Transcripts For CNBC Fast Money 20170207 : vimarsana.com

CNBC Fast Money February 7, 2017

Underestimate us. Why doesnt he put his money where his mouth is . First we start with a bit of a mystery. Maybe you can guess the stop. Give it a try. Less than 2 away from its all time high. Up 48 from its most recent low in may. 2016. Still not sure. Since that low, it has added a staggering 200 billion in market cap. Just to give you some context, that is worth more than the entire value of disney which just reported earnings. So do you know what it is yet . Guess . He has his hand up. Well tell you. Apple. Would you have guessed it . The all time high. Also just 11 points away from a split adjusted price of a thousand bucks a share. The tech sector is outperforming all the other sectors by a wide margin, thanks in part to apple. The question is why is apple trading line a growth stock again . Your theory. I think it is because everybody focused on what we talked about going in, the services. They had record numbers which i think surprised a lot of people. We kept hearing, this phone, everybody is waiting on the next phone. They have record numbers on the phone, on the mac, on the watch. When you look at the record revenues, records across the board. Everybody was expecting the worst. Then they see the services are growing still. Weve gone back and forwards. 18 growth is still growth and a huge growth area. Weve separated this out before. When you look at the services themselves, that as a stand1 company would be as big as everyone else. When you look at the size and the growth in that one area. 52week high it is not substantial enough to make the argument thats why this stock back now almost 50 from the 52week lows. It is not. 18 . So what is it trading on right now . Less than 10 of that companys total sales. It is expected to do 230 billion in sales. Except for the fact after last year, the first earnings and sales decline in 15 years, it is only expected to grow about 8 on the eps line and 6 . Thats not but here, dude, brother. I dont know how you can say it. 47 company. It is the Largest Company there is and it is growing at that rate. But i hear you talking about services growing 18 . Thats not exciting. It is just not. Dude brother. Thats never happened. As a member, youre talking about a pretty small base. One thing i think is also important here. I dont tone stock. Sure, i wish i did because it is near its all time highs. I think theres a floor under it in hopes that the next phone will be fantastic. In the interim, it is not the valuation has gone way above value stock. Remember, this is a hardware business. This part of services. So it is not a crazy multiple. If you look at, im sort of intrigued with Something Like sam sung. Also in that business. Were looking at apple stock versus the p. E. Ratio. As you can see here, the last time it was close to an all time high, the p. E. Ratio in the orange, was fairly low. I mean, here we are. Were approaching that above and were pretty much right there. Yeah. The 230 billion in cash is trading like a multiple. 4 40 in, welcome to the show. Dont i know youre a little agitated today. Lets all just ride it out. Dan knows a lot. 4 40, dan mentioned cash. And i think apple has been punished for their cash position. What happened in early november . Anybody . Guy knows. President trump got elected. What was he talking about . Repatriation of cash. Who has 236 billion laying around . Well, i think dont forget. They have a very big debt position as well. Not that they cant handle it. Of course they can. Its a pretty big knock. A third of that is probably dead. If they were not able to repatriate that money, i think it would be hugely, in my opinion, a benefit for the stock. I think it is in there though. It could be. We talked about this in january. I thought, a lot of us, ive not been crazy about it. Go back to april 2016. The stock made an all time high. 134. 54. I thought there was a very good chance that into earnings the stock would print. That it didnt do into earnings but it is pretty close now. Thats where i think the target for apple is. We had three Mega Companies report earnings. Google, facebook, amazon. They all failed after results right at the all time highs. Thats an important thing. We think about apple and its ability to catapult above the all time highs. The guy who does the charts who comes on here a lot. What does he say . When you get back to those highs, a lot of people have really long memories and theyre willing to let go of stocks. I think it will have rallied from those may lows, all the way back. Im not certain it has enough gusto to get to it. I think it does. Based upon the cash that they bring in. The cash flows are incredible. We talk about it every quarter. Were like, 27 billion. Unbelievable. When you look at the app store within businesses, what kind of margin levels do they have . Its about 90 . What is the driver of services . The apple store. Where do they have a billion devices . Apple. With those app store talk, youre talking about itunes and selling media. That has high margins. Except that they dont have a video offering. It is a company that is worth 10 billion. 10 billion, has doubled the subscribers that apple music does. You cant tell me with a company with an installed billion users across this world and they have 20 million subscribers to the Music Service . Im telling you that their Services Sector is a bust. If you want to keep growing at 18 . Youre calling a stock, a 52week high today whose services are growing at 18 , as a company is the biggest there is. They have a huge product release. It is still a Hardware Company but it is building into devices. And as they grow globally. And we have huge openings in front of them yanld and china. As that starts to open up and as that growth comes. What does this mean for Technology Overall . Wasnt just apple flirting with an all time high. We had netflix. Netflix, you know where my stand is on netflix. I think netflix continues to go higher. Weve said it a while. Reed hastings, one misstep, maybe two during his tenure. Say there is a huge cash burn which by the way there is. Competition. I dont know what the competition is. You asked about netflix. I think it goes higher and i think it is an acquisition. What do you think about tech overall . Google and then facebook. I like it. They should be at all time highs. The market is at an all time high. They had been the leaders going into the sxleks then lagged. I think theyll be back. For me, i like the facebook and Google Business model much better than the hardware model of apple. I want the facebook model as well. Last night you asked, what do you think Going Forward . Whats one stock . Facebook. I believe that. They have great drivers. Zuckerberg is magnificent. He is obviously beating everybody. You talk about who is really winning in the instagram world . We know. Its instagram. If you dont like apple here i think it is important. How does this she just said something really interesting. She said maybe theyll come back. Theyre back. Amazon is up 12 . Apple is up 18 . Theyre driving that the s p is up 2 . If youre making your bed these guys, theyd better continue on outperform the market or we better see a massive rotation into some other sectors. Weve already seen a lot of rotations. Weve seen them that banks and industrials and energy. I just dont know what it is going to do. The nasdaq is a lot more extended than the s p 500. It could break to the upside. I dont know what will do it. Were talking about cash repatriation. You heard the president. Im not sure well get that this year. Probably said it better than he did. If that is a 2018 thing, weve got a real problem. If youre buying all these stocks. Theyre bringing back all this cash. Youre not buying just the repatriation. Youre buying the earnings themselves. At least a 52week high. Take a look at the applied materials. Or klac. In the chip space that sfweed the chips themselves. Theyre hitting highs for a reason. The chips are high. It has nothing to do with the reparticipate yags. We had 200 worth in the last two months and a lot of that. They did have a lot to do with it for all intents and purposes, peter. Now youre peter. And then peter. We have to go break. The big story, bob iger will be here to talk about preferring the star wars to espn to just how long hell hold on to the reins of disney. A Julia Boorstin exclusive. Plus, following the stock, it is what he didnt say that has our traders shaking their heads. And the white house taking aim at drug stocks. Well tell you the words that sent chills through health care sector. Say carl, we have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 6. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 6. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Is this the team that knows how to win . I think a lot of people, they bet against tom fwroid other night, too. What a comparison. Speaking to scott, not to bet against his company like some did. Tom brady in the big super bowl game. He did ask, scott did, if kevin plank would consider buying back shares of under armour to restore confidence and heres what he had to say in response. Wave good company. We have people working hard. We just need on tighten the belt a little bit. Give us the opportunity to impress you. Were not looking to buy back stock. I remain the largest shareholder. Ive had lots of opportunities to sell my stock and i havent. It is not just because i like being in under armour. Dont bet against tom brady. Dont bet against you understand armour and im not buying any stock. So should investors be betting on a super bowl like comeback . Plank is not putting his money where his mouth is. Im a little surprised. It wouldnt be that big a deal to put in some sort of buyback. You dont even have to do it. When your stocks are trading at the multiples like that, this isnt buying back stock where it is tremendously, when you trade there. Its not like the cash bounces are gigantic where there is an underutilized bounce. This is something you brought up yesterday. He was basically mealy mouthed about it. We also know when we talked about it, Steven Nguyen when his stock wednesday to the 150s and he was buying the shares once again. How many do you need to buy . If he really has that commitment, it really does show up. When he buys a million and a half shares. He is in to it win it. On february 6, he bought a million shares. Plank is in it to win it. You like underarmor here. I remember, nike was plagued by investors. Nonstop. This is a company that might have had maybe they had 5 billion in sales in the late 90s which is what they are supposed to have. I think that you get whats going on here. At some point theyll turn it on. Listen, 20 here. Now they no longer do that. So a second ago you were arguing about apple and now youre arguing about this. This is a company thats doing something this is apple in 1997 or naum 2002 with the launch of the ipad. This is whats going on here. What was the ipod . Sleeping pants . A shoe . Athlete recovery . Theres a liquor side to this whole story as well. Ask me a question, where do you like to go . Shopping. Tj maxx. What do you see there . . All i see is under armour. I said i buy it. Nike has outlets in every other town. So does under armour. Were talking about something that is a 120 item thats going for 12. We spend a lot of time talking about management here. This is an inspired guy. He is a great guy. He created this brand and hes done it 20 years. Havent there been cases where that founder is not necessarily the right person for the next phase of growth . Yes. Weve seen him come back. Theres the business which has a hiccup. Still on a tremendous trajectory. The biggest problem is that they were trading way too high. So those are two very different things. I think the stock is priced too much for perfection mountain middle of a a hiccup. Trading at 40 times. Todays price, it is down a half . It does not appear this was a capitulation by any stretch of the imagination. I dont know what the low was in march 2009 but it was lower than that. That i think is a chance to trade into the high teens. The stock is very expensive and kit seemingly continue to deteriorate in terms of margins to point and any other metric you want to use. Still ahead, disney almost flat. Why . We will ask some guy named bob iger or Something Like that. Thats the one. Hell be joining us to talk about what drove quarter and much, much more. In the meantime, heres what else is coming up on fast. Hes for it. Absolutely. The words that took down drug stocks today. And well tell you the stocks that can feel even more pain to come. Plus, melissa said it before but ill say it again. Bob iger, bob iger, bob iger. Hell be here exclusively to talk about the quarter in a live and exclusive interview. Thats ahead on fast money. Getting your quarter back. Fountains dont earn interest, david. You know i work at ally. I was being romantic. You know what i find romantic . A robust annual percentage yield thats what i find romantic. This is literally throwing your money away. I think its over there. That way . Yeah, a little further up. What year was that quarter . What year is that one . 98 thats the one. You got it nothing stops us from doing right by our customers. Ally. Do it right. Lets get out of that water. Itbut one i think with quesa simple answer. Ally. Do it right. We have this need to peek over our neighbors fence. And once we do, we see wonder waiting. Every step you take, narrows the influence of narrow minds. Bridges continents and brings this world one step closer. So, the question you asked me. What is the key . Its you. Everything in one place, so you can travel the world better. Only at t offers you all your live channels and dvr on your devices, datafree. Its entertainment. Your way. Welcome back to fast money. We have an earnings alert on panera and wild wings. If you have a susan lee fan and who isnt, it doesnt get better than this. Do not adjust your screen. She is playing double duty. She has been monitoring both of the Conference Calls. Hey, susan. Lets stop scaring the audience. Were going to start with panera bread. The only stock that gained on its Earnings Release this afternoon. The quarter was pretty. In whine the estimates. No. We did see the sales miss but the market ignored that and instead focused on forward guidance. Panera still reaping the gains from its 2. 0 strategy. Earnings higher to a higher range of 45 to 770. Projecting sustained double digit growth. Also predicting 3. 5 to 4. 5 growth. Up 17 since the election. A different story for Buffalo Wild Wings which is being sold off after hours with some pretty good volume. An ugly report for them last year. Despite the big miss in costs which was twice as bad, Buffalo Wild Wings is forecasting growth of 1 to 2 . Thats pretty good. But they did give a very weak eps outlook. To have more franchise in the future, they did went the right to nominate four directors on the board. A reminder for you, like i need to remind you, we just passed peak wing day when over 1. 3 billion wings were consumed during game. They did mention the super bowl over the Conference Call. They did talk about how wonderful the brett favre commercial was. Thank you very much. Susan li doing double duty for us. I didnt have the Buffalo Wild Wings. I have a whole microphone thing. He really maze into his hands. Theyre probably feeling a little indigestion. Im surprised it isnt down more. With a big multiple like this and you miss, im surprised it hasnt gotten more. They probably have 16 eps growth give or take. The margins have been hanging in there. When chipotle went through their problems, i think panera won to this. 15 of people bet against the stock for a long time. I think theres room on the upside. I know it is a little crazy for a restaurant stock on get that valuation. I know youre having microphone issues. Shares of disney are trading lower after 7 reported earnings. Bob ig her jones us for an exclusive interview. Plus, michael kors is getting crushed. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Kors. Welcome back. Shares of disney are volcano ill following the earnings report. Were just minutes away from an its exclusive interview with bob iger. Well talk to him. Plus, twitter taking on troels ahead of the earnings report. It will be enough to get investors in . Next up, with all the details on this developing story. Of course, trump has said multiple times that he wants to bring drug prices down but it has been a key question whether he means he actually wants medicare to negotiate drug prices. A reporter asked sean spicer about it. He is for it, yes. When you look at the cost, not just drug costs. The u. S. Government has not done, you look at frankly, the easier way to look at is it what other countries have done. Negotiating costs to keep it down. Even referring to other countries. That raising some red flags. People saying do we want to be like europe which has single payer systems . You can see it gapping down on those comments midday. We decided to take a look at this. These are drugs you would take at home. 7 billion in medicare spending. And if you look at part b, what you take in the doctors office. Of course a lot of these drugs are facing generic competition so that will change. Throws 2015 numbers. It is interesting to see what the exposure is to medicare as folks may be trying to line up trades, with trump possibly seeking to Work Congress on this. It was interesting, i was looking at the big pharma companies. The largest biotech companies, they managed to stay in the green on the heels of those headlines. Are they seem to be most exposed to this . Maybe theyre moving around because theyre smaller, volatile names. It was interesting to see this. Interesting, the gilead Conference Call is going on now. About the price of harvoni. People are using it to show that it works. It was for a course of treatment. Now on average it costs 15,000 a month or 45,000. Thats more than half price off that list price. Their saying competition works. It came in quite light. Thank you. You made it a point for a long time that this is

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