2007 in the stocks. be careful about getting along to cbs. the same valuation, i would rather earn dizzy me me in. >> they are earning a cbs show. >> of course. i knew that. way to connect. >> kicking off the blackberry world developer by unveiling the company's latest operating system. so far they seem unimpressed suffering a sell off with the session. too little, too late. let's bring in the blogger with editor in chief of the boy genius. it's always great to see you. from what you saw, you think rem
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is dead? >> no other way to say it. i love the company, but they are not doing much. two years since they performed the basis of the new operating system. they only showed us three screens. they are really just not that interesting. they are not that different. not much differentiation. you have to look at when they are coming out with the first film. that's around october. i reported that. what's going to be around in october. you have a new iphone. they have the head winds that they will not get through. >> you have not seen the prototype yourself? >> i have not. >> just curious. that makes a big difference or it could. >> let's take you to the other side. you know you are a gadgety kind of a guy. this stock is cheap and we don't think it's that cheap, but at what point do you think this will go back to a take out play? people are looking at the
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enterprise value and the patent of this company is saying they will not grow internationally. all the places where samsung and apple say they have got growth, no one is even going to touch them over there. where do you go? >> what are the patents worth? even at a $10 billion valuation, they toor expensive for someone to buy. there were rumors that microsoft is poking around. they had high levels of samsung. they didn't go anywhere. what is the real value. is it the ip and the infrastructure and all of the things they have done so well are not useful anymore. the security features and network is not such a big deal with the iphone and android. what do they have? a plastic keyboard? that is what they are used to. >> that's why i chose one over.
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>> everybody here on the desk probably has one. this guy has a tin can. >> speak for yourself. >> we want to go out to play the role of the contrarian. you think it could be a take over candidate? >> i do. i don't own the stock, but i have looked at it. i think what you have to focus on is that the new ceo changed the culture of the company not all the way, but the company never before would have been this open about a new product. maybe they gave it out earlier, but that's to give developers signing up and creating product for it. i think what we have heard from boy genius is boy tech genius and that's what everybody knows. the opportunity is on the upside and you have a good opportunity to get in and a speculative part of the portfolio. they have only been in. >> they were in charge of all of
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blackberry north america for four or five years. he was responsible for the sales problem. mike is still on the board and still vp or directing the strategy. jim who was coceo left because they would not take into account the new strategy that would have been smart. the licensing and bring bbm to different platforms. that was a great strategy. >> the other side of steve, wall street thinks they are valuation geniuses. they are littered with cheap stocks getting cheaper. if you have the seem team and same product, is that until you show me a product? >> absolutely. i want them delivered and up until this point, all they do is promise and promise every year. amateur hour is not over. >> jonathan, we have to leave it there and we appreciate you coming by. the boy genius reports. they estimate for the first quarter, smart phone shares by rim is down by 50% year over
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year. >> ouch. >> enormous. i think it goes below ten. when you look at the ap business, 500,000 aps. apple 600,000 aps. rim is 10,000 aps. >> if you look at the paint on the chart, so many people have been drawn in. it seems like because it's a low price t moved a buck. this is swinging in 20% moves and people are getting taken out. people are buying option buying on this thing. they are people that hurt the most because it seems like a cheap way to do it and they wasted their time. >> going out to mike at the options desk, what are you seeing? >> it's interesting because there a lot of bullish activities. people hoping that people may rescue the business and they all but give occupy this. they are taking the other side. up until january, you saw that speculative call buying and open interest of more than a million contractors. they have gone out of the name
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and now that open interest is less than half of what it was. i think they are really giving up on the possibility. >> let's move on. the traders are expecting increases as they move closer to friday's data release. let's get the best move and let's start with that. you are expecting a big move up or down. >> i think there is just a tremendous tug of war going on in the market place. you have a friday's jobs report coming out. try to figure the direction of the market and concur it with what the results will be. i don't think anybody knows. the jobs report on friday and the market goes down. one way or the other, i truly expect that the next couple of days will be the busiest days we have seen so far in 2012. how you play that is buy volatility and puts and calls in the form of a straddle. you know what your downside is and it's not as if you are
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selling a premium and have risk. your risk is well-defined and you are in essence, the play and the belief is the market will be busy. it will move one way or the other, upside or down significantly. >> you are expecting down? >> i am agreeing with joe. if the number is bad, everyone is begging bernanke is going to be out there on friday. you don't know if bad is good or good is bad. you will test a new year to date or looking at 1360 your eyes wide open. >> real quick, why will it be such a busy day in markets? volumes are dead and most will go away. a lot of people have gone away. >> when you use the optics that i am looking at to borrow a phrase from you, the downside potential is significant and the upside if you break out to new highs, pms are under invested. they are short right now. you are going to see a little bit of a chase performance
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because it's counter to the thesis of sell in may and go away. >> at the same time you are buying tlt ahead of the jobs reports specifically. >> the easiest thing to play in a bad jobs environment is people shoring them. >> there is the trade there. 116.22 is a level that you bought. taking a break and coming up, the latest developments straight from the conference call from an analyst who has been listening in and asking questions. the trade today for the biggest earnings report out tomorrow. stay tuned. zap technology.
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money. new york's times square. let's respond. david bertrand. we have a question for guy. take a listen. >> just wondered since the s&p didn't break the levels and brings them into a bear market, what's the outlook. appreciate your comments. >> the man has a lobster on his chest. >> of course. that's what the pets are. >> a plastic lobster? >> they did if you top the know the truth. >> it's not red because it's not cooked. >> just because the guy is from maine -- >> he has a lobster. >> like fred schneider right there. i'm answering the question. what was resistance is support. we found that and we approached it for a couple of days, give or take. that was the level we bounced from and never made the reversal
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date for the month. we take a shot at 14 and 1/4 and if we don't breakthrough, you better watch out. say hi to the lobster. great pets. >> next is broad composting first quarter eps and after the bell today, let's bring in shaw on the fast line. on the numbers, any highlights that changes your mind on the stock. >> we still like the stock. they had good numbers in the guidance. the core business is growing in the quarter and that's due to wireless. that's in terms of the guidance.
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they are working through iphone four and likely be a new phone that will launch in the summer or fall and broad com should see strength on it. >> for the last years, it's been basically a sideways to slightly higher stock. granted the range has been wider than a lot of the names whac. what takes broad com north of 40? >> there was potential to earn around $3 in earnings in 2013. there is 15 times and that could be a $45 stock. pay are joiningous the fast line. visa and mastercard reporting quarterly earnings and we go to options action and get the trade
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for mike. >> it's interesting. visa i think partially for the things that joe was touching on earlier, we have a lost geo political global macro concerns. consequently the options markets are suggesting the average move that is about 3% on earnings and that's what the options markets imply. they are implying over 5%. in these situations, you want to sell the expensive options specifically what we are looking at is a weekly june callentar call spread. you want to sell the calls and you can collect about $2.90 for them and buy the junes. that's a net debit of about $1.80. that's a good way with the near dated options that you won't see in the longer dated ones. >> i mean i think visa because you have more clarity because mastercard is before. all time highs today and names we have talked about forever.
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they will continue and even if they missed tomorrow and the stocks go lower, they are screaming buys. >> you hope they miss and the name would be mastercard and i love the aggressive buy backs. they are halfway there and revenue is 12 to 14%. that's a name you want to look at. >> every friday at 5:00. follow the show on twitter and get constant trade updates. black stone reveals why he thinks the s&p is headed to 1500 by year's end and give you a strategy for investing radically after this. this is $100,000.
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we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.
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time for fast money portfolio where it means the black stone advisory partners and the world's largest private equity firms with $190 billion in assets. this is the year to be bullish on the markets. in fact he has a 1500 target. he tells us which sectors will get us there. great to see you.
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welcome. 1500 on the s&p 500. what do you need to see that will get us there? >> the economy will be better than they expect. the 2 preponderance 2 was disappointing and the heist sector was down 2.8 and the government sector was weak. isn't that what we want? the private sector will be forging ahead. i think you got a stronger than estimated bmi and you definitely -- there is definitely sign that is the economy got momentum in it and i definitely think the economy can grow 2.5% and s&p 500 will be $100 or more. they sell it 15 times and 2% long treasury market.
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that's how i get to 1500. >> let me ask you the $64,000 question. how does the s&p get to 1500 below 2%. we have to see that massive reallocation? >> we are beginning with bonds. the 2% is a result of fear around the world. the people are afraid because of the nuclear reeblthor and afraid in china because of the banking system and the real estate conditions there. they are afraid in the middle east and in europe because of the sovereign did debt. money is migrating and parking itself, not investing, parking itself in treasuries. as people become more comfortable in risk assets, they will put more money in equities. they stopped putting money in bonds. they haven't bought yet, but that's yet to come. we will see a little bit of it. >> one of the big mistakes
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people make is buying into the idea that growth could exist. how contingent is the high price with a lower one where the market goes from here? >> i will be humiliated by this. i think the price of oil is peaking. there is a premium in the price of oil and i don't think that you are going to see israel's strike. my feeling is that there is a game changer going on and there will be 500,000 barrels a day produced back in the oil field. how many of you are aware that they will be the second largest oil producing state in the country. most people or at least i would have before named oklahoma or louisiana or some other place. if that's right, if the oil field produces that kind of oil, the price of oil comes down, not up.
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>> even if bernanke burns the dollar at the stake? the price of oil, last i checked there was nothing and oil ripped. >> i know. what is mario doing in europe? the dollar is a relative currency and doing the same thing in europe. >> want to ask you about the radical asset allocation. that caught a lot of attention and this may be the most ab kabul to high net worth individuals. to get the idea, 10% is the multinational growth. 15% emerging markets. any investor can be in. can you elaborate on those two? specifically, the markets are a bigger allocation than stocks. >> very few. >> totally under performed. this is a gutsy call. >> they have under performed for the last two years and they are starting to do better. some of them are. emerging markets are 37% of
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world gdp and 75% of world groerth. the markets have been terrible, but economies have done well. they will get more as time goes on. >> a pleasure to have you with us and come by again. >> thank you. >> pf chang's goes private. who else can be right for take over when we come back. ♪ ♪ here we are, me and you ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪
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♪ oh, oh, all the way ♪ oh, oh the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful.
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he would never give up on any of us. pandora rocks the big board.
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the sale later this year. they got pure play of stock. >> good question. we want to thank art matters for sending us that. what his real name is, i have no idea. the big key is here. one of the biggest producing and potentially producing gold mines in the world.
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i think you have to believe in that story to really love this stock. the question is probably a question for goldminers in general. i think we have seen a price flip. this is a trade that i was in for a while. we cut the positions and we are still in gfi. a lot of the moves were liquidation going in the third quarter and valueations-wise doesn't matter. i don't follow this this company as closely, but the asset is what people want to buy. >> a huge holding. paulson's made obvious mistakes and this is one of them. if you buy something this liquid, you better be right. you have to be right on it. you can't get up. at the end of the day, you have to have a few on global growth and the price of gold. those are three big things and if you are bearish, you shouldn't be long. >> they traded $20 million. is that a liquid? nova gold? for john paul to get out that
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much in a day? >> on top of the fact that you have to get out. it's not going to be pretty the minute he makes his first sale. >> we have to move on, but we should tell you that you can get your 15 seconds of fame just like art matters by logging in. use the hash tag, ask fast. >> 30% premium to the average april share price s. this the beginning of a restaurant buying blitz? nicole miller regan who joins us on the fast line. great to speak with you. i want to start with two companies that did see huge pops on the back of this with a thought that they are perhaps next to be bought out in some fashion. cheesecake factory and red robin
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gourmet burgers. your thoughts on whether or not those make sense. >> i think the short answer is yes and what investors are looking at is that they have the opportunity to grow their base and they sell products on a licensed basis. that's very attractive for the equity group. >> the groups will get the cash flow. >> they are looking for non-traditional segments of concepts that have brand ek widy and that might be capped out in terms of current. >> let's go to the coverage. chipotle mexican grill. they have been going on this for $200.
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is it till a buy? >> absolutely. that is not the right bear argument. there is not one frankly. they continue to execute. when you continue the premium and draw the wear lels, you draw the high unit growth and the high comp growth at chipotle, they continue to trade at a long time. >> we're showed a graphic showing fewer publicly traded companies out there. there was a shortage for them to get involved. what does it mean? does it give them a floor on the stock prices because there not as many share to invest in? >> there is something for everyone out there. that lack of supply on the publicly traded kind of thing will support for premium or multiple expansion and even as earnings go higher as we enter this recovery phase, multiples
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expand alongside the higher earnings. >> steven weiss? >> first of all, i have never been a believer. just reasons to own an overvalued stock and secondly, i think that buying a stock because one company got taken out and i think the others will. that was one of the worst reasons to own stock. no real scarcity value. it's not a big portion of the s&p and you have taken a buyer out of the market. stick to the fundamentals and forget the take out stories. >> word to you and let's say somebody does, what's the top pick? >> it's the year of the restaurant and there is something for everyone. we would agree to focus on fundamentals. starbucks has a phenomenal buying opportunity. >> thanks for your time. starbucks. you like it? >> we talked about that. it's an opportunity to buy and i
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love people with three names. never discount somebody with three names or name like socrates or richard dean anderson or nicole dean reagan. you don't mess around with them. >> much more fast straight ahead. get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past.
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i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.
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>> welcome back. we are taking a look at charming shops. a nice spike to buy for $890 million. we also want to get a trade update on genworth financial and the buyer had earnings. >> we're talk about this with the lousy performers. it's surprising because the u.s. delinquencies and the mortgage insurance is lousy, but getting better. it will probably be the final trade again. >> we will see. that's tomorrow with the final trade after this. auto-bliss. with rent2buy from hertz car sales, you skip the lots... and pushy sales people...
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time for the final trade. >> aig. >> mike? >> chevron. >> tim seymore. >> back to brazil. >> go with the genworth again, babe. >> steve? >> back to shorting france. >> nova? >> casual dining space is in the sweet spot. if you are watching the hockey playoffs, they have been phenomenal.

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