continue to take victory lapse on this one. we saw senator elizabeth warren, now shaerrod brown, banking committee, also saying tim sloan needed to go by the way, he should not take a huge payout with him he says. >> stephanie, great to have you with us for the full hour. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. check out shares of wells fargo. that stock is up about 3%, 2.5% after hours. ceo tim sloan says he will step down from the company. we'll bring you all the latest details. plus we are waiting pricing for lyft which is expected any moment as the company gears up for its debut tomorrow we've got full team coverage as the action unfolds. first we start off with a rockin' retail the group of stocks. check out some of the biggest winners, ulta beauty, target,

best buy, tj maxx and costco recession fears tending to weigh on the minds of consumers. so can the retail rally rage on in this environment? are there any bargains out there, guy sd. >> welcome back. >> thanks, i'm glad to be here. >> brian was here. scott as sick yesterday. it feels like a warm blanket when you're back what's the question? i'm kidding. one thing i've learned over the year is never underestimate the u.s. consumers' want to spend. as long as the market is okay, which it now has been the last couple of months, the u.s. consumer feels good about things, they will spending in my opinion it doesn't mean they should be spending. we have a conversation whether they should be leveraging as much as they are look at what dollar gen did. the stock went down 10.5%, 11%

in a straight line and now it's back to those levels fair valuation the stock is telling you something, it feels like it wants to break out two days after earnings you had a couple of upgrades when you see bad price action but then great price action, that's a tell. i think that goes higher. >> what's your sense of discretionary at this point, phil >> i think you've got to like retail you can make the case that the consumer has never been as healthy as it is right now why is that? there's three things the wealth effect. the stock market has gone up but i think there's holes in that actually because not everyone has a stock portfolio the other thing that's important to remember, and i brought along a chart with me. debt service so this is a huge difference from prior cycles. debt service or debt payments as a percentage of disposable income, look where it is lowest levels since 1980 look at the endi of the prior cycle. >> is that because interest rates were so low?

>> the big one was the deleveraging but with the exception of a little a couple of times, the 10-year treasury has been between 2% and 3% the past eight years. >> right. >> and the fed just said we're done hiking rates. so consumers have delevered and debt service are very, very low. that's also a major tenet into the sustainability into the economy. 70% of the u.s. economy is the consumer. >> how does this translate into what you buy, pete >> anything i finding with serious growth, they also have a dividend yield so it's anywhere close to the 10-year, if it's close or bigger, i look at these companies. hey, if you've got growth, you've got that and the fundamental story is there -- i'll give you a great example. target they're a buyback king the stock has gone from $69 to $81 in a very short period of time and it's still too cheap in my opinion there are some that are a little overpriced, a little expensive walmart i thought got in front of itself. you look at the multiple of

those two different stocks, completely different and margins are different. so we compare those all of time. look at pvh last night great numbers, great growth. that trades at like a 13 pe. so there are companies not trading at this inflated area and they still have growth and they're delivering the numbers. >> here's the thing. if you're looking at retail stocks and what they're doing in the q1 of 2019 and saying this is a healthy environment for the retail for our consumer, i think you're doing it wrong. you just mentioned target. it was trading at $88 at the ending of q3 in 2018. it went all the way down to 60 in december. we've got breaking news on lyft, its price. let's get to deidre bosa. it's the moment we've been waiting for. lyft has priced its ipo at $72 per share. according to a source this new price gives the company an initial market cap of $20.5 billion. it will start trading tomorrow morning on the nasdaq. this was a major jump from its

last valuation of $15 billion. the company lost over $900 million last year, but of course there was a ton of interest in this listing it was oversubscribed very early on in the road show and lyft raised the range yesterday now, we're going through these numbers. the pricing also tells us how much lyft's founders and early investors are making at least on paper. logan greenstake worth around $600 million based on this pricing. john zimmer, the other co-founder, worth $415 million other big winners are ben horowitz, david lawe on the board. the lead underwriters are jpmorgan, credit suisse and jeffries we'll bring you more as we have it >> thank you, dreed ra bos deida francisco. we knew this was going to be a hot one, pete. >> we continue to see the pricing go up, up, up and it

goes to the top ending of the range from 70 to 72. this is something everybody has been talking about, oversubscribed i think the key is what does this stock look like aweek fro now. forget about what it does tomorrow what's it going to do in a week when it's a company that hasn't made money last year what did they lose $900 million you said? >> the comparison is the biggest ipo since snap what happened with snap stock after ipo. >> i think the lens should be what's going to happen a week from now we were talking about it last night on the desk. what they're doing on the addressable market as relates to transportation as a service, it's tremendously disruptive you talk about profitability, amazon went public in 1997 they didn't turn a profit until 82 late 2001, 2002. when you think about lyft, it's a pure play on the ride-hail market in the u.s. and will be plowing investment dollars into

autonomy and that's the future of transportation. who cares what it's going to do a week from now. this has been valued up pretty dramatically over a short period of time. i think this is a very unique opportunity unlike snap. >> i appreciate that idea. take a look at amazon. in terms of investing in this point of the company's life cycle, are we investing at the same point of amazon's life cycle when it ipo'ed. >> that was the first pitch of the first inning back then but i don't think investors felt that way in 2001 when the company was losing money. >> let's bring in gene munster who joins us from minneapolis. all right, gene, it sounds like you don't necessarily -- you're not a believer in this lyft ipo shorter term but longer term you like this idea >> yeah, that's exactly right, melissa. the near term, this is not a great business ike there are some differences between what's going on with lyft versus amazon this will create some heartburn for investors the next couple of

years. long term totally agree on the opportunity. the world needs ride sharing about 10% in the u.s. use lyft or some form of ride sharing and that number will undoubtedly go up dramatically. let's talk about the near term briefly here the big distinction is that their business model currently, as you've already defined, is losing money this concept of a shift to a world of autonomy, that is a major change in their business model. think about the supply side that they have of drivers and the demand side with consumers that whole supply side equation gets turned around, which means there's opportunities for other players to start to get in the mix. i liken the lyft ipo more to you mentioned snap i think it's more like tesla, minus the headache of elon musk. but this idea that this company has an opportunity to fundamentally change the world, but the business is going to be dramatically different i can't understate that. this is going to be a very different business when autonomy comes. i think for any investor knowing

what the kind of investment that it's going take to ensure their play in that future, that's an open-ended question. i think that that has an impact on the current valuation. >> even if the comparison is better to tesla as opposed to amazon, the first ten years of tesla's life span as a publicly traded company, they were good years for investors who got in early. >> i think they will i think the first ten years absolutely will be good years. the next two years won't be so good years for investors in lyft we're talking about trading at a ten times revenue multiple if you fast forward a year from now, they're growing at 100% so that means it's trading at a five times i understand the open-ended opportunity here, but i do think that this is a little too far too fast >> you think investors should stay away from this for the first two years or do you think the next two years are rough but this is still something you

should invest in >> if an investor has the luxury of owning something and basically putting it away for literally the next two to five years, i think they should own it on the ipo. i think you're going to get a better chance for people who need to be a little bit more nimble to buy this stock at less than a $20 million valuation. >> gene, what does this mean for uber when they come out? it must be a great sign for them or is it a question of -- is it zero sum i don't think it is. >> it's a good sign for uber just taking a step back and thinking about what this means for tech ipos in general and for players -- other players in the ride-sharing market, whether it's wamo or google, i think this is a positive i do want to point out one theme in terms of user behavior. the way we approach transportation today, if you're thinking i'm walking or driving, you go to google google has a huge opportunity here because they own that top of the funnel. more than a billion monthly

users on google maps as google starts to onboard wamo into that map, that's a powerful top of the funnel. when i think about other players impacted by this, i think google should have some sort of an impact, positive impact on their valuation just based on the opportunity around wamo and what they have already established as a go-to app around transportation. >> you're telling me then, gene, that possibly one of the deeply pocketed companies out there could potentially be a major rival and they already have a leg up with their own autonomous technology down the road that doesn't really speak well for the prospects of lyft and uber unless they're acquisition targets. >> they could be acquisition targets. i think there's room for multiple players to win in this space. when i think about the near term investments, that's part of the reason we're negative on the near term on lyft. we think they need to spend a lot of money to make sure they're properly positioned

against the deep pockets of google. >> gene, thank you for joining us we do appreciate it. it's always great to get your insight. gene munster phil, what does this mean, the fact that this is oversubscribed, it ranged its range, priced above its range, what does this indicate? >> from a sentiment standpoint, the market is looking for some direction here pete made a point about the next week i think it's really importan that this goes well over the next week actually. >> for the markets overall >> for the markets in general. and what guy was talking about, the companies coming behind it this was, what was the phrase, stampede of unicorns after this, if this crashes an burns, that's a bad sign for sentiment and what's coming after that. >> is that going to be an indicator for you, pete? >> to some degree, yes i still look at everything in their own individual silo. i look at this name. when snap came out, it jumped right away to $27 a share almost immediately. it hasn't even come close to returning to those levels since.

okay, snap, maybe snap does work five years from now. maybe lyft works five years from now. do you want to wait? is your money that value to you that you'd rather sit there and wait at lyft and wait at $72 and watch it sink down most likely in my opinion as it's burning money and competition starts to step in? if you think it's just lyft and there's only two guys in the game, uber and lyft, that's not true there are places all over the country you can go to. there are multiple others competing at a much lower level. so competition will make it that much tougher. >> i think phil makes a good point. you talked about the stampede that's coming. uber will be the test. >> yes. >> this is like an appetizer when uber, and they start talking about a $100 billion valuation, that is going to be the test that would be a fortune 100 company there by market cap. so to me -- then we know what

comes after that we have pinterest, wework, the list goes on and on and on these are massive, massive market caps. when we have mega cap tech that's stalled out, is there an appetite for all these companies that are basically all losing money? >> are you saying no >> i'm not so certain if they come this close together. >> or when people are so reaching for dprogrowth that thr willing to go out and investment in these unicorns. >> there's some great tv shows on the cnbc network. this morning i was watching "squawk on the street" and they asked jim cramer about this and he said if this goes well, it's great for the market and retail investor i'm paraphrasing but clearly this is a positive for the market my concern would be pete's concerns as well if this market were to turn, which we can debate whether or not it is, the first thing that's going to go are names like lyft. so i would be concerned given the frothiness of this that this exuberance won't last.

>> well, right before lyft goes public, catch the ride share company's founders on "squawk box" tomorrow. coming up wells fargo ceo announcing he is stepping down the stock jumping on that news plus the oracle of omaha just made a mistake with one of his investments but one believes the accident could pay off. plus it's opening day and pete najarian just itching to get into the game. he'll step up and give us his fast pitch for one stock sitting in bear market territory that he says is about to bakre out much more "fast money" right after this that rocking chair would look great in our new house. ahh, new house, eh? well, you should definitely see how geico could help you save on homeowners insurance. nice tip. i'll give you two bucks for the chair. two?! that's a victorian antique!

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welcome back to "fast money. we've got a news alert wells fargo ceo tim sloan is stepping down. wilfred frost joins us with more on this story. >> tim sloan has always been in a pressurized job since he became the ceo back in 2016 due to political and media pressure following the scandal but also due to share price underperformance but for at least the first half of his two and a half-year ten you are he was protected by the fact that it was felt by the board that an insider was probably the best place to tidy

up the scandal that thought process was when the fed's asset cap punishment was imposed in october 2017. however, shareholders started to grow tired as the tidy up, the fed asset cap and share underperformance persisted that said, this is a retirement of tim sloan and the political pressure is a large part in his decision to step aside in the best interests of the company. the board confirmed they will look outside for a successor, no doubt in part to try to remove that political pressure by appointing someone who is totally distant from the cross-selling scandal that let to his appointment in the first place. >> wilf, who will be the front-runners for this job? >> a few names a couple of former goldman sachs executives have been mentioned a former ceo in gary cohn.

you'd look as well to gordon smith, the head of case who is a coo one place under jamie dimon at jpmorgan, though he's pretty happy at jpmorgan and i'd be very surprised if it was him but he's certainly a hugely qualified candidate. a few others like richard davies and bill demshak would be on the list but the clear thing is this is going to be an outsider. the other point to note is the interim ceo is the legal counsel, suggesting they are still under a lot of questions on that front. but also making it clear that it's not the long-term person taking over. >> right and to be clear, it's not just that tim sloan took over and had to clean up the mess already made, but there were also other messes under his tenure that were discovered when it came to auto insurance, mortgage lending. it seemed like it didn't end it's not like he was just brought in to clean up a mess. the mess kept getting bigger an bigger. >> absolutely right, melissa

and i think whether or not you would try to point the blame to him for those uncoverings which you would understandably say initially developed before his time, i think the issue shareholders had, appeared this relates to the tidy up of the asset cap is his guidance always had to see the day pushed back as to when it would be sorted. most recently with that unprecedented punishment from the fed asset cap which was in place in 2017, initially they said it would be lifted by late 2018, then early 2019, and more recently mid to late this year i think those aspects started to frustrate some shareholders. and the share price underperformance i don't know if we have the chart since october 2016 when you took over. wells fargo is up 8% since then. the kbw banks index up 30%. >> wilf, thank you wilfred frost with the latest on wells fargo. does this now make wells fargo investable, guy?

>> i'll ask you a question and say no wells fargo should have been an outsider two and a half years ago. that was number one mistake. number two, they seem to be infatuated with ex-goldman employees, guys and gals the feeling isn't mutual i would be shocked ifharvey schwartz goes there. their tangible book when reported is $32 a share. it's now trading $50 that points it 1.6 times tangible book which is rarefied air for them they shouldn't be there in this environment. it should be closer to 1.3 the only thing you have going for the stock in my opinion is these double bottoms around $45. kwlo outside of that i think you sell it. >> i know where you stand on the overall panbanking industry, bun terms to the rest of the group this has the potential upside of cleaning its act up. >> sloan took over in october of 2016 we are here in q1 of 2019 and

the stock has massively underperformed look at the money center peers why does citi trade below 1. these are companies where sales are actually growing you know what's happened since the scandal in 2016? wells fargo sales have declined. they are expected to be down 2% this year. so there's still some more wood to chop. have a ball, buy, take a five-year time horizon. they'll get this thing fixed up. before you know what that management is and before you know really when these shackles come off them, i don't know. it's not a screaming buy at $49. >> tim sloan going away doesn't remove the overhang of the regulatory scrutiny. he was just on capitol hill and asked is wells fargo too big to manage that question doesn't go away with the change in ceo. >> no. and if there is a change, and to your point dan and i fully agree. until we know who that is and

how that's going to line up, i don't think it's the greatest investable idea out there because i think there are other names you could go to. >> in banking. >> in banking. i heard wilf bring up richard davies, if there's somebody out there the who would be very interesting, i'm not positive he wants the job but maybe he would. if he would, he did an unbelievable job for many, many years himself. does he fit? i think he fits very well to wells fargo. >> banks, phil what do you think? >> one of the things we like to say about banks is we don't believe there should be a 70% chance of a rate cut this year that's what's priced in. the only way that happens is if we go to crisis or are in recession. so from a banking standpoint we think they're undervalued, they're oversold. >> so you like banks you're in the minority on this desk, i think. >> i think the broader conversation is the end of qt is really effectively a cut so now we've had the percentage of an actual cut moved up pretty dramatically so you think they're kind of high at this point we have a fed that's saying one thing but we

have -- we have their actions, which are saying something very different. we have the yield curve telling us something entirely different at this stage of the cycle so to me it doesn't seem like a group -- we've been saying this for 18 months now. this is the group. this is the one that's going to benefit -- >> it sounds like he doesn't believe what the yield curve is telling us, that that's not a true tell. >> not this time around. >> why have we ever had rates as low as they are right now have we ever come off a period of zero interest rates and qe for as long as we had? i mean i just don't understand that. >> that has a $3.5 trillion balance sheet. the yield curve was never this flat with a balance sheet this big. how much higher would the 10-year be. >> they felt they were desperate to get it below a trillion which is was 10 years ago before they had to save the economy because the banking sector almost blew it all up. when you think about how fragile

it is and how they had to walk a fine line in q4 because that running off of the balance sheet was going to do serious damage to global markets and that's why they pivoted. >> last word, phil >> dividend yields to pete's point, banks pay dividends. >> barely. they barely pay dividends and weren't allowed to pay them for months. >> we've got to go, no >> head over to cnbc.com i'm melissa lee. here's what else is coming up on the show capitalism can be rough. it produces good results overall, but it is survival of the fittest. >> that's right, warren. and he says there's a clear winner emerging in this group of stocks we'll tell you the name that has the oracle of omaha doubling down. plus, it's opening day and pete najarian is hitting the field to pitch one stock that he says could be a grand slam for your portfolio there's much more "fast money" right after this

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welcome back the oracle of omaha, warren buffett, said he made a mistake with one of his investments, delta, by accidentally building a 10% stake in the company. >> delta made an appearance, i don't know, three weeks ago at some investment conference and announced -- i think they announced they brought in 26 or 27 million shares and borrowed a billion dollars to do it i like that in two aspects they bought in 4% of their stocks so all of a sudden we own 4% more of delta than we had the day before i like that we borrow a billion to accelerate a stock purchase program. but what i didn't realize is that purchase had taken us over 10%, so i was already in territory that i didn't plan to get. so i just decided to buy a whole lot more stock >> delta is now just about one of the only airliners sitting in the green so far this month.

will this accident by warren buffett pay off, pete? >> he's still willing to put more machioney in. >> do you care about what that says >> i think it has some meaning behind it. i don't think warren will throw money because he made a mistake. i think there's a little more thought process than that. also, mel, when you look of the names right now, no exposure to the issues with boeing so basically it puts them in a very interesting spot. i'm already in southwest, which has a lot of exposure or more exposure ual i like, less exposure. and dal. i look at delta. of the names, that one is in the best position to go higher faster. >> last night scott was the host and it is good to have you back. >> that's the second time -- >> he's that happy >> oh, mel, come on. >> to your point gave lousy, lousy guidance the other day but the stock was up 2.25% on that

lousy guidance we play poker from time to time and that's called a tell bad news, good stock action. stock up a little more today a little more expensive than delta. >> do you like the airlines, phil >> it's a classic pro cyclical trade. what does the yield curve say? does it say we're heading into something sinister where growth is going to slow or is it a classic financial condition story that makes things easy. the stock market has done incredibly well over the past decade because financial conditions are easy. so it's all about this fork in the road now is the yield curve tell us something about slow growth? our idea is it's path of resistance higher. airlines have helped to put the brakes on the transports in the past month but our next guest says the group is p to truck on higher. let's go off the charts with rob sluymer. >> hey, melissa, let's take a look at the transports it's a big concern for a lot of

people let's take a look at the bigger picture because i think it's really important to stay focused on the long-term market cycle. again, we look at this 200 week as a proxy for the secular trend for the market back in '16 we had a major inflection off that 200 average. we still believe what we're looking at is a broader market cycle taking off here and that we're just into a period of consolidation. we had a massive move in january and february a lot of these stocks are just consolidating and unwinding a lot of their overbought condition. the concern is we had all of this weak relative performance that's not a great sign. we always wanting to stay in the leading areas of the market. but i do think as we get into the second quarter, there's going to be a lot of backing and filling, a lot of mean reversion trades, and i think we're getting very close to one of those points right here. if we look at the transports on a very short-term basis, this is a daily chart. that's that menacing 200-day

moving average that everybody is concerned about that the transports can't get above but i think the key point is that this rsi indicator, a trading indicator, daily short-term momentum indicator, is starting to bottom out. after four to five to six weeks of trading sideways, we think a number of these names are getting ready to go. so what do you want toown? again, we want to come back to the leading names in the leading part of the market and the rails continue to screen very well for us we think there's a buy right here on unp. you've had that momentum unbinding. when you look at the relative performance, it's still in a relative uptrendi the other name we want to own, here's csx just coming off that

200-day. sideways for four or five, six weeks. we think the market goes higher the next couple of weeks. >> rob, why don't you come on over, evan will bring the chair in thank you, evan. >> we used to use real game show music so we use fake music but it still conveys the point he's here now. is this a good sign for the overall markets? if one is a believer of dow theory and some are. >> so our overall view is we think that the lows that we saw in december were a cycle low, very similar to the beginning of '16. it's up for debate but that's our view this huge runoff the first quarter lows, q4 lows and now markets dpin to churn and consolidate. so you're going to get backing and filling an backing and filling. so i think the call is these things are going to pull back but not break down longer term i think the market just works its consolidation and eventually moves higher. >> rob, i love your charting

work but you just cherry picked the two best-looking charts in the transports csx, unp, the rails look great but there's a lot of divergence. the airlines look horrible, fedex looks horrible. >> yes. >> the truckers look horrible. >> not off of them. >> landstar. >> odfl looks fine >> jb hunt looks horrible. there's lots of divergences there. >> there is. so the question is are we seeing a massive fail in risk assets in general. we came off the lows everything went up after crashing in the fourth quarter is this just a rolling over bear market bounce or not i don't think it is. honestly we're not going to know for many, many weeks but if we're right, of course we think we're right, and what we're seeing is a consolidation and rotation, you've got daily buys and all these actually

indicators on truckers, on rails. of course i'm going to pick the best names if you look at names like xpo and even fedex, i think they're trying to bottom out so i think they're going higher. >> but dumpster diving is important because it speaks to risk it speaks to the fact that, okay, things might be better three, six months out. i think that a fedex or ups -- >> you would rather a dumpster dive. >> that unp, that csx, they'll be making new highs very soon. i guess with fedex down at 176, you may get a lot of bang for your buck. that was a stock above $200 six months ago. >> what would you rather let's say fedex versus union pacific. >> first of all, this dumpster dive thing concerns me it sounds extraordinarily dangerous and it's dirty like the mice. >> rats. >> rats. >> vermin. >> food. >> my question is the s&p 500 is 4% off its all-time high that's just math

federal express made an all-time high in the beginning of 2018. why is it 35% lower now with the s&p 4% is it a federal express thing or does it speak to a much bigger problem. i don't know the answer, but it's worth having a conversation i would say i think it's actually rolling over again to the downside. >> so that means the answer is -- >> if i'm answering your question. >> which he never does. >> i had to get that out, unp. >> i forgot we were playing a game because usually we have the graphics. >> we did have the graphic. >> trade it or fade it. >> we had it when i asked the question, fyi. >> fedex has already had a major cycle correction from 2018 everything cyclical got washed out and now we're working through a bottoming process. >> absolutely, there's a possibility of that or there's a possibility -- >> are you going to say something like that, pigs fly? >> no, but i'm concerned but this dumpster diving is so concerning is that a thing you have to do for fraternities you went to those things where

you have to rush. >> brie just said move on. still ahead, this chip stock is down 40% from its 52-week high but there is something in the chart that suggests the worst could be behind it. plus it's opening day at the ballfield and pete is stepping up to the plate with a stock that will be an all arst for your portfolio find out when "fast money" returns. they have the investment expertise to unlocunities other advisers might not see. learn what a cfa charterholder can do for you, at therightquestion.org

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welcome back to "fast

money. it's opening day for major league baseball and one former major league pitcher is helping investors cash in on the next baseball star. let's get to eric chemi. >> reporter: that's right, the yankees just finished their game they won 7-2 as a yankees fan you'll appreciate that. michael shwemmer leads a company with a capital-like approach he's raised over $150 million so far and you treat minor league players like venture capital companies. they invest typically $300,000 to $500,000 for a 3% to 5% stake in these players it's not a loan, the players can keep the money for the rest of their lives, but if they make it to the majors, then big league advance gets a cut of their major league earnings. as we've seen with contracts like bryce harper and manny machado, you could see a $300 million contract, all of a sudden 3% of that could make a lot of money

here's what he had to say about his firm. >> it's set up just like a tech startup. if you invest in ten tech startups and one or two become facebook and google, you'll do pretty well even though eight or nine miss. that's how we do it just for baseball players instead of tech stocks >> so schwimer's point is, look, we know we'll loose money on about 80% of them but just a few will cover the losses on everybody else the one thing people like about this investment, it's not correlated to the stock market so everyone is out there concerned about stock market, bond market volatility this is an uncorrelated asset. and that's why he's seeing a lot of high net worth investors getting involved in this product. back to you, melissa. >> it will be interesting to see what the longer returns are. eric chemi outside yankees stadium. >> it's fantasy sports 2.0 in the 1980s i could have bought pete najarian futures or in the '90s dan nathan lacrosse

futures. but this is the next -- this is the next iteration of fantasy sports it's fascinating. >> in honor of opening day, pete has a fast pitch on one name he thinks will break out. head on over to the plasma and give it your best shot. >> i've got a great name for you guys and i've already got guy adami sucked into this one he's going to love it. lockheed martin. >> yep. >> i locked you up already here's what i love about it. they have an unbelievable ceo who took over five years ago since she took over, this stock has tripled. one of them was a great acquisition of sacorski that has paid dividends for these guys. it trades at a 15 pe if you go forward, it trades at a 12 pe so it's very inexpensive. it's giving you a 3% dividend yield and they have shrunk their share count, in other words, buybacks, 12% over the last five

years since she took over as well the strong earnings growth, revenue growth revenue growth is not unbelievable but it's the middle single digits. that's fine. get 6% or 7% but the earnings growth continues and some of that is engineered by the fact that they're shrinking their share counti counting i love what they are so dependent on the u.s. government we know who's sitting in the oval office. he's not about to cut back on defense so for all those reasons i think this stock can go to the upside significantly from where it is right now. >> i'm not going to give away my answer because i'll play devil's advocate does it concern you the stock has had a significant bounce from 275 to 310, i believe >> i love the fact that it's reacted. guy, basically it's reacted like the rest of the market i still think because of the valuation. again, it goes to the very top of the show. what you're looking for in this market is a great valuation that has a dividend yield north of wherever the 10-year is right

now. that combination and the fact that there's not slowing, they're glowirowing, i like thi stock to go to the upside. >> are you buying pete's pitch on lockheed martin >> what's that say, mel. read the thing they just said starting with you. houston 2020 what does that mean? she should run for president marilyn hewson i'm with pete on that one. >> you're a buyer, got it. >> there you go. >> what does that say? it's a mess. >> my thing doesn't work here. i'm a seller of this listen, this thing trades ata market multiple, it's got mid-singles earnings and sales growth it all makes sense everything you said makes accepts. this stock is in a massive, massive downtrend from those 2018 highs above 350 i think it topped out here relative to performance of the s&p. i think it's really bad so i think this things goes lower. >> you've got to get the opportunities when they're there, dan. >> on the sector, what do you

say. >> first of all, all rise, yanks 1-0. aaron judge mvp. i also like the sector, so buy defense here this is a great portfolio and the comment that pete made and the government contract and things like that, that is certainly something that we would incorporate into the portfolio. >> i feel like this is unprecedented, pete. everybody is buying. >> no, i sold. >> did you listen to him >> we want to know if you at home are buying pete's pitch we'll reveal the results later on in the show. chip stocks on fire this year but are they getting too hot to touch the traders will weigh in when "ft ne rurasmoy"etns making my dreams a reality takes more than just investment advice. from insurance to savings to retirement,

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welcome back to "fast money. micron getting a boost after rwc initiated the stock with an outperform rating. the stock had a $50 price tart shares have been under pressure with slowing memory chip demand and growth they say expectations are bottoming. there's a ramp-up in noniphone smartphones. shares of micron up double digits but trailing behind names like xilinx, amd, nvidia should investors may micron for

a chance at a catch-up or do you stick with the leaders i feel like this is a regis question >> he's watching right now he's probably in his pajamas he ate dinner like three hours ago. he's watching. you know he's watching. >> no kidding. >> see, he called in i don't think you chase it here. you said the stock was up. market was up today. micron was up a quarter of a percent. that's not gang busters. the quarter to me was lousy. steve grasso said pricing has been lousy i think the stock is headed back to 35. at 35 we can have a conversation at 39.5, i say no. >> given your views on cyclicals, you probably love semis. >> the bigger picture on tech is are we going to get a trade deal pause cap ex just went silent. so are we going to get a trade deal the other thing that's important for tech is back to the fed. tech has had a field day over the past decade. up over 600% because of easy

policy that's basically what the fed has endorsed the next couple years. >> micron is one of the most difficult of all the stocks in the semi space it seems like by far the most volatile you look at intel, amd, marvell and they perform at their own pace micron is either flying to the upside or dropping like a rock and we all know that we've seen these ranges. it's unbelievable. this was a $55 stock not that long ago and here we are at 40 and it's made a move to the upside at 40 so i think there are opportunities. maybe at this level, maybe because it's so beaten and so unloved that it might be the right time to be in micron. >> i think that's why the stock did rally after that earnings report because it wasn't particularly good except sentiment was so bad and expectations were really low so you had a little bit of a short squeeze. last year we talked about how the semis topped out in q1 of 2018 and made a series of lower highs and lower lows most of the year there was a lot of double ordering in the first half of the year they had major inventory issues.

i don't think that trades on a dime even if we get a trade deal. telecom stocks dit connecting over doubts between the sprint and t-mobile merger we've got the details when "fast money" returns your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

welcome back to "fast money. doubts over the sprint/t-mobile merger sent stocks sinking today. one trader is guessing it will come back. verizon has massively outperformed the whole sector.

total options volume was two times average daily volume there was a trade that caught my eye when the stock was trading at about 60 bucks. there was a buyer of 3,000 of the september 62.5 calls paying $1.50 for those. those break even at $64 in september. expiration is up 6.5% from the trading level. what's really interesting here look at this one-year chart. like i said, verizon has massively outperformed its peers. it got a little bit of resistance here at that prior high from last year here and it fell back pretty hard today. if the reason it was down was because doubts of t-mobile/sprint, i don't know that's the reason it should be down if you're buying out of the money calls, look at this 25-year chart. this stock's all-time high came on december 31st, 1999 it was about $62.30. so if you are buying calls out above those all-time highs, you're playing for an epic, epic

breakout that's with defined risk i don't know what's the catalyst for it to break out but that's one way to do it. >> pete, what do you think of this action? >> i think they're playing just the breakout woe see people reaching and saying they're up against resistance we think it's going to bust through. they start buying these calls. i think it's a very, very nice piece of work. >> for more options action, checouk t the full show friday at 5:30. up next, final trades. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

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welcome back to "fast money. the twitter universe has spoken on pete's pitch on lockheed martin and he lost but we're still going to play the winning song. >> no! >> you'll feel better. so there you go. >> it's all good >> we lost the rights to the other song >> throw it out. >> it's all crumbling down around us. time for the final trade pete. >> you talk about transportation i think this trucker is going higher, giddy up. >> phil. >> s&p 500, very easy hurdle go to the u.s. large cap. >> dan. >> i don't want to give guy so much time because i think -- >> why stretch it out? >> micron. you were talking about semis i think you sell micron. it's such a commodity. sell it. >> did you know today was hoping

day, mel the yankees played in the bronx. really, you didn't know? i'm pointing where the stadium is. >> i've been to yankee stadium many times, guy. >> dollar general. bad news, good price action. i'm just saying. >> all right that does it for us. phil, great to have you desk tomorrow more "fast. don't go anywhere. "mad money" starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there is always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain, but to educate, teach and put it in context call me at no. or tweet me @jimcramer. i spent the last week warning you about how this wave of major ipos