tv Fast Money CNBC February 28, 2022 5:00pm-6:00pm EST
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time now russia has been limiting access to facebook along with twitter. we'll have to see if it restricts those in response. >> julia, thank you very much. that will do it for us tonight on "closing bell." thank you for being with us. "fast money" begins right now. live overlooking new york city city times square i'm melissa lee. tonight on "fast" the low is locked in. that is the message tonight from tom lee, why he thinks the worst of the selling is over for the near term. shares of zoom video, the stock off its after hours lows the company's call just getting under way. we'll break down the latest.
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and trading target how traders are positioned ticking into high gear l3, northrup, lockheed soaring as the russian/ukraine conflict moves on the best performing sector, occi, devon leading the way. investors brace for moscow to retaliate with online attacks. some of the names jumping today. despite all across the sector the broader market end of the day pretty flat. s&p and dow both broke the two-day win streaks. the nasdaq managed to eke out another gain what does this market action tell you, tim? >> if you asked me what i thought the market would do today, i'm dead wrong. guy says it's a lot.
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guy is usually right more than wrong. if you read the press, had smart people in the markets there were discussions of things related to discussions. if you think about the potential for the pipes getting clocked, we need them to say they will provide extra dollar lines we didn't get that some of the obvious trades were ones that were hard at work. treasuries rallied yes, oil rallied although i would have told you oil would have been up north of 10% and i still think that's a trade that you have plenty of room on i think the discussions around where risk is and where markets are are things that continue to evolve there were headlines, of course, around the fact there would be peace discussions, treatment, some kind of a discussion, i should say so when you think about the day that was, it felt kind of like a relief in some sense but in no way especially when you look at volatility and the potential here did we get that but, again,
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gold, oil, treasuries, uranium, these are places where i think investors still have major opportunities and, again, this whole offset of nuclearagainst energy is another big thing to think about. >> guy, we do like to play this game if you had told me 24 hours before what the set of circumstances would be and could you guess the direction of the market or a stock or what not, i mean, i think you fall into what tim described and we probably all came into the session thinking the markets would be down sharply given everything that's happened. given they were not, does that tell you that perhaps we put in a war bottom >> war bottom, first of all, let me echo what tim said. i'm wrong most of the time it did feel some of the rhetoric coming out last night felt really catastrophic. the last time we heard language was probably 12 or so years ago in terms of the financial crisis with that said, i'm with tim i will say this. i don't know about war bottom.
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i say one thing, i think the market learns how to deal with things like this extraordinarily quickly. my concern all along has been the pivot of the fed you will say in terms of trades i remember it was over the summer i think pedro power pitch lockheed martin had a couple sideways to slightly lower months as is general dynamics, as is northrup all three of those about 15 times next year's numbers look like they have some room we thought yields would go to 2%, it did, and then we thought we would see yields back up. i thought two 10s would go to 30 basis points 1.5% in twos and we're real close there i echo tim on energy oih at these levels is too cheap. the components, the three names, halliburton and slumber j are
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better run companies today than when oil was here last time and they're not trading anywhere they should be trading >> i agree oih, i agree with tim and guy. i'm sort of a night owl so late at night i was looking the futures were down 110. okay >> a decent cigar back in the day, fyi for the folks at home >> okay. i was thinking we would have an ugly day 33 maybe if you didn't know the headlines related to ukraine, to russia, sanctions, you would have thought this is a crappy day and you did have those things happening. why the banks were down, i think there's a risk there
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i didn't do much or anything of any significance because this doesn't feel like it's fully priced in. we don't know. there's still a lot of uncertainty. they're okay with bad news i do think we still see some uncertainty before us before we have more clartity. >> are there areas there's still opportunity and guy mentioned your power pitch, as guy likes to call it, on lockheed martin, senate republicans are going to ask for an increase in defense spending because, of course, you need defense spending to ward off the threats from a russia and a china. so maybe the stars are aligning for this trade >> i think so. asyou mentioned, it hit a high today so that's impressive i like what we've seen out of
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that name and all those names in the defense sector, mel. the key is the upgrade today of lockheed is the primary reason where it really got a lot of that steam to move to the upside as well when they were talking about the international side i think we always focus on the u.s. government and our defense spending that's not their only client out there. and because of that the rest of the world is looking at what's going on and saying, hey, we need to bump this up whether or not you want to look at germany or wherever you want to look, you will see what i'm talking about with germany where they are going to be bumping it up big time in terms of the orders into the future i think that's really interesting. by the way, all three of you, don't kick yourselves. until the final 22 minutes and the dow rallied 500 points and the nasdaq 170 points, you were definitely dead on on what you were expecting to see in the market
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that's the market we're in, mel. if you consider the fact we were up 1,500 points on the dow on thursday, the last two hours of thursday and into friday, it's been a crazy market. we know the volatility is there. karen mentioned it over 33 in the last 22 minutes it went from 31.25 all the way down beneath 30 to close out at 29.75. it gives you a perspective of just how wild and the velocity of the moves we are seeing right now. and it's not just defense. cyber security is another area where people are going the energy patch, they keep on buying options in there. that isn't even close to over. everybody who thinks a lot of this is ukraine driven, they're wrong. there's a lot more than ukraine. a lot having to do with capex was cut out for so many years and now demand is there. i think there's a lot more room to the upside. i'm not looking at the oih that's where you get your best
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bang for your buck those etfs are on fire on days like today >> the flip side to all of this is the huge downdraft on exchanges like london. gas was down by as much as 60% during the london session. tim, you navigated russia during some trcrazy times. putting politics aside completely here, these are some companies that have assets to them >> assets and great balance sheets i own a company that has been a 14% div payer. companies do well when the ruble is devalued. their sales when they can make them, are in dollars and costs are in local gas trade is down. the russian local market is
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closed you make the most money when things go from terrible to bad people are questioning their ability to operate in a global environment. a lot of people need russian energy in the real world leaving aside what could be wonderful thoughts around a settlement, if you look at oil and gas history in 1998 when other companies in russia and in eastern europe were not paying, actually they worked out their debt and russian sovereign debt was one of the best things you could own. you can do the risk/reward >> the blood on the streets is interesting. to tim's point gas bombs were fascinating to me.
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these are bonds that mature on monday of next week. they went from the high 80s to 60 so if they actually pay next week and they do have the resources to pay how that gets done i'm not sure. you would make 40 points in a week i feel like what's the catch i don't own them but the idea of things trading down so dramatically, they were fair priced things are off that's interesting to me >> let's drill down on the big rally and the cyber stocks the senior equity analyst at wells fargo, andrew, great to have you with us when we think of cyber attacks, what source are they most likely
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to mound and which companies for those attacks? >> thanks for having me back >> we will see more as well as other impacted countries so far over 70 government agency websites from the ukrainian gove government i think we'll see a number of phishing attacks the ran some wear attacks that will likely come next. the best positioned companies to, sadly, benefit from the expected onslaught would be
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crowdstrike. cloudflare could benefit from the attacks we've seen so far. >> we try to make a case and the push back is valuations. people can't wrap their heads around we've tried to make the point in this group valuation is not as important as other groups. is that a logical argument >> it certainly is a logical argument it's hard to forecast the impact of how much additional spending and growth if you look like a palo alto trading at 15 times, it should be trading well north of 20 times. and they are the single best positioned you look at a palo alto.
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another well positioned positioned company to stop ransomware attacks but they have the network, the end points as well as the threat intelligence layered in to really stop those sophisticated attacks and the integration of the assets is what companies need to stop the most owe fist kated attacks. trading at nine times sales, another one we think should trade in perhaps the low teens providing a lot more upside to where it's at. cloud flare is more difficult. it is one of the most expensive stocks, well over 30 times sales. they have the single best platform for stopping what we've seen they're very easy to launch. cloud flare can absorb 100
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terabyte per second attack and not even notice it if you move your website to cloud flare, it's safe it's not going down. your business will continue. it is difficult to convince someone there's a lot more upside but the numbers and estimates are going higher >> last quick question, andrew, when an attack is already, you know, under way, which company gets called first? so who will benefit from cleaning it up as opposed to preventing >> there's certainly a lot of incident response firms out there. one of your next guests, kevin, is one of the best cloud strike also has as good of a response cloud flare acquired a company as well. you look at a cloud strike and a palo alto where they have the best in class products to defend
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against an attack. they can respond and clean up. you get the benefit of both in those stocks >> andrew, thank you pete, where do you stand on this trade? >> i agree with the panel and i know they've been talking about this the multiples are difficult, mel, but i'm looking at cloud strike, for instance, and we did have options getting bought in there. i tagged along because they were buying the upside calls that expire on friday, buying the 200 strike calls while the stock was trading at 189 it was down to 150 it was much higher when it was at its highest in the last year or so. i think there's upside there i think it's a trade that can be put on based upon the fact we know there's going to be demand, they're going to be pushing, and at some point in time maybe all these different names in the cyber security space will start to see that actual p/e show up as a p/e has palatable for all
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of us. for now i would do it with options that gives you best risk/reward and that's why i bought those today >> guy, you tweeted about palo alto today you've been following the space for a long time. >> yeah, and collectively we've been talking about this. new all-time high, people get wrapped up in valuations over the last few months when valuations have been a concern for everything the point we've been trying to make you shouldn't be all that focused on valuation in this space which is why i asked the question in terms of crowd strike, pete makes a good point this stock is not at a new all-time high. it's significantly lower than the 298.48 level not that it means anything necessarily but you might get some bang for your buck. another name in there because, why not, z-scale, has sold off significantly since its all-time high that might be worth a play for a bounce as well coming up, stocks dropping as the fallout from russia's
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welcome back to "fast mo money. to zoom. frank holland has the details. >> reporter: shares of zoom down just about 3%, well off the double digit lows. the company reported a beat on revenue and soft guidance appears to have some investors concerned. first look at the numbers from this quarter showing a lot of growth revenue up 21% 35% increase in enterprise customers. the cfo says she expects that to be where zoom sees growth going forward. 9% growth in companies with ten or more employees. however, the four-year guidance tells a bit of a difference story. the guidance both the top and the bottom about $200 million below estimates. eps guidance at the top end 90 cents below estimates. zoom also having other news. bill mcdermott, former co-ceo of s.a.p. will join the board effective tomorrow replacing
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bart swanson who served on the board for eight years. mcdermott saying he believes the platform has more room for growth and tomorrow on "squawks box" the cfo kelly steckelberg will appear to discuss the results and the outlook for zoom and what appears to be, as we inch to a post-cope individual business world that will be first on cnbc. melissa, back over to you. >> frank, thanks frank holland. karen, what do you make of this name at this point in time >> well, so when you think about what they reported for next year, that multiple is not so crazy yet it is still high and i think the sentiment around those pandemic trades, right, the pelotons, the zooms, i think that's kind of over now. so given that hyper growth might be over, maybe it's not a hyper growth multiple. it's a growthy multiple. it's not a hyper growth multiple i've never been a zoom owner but
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this isn't so crazy. so if there's a lot of selling, that might be somewhere i would be interested. it's down from i don't know where it peaked, high 300s, probably higher than that. i think it's here to stay but now the multiple is getting to be more palatable. not quite yet for me but it could be, a couple bad days. >> they authorized a billion dollar share buyback which could help >> it was a $550 stock at its peak if you liked zoom precovid at $118 or $120 in march of 2020, you love it here based upon the growth story that was there and, sure, they pulled forward a lot and, yes, the competitive landscape is certainly significantlymore emboldened >> can i ask a question? >> yes, you can raise your hand. >> i don't know why i'm raising my hand. i can ask whoever the heck i
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want we've gone through the gamut of their peak demand. we've played that scenario out, and so what else is there at this point why should we love it? prepandemic you're thinking about the potential. we saw that potential materialize and then fade away why is it we should love it here now? now, i call on you >> hi, how are you i think this is a company that has the exact same market valuation. i'm looking at a $40 billion company, maybe $35 billion now, or $37 billion and change, and an enterprise base and to me a subscription base that dwarfs where they were and so on a multiple of sales and on a growth trajectory you pull in a lot of that enormous growth but i think, first of all, zoom established themselves as the brand in covid now to the extent that may not
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do much in the future, they're not necessarily googling or all these other dynamics but, again, this is a company that to me has a subscription revenue and a recurring revenue stream that's two and a half times where we were that to me the same market cap there's no question it's more interesting. >> guy, how would you answer the question that i posed? >> and did he raise his hand >> no, i'm calling on him. it's like when you're in class and you're trying to duck the teach earp er but the teacher co you anyway guy? >> i think a lot of competition has come since then, so my response would be, look, even with our current levels, even if you take the top end of the full-year guide which, by the way, i'm shocked they gave, even if you take the top end, they're guiding down by about 20%ish and it's still trading close to 30 times this year's numbers. that's not all that cheap. you could do a complete
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roundtrip of where it was pre-covid. just because i'm here, a night owl is an individual who likes to stay up at all hours of the evening as opposed to a white owl which is something that is smoked back to you. >> that's a great point. sorry. and it's not a good cigar. so karen is not talking about cigars >> glad we straightened that out. we're just getting started here is what's up next >> announcer: is the low locked in fundstrat's tom lee calling a bottom for stocks. why he thinks the worst of the selling is over for the near term we're breaking it down next. plus, the earnings keep rolling in and we're checking out target ahead of its report so is this retail worth a try on the traders dig into that name next you're watching "fast money" live from the nasdaq marketj■y■o
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welcome back to "fast mon money. at tomorrow's state of the union the mask is optional new york city ends its mandate next monday and states from new york to california are dropping mask mandates entirely the backdrop could bode well for reopening trades tom lee has been bullish he runs fundstrat. great to have you with us. >> great to see you. >> we were talking about russia/ukraine at the top of the show but this sort of folds into all the markets. is the reopening and the strength of the possible reopening offsetting any sort of down side action we could be
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seeing from the impact of war? >> to an extent, yes, i think there is pent-up demand. for the last two years people have been home and there's been a lot of anxiety starbucks noticed their more unhinged customers as masks come off and we move away from pandemic i think businesses start to see workers come back, business travel comes back, and it is all a virtual circle the bigger reason markets are stabilizing is likely because the fed which people thought was turning hawkish ends up having to make an incrementally dovish p pi pivot. >> meaning to 25 or more than that >> yes, to 25. i would say as time ludy, former jpmorgan vice chair likes to say, is good if the expectation has gone from 50 to 25 that's dovish
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>> it's karen. thanks for being on. if they were to proceed in that dovish scenario of 25 and several 25s, what's your outlook for the market then and the economy? >> as that chart shows, the market expectations have dropped sharply. i think the question we'll probably ask at the end of the year, and that's a long ways away is whether a 2% ten year or even 2.25% is bad for risk assets or bad for the economy. it's still supportive of p/e expansion and that's because today you would still be paying a 40 multiple for a ten-year bond and investment grade will be in the 30s and high yield mid-20s. a pretty attractive bet and that feeds into the idea if rates are
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rising you will not make money on credit but will in equity >> how much, tom, do you think market participants are underestimating the strength of this reopening and i'm asking because i feel every step along the way people have been skeptical. you've been bullish and your view has largely turned out to be right >> i think investors when they talk about supply chain glitches or inflationary pressures they tend to think of it as margin pressure so i think there's a tendency to think the durability of any rally is short-lived. but it's not that different how investors were skeptical of energy stocks because they didn't think energy would be around even in 2022 energy has been performing pretty well
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>> i have to ask you about bitcoin. that's part of your beef trade, bitcoin equities are you surprised how it's traded i would have thought with the on set of the skirmish, the war in ukraine, bitcoin would trade higher not because it's a safe haven at all but the notion that there needs to be an alternative payment system developed and other ways to move money around the world other than traditional means. >> i think it depends on your measurement. i think over the weekend there were several things that made bitcoin quite useful we know the ukrainian government, the prime minister, was making a request for donations in crypto. with the s.w.i.f.t. actions we know russia -- if you look at the ruble exchanges bitcoin volumes were through the roof.
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in times of uncertainty gets caught off people do turn to crypto i don't know if this is the moment they had to go parabolic but i think bitcoin equity -- the b is bitcoin -- the e is bitcoin equity they did quite well because u.s. mining, that mining is moving into the u.s they are boosting the portfolio. >> tom, thank you for your time. good to see you. tom lee of fundstrat pete, how are you playing fundstrat or bitcoin >> bitcoin has become front and center one thing, mel, i want to pivot somewhere -- sorry, i know you asked the question -- >> are you going to stand for that sorry. >> and i'm having trouble with this, you know me and how long i've been talking about oil and energy and i continue to talk
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about it and tom is talking about it even more aggressively than myself. i don't understand why that's not some sort of a headwind for his bullish case as we watch oil and energy and looking at certain levels and it's pricing in as if oil is trading at 50 and the oih and what he's laying out there for energy it makes me wonder how can he be so bullish on the broader market i would think a definite headwind not to stop the market but to slow it down i'm puzzled by that. i understand his point and where he thinks the market is going. i love what i hear from tomorrow but i question a few of those things crypto is an interesting thing it's so accepted people are trying to figure out the ways
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people can move the dollars around i think it's actually should be something that really does boost up crypto i think over the next several months turn your ringer off when you're on live television i don't know if you can hear it. quickly, have we hit the lows, do you think >> no. and i think this is a tremendous opportunity for traders out there. i think there's a ton of volatility i think we are in a downward trend. there's very little. i agree with a lot of what he had to say i think about a world where everything happening is inflationary and a headwind to growth and the fed is hiking into this and this comes out of a period where the fed gave away 25% of u.s. gdp and that's run out. that's my bigger term. the reopening is where you
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should be. certainly over pure pen banks as rates start to drop. coming up, right on target, the retailer set to deliver earnings tomorrow morning. so is the stock worth a try on first, we're all over the after hours action in lucid. shares on the move after reporting results. the details next when "fast money" returns >> announcer: get your trades to go with the "fast money" podcast. catch us anytime anywhere. catch us anytime anywhere. follow today on your favorit different devices and different ways of working. so how do you manage to keep everything together? cdw can orchestrate a cisco sase solution podcasting app so your dispersed team feels closer to home. for a unified hybrid workforce, trust cisco and it orchestration by cdw.
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welcome back to "fast money. lucid motor, shares down 14% after reporting. the conference call is under way. to phil lebeau who speak with the ceo moments ago. phil >> reporter: melissa, the reason for the stock being under pressure is because of the guidance we'll talk about that in a little bit let me quickly give you the numbers for the fourth quarter, a loss of 64 cents a share on rech revenue of $26 million the company dramatically cutting guidance for 2022 production for some perspective the
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guidance was to build 20,000 vehicles this year, the new guidance only building 12,000 to 14,000 peter rollinson tells me the company is now considering alternative supply sourcing, one of the issues the quality of the class for the lucid air. it's not up to the standard they want as a result they will have to slow down production that's one issue there are others as well he says demand is very strong. in fact, when he look at the reservations for lucid now exceeding 25,000 the last time they gave us an update on reservations was on november 15th. at the time it was 17,000. that's an increase of 47%, which is good. you do want more reservations. you have to cut your production, that's the reason the stock is under pressure the firm will be building a plant in saudi arabia. if you take that plant, which is not going to come online for some time, along with the
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arizona production plant which will grow in production the company says its capacity should hit a million vehicles whether that's in '25 or '26 but they expect to be at half a million vehicles capacity. we're going to hop back on to the conference call and we'll have more in just a little bit that 25.07 where the stock is trading is pretty much where it was when the ipo happened in july >> your conversation with peter, i heard you talk about on "the closing bell" he stressed the quality issues >> reporter: yes >> you mentioned the glass, the carpet is not up to snuff. is it all about them -- >> reporter: no. i think it's a number of things,
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melissa. look, we've talked about this for all automakers the supply chain is stretched and stressed across the board. he pointed out those two in terms of the quality aspect but we'll see how much they talk about the chip component of this which has just gone. >> phil, thanks. phil lebeau. he'll keep us posted on lucid's call they're throwing everything out there as to why they can't come close to the original forecast >> did you say something about carpet is there something in my ear >> carpet. cars have carpet and apparently the quality is not you have to snuff for the lucid carpet >> people buying lucid at $55 were anything but, by the way, and even if you want to say $2 billion in revenue this coming year, their fourth quarter just reported, and i'll give them
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that, talking about a company trading 25 times revenue it's a hope and a dream. good for them. i hope they figure out their carpet situation stanley steamer has a great 800 enough if they want it i can provide it off line. i think the stock goes lower from here. >> 1-888-555 -- pete najarian where are you on the ev trade >> that wasreally good that was good. lucid, the problems are actually great problems, right? they can't keep up with the demand and they promise too much they promised 25,000 and want to deliver 12,000 you can't overpromise. there were times elon musk had issues as well along the way i'm not saying this is tesla but i am saying it's an interesting company. they have the demand there they continue to say that they are the best in the world at what they are doing. i still think tesla is on top. we had huge buyers in tesla in
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the options world and i jumped onto that as well. i'm riding that. lucid, tesla and ev names, mel, you have to trade them those are different investments to want to hold on to in terms of stock, in my opinion. coming up, target earnings on deck. it's been a rough couple months for the retailer there is a turnaround in store we are digging into that next plus defense stocks getting a pop as the fallout from russia's invasion continues and that has options activity surging thet#en "fast money"
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welcome back to "fast money. check out target rallying after spending most of the day in the red. before the bell tomorrow, karen, this is a favorite of yours. what are you looking for >> so i'm looking for, hopefully, a turnaround in some improvement on some of the things that bothered street and their earnings last quarter and those were labor and supply chain issues then also shrinkage. i'm hoping some of those things have abated and the street was disappointed with the margins. i understand that is disappointing. when you think about the reaction of the stock from a
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high teens multiple to now 15, below market multiple for a company that has really transformed itself and i think they're not giving back that market share that they've gotten so i think the pandemic stocks had a great run, target, the growth was extraordinary we know it's coming in some but the multiple, i think, has come in more than it should have for a company that's really hitting their stride i think they will get over some of the short-term issues it was announced today they are adding 250 you wilulta stores. i own ulta as well i like the stock i would buy it here. we'll see tomorrow on the call >> i try to be in the heads of the viewers. so i will ask the question, shrinkage. shrinkage refers to the loss from theft, correct? i just wanted to clarify that. guy. pete najarian, you like target
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and always have. >> yeah, this is a forever hold for me since cornell was hired and he's done all the right things i would say to karen do not expect to see those labor numbers get any better at all. they continue to pay more and more and more. all that being said they've been very sticky with what they've been doing with the digital side of things that kicked off during covid and they really took off in terms of that side of things. you look at it at 15 times, $5 billion in cash flow this is a cheap stock you have to own it. i own it more and more and have continued to add to it over the years. on any dip tomorrow labor was their main issue i would be a buyer. margins would get hurt but they will be able to make up for that >> walmart or target, guy? >> target. oddly enough you can probably
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buy something at target. i think you get 50% retracement around 270 i'm with pete on valuation target at these levels >> do not miss an exclusive interview with ceo brian cornell tomorrow at 7:00 a.m. eastern time breaking down the company's quarter right here on cnbc coming up, lockheed martin seeing a boost as the falloff from russia's invasion continues and that had traders piling into the defense stock. how they're playing this one next and as we head out a message from cnbc contributor robert ferguson as cnbc celebrates black history. i always have hoped they would make progress and changing the financial future of th black community. the entire future of america depends on it. there's a great deal of evidence that shows if we close the racial wealth gap and income gap all of america will be made better off, and we know how to do it through education, through financial literacy and through
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talking with the ceo of workday, top of the hour on "mod money. you can have cramer delivered to your inbox sign up now. meantime check out some of the big defense names on the offensive right now, ratheon, lockheed martin, northrup on 52 week highs mike has the action. >> reporter: virtually all of the defense stocks and etfs are well above average today the three stocks you just mentioned traded three, four and five times and lockheed martin did see one substantial trade in the other direction, the april 430/382 1x2 put spread somebody spent $8.40, an outlay of $5 million on a premium worth $27 million if it falls back to the preinvasion level. possibly hedging along exposure
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there. >> tim, wouldyou fade or trade these defense -- >> i would trade them. an rtx i'm long, you have some legacy utx dynamics you get 15 plus percent i think it grows the next few years. this is growth at a reasonable price. i think in lmt have had a good run. some concern around that deal with aerojet that got in the way of we'll see. a lot of people felt m&a head winds. valuations are not terrible here i think it's a good environment. >> mike, thanks. be sure to tune in to the full be sure to tune in to the full show friday at 5:30 eastern ♪ ♪ time ♪
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block, target. >> tim >> great to be with you ladies feels pretty good. uranium feels good ura, etf the way to play that. check it out >> thanks for watching "fast money. do not go anywhere "mad money" starts right now. 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 >> hay, i'm kraler welcome to "mad money," welcome to cramerica my job is not just to entertain but teach, you call me at 800-743-cnbc or tweet me at jim cramer get used to this we have no choice.
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