tv Fast Money CNBC April 23, 2014 5:00pm-6:01pm EDT
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melissa lee, that's what we have been talking about. the conference calls coming up. >> yeah. michelle, we are following all the headlines. josh limpton had a talk with someone over at apple. we'll get his take. i like that theory, dom. >> interesting for sure, melissa. >> "fast money" starts right now. the two biggest tech items on the street, apple and facebook out with earnings on the same night. both conference calls underway. we have got top analysts on the street and bob peck of sun trust covering the calls brings us the headlines from both tim cook and mark zuckerberg. but we start out with apple. boosting its buyback plan to $90 billion and announcing splitting stock 7-1. falling short on ipad sales. check out in the back of apple
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as well as facebook, higher by more than 1%. traders are tim, brian, karen, and guy adaoamdami, we go to do >> five good things and one bad thing. there's nothing to knock about the quarterme. they're trying to take your eye off the ball. with all that stuff. >> if you look at the quarter, the quarter was outstanding. nothing negative i can see other than the ipad. now in terms of how do you trade the stock, timmy bought the stock. we have said as long as it held 520 level, it was worth it and proven to be correct. now it has to prove itself. we'll see what happens from here. >> you bought the stock when? >> two weeks ago and bought a little this morning. >> your expectation now? >> you ride it and hope for at least some push through this 565 level which is the level that i think you need. the catalyst to getting through
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that i think are the refreshed. the iphone 6. i think the thing exciting about these numbers for apple is no hint of china in here. some of that might have been china mobile. but china mobile was out two days ago and didn't give us the sense that the apple -- jv, the roll out was something moving the needle. i don't think they're listening to the market and saying, oh, boy, we have got to do something. i think there might be some engineering to get into the dow and other industries they should be a part of. to say we're doing this because we're play dating investors, i don't think so. >> we need to hear some sort of catalyst. but we got a catalyst in terms of the buyback plan. >> the buyback is nice. it's $10 billion which is a lot of must be to you and me but not to apple. i'm glad they're doing these
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cosmetic things. i think any benefit from those are short-lived. i would be much more concerned if they didn't have a quarter that backed it up. they did. with one minor blemish. those iphone numbers were huge. when you have that product, that big a beat there, you're going to get a big gross margin. which we saw. that's great. i'm happy to be an apple owner. i don't know that i would buy more tomorrow. >> are we in a sweet spot in terms of trading the stock where we have a certain amount of catalysts here and got a good quarter and waiting for another product cycle which could be announced later this year? >> i'm with karen. i'm not up 7%. do i jump into it tomorrow morning. i think now that you have this good quarter, how will i trade it, i would probably wait two or three days. maybe on a pullback. see if it hoeltlds and from the take another look at it.
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for me, it's not necessarily going to get me in the stock. stock could go up a lot. i like the stock. i need to see a new product for me to get super excited about it. >> we're showing you the xlk here. facebook as well as apple combined giving you a nice boost. 1.3%. first we want to hit josh lipton who spoke with apple ceo tim cook. josh. >> yeah, i did just speak with tim cook going over some of those numbers. 43.7 million iphones. cook telling me it was broad based strength he saw. 5c and 5s and pleased with the performance from china mobile. and expanding capital return program by $130 billion. boosting the dividend by 8%. and 7-1 stock split, he wants to
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try and make the stock as accessible as the products are. we're always talking about new products. cook was telling me there will not be clarity on the call about new products but he assured me they are on the way. he also talked about acquisitions. they have done a number of acquisitions in the past 12 to 18 months. he said they're on the prowl for more. >> did he comment on dow inclusion? >> i'm sorry? >> did he comment on being in the dow being the reason behind the stock split? >> he said we thought we could make this stock. it's pricey for a lot of retail investors. he tried to make it more accessible to your friends and family, melissa. >> thanks for that. josh. let's go to collin, financial director of research. collin, you have been luke warm on this stock. does this change your mind?
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>> it's a great quarter from apple. it's good to see the dividend and the stock split. but you have to remember that the iphone sales rate, even though it exceeded expectations, that plus 17%, it's still well below the market growth rate and the ipad number, one of the reasons it missed is because of reductions in channel inventory. you have to be concerned about that. i would not be chasing the stock tomorrow. i think even though you have got a good number out of the iphone, you have to be concerned about the fact that their asps are significantly above where the market is pricing phones these days. >> collin, why would there be stuff in the channel? is it because there's a new product on the horizon? i think that's an excuse to say i think these numbers were -- i didn't think these numbers were going to be good and looking for a negative spin. >> no. we haven't gotten the channel inventory. we want to be careful that the sell-through match the sell-in
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and the greater than expected iphone number was not a bump up for china mobile. if you think about inventory last quarter about 15 units. it should sthay the same. if you see it lift, that's something to factor in. >> 7-1, stock split, which will make it more accessible to the retail investor. in terms of dow, does that move the needle? incrementally this is something? >> stock splits are supposed to be math and shouldn't have any positive impact but they tend to give a positive impact in front of the split. inclusions in index is better not to be included. if you look at the 7-1, that $80 level, it does seem targeted to be more assessable to retail investors and be included into
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more indexes. from that angle, it's a positive. >> again, the conference call just got underway the top of this hour. we'll have more for you as well as the trades as you see apple holding on to its gain up by 7.5%. take a look at what carl icahn tweeted here. of course, he's got to get in on the action. agree completely with apple's increase and pleased with the results. believe we'll also be happy when we see new product us. reiterating what you said, karen. we have got the good quarter but we want the real catalyst of innovation that apple has been known for. >> that's going to take apple out of being admired in this multiple place it's been in for a year at least. >> even after this move, and that's a very important point, ex-cash apple even after i move today's trade. 8.2 times. this is a cheap company. we tried to compare it to face book. not close. when you look at the cash flow
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and the cash and the balance sheet and i think when you look at the chart, the setup was a long term trend that's been on an upswing and weakness in the second quarter was expected. this is the second quarter. good numbers. second half of the year is when people are expecting that trend to kick higher. >> facebook, take a look at the chart. the company giving earnings estimates by 10 cents. let's bring in the managing director. it looks like the metrics are good in terms of mobile revenues. >> yeah. i don't want to go through the numbers you have gone through before. engagement, daily active users have increased to now 6 3%. the mobile revenues were actually up sequentially. think about this business model.
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usually online advertising down first quarter. the fact they were up is very big. ad revenues accelerated. last quarter we thought it would go as high as it could. it has grown 82% up from 76%. continues to accelerate. where the bears like to go is towards the u.s. we look at the daus, all those numbers are up sequentially. the last point that's important is the cost side. but improving year over year 1,000 bips. what your seeing to flow through to the eps. >> we will check in later on. guy adami, after facebook gained in the past two weeks since its
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low april 14th, you said to continue to buy. that was the right call. >> if you look right -- the stock was trading 58 and change. i think the only headline they saw was the cfo was stepping down and they realized maybe it's not as big a deal. this was as good a quarter as any last calm quartouple quarte. this should be north of 65 in my opinion and i still think you stay with facebook. >> there's nothing you can say about this quarter that was bad. the only thing that if you want to say what could go wrong is this is as good as it gets. it may not. i don't know. i'm just saying that if you see the stock fall, maybe that's what people are starting to think. every metric was fantastic. >> we have some breaking news here on gec. >> according to to bloomberg general electric is set to buy
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alstom for $13 billion. take a look at shares of ge down about 1/10 of a percent not really moving. >> this is not too long after ge said it was open to acquisitions greater than the range of $1 billion to $4 billion. >> it's power generation. this is where alstom is. it's a big acquisition. with the balance sheet they have now that they have started to develop cash flow, they're spending off noncore assets. this makes sense. >> apple announcing a 7-1 split stock. trading up well over 7%, almost 8%. what you need to know ahead of tomorrow's open next. we have got you covered on everything from zynga, qualcomm and how to play the biggest night in after-hours trade. stay tuned.
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s so i didn't want to vote know. kind of unamerican to vote know at a coke meeting. i didn't want to express any disapproval of management but we did disapprove of the plan. >> saying equity coquity compos plan was excessive. it sounds like it's disapproval by not voting. >> it's hard to read it as anything but that, right? >> right. >> it's somewhat embarrassing for management, i think. >> i would think so, too. guy what do you make out of that? >> let's talk about the stock. the stock has underperformed since early last year and continues to sort of at these levels. i still think pepsi is the better play. i know a lot of people like coke and you had that big announcement with gmcr. i thought soda stream was the play back in december when the
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coke news came out and look at the move in soda stream today. >> karen, do you think -- i mean this report has been around a couple times at least in the past few weeks. >> right. >> in terms of buying a stake in soda. >> yeah. you know, it's hard to have a lot of faith in it. i wouldn't buy in on this. i wouldn't buy the stock right here on the hopes this will happen soon. >> caterpillar hitting a 52-week high despite a drop in sales. the equipment maker, did it just dig itself another hole? >> are you embarrassed about that. >> 90 seconds total to make the case. go. >> everybody new coming into these numbers which were not good in terms of the mining sector. we know mining is off and china has been a problem in terms of the dealer channels. construction is up. we have seen nonresidential construction and the station move higher.
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we have seen latin america is starting to turn. what do you want to do with the stock at 23% into numbers? this is a problem if you think this was a value stock. it's not. this is a stock that by 2015 is going to grow earnings again another 30%. we came into this year somewhat plat around 580. trading in line around 2013 numbers. 2015 is when you get the earnings build and start to see mining increase. i would stay in the stock long term. tomorrow is an important day. >> i think you get bull dosed in the stock. this company has had a history of guiding higher and completely missing it. their biggest customer is slowing which is china. we had housing numbers this morning that weren't that great. i just don't think the global economy is as strong as everybody is pricing it, particularly in caterpillar. up 23%. it's trading at valuations of 2012 valuations and the growth
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just isn't there. the game has changed and they haven't changed their business. >> well -- >> and you left eight seconds on the table. >> china has been -- say this is crazy. it's crazy. >> 23%. >> i'll take -- >> you're not taking anything. guy, weigh in. >> it's shocking to me how strong caterpillar has been. tim makes great points. >> but -- >> no. the quarter was so bad, there should have been an investigation. the stock held 80 so many times it makes you believe it wants to continue to get higher from here. i'm going to vote for tim on this one. >> who do you out there thought one the street fight? we'll get the results at the end of the show. invasion of the robots. washing robots. even robots your cat can take
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low side. it also disclosed a release from the fcc regarding bribery allegations associated with chinese state owned companies. stock trading down by 5% after hours. >> foreign corrupt practices act. this has been hanging over qualcomm for a bit here. >> go back 18 months. and you have seen moves of this magnitude. we traded up to north of 80 bucks. i say you buy it. granted, revenues weren't great and guidance. eps, big beat there. i think the quarter is fine. it's funny that apple had such a remarkable quarter. it's completely back and forth. >> you got to wonder if this is a read on samsung because people were expecting qualcomm was gaining share within samsung' e
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ecosystem. >> apple has not competed in china the same way they have. the android space as gotten very crowded. i think qualcomm makes sense. guy is saying they expected weak guidance. the market has been paved for this and that's something a lot of the street think they can outperform. >> don't miss my interview with the ceo of qualcomm tomorrow on closing bell, 3:30 p.m. eastern time. his first interview since taking over. shares of irobot under heavy pressure. beating wall street estimates. joining us first on cnbc irobot which and ceo collin. great to see you again. >> good to be here. >> i want to talk about what analysts are pointing to as the weak spot in the quarter now as the defense in the security business. the backlogs were down year on year and it was just disappointing overall, they
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think the quarter could have been a beat on the revenue side. what can you tell us there. we have heard from other defense contractors out there indicating 2014 will have the trough in terms of defense spending. what's your sense? >> i think it's going to be a challenging year. we have guided flat relative to last year. defense is a small part of our business. so that our exposure to the defense industry is relatively modest. we had a great first quarter on the home robot side, up 17%. that would pull down a bit by a week quarter on the defense side. but you know, it's with new technology and budgets get compressed, sometimes we see the pullback first. but we think we're good with our full year guidance for defense. >> i understand defense is a smart part but in terms of what you're gleaning from the government do you think 2014 is
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going to be the low point in terms of spending for you? we think we're stable at the guidance we gave around $50 million. we think there are great prospects for defense in the future. the question is when is 2014 the trough or 2015. from irobot's perspective, there's a great demand the the products we do. we just need the pentagon to get back on track. >> i want to talk about the home robot segment in the united states. analysts say this could be a huge opportunity given that your penetration in the u.s. market is roughly 12%. how do you view this market? as you can get -- you're going to display every vacuum clean are out there or -- what's the target? >> you know, i don't understand why people still want to push vacuums. the state of technology for robotic cleaning has gotten to
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the point where you can routinely clean every single day with your robot and get results similar to uprig righright vacu. we see over time displacing upright vacuums. we're just getting started. >> a smart home, that's all the rage. if i can control it with my smartphone, that would be better. do you have any plans with a partnership with a google or apple or imbedding this technology in your robots? >> i think the robots are going to be an important part of the smart home. these are devices that can move around the home. it will be interesting to see how this mplays out. critical is making sure we use smart technology intelligently. if your robot is designed to
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turn itself on automatically every single day, then the utility of your smartphone to turn it on is reduced. if you could do things that would allow you to tell the robot -- >> so are you working on it or not? >> of course, we're working on this. we have internet connected robots throughout our product portfolio and certainly rumba will be connected in the future. >> always good to see you. up 44%. past 12 months down 15%. >> how do you trade it. if 44 holds, you'll start to know that the market is many concerned or excited about the home. that's how you trade it. number two, i still this that if -- let's say you're an apple and looking for acquisitions and want to add, a company like irobot is not a bad place to look. >> up next, officially halfway
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through both the apple and facebook conference calls. how to trade it ahead of tomorrow's big open. after the bell tonight from zynga to texas instruments. we got to headlines and the traders trades coming up. after your company's gone public? and the capital's been invested? or when your company's bought another? is it over after you've given back? you never stop achieving. that's why, at barclays, our ambition is to always realize yours.
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we could be we could be looking at a very, very big tech trade tomorrow. we got the biggest night in technology in terms of earnings. take a look at the moves in apple and facebook. the chart somewhere. here we go. we were covering the conference calls from every angle and bring you the latest headlines. let's get a check on apple and josh lipton. josh. >> when i spoke to tim cook, we talked about that legendary cash pile. he said we know we have more money than we need. so what do you do with that cash when when you look to launch new products? it's a theme he's talking about on the conference call. take a listen. >> we're expanding apple's products and services into new categories. and we are not going to underinvest in this business. we're also investing through acquisitions and we have
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acquired 24 companies in the past 18 months. >> now, cook pointing out that most of the acquisitions apple has done have been small. but he told me they're not opposed to doing a larger acquisition if it makes sense for their company and that he is, quote, on the prowl to do more acquisitions. melissa, back to you. >> thanks a lot. let's go back to collin of bgc financial. what josh pointed out, that's exactly what you want to see apple do? >> absolutely. one of the things cook mentioned on the call that was a highlight, they have 800 million users with eye tuitunes. he acknowledged that. they should mon ties -- with existing services. the record date of june 2nd is
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for the split and the split will happen on june 9th. this is the last call for the cfo, peter, and the incoming cfo handling the incoming portion of the call. he did a great job. >> part of that was making an acquisition and you outlined a couple scenarios where apple could acquire like a note or cbs or time werner. anything like they could entertain something like that? >> there's a lot of demand for their lower end price phones. the 4 s. we just as we see asps continue to crunch down in the space, people are doing the blades
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model. there's advertising ways. there are payment cycles and services that could be layered on top of the platform that i would like to see apple progressively pursuing. >> up 7.9%. pretty close to session highs. guy adami, what do you make of the price action? >> before the show, we took a poll -- >> wagers. not a poll. wagers. >> bk nailed it. it's right where it was -- >> bk said 561 and you said 560. >> it's totally true. >> in terms of the -- it needs to build off of these levels. if it fails here, this is where we broke down from in december. great quarter. but now it has to prove itself. >> failing does not mean it breaks down -- >> i'm not saying that. it needs to hold these levels and build from it. otherwise we get back to that 545 level. >> let's go to morgan who has got to latest from the call of
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facebook. >> the call still going on but get a lot of information out of this call. one of the most heart felt things coming from the call, of course, being the words mark zuckerberg had to say to ebersman, he is stepping down later this year as cfo. here's what zuckerberg had to say thinking him. >> i want to thank david ebersman who is stepping day after five years. he has been a great parter in building facebook. he set the right tone and set us up to make the long-term investments we need and built an incredibly strong team including our next cfo. >> ebersman confirming going back to where he spent the most of his career. zuckerberg reiterating the
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company's strategy of connecting everyone and building the knowledge economy. says these big ticket pending acquisitions of what's happened with occulus will be the long term quarter. business also noting that they're growing collection of apps is about sharing different content with different people. messenger. monetization is not the -- also, oc occulus had more to say. >> these are important efforts that we believe will help us continue making progress towards our mission over the long term. >> great. the last thing i want to touch
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on is ads. mobile ad installs have been strong and zuckerberg saying they are focused on making ads as on facebook. still plugging in there. >> i want to go to sun trust who has been listening in on the call. are you getting a sense of how zuckerberg and the team are going to synthesize all the acquisitions they made into sort of his vision? >> there was two positives. one they gave a $200 million instagram number. number two, the revenue growth which is accelerating as we talked about was driven by 118% price in growth. they're getting to the revenue growth. willing to pay more. they're seeing the ads affective. the reason why stock is not up more, i would have thought it would be. one was david ebersman and they
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talked about the payments area being challenged by games. number three, was they reiterated their cost guidance which they had given before of growth to 40% to 45%. we'll see if they're being coy on that. the last thing was that comps get harder from here. that's what's restricting the growth price. >> that's a good point. >> right. look at the ad mobile as a percentage of overall revenue which was 23% at the end of the first quarter of 2013. >> it's not just apple and facebook. a lot of companies reporting earnings. let's break down the earnings trade book. first up zynga, jumping in the after-hour session on its report. >> guidance wasn't great. i felt the reason why the stock is rising is because the margins were better than expected. obviously not buying zynga on
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valuation but might be buying it for a continuing short covering rally. i don't think there's anything necessarily good about the business plan. i think the stock right here still might have room to the up side. >> texas instrument is up 4%. >> a stock that has a huge run. 34 bucks on the stock back in june of last year. beat by 35%. the second quarter guidance much better than the street on revenue and eps. if you look at where the stock is priced at 20 times, you're fair valued. >> and f5 beating on the estimates. >> they guided higher as well. if there was any knock on this -- two knocks really. one, their costs were up. and number two, they're competing with the cloud play ares nd -- they did well here. we'll see if it holds tomorrow
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morning. >> karen, i'm wondering if the big earnings giving you more hope that perhaps we have seen the worst of it in terms of market sentiment? >> i think for the mo names this is a great thing. i'm not tracking those any way. sentiment is an important factor and i think this will bring more confidence back to the market. >> on our birthday cnbc celebrating all week. breaking down the captain planet trades. are earth, wind, water, or fire stock trades the best? what will they tell clients tomorrow morning? find out tonight next. her valuabwere staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker.
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it. >> boeing up 2%. >> coming off names you wanted to buy. boeing was one of them. their quarter proved to be correct. as it gets towards 135 start taking profits. i think it's going to be there. >> navigating holdings up 12%. karen. >> they are in the tanker space specifically moving things like ethane. there is a big move increasing their ethane. a good day for them but i wouldn't cha wouldn't chase it. >> today mark marks the 450th birthday. a tragic note, april 23rd marks the note of his death in 1660.
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>> you know who is not celebrating is phillip arlo. he's the guy shakespeare ripped off. >> did you like shakespeare? >> that's an old joke, isn't it? we did whole semesters on him. >> classic. >> let's get to earth week. we at cnbc are celebrating all week. in honor of captain planet, we are trading earth, wind, fire and water stocks. tim. >> when i think of earth, wind and fire, it's not just phil bailey, who is the guy with the big afro and the stilts? anyway. this is one of the greatest companies in america, it
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certainly suffered as brazil has suffered. starting ing ting to turn the very important part of the infrastructure and great long term holding. >> bk, your pick. >> if you take a little bit of tim's water port on the earth, you get something that grows. >> you need seeds then. you do. and then they grow blackberries. >> oh, my gosh. >> that's lame. >> c'mon. goldman sachs had a conference call with john chen and how he's turn this company around. lots of places to monetize. i like blackberry from the earth. >> you get a demerit on that. karen. >> i originally wanted to do earth, wind and fire, and instead i'm going with ge.
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ge is a huge player. if you think that qualifiequali wind, water, they're everywhere you want them to be. i like the idea of the acquisition they announced that they were in talks. it's power generation. i like that acquisition for them. i'm going with ge. >> gold star for karen. >> lame. >> gold star for tim, too. >> lame. lame. >> all right, guy. >> pentair. it's a global play. it's not ridiculous. they reported their quarter was okay. not great. doesn't matter. this is slow and steady and wins the race if you look at the stock over the last three or four years, it's proven to be that. i think there was a downgrade to neutral. >> still ahead, dunkin' donuts, we break down unusual activity on the stock and we'll reveal
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tonight's street fight winner. who is going to take home the trophy. still time to vote on twitter. please do next. to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line. call today and we'll make it easy to move that old 401(k) to a fidelity rollover ira.
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>> >> dunkin' brands down 3% today. mike, what do you see? >> we saw well above average activity. almost seven times the average daily volume in dunkin' donuts. buying those things for just under 60 cents. the stock is going to rise by at least 50 cents up about 6 plus percent by may expiration. >> apple, 7-1 stock split. one of the most actively traded contracts. what happens with the stocks? what do you anticipate? >> i would expect to see an up take in volume but it is the most active single stock option. you have to take a look at how many contracts trade. about 320,000 contracts take an average a day. when you take a look on a notion level. us significantly larger. it's about eight times the size of facebook trading.
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when we see the split, i would be surprised to see it grow. how does it grow from the equivalent from $32 billion a day. it's hard to imagine how you can get to a number much bigger than that. i think it's going to be helpful for retail. people who want to go out and buy the stock, they can buy the shares and over write calls. >> basically the stock with apple where there's some doubts, it's shown this pattern for a long time. this might be perfect in terms of attracting the incremental investor because you can place a bet so to speak, buy the stock and overwrite it? >> there's no question that these high priced stocks, especially in the options market, are exceptionally high so priceline would be an exam e example, google. when you see these splits, you'll see more retail participants. >> check out the website,
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optionsaction.cnbc.com. who is the winner of the street fight? tim was the bull on caterpillar and bk was the bear. bk won. >> how was that. >> now offset by a virtual trophy. congratulations on that. tonight on "mad money" don't miss what cramer has to say. he's got a take you're not going to want to miss after this. coming back with a final check. apple and facebook and their blowout numbers straight ahead. stay tuned. ♪ ♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today
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big beats out of both facebook and apple. holding on to after hours gains for apple up 7%. collin, what are you going to tell your clients tomorrow? >> so we're going to tell them don't chase the stock. this was the china mobile quarter. yes, the iphone number were good. but the asps were down over $40 on a sequential basis. you got to be worried about that
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ipad number which was still down 3%. >> so you're saying hold the stock? >> that's right. >> no changing the price target? >> correct. >> thanks for joining us. bob what are you telling your clients tomorrow about facebook? >> we recommended they would be in the stock before the call tonight. but with the call, they have accelerating revenues of 82%. margins worth 70%. i think it's a buy. they should be adding. >> it is still a buy even at these levels? >> yes. >> thanks for joining us tonight. let's go around the horne for the final trade. tim. >> starbucks in earnings tomorrow. >> tomorrow everybody is going to be excited. it's a great day to protect your fort fellow you and buy spy. >> karen. >> i like wlp. >> can you enlighten us or no? >> it cleans my floors.
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>> i want to do this, and clean my floors but i can't. >> that's coming. >> guy you can go over and do that, clean my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to mad money. welcome to cramerica. i'm trying to make you a little money. my job is not just to entertain but teach you. call me at 1-800-743-cnbc or tweet me. sometimes even on these not so vicious down days it's worth asking why isn't it working
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