Skip to main content

tv   Street Signs  CNBC  October 23, 2013 2:00pm-3:01pm EDT

2:00 pm
>> what a fun hour we've had. marcus, profit putting $50,000 in orders on-line for that dguy with the camp stove. >> it's been a lot of fun and you know the power pitch it's fantastic. keep watching cnbc. "street signs" begins right now. >> the finals coming up later. see you tomorrow. >> so much natural gas being produced in north dakota they have to burn off the excess, called flairs. see them all over the skies at night. welcome to a special "street signs" all part of america's power play. we have come from midland texas to here in williston, north dakota to tell the story of a bakken shale. if you thought you knew the numbers, i want you to think again. take a look at this. average daily oil production ten years ago, was under 2,000 barrels a day. today, it is more than 900,000
2:01 pm
barrels. 50 years ago about 30 operating oil rigses. right now more than 6300 and that number projected to keep climbing as long as oil stays high. it is a boom unlike i have personally ever seen. there is growth everywhere, mandy. this is truly i think reminiscent of san francisco and how it must have felt in 1849. >> old booms turns to busts. we hope that's not going to be the case with this boom. back to you in a second, brian, but i love the fact that no matter where you go on location you always somehow end up in a bar. good for you. you have quite the gift. back to you in a second with more on the bakken boom time. caught up with all the headlines in the market. three big ones today. first of all, catching breath. today is the first time in five sessions we have not had a record high for the s&p 500 and with today's drop, all the major averages risk being in the red for the week.
2:02 pm
earnings roll on. cat ter polar reporting a miss and about a third of s&p companies out so far, 66% beat profit expectations, slilly higher than average. roughly 54% have beat on revenue which is below average. and gasoline futures hitting the lowest level this year as oil prices move down. the national average at the pump is 3.34 a gallon and gas buddy saying that could drop as low as 3.15 by christmas. i say that is a gift. talking of gas. back out to brian. >> the gift of always finding the best bar in town and that is a gift i think i was born with. it is genetic. talked about energy prices and that's what you know of the bakken. we talk about oil and gas, cnbc talking about it for years. so why are we here again? things have changed and there are so many other stories to tell around getting wealthy and successful in this area that are
2:03 pm
certainly revolving around oil and gas but they are not directly tied to oil and gas. for example, real estate. there's a guy we met yesterday when we landed who lives in brooklyn who comes up here a couple times a month developing i'll call it real estate but see for yourself and if you thought housing was expensive where you live, america, i want you to see this because you may not believe it. >> what brings a brooklyn guy to williston, north dakota? >> this is where the opportunity is. the oil is here. they didn't discover oil in brooklyn so i had to come where they discovered oil. >> these are men who live here and work the oil fields, right? >> oh, yeah. this is typical bakken housing. they're here. completely full. if i had another 30 spots i could rent them out before i was done sooig signing the papers. >> what's a spot like this go for? >> each spot is about $800 per month. >> $800 a month.
2:04 pm
>> yeah for the spot. >> that's their own trailer. >> that's if they bring their own trailer. if we provide housing like we do over there, that's about $2500 to $3,000 a month. >> 2500 to $3,000 a month for essentially a mobile home here. >> yeah. cabin, two bedroom cabin in an rv park. >> i mean, are they happy to get it? >> oh, yeah. i'm completely full. as i said, if i had more i could rent more. my only limitation is just inventory. >> so i'm going to assume this piece of land here, you can see there's still an open area here, is pretty profitable to you. >> it's been the best investment i've ever made. the entire bakken has been just both enjoyable and profitable. >> could you buy this land now for what you paid for this when you bought it? >> nop. i've only owned it since last november and it's -- i don't know what it's worth but it's gone up maybe 50, 100, 200%. it's hard to tell. >> any concern that boom is
2:05 pm
going turn into a bust? do you worry about it at all in. >> i worry about it because that's my nature, but logically i don't have a concern about that. anybody who's been here knows it's not going to end. >> see if you market it as a cabin, instead of a mobile home, i guess you can charge more. listen, i live in the swamps of new jersey, you're a high manhattanite on a square foot basis those guys are paying more than you probably are in manhattan. >> i've got a question as for you, brian. am i guessing correctly those mobile home towns that you just showed us here, they're largely men? what's the ratio of men to women out there? >> i've heard it's nine to one. our flight up here from denver we had to connect through denver was 100% guys, with a lot of these housing developments they call them man camps, i'm sure they call them man camps for a reason. the hotel that i stayed in last night, couple hundred bucks a nice, perfectly nice may place, like a hampton inn type.
2:06 pm
down a dirt road. they built the hotel before the road out. they need the housing so bad. >> yeah. incredible stat. you have lots more for us and a special interview right now, right? >> yep. mandy, thank you very much. you always talk, kind of joking i find a bar. happened to find the best one owned by marcus. come here. marcus is the owner of this place, the williston brewing company, owns four restaurants in town. did not know this, he is the founder of publicly traded kona grill and lead early investors in cakara but coffee. you live here in willisen ton. what do you make of the boom? >> i think this is the most exciting city in america despite silicon valley. it's the land of opportunity. i came up here three years ago and went back to minneapolis and i decided that i didn't want to be 80 years of age look back on my life and i didn't participate in the greatest thing that's happened during my lifetime.
2:07 pm
>> i'm going to gis you founded or help co-founded a couple publicly traded companies. i doubt you need to work, opening a restaurant like this, a lot of work and stress. why bother? do you see the opportunities that big here? >> i was here three years ago on a monday night and waited two hours to get a table at applebee's. >> monday night two hours for a table at applebee's. i have a bunch of friends in the business, i called them and said you have to get up here but come up in january. i got them up in january and looked at each other and said we have to do it. >> you're going to keep expanding here? >> we started williston brewing company and our goal is to make it a national chain. hopefully in 20 years you won't think of it as a place of oil but a restaurant city. >> mandy, one thing you don't see in manhattan restaurants, this is -- the prices are manhattan prices. i mean that with all due respect because people can afford it. this is probably the only restaurant i've been to where the owner, these are his, okay.
2:08 pm
he didn't buy them either. >> i saw you tweeted out, that's being delivered. a picture of you seeing that being delivered. you don't see that every day. a moose head being unwrapped from its glad wrap. >> the moose head is gigantic. we have elk, caribou, all the things here. it's a little bit of a different flavor but feels like new york in north dakota. thank you for having us. >> thank you for coming. >> i'll drink one for you later but we have a show to do. >> i prefer you to drink two more me. more two than a one girl. okay. >> we have more coming up. in fact, we're going to hit some of the stock stories. don't want our viewers to think we're ignoring the names. street talk a special bakken edition. >> you understand correctly. >> carl icahn nailing his netflix trade. what is the next perfect trade? we've got picks coming your way and later on, eureka, the gold rush is on from todd hoffman from discoveries gold rush
2:09 pm
joining us when "street signs" returns. don't go away. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪
2:10 pm
2:11 pm
news alert out of washington. to eamon javers. >> hi, mandy. an unusual denial here from the white house just within the past few minutes or so, and an unusual situation involving a personal phone call between president barack obama and
2:12 pm
german chancellor, angela merkel today. the white house denying reports in the german media nat united states was involved in spying on angela merkel's personal cell phone. jay carney said the united states is not monitoring and will not monitor the communications of the chancellor. nonetheless the call prompted by reports in the german media from the chancellor of germ my to the president of the united states today. german spokesesman said that merkel made it clear to president obama in the phone call if the information proved true about the spying allegations, it would be completely unacceptable and represent a grave breach of trust. those comments from the german spokesman to the reuters news agency. the white house denying the united states is spying on the phone of the chancellor of germany. back to you. >> thank you very much for that alert. guys, get out your pencils and paper because we're about to do some math. carl icahn announced he sold 3 million shares of netflix about
2:13 pm
half of his stake in the company. he bought the stock at $68 a share and sold at $334. it has been called the perfect trade. anyone could pull it off. so, what is the next perfect trade? let's bring in paul hickey, co-founder of the spoke investment group and patrick, portfolio manager at brandy wynn global. we're not going to get into whether or not there is the perfect trade. people never buy at the bottom and sell at the top. want to get to you, paul, first of all. are there a couple stocks you think would be ripe to sell and make as close to a perfect trade as you could get? >> well, yeah, hey, mandy, two of the stocks, of the top performers in the s&p 1500 this year, two names that stand out are my con and yelp. micr micron, has been driven by a fire at its competitor which has
2:14 pm
created some shortages in the sector and improved pricing and, you know, as that eventually will be worked off and we know in the tech sector and seen too many times throughout history, shortages always lead to gluts in the futurep what's good now is poor for rising in the future. and at 70 times earnings, micron even for micron it's a pretty steep valuation to i think you can see some give back here. >> okay. 160% year to date gain for micron if you sold it would not be a bad trade, maybe a perfect trade. patrick taking other side and looking at some stocks that perhaps for a perfect trade would be ones to hold on to. like what? >> yeah, that's correct. here at brandywine we look for things undervalued and the two stocks i'm going to stick in tech like paul did. the two stocks i'm going to throw out in the hard drive industry, it's an industry consolidated the stocks are up a long way but still think there's
2:15 pm
room to run that could be seagate technology and western digital. the hard drive industrial is consolidated both stocks are still cheap, fairly low pe. they're returning a lot of cash to shareholders in terms of buybacks and dividends and when we look ahead we see growth in game consoles, both will have 500 gigabyte drives, enterprise servesers. the stocks have skepticism, people think pc sales are declining but at brandywine we have the view there is going to be growth to the industry, the stocks are cheap and more importantly well managed. >> holding is easy. >> those are things we still think -- >> holding is easy, right and knowing when to sell is a tricky part. when would you press the sell trigger for those two stocks? >> yeah. we still look and say these stocks are still at ten pes on forward, 30 to 50% to run, earnings will be better than expected so on the good news side we think if things play out
2:16 pm
the way we expect them to, a fair amount of upside and a ways to go and are up a lot. we've held it for quite a while. that would be a perfect trade. things on the downside are if game sales, new game console sales are worse than expected that would be one thing or the growth of the cloud, enterprise servers slowed down would be another trouble sign. for right now we think there's not a lot of high expectations and the stock still looks like good holds from here. >> really good holds would be your perfect trade. paul one more stock, yelp up 250% so far this year. but it's a momentum stock and could fall quickly when it does. so, what are you going to do. >> yeah. yelp trades at over 100 times 2015 earnings so i mean you can't look at it on a valuation perspective. with the momentum stocks you never can. primarily thing to do is look for when they start to show signs of breaking down. on friday the stock closed at a new high and then in the next three days it's been pulling
2:17 pm
back consecutively, falling below the breakout point and, you know, it's a name we sold earlier on the week because it's showing signs of faltering and have an over bought market so you could see profit taking. a name some sentiment around it as far as the quality of the reviews is being questioned now, and it's becoming -- people are comparing it to say like the yahoo! message boards on the stock, it's all promotion and not a lot of substantial on them. it's a name that we want to -- we would be cautious of here. >> understood. thank you very much, paul and patrick on the perfect trade. herb, bring you in here. you've got your own personal take on all of this. ale going back to my original question to these guys. maybe the perfect trade is not really exist. >> well, there is a perfect trade, mandy. the perfect trade is all about making money. if you can make money on a trade it's good. that's what's changed. people are not talking about having discipline.
2:18 pm
where's the discipline in the market. where's the point where people said i have a stock, going up 20%, i'm going to sell it. at the point where people are basically the green has taken over. talking about let's just -- i will pull one more time on slot and get the cherries all come up and be a big winner. that's what's happening with these stocks. it's like going to the racetrack. you've gone down to the pad do dock, the horses look good and it falls back. >> can fall back real quick. >> i've seen that happy. happy to take the profit on the table and not be greedy. you have to do it. have to leave it there. >> sure. >> thank you very much. still ahead, big machine battle airplanes versus bulldozer edition. boeing, right, on one side, whether you should be buying on boeing, caterpillar and get your pick axes out because the guys from the hit series "gold rush" are digging it.
2:19 pm
the star of the show is here. we're going to go back to the bakken with brian. you're watching a special "street signs" here on cnbc. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade-proud to be ranked "best overall client experience." sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
2:20 pm
cme group: how the world advances.
2:21 pm
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. i would like to show you
2:22 pm
what's going on with google at another all-time high. today up by another 15 bucks at 1022. it's up 44% year to date and if you bought in at the ipo which was back in august of 2004, guess how much in percentage terms it's up since then. over 1,000%. it's been a gad investment for some people and once again it is up today by 1.5% at an all-time high. let's take a look at what's happening with gold prices. bit of a different story than from google. losing steam following yesterday's surge. i want to get to sharon epperson and find out what is going on with gold. >> we're looking at profit taking in gold after gold prices hit a four-week high yesterday and a lot of traders say there wasn't much news to move gold today. so we saw gold basically just about $10 down from where the highs were in the previous session. we are looking at the movement in exchange traded gold funds and there we saw inflows
2:23 pm
yesterday, the biggest inflows in about two month's time, not a ton of inflows but they were there and we did see at love outflows out of that market. traders watching the demand for physical gold. the wedding season so that is a key determinant. they're keeping their eye on the other precious metal silver, because it has been outperforming gold and something traders are watching. key technical levels they're watching as well, the 23, 25 levels for silver one they say is the one to watch. back to you. >> thank you very much. forget the profit taking for a second because gold trade is on, at least on tv, and that means the guys from discovery channel's "gold rush" are back. this season they're heading south, really south, hitting the jungles in south america to mine for gold. and hopefully a big payday as well. joining uss is one of the stars of the show. i believe you're going to be braving snakes, braving quick sand and malaria and deng you go
2:24 pm
fever. hope it's worth it. >> you're reminding me of things we went through and, you know, what you're going to see starting this friday, again, you know, here i am in new york, too. brian, now he's in north dakota. i came here to be with brian and now he's gone. hey, hey, friday, you know what, the big journey begins again and, you know, we're ready to take it off. you're going to see things in south america that we do that's literally you've never seen on tv before and, you know, snakes and things like that and all the dangers. it's all part of it. >> todd, i am here for you, buddy, here in north dakota. you're welcome any time. you have the beard for it. >> right here. >> bigger risk, snakes, quick sand, witches, isn't falling gold prices the biggest risk you face? >> the falling gold prices like around here, i don't buy, you know, particularly gold shares or things like that on paper.
2:25 pm
you know, obviously i'm going for the actual metal. i suggest that, to get the metal in your lands and be able to hold on to it. but when i was in south america and i could -- you know that first bump we had where the price started coming down, you know, i could actually feel the country, you know, which is about 50% of all their income coming from mining, i could actually literally see everything get tense. i felt the situation starting to get more dangerous. and people just got a little more desperate. so, you know, we can kind of, you know, take the ups and downs, but in south america, where these guys are living, you know, hand to mouth by the gold industry, it got dangerous down there when i saw that first blip down into the 1200s. >> you know, todd, i don't care if it's gold, it could be oil like here, any commodity that booms, people rush to where that is. you've seen it first hand.
2:26 pm
you have a 1-year-old kid with you. what's your advice to people that want to take advantage of a boom, like here for oil and gas. >> obviously, you know, you want to jump in and get in early. you know, a lot of times when you read history and look about like gold mining or even in the oil business, you know, there's the businesses that like you just talked to that gentleman with the restaurant, there's other supporting businesses and a lot of times those guys made a lot more money than the actual guys drilling the oil and drilling the gold. so there's all kinds of ways to make money. you know, in a boom. but actually going for gold, i don't suggest tell everybody hey, you know, sell everything you own and go do what i do. the chances of making it in gold mining and doing what i do is less than 5%. and, you know, so that's scary. you have to be very, very careful when you have a boom, but if you're smart, there's a lot of millionaires made by
2:27 pm
going after booms. >> and they're here. you got a pretty big brain underneath that hot, todd. not letting the beard fool us. good luck in the debut. appreciate it. >> thanks for having me, guys. >> all right. well i would like to talk more about google since that is a stock on my stock draft team. coming up after the break the bakken shale version of street talk call it bakken the walk, five names you need to know about that are players here you might not have heard about it. a long distance bakken shale street talk when "street signs" returns from williston north dakota and inglewood, new jersey. which is more dangerous? you vote. williston. ♪
2:28 pm
[ bell ringing, applause ] five tech stocks with more than a 10%... ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.
2:29 pm
2:30 pm
it's bakken talk time. some of the biggest companies benefitting from the bakken boom. brian, i want to kick it off with the biggest land holder in the bakken called couldn't nenl resource -- continental resources. >> here we go. continental resources 1.1 million leased acres, kind of a huge player here but quiet. we've talked to people and said not a company that talks a lot.
2:31 pm
little battle on the street, goldman sachs with $130 price target but cancourt downgrading the stock. has been a big runner year to date although down today. >> okay. next up two former oklahoma gas partners, oke and oks the tickers. going to put you to the test again. what do you know about these guys? >> i know that i threw bun oak in here because i saw one of the trucks driving by. one oak partners is their pipeline division and they own about 43% of the company. separate but related. they threw them up there today. expanding their pipeline presence. one of the big things we'll mention another name in a second getting all the oil and gas from here out of here, oneoak and oneoak partners in the business of doing that. that's a name we don't talk about a lot. >> oneok up about 30%. >> railroad play, getting in and
2:32 pm
out, we need the railroads. canadian pacific a stock we need to watch. >> exactly. we kind of threw this in on the back of oneok and the pipeline business. getting the stuff from here out of there, canadian pacific decent day. one of the biggest railways around this area, in the business here of getting stuff out from where we are. they're the biggest rail player that gets the liquified and natural gas out of here. this was a big -- i know bill ackman has taken his lumps. this was a play a year or two ago. watch canadian pacific. trades in toronto and new york. >> talking of canadian, a energy delivery company, another one on our radar. >> i knew of enbridge, surprised to learn this has the most miles of pipeline in north america, canada, also here. 13% of canadian oil comes into the united states comes in through an enbridge prip. they're planning expansion around here, fort mcmurray up in
2:33 pm
northern alberta to edmonton, canada. down today but a huge pipeline player looking for the delivery of oil and gas these are the names you need to be focused on. >> our last name, kind of an iro irony, under the radar names on "street signs" are really good performers as well and this is the best performing bakken related stock this year. it is pdc energy. >> yeah. not a name i had heard before we started doing research for the trip on here. stock down year to date, up 105%. stock one to watch as you pointed out. one of the under radar name. if we could do a "street signs" for an hour we probably wouldn't have time to get through the names here and the basin. we ask what we could in the time allotted which what is street signs is known for. we do our best. >> we talk for an hour only all my dreams answered at once. go and have a sprite, nothing too hard. back to you after a beverage. call it the tale of two dow
2:34 pm
components. caterpillar and boeing reporting q3 earnings today. boeing beating estimates sending its shares to new all-time highs. caterpillar shares tanking after a miss. are these results painting a picture about the state of the economy and which company might be a better buy for your portfolio. start talking numbers. on the technicals, rich ross, and on the fund mentals, john stevens stevenson. john, i want to start with the fund menls. what do the contrasting results say about the economy and which do you like better? >> well, it says that the economy is getting better because it's a story of two cycles. one is the uptick in the aerospace cycle and seeing aerospace orders increasing by roughly 16% for boeing and while it has a higher valuation than cat, it's very strong. it portends well for the u.s. economy. the company has $14 billion in cash and that's going to come back to us as shareholders in dividend increases and special share buybacks. i think this is strong and
2:35 pm
really highlights the fact that the world is coming off a dark period and things are looking good. i think you buy it all day long and this is positive. the other side of the story is caterpillar. it's a story of a cycle turning down, where the cycle is turning down in mining, global infrastructure, power systems and that's why the company disappointed. and will continue to disappoint. it has too much inventory in its system and that's another thing holding back the name. >> one of the biggest decliners on the s&p, down about 6%. rich in terms of the charts which ones has the healthier chart some. >> look, boeing, planes, trains, automobiles have been hot this year. the transports, the best performing major index here in the u.s. i'm not going to chase boeing up here, too rich for my blood. you want to be taking profits. the stock you not only want to be taking profits and selling or selling short is caterpillar. bring up the year to date chart this stock never had a chance, down 20% before opening day. trade sideways in the well defined trading range. 80 on the low end, high end $90.
2:36 pm
today's breakdown. when we look at the weekly that's where we run into trouble. you can see the sinister double top which has proceeded significant declines in the past. history repeats itself and also see a textbook descending triangle, a bearish continuation pattern to the downside and we've broken below the 200 week average for the first time in several years. that tells me this stock is going lower we could see a stock in the mid 90s, seller and short seller of caterpillar. >> a bearish case on the cat. thanks to both of you for joining us. check out the on-line edition of talking numbers on yahoo! finance. also still ahead, we're playing favorites here on "street signs." america has a love affair going with this behe must from the lone star state. find out who it is. and ding ding ding, round four of our power pitch tournament of champions, closer to crownsing the winner. bill, what's coming up on the "closing bell."
2:37 pm
>> we will crown the winner coming up. thank you. meantime hedge fund manager mark spitznagle reportedly made a billion dollars in the stock market crash of 2008 and he thinks we're on the verbal of another major -- verge of another major sell-off, how you can protect your money in the meantime. dallas mavericks owner mark cuban back with us, who is a bigger thorn in his side. nba commissioner david stern on the s.e.c. you won't believe what he has to say, maybe you will, it is after all mark cuban. maria and i look forward to seeing you at the top of the hour. mandy is back with more "street signs" after this. stay tuned. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action.
2:38 pm
tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. (vo) you are a business pro. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle...
2:39 pm
and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. the ocean gets warmer. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment.
2:40 pm
it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon. it is time for the power pitch tournament of champions. all day today on cnbc six start-up founders were given 30 seconds to power pitch their idea to the world. three founders have been sent home. three have made it into the finals competing head to head to become the power pitch champion. the competition has one ultimate judge, investor and millionaire mark, the host of cnbc's prime
2:41 pm
time series "the profit" and he is here and going to take it away. over to you. >> thanks very much. look, we've had a lot of fun today. the two of you were in earlier rounds and some of our viewers haven't seen you yet. you know on my show i focus on people, process and product. both of you know that. we're going to dig deeper into some of the things i asked earlier i didn't get the answers i wanted to. before we do that i'm going to introduce the two of you. elias of songza, music play service app service, cath trin from the muse, career advice and job search service. elias, you're going to be up first, take the podium please. are you ready? >> i'm ready. >> you don't need the book in front of you? >> don't need the book. >> songza makes what you're doing right now better. six data points to improve what you're up to and serve an expertly cur rated play list to make it better. with no marketing we've grown to over 5 million monthly active
2:42 pm
users, a way for brands to serve ads that users enjoy and we've built an experience for people telling us what they're doing so we can make it better. that's a powerful foundation for curating content and products beyond music. five more seconds. >> happy to be here. >> happy to be here. happy to have you. i asked you earlier about the investors you have and any time you look at a business you want to understand what other people think of the business. when i looked at your investor list i saw william morris the fallen agency, amazon, a number of other players that were notable. tell me about your fun raising strategy and why you selected those people and what role they play. >> absolutely. i think what our investors are excited about we're building the next generation of what makes google so profitable. we know what people are doing and thinking about and compare that with the perfect product at the perfect moment. bringing lifestyle talent like william mores ris, amazon from the e-commerce side we see opportunity in that future and
2:43 pm
far along in building it. >> amazon got into the media business and buying a newspaper. is this their way of getting into the music content business and investing in you. >> i can't speak on their behalf but we're interested in the media about media and e-commerce. to us they're part of the same experience. >> your other investors what roles will they play? >> play very different roles. a lot were key at building the ad products for like facebook and google and helped inform how we think about monetizing our experience which is different from other music services. >> thanks. you can go back to your mark. >> thank you. >> katherine, take your stand at the podium. are you ready? >> i'm excited. >> safety blanket with you. you're okay? >> go for it. >> last year 20% of americans said they would rather die than go to the den test but rather go to the dentist than look at a new job. we created the muse to not only
2:44 pm
help people find really interesting jobs but get them. if you visit the muse.com you will see behind the scenes tours into what it's like to work at companies like facebook, gucci, spottify and job opportunities at world class companies. a million people a month count on the muse to inspire your career and we hope you're next. >> thank you. >> tell us about your fund-raising. have you been successful in raising money for your idea? >> not at first. we gathered a lot of momentum. i pitched 148 investors and they all said no. sorry, 150, and 148 said no and two said yes if you find other people. and then we got into white com dater which took a chance on us because our user growth was strong and slowly, you know, i would go to people and say, this what is we're going to do, why we're different. they would say i don't believe you can do that, i don't think you have what it takes to make it happen. i would come back three or six months later and have done it and beat it by 20s%. >> do you get any criticism
2:45 pm
about the name of the company and having people understand it or not understand it? maybe some feedback on that. >> i think a lot of people really love it because career has traditionally been a boring space. a lot of the products out there get the job done but hile hi transaction very tech space. we wanted the name to speaks to the idea of inspir rags and delight and excitement about the potential your career could have. there's people who say why did you pick it? why don't you have a name like your career.com. >> or job match or something like that. >> but again, like there are hundred sites like that on the intern internet. >> i appreciate it. you can go back over there. i liked both of you earlier which is why you're in this round but i have to tell you i still struggle with both concepts. i struggle with them a lot. one, because it's a crowded space. you're competing with pandora, spottify and itunes but i like the energy that you have and the partners that you have. katherine, i like the fact that
2:46 pm
you're focusing on jobs. in this country it's tt important thing we have going on in this country but i like the fact that you're focusing on the employers and not just the employees. let's make the employers work for their talent and i appreciate that about you. i've made my decision and while i like the muse i don't like the name and i don't like the mobile app. i think we'll see you in the future but unfortunately cath rip, you're going home. >> thanks for having me. >> absolutely. good luck to you. >> thank you. >> thank you. >> mandy, back to you. i hope i did it as well as you normally do. we're going to let you keep going. >> that was fantastic. that was excellent. spine tingling, kept me on the edge of the seat. the final round is coming up and the winner of the round will face off with the founder of pet flow.com. the champion is going to be crowned on "closing bell." so catch up on all the rounds so far, all you need to do is go to power pitch.cnbc.com. still ahead on the show, widely
2:47 pm
held but how do i say it, it's got performance anxiety. why does america continue to have a love affair with this stock? we're going to tell you about it ahead and then back out to the bakken for brian's live interview with the mayor. americans take care of business.
2:48 pm
they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach.
2:49 pm
2:50 pm
this just in. video of at least a dozen ceos coming out of a closed-door meeting at the white house to get there will be month on closing bell. make sure you tune in to find out what is going on. we're looking at favorite stock. since oil is talking about oil from the bakken, we figured exxonmobil would be the stock we would like to look at. it's the biggest on the dow but it's sharply, here's the but, sharply underperformed year to doed. should it continue to be a pick stock? bill featherstone from ubs making the bear case. alan, the bull, it has not delivered for shareholders.
2:51 pm
why do you feel that's going to change? >> good morning. i think the difference has been over the past years is investors are continuing to be concerned about the growth prospects for exxon. you have increased spending relative to lower growth. the share repurchase stories taking a hit with them, share repurchase over the last few quarters. going forward, exxon has taken a more active stance, as well as it's production mix. over the next few quarter, years, you see adding more liquid compared to shell. >> you think it's going to get better, bill, we're making the point on production. so far it's had little or month production in growth. you don't think that's going to change. >> no, we don't. i guess there's four concerns we have with exxon. first is production growth. it offers very little or no growth. in fact, this year we see production declining about 1.5
2:52 pm
%. guiding to longer term production growth rate of 2% to 3% per annum. over the last four years they've missed production three or four years on average by 250 basis points. with respect to free cash flow, it's gone from 5 billion per quarter a couple years ago to less than 2 billion per quarter today. that's caused them to reduce the share repurchase program, which has been a big driver of earnings growth over the last few years. i'd comment return on capitals had been a 600 basis point premium but we see that eroding to 200 basis point premium. you have a high correlation to major return on capital and relative valuation. finally, despite declining returns, relative returns and free cash flow, exxon still trades at 2.5 point premium. we think you could play other names like chevron that offer better growth at much more inexpensive multiple. >> you're preferring chevron but that's not the case for you,
2:53 pm
allen up. say exxon on still the superior over chevron. >> yeah. i think a lot of choef ron's outperformance has really been oil-linked. if you look at earnings per barrel, that's more a function of the commodity exposure relative to exxon. they lost a lot with the xto acquisition in 2010. ultimately i think that shift will be mixing as they shifted toward liquid plays. most new production coming on line, africa, indonesia, it will be oil-based. we think oil prices will flatten out from here. the advantage chevron has this is unlikely to be sustained. the level of spending, chevron is spending the same amount exxon on despite being two-thirds of its size. we think it will roll off, but certainly in the near term that will take a hit. chevron's earnings as well as returns on capital will take a hit as that spending remains high. >> thank you for making your individual cases on xom.
2:54 pm
back out to brian in williston, north dakota, bakken. >> their xto deal, $44 billion, that's a good example. we're here now to wrap things up. we have the mayor, ward koezer. thank you for having us here. have you to do something about the roads. why is my hotel on a dirt road? >> you're outside of the city limits. >> it's the only room i could get. >> i know. >> infrastructure, it's a serious point, you've been here for 20 years. what a boom. everything is under construction. can williston manage this growth? >> we're doing the best we can. you can't stay ahead of it. like i say staying between the white lines -- >> there were white lines? >> you try to make sure you don't get too far to the right or left. obviously, you don't want to get in a lot of debt as a city as you try to do this
2:55 pm
infrastructure, so we tried to partner with anybody we can to get people to share the risk with us. i think we're making good progress. >> how much does a town -- oublg, we talked about the boom, the stocks have boomed, does the town get rich? >> no, no. maybe eventually it does once you have this new construction, get on the tax roll, you start to generate those dollars. at this particular point you simply have to put up money for infrastructure in the home day a apartment or home built there to pay taxes to the city. >> it's private money. all of our cnbc viewers are familiar with private of kkr, gigantic firm, they are building apartments and houses. >> they have eight large apartment complexes under construction now. >> are you seeing more traditional wall street money coming this way? >> i think we're seeing more of that. we see people come to town and i don't know where they come from but they say we have $150 million, $250 million to invest. they say, where do i invest? i'm not the person to tell them. there's a lot of interest here.
2:56 pm
and i think partly because, where do you make any return on your money other than in something like an oil hill? >> mayor, thank you very much. a real pleasure. we'll try to spend a little money in your town. >> cool. >> kkr, all of our audience knows kkr. they're building houses and apartments here. goes back to the story, booms are only as good as people you can get to be in the boom. if you have no housing, there's no boom. that's the greatest challenge. >> the fact they are investing there, this boom, the commerce will sustain it. it's much sexier talking about boom time but what happens when it's bust time? what would be the risk factors you can see or you have heard about from chatting to people that could turn this into a bust? is it regulatory? environmental? something i haven't even seen? >> it's a collapse in oil prices, mandy. that's the biggest risk we hear everywhere. if your cost of production is 50 bucks, like pea near ceo told us yesterday in midland, can you
2:57 pm
survive if prices go down. here the cost of production is higher because it's harder to get up here, labor costs more, we wills are newer, technology a little more sophisticated. costs more to get it out. the biggest risk we've heard is a sustained drop in oil prices. listen, saudi arabia, they wanted to destroy oil prices, they could, but they need high oil prices, too, because they have social programs they have to maintain. they need 75 buck, 80 buck a barrel oil as well so i don't think they'll flood the market. >> what's on tap on friday? >> well, tomorrow hopefully back in studio. if not, call authorities, that means the plane went down. friday, in a shipyard in philadelphia. a really cool story about this boom you've never heard. i want to say thank you to everybody. thanks for having us here. beer time. manned y i'll bring one home for you. >> see you tomorrow. ♪ ♪ here we are, me and you ♪ on the road
2:58 pm
♪ 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. ♪ ♪ oh, oh, all the way ♪ oh, oh
2:59 pm
in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today.
3:00 pm
at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. hi, everybody. into the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. >> i'm bill griffeth. big show on tap. we'll be crowning our power pitch champion, and also mark cuban is here. oh, boy. fresh off his victory in the insider trading case a couple weeks ago. mael

84 Views

info Stream Only

Uploaded by TV Archive on