tv Fast Money CNBC December 16, 2013 5:00pm-6:01pm EST
appreciate your time this afternoon. speaking of zero to hero, what are you guys talking about? >> it's almost the end of the year and i'm sure a lot of people are looking for new picks for their portfolio. so zero to hero. we will enveil all of those picks on the top of the hour. >> we just said someone talking about aeropostale as a long one. >> i'm melissa lee, here's tonight's line up. there is one clear loser in today's session, twitter. it's not so teflon any more. tesla going mainstream. you won't need hundreds of thousands of dollars to drive one of those vehicles. and a clean bill of health for
herbalife. find out what it could all mean for hedge fund manager. industrial strength after two straight losses helping to push the markets higher today. 3m, caterpillar all showing signs of strength. everything related to global growth to a stronger economy that did well. >> it makes sense. we have liked a lot of these names. i could speak to it, the gep could speak to it. now they are sort of diversifying themselves, getting more like a honey well, i think that stock has a lot of room on the upside. that stock got whacked much too
hard. these things are showing life again and for good reason. the best one for me is honeywell. >> bank of america initiated with a buy rating. those shares higher today. >> i have liked this space for a while. at least they have taken a little bit of the lead recently. the financials finally did have a reaction today. my favorite names in the space remain ge, be i love those rails. these rail names, the exposure they have to be able to go from where they're getting the oil and trying to get it to the refinery, that's the spot and i think it will add a lot to all of the different companies. i love it and i have loved it for a long time. there were options there today that tell me it's going higher quick. >> it's interesting, to me another sector that maybe there has been a rotation is consumer stables. you know, it's about 2.5% off
the recent highs here. you have seen prettiy erratic behavior. so you may be, i think guy said, if you're believing in global growth as the story for 2014, you will want to rotate in some of the multinational laggards. >> posting the best quarter since 2011. >> there is is a lot of volatility in this kind of space. the kind of movements are huge. as we talk about the operating leverage. i'm staying long those. i like the u.s. exposures. that's the kind of name that i will stick with. >> those are the trades we can get in right now? >> yes.
honeywell we have been talking about for the last $40 or so. so i think honey well you can buy here. if you overlay over the last four or five years, you have ge starting to catch up and nowhere near where they should be. another name that we talk about all the time, rop, that name goes further, too. the underperformers in that sector, ge, cummins, honeywell, and eee. >> i love what ge, they have been transforming themselves for years. they are energy exposure and health care exposure. but this is is a stock that i
think goes up very quickly. kicking off the final meeting of the year tomorrow. the big question, will the fed decide to taper? >> always good to be seen. >> does it happen on wednesday? >> no, i really don't think it's going to happen on wednesday. i think that's obvious. i think it's far more likely that they will pass the pa on the on to the next regime which happens after another meeting and i think it's logical for them to do exactly that. i think in the press conference, don't be surprised to see the doctor explain that there was a great deal of debate going on. but one thing we have to understand is when they make a change in policy they want to remain in that same position for a long period of time. months and months, maybe years. no one wants to reduce the
amount of accommodation and have bad numbers come out and have a new fed chairman have to reverse the situation. clearly the debate will rage. >> underpinning this forecast is your belief that the economy is more than we might think? >> no. >> it's not? you're pitting out there that maybe they will have to switch gears. >> they will go in that position, but just in case the economy should turn the other way and i don't think that it shall, they don't want to have to put a new fed chairman in a position of having to reverse a position so i think they will go ahead and defer. what's the harm of waiting for another month or so? i think really very little. pass the baton to the next regime. let her make the decision.
let the debate occur tomorrow. but go ahead and defer until actually the second meeting at the end of february. >> you don't think there is a possibility that even if they don't do anything right now that they give some language what difference does that really make? versus right now. >> i think that the fed has got itself in a bad position because it has led us all along to look forward as to what they're going to do. they are stuck in a position of having to give us forward guidance and i do think after the debate the doctor will say we have talked about it and debated it.
still moving forward. but using less speed along the way. it's not such a bad thing to do. i don't think that the markets are going to be disturbed either direction, especially if during the post meeting debate, or the press conference he explains that there was a lot of debate going on. >> options people in terms of the risk. risks to the upside or downside if the fed does nothing? >> i think it's priced in at this point. >> taper is priced in. nothing is going to happen this week. i'm just going to tell you the last week, right out of the gate this morning, their upside call buyers, this morning, about march 23 calls. last week someone bought the april 22 calls paying over a dollar for 40,000. i think people think that the taper next year is going to cause more volatility than we have had this year. >> i have no doubts that we will
see more volatility next year. we have had guests talking about exactly that as well. when you look at the volatility over the last month up over 30%. i don't look as much at the options just because i think it's far more hedging that is going on here. >> not so toueflon twitter afte receiving not one but two downgrades. this as shares now steve has been making some interesting moves on his twitter trade. he joins us now on the fast line. what did you do? >> so today i saw the momentum coming out of the trade. it was to be expected when you get downgrades like that.
30% in a short period of time. i had a lock in the process. >> you don't make much more of this move. i was looking at the numbers. seems like a big one. >> you have to really look at it. i believe it's 55 and three quarters. that's where you're gauging yourself now. you have to see when the low holds. it's not as if i was selling it because of the downgrades. i'm a momentum trader at heart so i had to lock in this profit. i will revisit it. i'm sure that you will have
enough time to get on board on weakness below 55 and three quarters. >> today is is a day where the momentum has been taken out. >> i think today for the first time will be more accessible. >> i think i'm looking for this to pause right now. very similar to the way facebook made that move to the upside. paused for a while. started to fade back and then it was in the mid 40s. twitter is almost identical right now. he loves the stock still. but he downgraded it because he thinks its too much too fast too
soon. >> you know, we have to remember, though, there is an over20% short interest in the name. this is truly one that can trade with the wind. we could see this stock trade right back up. >> thanks for phoning in. >> mr. akman says the following. it is not the role of herbalife's auditor to determine if it is a pyramid scheme but whether they earn more from recruiting new distributors than retail sales. the few that make money earn the vast majority of profits from recruiting. it is is a pyramid scheme that will be shut down by regulatore.
i think the prevailing thought out there is that this is ha important step that only at least in carl icahn's eyes that it only further legitimizes the business model at least in their eyes. i think the most important line is the last line. sit is a pyramid scheme that will be shut down by regular lators. it rips higher. the volume was tremendous. it was north of $75 a share. not sure where it's trading now. i can't see it where i'm sitting here but it was interesting that you heard from carl icahn and now bill akman. what happens next? >> $75.01 clrs is where the stock is now. did you get the comment on where
he is with his position now? >> i don't know. i don't know what he's doing right now. we know that he already restructured his position. there are names who are long the stock. and of course carl icahn. and really the audited financials were seen as the next and most important step into whether this company will be able to buy back. they wanted to try and borrow money to do a buy back of some kind of magnitude. more so than bill akman a bm --
i think everybody is sitting there wondering what the next big move is going to be getting the reauditing financials out of the way. >> he can be right but wrong in the trade. that's not going to save bill from a losing position. >> you're absolutely right. you know, the market can be irrational longer than you can be solvent.
he can sit there for a while but eventually the decay will come if this is not unveiled as a fraud. now the audit is done. now it's not important. that seems to be a little bit hypocrite call, actually. >> the optics are terrible. i don't know what's going to happen with herbalife. there is is a good chance that blackman is right.
>> people are out there going for the december 80s looking for more pain. if they want to be short they will feel some pain. they went from 11 cents to $1.37 today. >> not so bad. let's go to break. what it could mean for your portfolio. that's next. switchgrass in argentina, could change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. with investment information, risks, fees and expenses (announcer) at scottrade, our cexactly how they want.t
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>> welcome back to "fast money". boeing authorizing an additional $10 billion for its share repurchasing program and declaring that the quarterly income will increase to 73 cents a share. the ceo saying that actions reflect strong operational performance by businesses increase in cash flow and our confidence in the future. >> thank you, from pete's mouth to the stock market god's ears. >> but during the day today, i had no insight. we talk about this company for a long time. ever since the issues they obviously had in the past, it's been going up ever since. look at the december 138 calls
today. over 6800 of those traded. but they're buying them. when i say they, whoever they are. some institutional sized buyers happen to be right on this one. >> time to hit today's top trades today. first up, google's gadget gamble. it makes animal-like robots including a mechanical cheetah able to run 21 miles an hour. this is another one of those weird ventures google gets into. >> i know that they don't sell things commercially. they sell to the defense department and others. >> amazing. >> how can you put a value on that? you know? and they didn't. we don't know what they paid for it. but it can't be a lot. so to me it doesn't change the
google story. i think that's two guys in an outfit. really? >> pete and guy in a robot outfit. >> and they can't decide which way to go. it's you guys. >> the guy kicked it. >> you can tell that's pete and guy. >> that was dan kicking it. >> i'm still long. it doesn't change the story. >> absolutely not. and since they didn't disclose the terms it can't be that significant to them. >> phil lebeau joins now from chicago with all the details. >> keep in mind. what tesla according to an interview that was coming out of germany, what the chief designer is saying is that they will unveil this mass market model e.
that's not the model e. that's the model s. supposedly the model e will be unveiled in january of 2015. the key here? what kind of range are we looking at and what price. and it's all electric. if they come out with something that can only give you maybe 125 miles range or 150 miles range and its 35,000 people might sit there and say i'm not crazy about that. meanwhile with regard to the model s, the company has officially launched its website in china so they are taking orders online. if you wanted to place an order for a model s, which the first deliveries will start in the first quarter, just $41,000 u.s.
dollars. if you actually want to buy it it starts at $145,000. they have steep tariffs for any vehicles imported. >> dan, what's the trade on tesla in your view? >> right now, the stock sold off 40% from all time highs. it just bounced about 25%. on friday morn it touched the 50 day moving average. i actually bought some short dated puts there. today i think you play the move back to 120. >> and the model e delivery is 2016. let's keep all of this in some sort of perspective. they can't produce enough cars to really be relevant so you're buying technology. >> still ahead from zero to hero. our traders give you the play by play on several market underperformers that might be
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>> welcome back to fast money. i'm kate kelly. standing in front of the federal courthouse where starting tomorrow, a jury will deliberate over the fate of michaelsteinberg. insider trading on two tech stock names and today closing arguments to that effect to the issues in the case wrapped up and we will now be soon hearing from the jury first thing tomorrow after judge's instructions. essentially the case boils down
to documentary evidence and a key witness. he is accused of lying by the defense attorneys in order to help make his case that he aided steinberg in insider trading. you will see that things have proving. in any case there will be a lot of interesting issues for the jury to consider starting in the morning when they're starting at four different counts of fraud and conspiracy. >> thank you for that. >> the ruls of two new studies calling into question the benefits of multivitamins and it is fought that high dose multivitamins and minerals did not seem to reduce heart attack or death in patients who had
previously experienced a heart attack. all have a significant footing in the vitamin industry. recently upgraded vitamin shop to conviction buy. and also wrote that younger consumers are increasingly focused on their physique than in years past and that's one of the reasons to be bullish. >> karen, you're in gmc? >> i am. i love to hear that. although i think we have heard stories in the past that have been disparaging of the vitamin industry. >> uh-huh. >> i hope that it doesn't react too badly. it's a growth story.
today's metal rally a good sign for 2014? . john, great to have you with us. >> great to be here, melissa. probably a hard act to follow. >> ask you where you saw the price of silver. where do you see it going? >> i think it has substantially come down and everything is cyclical and the silver business is no different and i think we're starting to see the bottom of the cycle. i think we're in that bottom region which bodes well for the next year and beyond. once we get that noise out of the system, i think that will actually be good for something. >> can you further reduce that
cost so maybe next year as solar costs go higher your costs will go down? >> we produce over 8 million ounces per year. we're working to get down to $11 for a mine site and effectively break even. we have hedge room to go and plans to get there. a good position from a relative cash cost. >> if i want to be long your stock, what should i be looking for? what are the positive factors, a $35 stock. rallied five 0 points. silver is probably where it was then. what do i need to happen for the stock to go higher? >> well, i think what we have substantially done the last couple of years is sorted out a mine in argentina. i think it is running very well
and we will continue to push hard. we have also built a fair amount of cash in our balance sheet. we have got over $400 million ready to spend and we still have got one of the largest reserve and resource positions in silver. and that is on a range of properties all over the world. we have got the resources. i think the situation and the way that silver is, we are just coming into a point of opportunity i think we are uniquely positioned for the upside and we know what we have to do and we know what the value to shareholders is. >> most of silver is used for industrial applications. what sector should we be watching in terms of the health of one sector. >> i think that's the big story on silver. for me it's quite interesting. it's all metal but applications are all brand new.
it's all technology products from computers, television screens. each use about a gram of silver in their making. and in the medical site, it's anti-microbial naturally. if you think about this, here is an old medal. that is going to enhance its consumption i think there is is a lot of growth potential there. >> john smith, of silver standard. if you're a believer, should you be a believer in silver? >> i would think that you should be. >> would you? >> i'm not right now. >> would you prefer to play industrials over silver? >> why? >> i look at the space and i see what the activity is all over
the world. >> let's hit some unusual act e activi activities. >> it was very interesting. when you look at november, option contracts trading there a day and suddenly you get into december. you look at december 10, 2500 contracts trading. the january calls really stand out the most. today based upon this deal they are trading over $3. >> micron is not getting bout out by anybody but i think the whole space is definitely moving up to the upside. >> traders don't think there is any reason to party. dan made his way to the smart board. hi, dan. >> some of the largest activity
in the options market was in large cap tech today. three trades that caught my eye. there was a closing seller of the december 37 puts. 30 thousand times at 65 cents and then moving on to intel where a trader sold 17,000 of the february 26 calls out of the money to close. so kind of closing out of a bullish bet. this is what i want to highlight here. these guys report on wednesday after the close. the options market is implying about a 4.5% move. he rolled down some puts. this friday exploration, 33 puts paying 53 cents for those. we will look at the chart right here and these are the reasons why traders buy puts. look at the gaps. these are massive earnings gaps. this is is a really important technical support line. this is where the stock closed today. this put expiration on friday to
break even. >> for more options action, check out the website, option action.cnbc.com. what names have broadly underperformed in the market, been trash talked and missed on earnings. we will tell you why they just may be big winners right after the break. stay tuned. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.
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>> welcome back. in case you missed some of today's top moments, here is a rapid fire recap of tonight's executive edge. >> if you're going to risk driving mortgage rates higher, you want banks to be able to accommodate and lower lending standards a little bit. >> lower lending standards in the process? >> the banks are more than willing to lend.
but people are reluctant to invest because there has been a lot of uncertainty. >> you see that the economy continues to be stronger than people think. we are not expanding as much as we should. i think there's a fear. i will go around, people are frightened about how much you want to invest in the united states at this time based upon regulatory requirements. >> there has been some uncertainties in the market. but i think part of it is that the market really ran this year. and the market ran but ceos and managements really hadn't changed their view of the world so valuations are out of whack. >> so to me, the buzz word of the day was uncertainty. the markets hate uncertainty. even if we begin to taper, that's fine.
>> okay. >> let's move on. >> could some of the years reverse their for chuns in 2014? a segment we are calling zero to hero. >> that's great. >> we kick it off with dan. >> all right. ebay here. this is one that's going to need a little help. it may be like activist bait in the new year. i have taken a couple long shots and it will not get off of that $50 level. here's the thing. this company trades at like one times its expected growth. earnings and sales. very similar to google. okay. i just don't understand why google's up 50% and ebay is only up 4% this year.
>> what is your zero to hero? >> target. they spent a lot of money an their single store expansion. by year end is what they were trying to expand to. when you look at what management has done. when you look at the share buy backs they are lowering down their numbers. so when you look at what they are trying to do for all of us, i think it's moving the right direction. >> it's a super man. >> the video was spidy. >> john deere. this stock closed the stock.
it's trading 88 now. it's gone nowhere for the last 2.5, three years. it's my sense that all bad news that we can see at least has been priced under this name. valuation is very reasonable. i don't think they get enough credit for their construction business. names like potash, caterpillar, have all been really taken out to the wood shed. this stock has held a number of times. they have authorized another five to eight billion dollars. you get any good news in this name. >> nothing runs like a deere. >> nothing. except that four-legged thing. >> good one. way to rope it all in. >> tie it together. >> exactly. >> zero to hero? your pick? >> it's actually very surprising that i thought would be a hero and it wasn't. which is soda stream. this is is a name you may be familiar with the product. you can make your own soda at home. they sell the carbonation, the
cylinders and flavorings. that is is a razor blade business. a story that green mountain is going to get into the business. but the starbucks story which actually is definitely weighing on the stock that would be starbucks carbonating the drinks, not them getting into the business of selling these carbonation machines. the stock is trading at a very reasonable multiple and the numbers have been quite good. the number of machines they are selling is very high and all of that add-on business. this is actually, there are barriers to entry here. you have got to set up the process of being able to turn in the canisters. >> how is this not take over bait? >> it could be take-over bait. it's not huge short interest. that you could do that as a positive or negative.
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final trade, pete najarian. >> annaly capital. >> yeah, gm if you're long, new highs today, stay long. >> karen finerman. >> all this industrial talk got me thinking about ge. i like it. >> guy adami. >> yes, the reject here for you. >> you got me thinking about the railroads. >> yes. >> choo choo like gladys knight
and the pips. i like cp here tomorrow. >> i didn't call you a reject, by the way. >> insinuated. >> a segue. >> anyway, i'm melissa lee, thanks for watching. i'll see you tomorrow at 5:00 for more "fast." meantime, "mad money" with jim cramer starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm just trying to make you a little money. my job is not just to entertain you but educate you. so call me at 1-800-743-cnbc. after still another great day for the market right ahead of a key fed meeting, dow gaining 129 points, s&p climbing .63%. nasdaq