tv Countdown to the Closing Bell FOX Business April 9, 2013 3:00pm-4:00pm EDT
♪ liz: jcp could now stand for just change personnel as ron johnson gets pushed. why are they bringing the previous ceo back when he had no luck either? what happened behind the scenes, and will investors buy the new swapping out the new guy for the old guy trick? near impossible stock turn arounds can be pulled back. and north korea threatening war with its neighbor to the south as the u.s. ramps up its military presence in the region. what does it mean for south korean stocks like samsung and ld electronicsing? electronics? "countdown to the closing bell" starts right now. ♪ liz: three points away from the
intraday high for the dow jones industrials, and yes, it's a record. good afternoon, everybody, i'm liz claman. the dow i and the s&p both on track, actually, for new record closing highs. let's get to the floor show, we wanted to bring the traders in immediately to get the sense of what was going on on the floors. we're at the cme, the new york stock exchange, the nymex, we're at nicole petallides eye standby location and a headline from each of you. okay, teddy, if i hear one more person say a correction's coming and yet not here today. >> well, what i'm looking at, liz, is i'm looking at no volume, a market that's done 100 points, they're all talking correction, and the tape just keeps going, keeps going north. and i think they've got a lot of people fooled here, and i think we've got a lot of shorts trapped pretty good. liz: they're screaming, trying to get out of the quicksand. elliot, same with oil, we're just a few pennies away from
being up more than a dollar. what is up with this? is this north korea or a dollar story? >> i think in the case of crude right now, it's no news is good news, liz. i mean, really a dollar movement in crude isn't much right now. we're a little higher than we've been. you know, i think it's a lot of saber rattling, personally, and they're talking about those south korean stocks. if those get whacked, i think they're all biased. liz: my kids asked if the bombs can reach us. i mean, it's come to us. [laughter] no, they can't. saber rattling, but who knows? it's certainly not that for the south koreans. charlie at the cme, what's your headline? >> you know, we're marching on to new highs in front of the fomc. i don't think the fed can move higher in terms of rates, and i think we had a mini correction here. we came down and tested the 20-day in the p s&p and marched right on to fresh highs. liz: teddy, i say fresh highs again and again, we've got
somebody coming on later on in the program who absolutely believes the 10-15% correction is coming in the next two months. do you think so? >> well, even a broken clock is right twice a day, liz. [laughter] i mean, if you keep saying it's coming, eventually you're going to be right. liz: right. >> but the reality is whether we like it or not, the tape doesn't lie. the tape, obviously, sees something, whatever the reasons, and the momentum is clearly on upside. i mean, at some point are we going to correct 5 or 10%? i sure hope so, because there's a lot of money on the sidelines looking to come into the market. but, of course, when that happens, the money will get scared. liz: and look at the vixx, it's now below 13. >> yeah, well -- liz: i mean, who wants to jump in on that one? [laughter] >> well, you know, i think -- liz: go ahead, charlie. >> i think that teddy's right here in terms of don't fight the tape, and i think that's one of the reasons the market keeps pressing higher. you do keep getting people who are trying to pick tops.
last week when we came back and tested the 20-day moving average, it looked like this thing was going down for the count, and what'd with we do? you just attracted more money here. liz: elliot, i hope you're making money. he sits there at the nymex trying to trade, just shaving pennies off crude. we know how tough it is. natural gas has been on the move. not today, though, why not? >> natural gas got to this $4 level that everybody was hoping for, and i was just saying $4 is not a big deal for natural gas. we've been in this range for five years. when we talk about $50 natural gas -- $5 natural gas, that'll get people interested. we want commodity prices to be lower so we can spend our money on teddy's stocks. [laughter] >> thank you. because i've got a few i can tell you. >> i'll bet. >> i tell you, though, i think natural gas is kind of showing, though, that the economy is getting stronger. you are seeing usage. you've seen the injection rates all year go down, and i think a
lot of that equipment that was being used for natural gas now is being used for fracking, and now we're talking about going from a deficit in being a net energy importer to a net energy exporter -- [inaudible conversations] liz: certainly shows something, definitely. >> i don't agree with that at all. denmark, these people -- you know, you talk about people who have to buy gas for their cars, they're going to buy energy regardless of the cost. that is not an indicator that the economy is recovering. the stock market rally, that absolutely is. but these people, you know, you have to drive to work, you have to pick your kids up at soccer. they're going to buy gas, and they're going to heat their house. to me, that does not indicate a stronger economic recovery. liz: elliot, that was exciting. >> sorry. liz: no, no -- >> i don't like that. liz: elliot not a red bull today, i like that. gentlemen, great to see you. so much happening. we're going to move on, but thank you for being on the floor show. basic material stocks, be you
really want to know what's leading the market higher today, it's that. let's find out why, head to nicole petallides on the floor of the new york stock exchange. >> reporter: that's absolutely right. we're seeing these basic materials doing so so well. energy, health care, financials, those have been some of the other groups, but really you've seen these materials doing so well. we've got alcoa aluminum numbers after the bell yesterday, today five of the top ten names in the s&p 500 are actually material base, names like cliff natural resources, freeport-mcmoran, we're also seeing u.s. steel in that group as well. so we're watching some of these names on the move, and there could be some bargain hunting. the worth s&p stock year to date down other 40%, many people are saying, hey, you know what? maybe it's not as bad as you think. liz: nicole, thank you very much. if the market gave a thumbs down to ron johnson's pretty short tenure running jcpenney, it's giving another thumbs down to his replacement. look at this chop here of losing
11.75%, shares of jcpenney sinking today. we're bringing in the retail turn around expert of all experts to break down new/old ceo mike ullman's run. what his next move should be and what it means for jcpenney. jay mar -- margolis has more than 30 years of retail, he's joining me now in a fox business exclusive. jay, you're still in the game. you've been brought in to now turn around cache which is a mall store, high-end clothing. looking at all your past background and seeing what jc penny tried to do, shake things up, that didn't work. what do they need to do, and is mike ullman the guy to do it? >> i'm so disappointed this chapter in american retailing is coming to a close. i think ron johnson did a lot of right things that mike ullman started. he started american living, he started the concept of having exclusive brands that in multiple channels can be controlled by pennies and
differentiate themselves, kind of the terry lundgren model with macy's. i think ron came along said i have to keep going with this, i have to get more brands in, and i'm not sure he had all the time he needed. now, he did fire his consumer by stopping couponing and discounted in a whole different way. that was the big mistake. i think him getting hold of these brands that mike ullman will continue. he's brought in people like michael fisher who does an amazing job with retail experience from apple. i'm hoping he keeps going with the concept that multiple brands and multiple channels will work and that he will keep going forward with that. liz: just because he slapped the word apple on a resumé, jay, doesn't mean it's going to work with middle america who is the target audience. you put it perfectly, they fired their customer. >> yeah. liz: i don't see mike ullman having done anything great during his tenure. i'm wondering why are you not burying him versus praising him to take a line from marc
anthony? >> the way i understand it, it's an interim role to kind of calm things. i think mike did a solid job over the years and towards the end needed to branch out, get more aggressive as macy's and others were building their brands. i happen to believe this time coming back in mike is a solid person. the financial community's going to be really nervous in terms -- liz: does he brick back what everybody got upset about, and that was the elimination of the coupon thing? >> oh, absolutely. he brings a different way of promoting. liz: what would you do? you're really known for having turned around express, limited, which was junkie stuff. you washed it once, it fell apart. you came in, you fixed it. we started wearing limited express skirts. >> thank you so much. he has to go back to promoting in a way the consumer understands. i went into the stores after ron did all these changes, i couldn't understand the promotion. he lost trust and credibility in the consumer's mind. i think the solid going back to couponing and discounting now with brands he controls.
so last week liz claiborne had a promotion on dresses preeaster, that's the way it should have been done. he should have gotten these brands on track and then started promoting to get the consumer in the door. competition's different than apple, right? kohl's, macy's and sears, etc., a whole different competition than apple had. liz: adam shapiro is coming up in just an hour with a top analyst who says this thing's heading for bankruptcy. do you agree? >> yeah. it's tight. where they get the money from, is there an offering, because private equity -- does private equity save the day? i don't think mike could just cut back budgets and make that go away. they're going to have to get aggressive about getting sales up. it's tight. it's really tight. about six months ago i reported on those problems there. liz: jay margolis who noticed that nicole petallides and i were both wearing hot pink -- >> very bad fashion mistake. liz: we all need to look
different. her silhouette was different from mine though, jay. >> yours look wonderful. liz: he knows too much. he's scaring me. jay margolis, the turn around retail expert. good luck with cache. we've seen those stores, see if you can bring us back into them. thank you very much. closing bell ringing in about 48 minutes. we've been talking jcpenney. it's a huge story, but it's no secret the ceo's out, the stock is tanking, but is the biggest secret whether it's buying an opportunity there or a bankrupt opportunity? we take you to the street with what we call the ratings rumble. two experts with decidedly different views on jcp. and, yes, we took it to the streets. we're going to hear from shoppers like yourselves and find out whether jcpenney was just starting to get its mojo back before it canned its ceo or whether everyone's still furious. here are a couple of your answers as we head to the break. >> they didn't have what i was looking for. >> they stopped giving away the
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look at the markets here, we've pulled back just a wit, right now up 82 points for the dow jones industrials. a lot of green on the screen, and we're looking at the most actively traded names at the moment. we've got bank of america, jcpenney -- that's why we're talking about it, folks, a lot of you are trading this in and out of your portfolios. alcoa, of course, up just a penny. missed on revenues. we've got microsoft as well as along with first solar which is jumping significantly right now. talk about an epic disaster, i thought jay margolis was saying he was so sorry this was coming to an end because this was fun to watch, but if you own jcpenney's stock today, you're livid. not only because ron johnson was pretty much a disaster, but their best idea now is to put the guy who already somewhat unsuccessfully held the seat before johnson back in the chair? shares have tanked 55% since johnson took the helm in june of 2011. rick snyder, maxim group's
senior retail analyst, was here two weeks ago warning us johnson had one foot out of the door. as he changed his sell rating on the news? and paul, morningstar equity ap list says, forget it, he's hanging on to his buy rating with white knuckles. good to see you both. okay, paul, why do you still like this company? it seems in such disarray at the moment. >> well, on your last segment i said i was a lonely alice, i might have one friend left, ron johnson, but he hasn't called me yet. but to be fair, you know, they didn't fire johnson over the weekend on the dime's notice because sales were great in march, so i think the problem is right now even though the stock's gotten really cheap, there are more liquidity concerns, and the worry is, you know, what happens next? liz: rick, i'll tell you, the biggest worry sometimes when people fire executives is that their ideas just started to take hold, as paul mentioned.
they had good march sales. maybe this was a mistake? >> firing mr. johnson was a mistake? liz: yeah. >> i don't -- >> i was saying the march sales were bad. liz: oh, i'm sorry. >> they've got to be bad, or he wouldn't have gotten fired on a dime. liz: okay. so we haven't seen the march sales, but did you see any turn around? because you called this two weeks ago. >> yes, i did, thank you for pointing that out. no. i think this company's in real trouble. i think they've gone back to promoting, their margins are going to be very bad this quarter, and i think that's part of the reason that mr. johnson was shown the door. they have a severe cash flow problem, and i heard jay margolis say -- you mentioned the b word, and i think that is a real possibility -- liz: the b word, folks, is bankruptcy, and jay side tight, could be close. >> i think it will be tight. i think they have telegraphed a diluted offering in the near future, and i think that might be the reason for the sudden change. they might want to get this out of the way before the quarter
ends at the end of this month so they don't have no show those numbers before they raise money in some type of a divert. liz: paul, you've got the buy rating here. bankruptcy? i'm assuming you would say, no, but it looks like it's circling like some type of vulture. >> yeah. and i think the issue here is can they manage, as you point out, can they manage liquidity, do they have flexibility on inventory, do they have flexibility on additional cost cutting. and, of course, some of it has been coming from the vendors, but they also have cap ex plans that they could, hopefully, scale back. now, you know, one thing i'd also point out is when retailers go bankrupt, they're usually not in total zero cash situations. the problem is vendors won't ship them. so while, you know, the vendors were bought into johnson, at least ullman has 25 years experience, he was president of
macy's, hopefully he can calm the vendors and make sure they're not going to get cut off. liz: okay. so, rick, the vendors are key, but then you've got names he just struck deals with. the fact that they finally got some decent deciphers in there mic -- designers in there mic mar marchesa, very big in the celebrity world. we'll get to martha stewart in a minute. >> you know, it's very hard to tell. and my position on those brands is that there is a disconnect between the customer that they lost or fired and that they're now trying to get back, and what's in the stores right now. so i think that's the biggest challenge they have. i mean, they can discount, but are they going to get that customer back? liz: paul, mike ullman's name is not exciting this market at all, the stock is getting slammed here. you still hold on to this buy rating? you said with white knuckles, but what would get you to change your mind to downgrade it? >> well, again, the worry is that the liquidity just burns through over the summer which is
typically the toughest liquidity burn for a department store retailer. you know, the hope is he can be the howard schultz where things went adrift when he left and then he's personally motivated to turn things backkaround when he returns. i think he's taken it personally when he was pushed out. he wants to leave on a high note. liz: yeah. i just don't think that this is going to happen here, but we're watching it. rick, i might lean toward your opinion because you were really right on in this other part of it with ron johnson leaving. pulling a howard schultz is a very tough thing to do. we want to thank you both. rick snyder, maxim group retail analyst, and paul swingen, morningstar analyst. watch out for the b word. not sure it would happen, but we are watching closely. just about 38 minutes from the closing bell. hewlett-packard, that's the real comeback kid of 2013. see, you can be down but not necessarily out. shares are up 55% this year, and one guy called it right here on countdown. we're bringing him back.
we're done with hewlett-packard, because we know what he thinks about that, but what are his next big comeback kids? plus, north korea demands foreigners leave north korea to avoid being caught in an all-out war on the entire peninsula. how's the south korean economy holding up? we're going to take a look at how you could actually be making money from some of the largest companies there. you probably use their products. stay tuned. ♪ we went out and asked people a simple question:
how old is the oldest pern you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ liz: talk a turn around, after beinge worst performer of 2012, hewlett-packard now up more than 55% so far this year. so we're bricking back the guy who calls it for his -- called
it for his next big call. joining us now in a fox business exclusive from boston is new generation research founder george putnam who writes the turn around letter. he's the editor of it. and, boy, aptly named, george, congratulations on the call. >> thank you very much, liz. liz: well, more interested in what you see on the horizon as it pertains to turn arounds, but just a quick line on hewlett-packard. what did you see last year that indicated to you that this was a name that could really come back even before it started making some really big changes? >> well, i think it may have, actually, moved sooner than i would have thought -- liz: take a victory lap, george, you were so right on that. >> i probably should. but i also think it has further to go. i mean, it still has a lot to work with, it's getting its cash flow in order, they're fixing the board which has had its problems for many years. so i think it's got further to
go. liz: all right. >> maybe short-term volatility. liz: a runway there. again, hewlett-packard up 56% year to date. you also called best buy, that's up 119% year to date. these are two names where some people might have looked at them and said, no way, they can't turn these things around. what did you see in best buysome. >> well, best buy has a strong franchise. right now there's nobody else really out there with the scale that they have in that space. this is one where i think, um, it may not go much higher. it's really hard to call. but it's had a great run. but there is a lot of competition from online vendors and others, so i'd be more hesitant about best buy going forward. liz: okay. so i'm interested in the next big thing. what do you see out there that doesn't look good at the moment that's floundering, but that you believe might be a real opportunity for people watching right now who would like to make
money? >> well, one area that we like, and they've had a bit of a run this year, is the mortgage insurers, names like mgic and radion. they got hit really hard in 2008 and 2009 with the subprime mess, and they have legacy problems left over from that. but they're working those out, and with home sales going up, the new business that they're writing is very, very profitable. they've raised capital, so they're really not in danger anymore. liz: well, can i make a point about radion, george? they're up 200% year-over-year, 31% of the float is shorted. is that a little disconcerting to you? >> well, it may have some short-term volatility, but as i say, the long-term trends, i think, work in their favor, both
of those names. liz: radian and just so our viewers know, mortgage insurers mtg. because they've been beaten down, and that's what he did with hewlett-packard and best buy. george, thank you very much. we'll bring you back to see if you were right on these again. thanks. >> okay, thanks, liz. liz: anytime. george putnam founder of new generation research and editor of the aptly-named turn around letter. north korea intensifying threats today of an imminent conflict against the united states and the south, warning foreigners to evacuate to avoid being dragged into a, quote, thermonuclear war. but there's still big business in south korea. let's take a look at some of the publicly-traded companies. first, samsung, you cannot miss that one. shares up about 2% over the past year. as for the company going for global smartphone domination, they've done very well this that regard. next up, automaker hundred --
hyundai, the company announcing it will recall the 1.9 million vehicles, and you look at the far right part of these charts, you see a little bit of a drop. so perhaps that has something to do with the concerns about the tension in the region. but postco which is south korea's largest steel maker, this was a favorite of buffett's in the past, announcing plans to strengthen the auto industry by spending $600 million to build brand new plants in thailand and indonesia, but shares floundering, down about 15% over the past year. that could have something to do with steel prices. and korea electric power, ticker symbol kep. that company just won a deal to build a 1200-megawatt coal-fired power plant in vietnam, so they're doing business lately, off the highs of the year, still off the lows as well. the closing bell ringing in 28 minutes and change. we're still up 85 points, that's a record. s&p is hitting another record too. more drama at herbalife.
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dollars to expand its 787 assembly plant in the nonunion state of south carolina. the aircraft maker says it will create 2,000 new jobs in the next eight years. the first 787 made in south carolina rolled off the assembly line a year ago. and chrysler recalling more than 119,000 sedans because their air bag warning lights go on for no reason. recall covers chrysler 300, dodge charger and dodge challenger sedans made between april and december of 2011. chrysler says the defect has result inside no injuries, but it will start notifying owners about the recall this month. and now to continue our "countdown to the closing bell" with liz claman. ♪ ♪ liz: we are well above record territory here except that we've pulled back. not that that's a big deal because we're just minutes until the closing bell. we're watching what's driving the market moves. nicole petallides, sandra smith
at the cme. nicole, before we get to first solar, a line on the real positivity that the markets are seeing today. >> there's no doubt about the fact that we're seeing this momentum to the upside. it takes a lot of the traders by surprise. they can't quit it, right? you can't fight the tape. the market continues to run higher, the dollar is weaker, and you're seeing gains across the board and setting new records for both the dow jones industrials and the s&p 500. and now i'm going to get to first solar, a name that certainly has been grabbing attention on wall street, it's up over 40% as we speak. it's a name that has hit volatility pauses throughout the day. they gave guidance that was better than expected on both revenues and earnings per share, and there's a big short squeeze. so they're rushing to try and cover. in the meantime, in the last half hour or so some more headlines broke on first solar that they're going to buy tetra sun. the terms of those deal have not been disclosessed, but that will
continue to be based in california. liz: thank you very much. and now sandra smith in chicago. what's catching your eye today, sandra? >> reporter: a hey, liz, we're watching oil prices. they have been extremely volatile. at one point they were down big, and right now they are extending gains so far this week. not only are they up on the day, they're up two straight days, they're up on the week, and the traders always look at the day, the week, the month and the year. they're down on the month 4% but for the year crude oil prices up a couple percent. so in positive territory for the year. big inventory report out tomorrow morning, of course, that's the weekly inventory report. but this as oil inventories sit at 23-year highs, and many analysts are calling for that to extend. so, liz, that's normally very bearish for oil prices. not the case. oil is going up with the stock market, and it's going up as we saw a weaker u.s. dollar. so really interesting trade to watch and right about $94.18 a
barrel. liz: that's right. we were getting that earlier from the nymex. and jay margolis of cache is on the phone and says he can't believe all three of us are wearing hot pink today. [laughter] >> reporter: are we? liz: yeah, we are. sometimes it just, you know, she's in chicago, nicole's -- >> hot pink? liz liz that's hot pink. >> what's the difference between cold pink and hot pink? liz: there's no cold pink, charlie, but there is a hot story charlie's working on. disclosing a partner at the accounting firm had traded on inside information about the company, now he's got exclusive details that are new right now. >> reporter: well, this is such a great story because it affects viewers that trade the stock. we talk to people that like to trade stuff on this show, so there's a lot of different things, angles going. we should point out that the justice department is investigating this whole thing from an insider trading standpoint. are they investigating kpmg? no, not the entity itself, but the actions of this partner who,
essentially, basically gave inside information to a third party who traded on it. we'll get into why people should care about that in a minute in terms of herbalife stock. liz: by the way, listed on linkedin. >> reporter: this gentleman was a senior partner. here's why this matters to shareholders, two reasons. number one, there's a chance -- i think it's theoretical because i don't think it's going to happen based on who i've spoken to -- that herbalife can be delisted from the -- liz: why? it's not their fault. >> it's not. but kpmg because of this sort of action that, basically, meant that a partner gave confidential details to someone outside -- liz: oh. >> reporter: -- sort of polluted the situation; they have basically nullified three years' worth of audited financial statements of herbalife, 2010, 2011, 2012. essentially, they don't have order to their financial statements. we do know they're trying to hire someone new, and in the course of that, they do have a grace period, from what i
understand, at the new york stock exchange to basically get some audited results out there. but clearly, it's a theoretical possibility if somehow they can't get auditor response out there that that there will be an issue here. liz: well, keviners is caught up as well. >> reporter: it's interesting if you own the stock, but what makes me fascinated about herbalife is it's such a hotly-traded stock right now. liz: because of the billionaire battle between icahn -- >> reporter: icahn says it's not a pyramid scheme, the company says it's okay, it's a big company. but here's the interesting thing that we should look at if you want to trade this thing. like i said, you're gambling here, which way did the guy who traded the stock actually trade? now, remember, he's getting his stuff from a kpmg executive, a senior partner -- liz: have they id'd -- can they? >> reporter: of course they can, they will. i really don't care about who he is. i -- liz: well, if it's actman, we
care. >> reporter: i don't think it's ackman, but if it's one of those, yes, that would be a huge story. i think it's someone that this guy knows, but here's the interesting thing: which way did this guy trade? let's just say he shorted the stock particularly recently or sold the stock based on what the auditor said. the auditor knows how to read those numbers inside and out, inside herbalife. that would mean the auditor himself, herbalife's auditor, is basically signaling sell the stock. that would be huge in terms of this battle whether herbalife is a stock to own or not own, whether it's a pyramid scheme or something like that or not. that would be huge. so -- now, why is it trading down right now? i don't know if the market's factoring in what i'm telling you because we haven't heard whether this guy traded or sold -- liz: not the worst trade to the downside. >> reporter: it's down on the potential delisting, obviously. here's the other thing. when you have an issue like this where the senior auditor of a
company is sort of doing something sleaze i have on the side -- sleazy on the side, it raises the possibility that he skewed his report, his part of that report in terms of, in a certain term that benefited his trading. and maybe he pumped up, i mean, this is what people are betting on, in the market. remember, markets are bets. tear short-term bets, they're often wrong. maybe he skewed his opinion on herbalife up so the guy can make some money where it should be down. that's why this becomes a big trading issue, which it is right now, i can tell you that. my twitter page is going nuts on this stuff. liz: oh, mine is too. >> reporter: i doubt it, but anyway -- we should point out that i'm beating you still pretty easily. of. [laughter] liz:@lizclaman, please. [laughter] >> reporter: that's where this is. a lot of shoes left to fall. liz: i'm interested to see if more companies are dumping
conclude -- kpmg. >> reporter: they said when they found the guy out a couple weeks ago, we'll see. they're a fairly reputable company. liz: just about 15 minutes -- >> reporter: they say they are not specifically under investigation, it's the activities of this one guy. liz: of one person. 15 minutes before the closing bell rings. charlie, thank you very much. we have given apple's recent moves a very close look. it may be hard to argue that apple is the stock pick of the century, but our next guest is saying just that. do you own apple? you need to hear what says, and if you're thinking about buying at this level, right after the break he's going to tell us why you should. ♪ ♪ all stations come over to mission a for a final go. this is for real this time. step seven point two one two. rify and lock. command is locked.
liz: we work very hard to keep you gs up-to-date on what the experts and analysts are saying about the jcpenney ceo shakeup. it is one of the most active stocks today, but we also wanted to hear what you have to say. we asked you on facebook if jcpenney still has the cool factor or did it ever have the cool factor? were they trying to get it back? well, ron doesn't think so, and not ron johnson, our viewer, ron. he says: haven't been in one of their stores since my mom shopped there when i was a child. david weighing in, he says: he remembers tweeting the day they announced their new ads, how it was doa. he should have stepped down a while ago. thank you, david. you know what? the board doesn't get enough blame for this, right? the board should be replaced for allowing him to do what he did. mike weighing in, mike says: he doesn't think they can compete in the current retail
environment, just too horse and buggy. join in, don't forget to like us at face book.com/liz claman. also help me beat charlie in the twitter or war we're having, @lizclaman. i think i'm 3,000 behind. okay, when this analyst was on our show in september, he picked a stock that has rallied nearly 55%. yes, 55%. don't we all wish we put everything we own into safe? i mean, who would have thought safeway? but his second pick almost as good, it's up more than 30%. the man, the legend behind these two picks, look at don schreiber. been in the business 30 years, and look how well you're doing now with some great picks, and we want more, don. first, how did you know to pick safeway? i'm always interested in going back and saying anybody, you know, after it happens can be a hero and say, oh, i saw that
coming. of you really did. >> well, we have a software-based quantitative stock selection program. liz: so it's not your genius? >> it is. we try to take the emotion out of investing. you make mistakes when you're emotionally involved and whether the stock is too inexpensive or it's going the come back, i'm going to get rich off it, people hold too long and buy in too soon. we look for really strong value. if it's not really cheap stock, then we are willing to wait in cash until we can find those cheap stocks like safeway that will rise if their normal price -- in their normal price channel significantly and give us an easy win. liz: boy, it sounds like you follow, in a way, the buffett way. some of the names you really like right now, i'll start with the obvious one, and that is apple. down 39% since september highs. you were saying this is it, buy it now? >> yeah. we love this stock. i mean, i think that the
fundamentals on apple are unbelievably strong. the psychology on the stock changed dramatically, you know, a few months back, and the stock really started to take some gas. it was probably fully priced. the expectations were too high. now they're too low. so we think that the stock selling at eight times cash flow, you know, with a pe of nine times, price to earnings ratio of nine times, and google trading at 25 pe is mispriced. liz: right. >> i think the stock is really mispriced. and when they come out with a plan to return some of their capital that they've got sitting there to investors, increase the dividend, they've got good product cycles coming out, so we really like this stock. liz: here's your second pick, and it is coach. coach also has taken a hit. it had a miss in its quarterly numbers, and suddenly it's lost a little bit of its cool factor, but they've got new shoes coming
out. i look at this company, and i wonder where's this one going? >> well, i think they have some luxury brands, really premium. most people don't know that reed is owned by and works at coach, a major player. that's doing extremely well for them. so we think that that marketplace, that mid price market and then the premium market gets stronger as the year goes on. liz: robert half international is your third pick. what gets you excited? >> employment's coming back. this is a company that stays away from the government sector, they essentially make money by putting leasing employees to people, putting -- placing employees. so you have financial services which are pretty strong on a relative basis, there's a lot of outsourcing there, and we also have -- i can't remember the other. but they're not in the government sector which is really good. liz: don schreiber, thank you.
and yes or no on jcpenney, would you touch it with a 10-foot pole? >> put a fork in it, it's done. liz: jcpenney, either way, don, thank you. pretty honest there. closing bell, five minutes away. we're on record close watch again. the dow well above this number, but the s&p 500, will it make a new record? again, five minutes to go. we've got you covered into the close. stay tuned. ♪
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♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ liz: record territory. brushing up against it. let's get to nicole petallides on the floor of the new york stock exchange. yes, jcpenney the big stock of the day. that has the heaviest trading volume day in its history. >> that's right, ever
>> the stock is closing down 12%. these are 12-year lows. jcpenney shareholders are pretty upset these days. ashley: talking about rough days, herbalife having one of those days, nicole. >> herbalife is another story when you talk about herbalife and kpmg. they were the auditor for both skechers and herbalife. could be interesting what happens going forward. alleged insider trading at kpmg. liz: charlie gasparino just reported on fox business that herbalife could be delisted from the nyse because of some of these problems. we're watching that as well. let's broad the picture to see material stocks. they led the markets to new highs, seen on somewhat of a miss for alcoa. >> that's right. pretty amazing. cliffs natural has been a pretty big loser. people may be buying it up. market is movin