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tv   Barrons Roundtable  FOX Business  March 19, 2022 10:00am-10:30am EDT

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i don't even know where he stands on half of the stuff trying to negotiate something with an evil regime like iran or russia they take advantage of it. >> thank you both, kristin tate and charlie hurt thank you so much for joining us. join us again. that's a process for >> next week more commentary and interviews right here in the wall street journal at large would thanks so muc ♪♪ jack: welcome to "barron's roundtable" where we prepare you for the week ahead. general electric's ceo larry culp on the outlook for the company on nuclear power and renewables. how the russian invasion of ukraine could make food inflation worse. we have some investment opportunities to reduce the sting. we begin with the most
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important things investors ought to be thinking about. stocks staged an explosive rally. is the correction over? china made a sweeping push to reassure markets figuring you dramatic stock gains. ali baba and soaring 1%. has concerns about russian cyber attacks grow the software companies that protect us could see big gains. "barron's roundtable,"ben we are analyzing why stocks fell but this week the market staged its biggest rally since november. do you think the market bottom is in for the short term? ben: it was an amazing rally. the nasdaq gained 1% for four days, first time that has happened since 2,011. it was about things not getting worse.
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russia, ukraine, so awful what is going on but we had headlines about progress on negotiations and things are not getting much worse than they have been. we had the fed raise rates by 1/4 point, 3 quarters of a point. and and they just didn't. >> >> oil company stocks have not gone as high as the oil commodity. which suggests the market think there's more to pull back. ben: hard to read into it. investors don't want to take stocks up as much as oil prices, and what the
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longer-term price of oil if it is. if oil hit 130 investors say let's see what happens before you take oil up that high. it has pulled back so oil stocks pulled back, the only sector to fall this week. if oil doesn't pull back, oil stocks rally in the days ahead. ben: was the magnitude of this rise meaningful, does that send a signal? ben: over the short term perhaps. when you have two days of 2.5% gains the index goes up 3.4% over the next month which is more than it would in an average month but doesn't have lasting impact over the next 3 months. we expect the rally to continue.
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ben: the data is very light. if the data holds up in the fed of the rate hikes and inflation. jack: thank you. in china, before we got there we see an ugly freefall. are you calm? reshma: covering the market is not calming for me. the authorities offered a set of reassurances and pledged to support markets and the economy and they need to follow those up with actions but they indicated the crackdown on internet companies that decimated that sector's stocks opening the door for easing covid policies as they locked down cities and they said they
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were making progress to keep regulators from delisting chinese stocks. it sets them up for our recovery. jack: for american investors should americans have an allocation in their portfolio? rechma >> china is not an investable like russia as long as it does not give russia assistance with the war in ukraine but needed diversification, policymakers are focusing on stability. it usually needs -- means stimulus. be prepared for volatility. jack: everyone asks should i invest in ali baba? get in now? reshma: you can, but be ready. it will not be like it was paris crackdown and it could be volatile.
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jack: last week we had christopher craig on the show talking about russian cyber attacks, you look at cybersecurity companies helping protect them. >> money is pouring into the industry. i spoke to the ceo of palo alto networks, grew 30% last quarter. he expects as economic conditions worsen we should she a shift from ransom where tax to attack designed for maximum destruction and chaos. the last few weeks he has seen an increase in denial of service attacks, companies that have spoken out against the war in ukraine. he's been ceo since 2013 and it was right for consolidation. they have more cybersecurity
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vendors than it vendors. he's done small and midsize deals to increase palo alto's capability, stock has done well. look at free cash flow. sometimes revenue and earnings lag so the stock is trading 60 times forward earnings projections but 30 times free cash flow which makes sense relative to the company's growth. jack: google is buying mandyin. that's a vote of confidence from a big software company. larry culp is making big changes. why he says footing operations in three companies will unlock additional value for investors next.
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jack: in 2018 larry culp took control of general electric taking hold of a sporadic culture. he's moving the culture forward splitting into three companies focusing on power, aviation, and healthcare. i spoke with him earlier this week. thanks for joining us, appreciate it. you had a tough job to begin with and so many things happened, covid, inflation, the war in ukraine, what pivots have you made to respond to the rest of the world? >> our first pivot has been to focus on the safety and well-being of our teams in the region. we don't have a large footprint, 60 people but we've been key to make sure they are in a safe place. we have a number of ukrainians particularly in poland and they are top of my course as well.
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russia represents 2% of our overall sales so we don't have tremendous exposure to russia but we did suspend operations in russia with the exception of our healthcare operations. jack: one element of geopolitics and price of energy is nuclear power looks more interesting and in terms of climate change, ge has a foot in that business. what is your view of nuclear energy and what might be involved? >> we really touch every part of renewables and wind on and offshore. with respect to nuclear we are excited about the small modular reactor. a number of customer commitments in canada, ontario power, so these are longer
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cycle development. we won't see a modular reactor installed in 2022. when we think of the energy transition and sustainability, reliability and affordability, they have a role to play. jack: you mentioned the renewables. where does that stand? wind seems good offshore, those turbines are pretty large. what is your view? >> we are big in wind. we are the number one provider in the united states for onshore wind, we don't have a large offshore business, but with the offshore wind turbine we have $17 billion in back log. we are excited about that product launch over the next several years. jack: you source from all over the globe. you have a good view of the leading indicators with supply chain. it has been extraordinarily
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frustrating for anyone wanting a refrigerator to dealing with the inflation that helped to light a fire. what is your view? any green shoot shoot that suggests we are on snarling the supply chain issue? >> we seen product availability challenges and inflationary pressure the world over without exception in terms of various commodity class es. it is a day-to-day battle but in recent reviews we have seen encouraging signs, not sure they are signals but electronic components we have to better line of sight, what we've seen from suppliers in the next three to six months. jack: t. rowe price is the largest shareholder of ge. what is wall street missing? >> companies have been through a lot.
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some other leading institution, it's not to stock -- if you talk to david or others, a view that the earnings and cash generation potential of ge is significant. we are running the business better every day. back in november, is independent companies. we think that will lock additional value. jack: despite the mythology of your predecessors ge was not well managed for decades. you are pushing the reset button. in one minute if possible can you give us hallmarks of your management style and how you are changing things? >> i studied the company for a long time. there's a lot of good in our
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heritage, 130 years. but if you look at our leadership behaviors we talk a lot about humility. to ask good questions rather than smart answers, the red and the green. those are the things that have been near and dear and represent leadership behaviors of ge in the future. jack: it is a better thing to run the company. >> the only way that i know. jack: appreciate it. jack: if ukraine doesn't export wheat, your grocery bill should shoot higher. how you can position your portfolio next. (vo) for me, one of the best things about life is that we keep moving forward. we discover exciting new technologies.
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jack: inflation sending grocery bills higher, shortages are affecting grocery stores and the russian invasion could make things worse but there are hidden opportunities for investors. the cover story on this week's addition of "barron's roundtable". andrew baron is back on the show. we have seen food prices rising dramatically obviously. give us background here and explain how it rippled across the economy. andrew: food prices are up 18% affecting a range of companies including restaurants, package food companies, equipment makers and grocery store chains. restaurants and package food companies are losers because they are absorbing price increases while farm equipment makers are winning because farmers are flush and grocery stores tend to benefit as
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consumers trade down to private label products when grocery budgets are tight. jack: one element people may not understand is how important ukraine is as a global food supplier. can you put that in context? andrew: it was known as the breadbasket of the soviet union. enormous farmland in ukraine, larger than illinois and iowa combined. they account for 20% of global wheat exports and ukraine unloaded 50% of global corn exports in a normal year. jack: if that doesn't get harvested that sense prices up. one more thing to worry about, illinois and iowa. andrew: the next quarter is number 2 in soybeans behind brazil and the us has been
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fortunate, there have been good harvests and bumper crops so, and yields are affected and prices would go a lot higher. ben: you mentioned dear as a beneficiary, this seems like an ideal situation. andrew: dear is well positioned because farmers are flush, corn prices are $7, double the cost of production for us farmers and the average age of combines is pretty old. incorporating features to improve farmer productivity. carleton: how starbucks doing these days.
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andrew: the issues that has been number 2 market in china affected by covid restrictions and our growth concerns but the stock is in a reasonable multiple, the fiscal estimate is low for its start but if it can be back on track later this year and show 10% earnings growth the stock can do well. jack: this is jack hough. you said you liked her she. i might have called the company boring. i might have said a lot of things and stock is up a little bit. do you still like hershey? andrew: it is a great category. her she's the leader in the
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united states. people of reese's, the signature chocolate bar. jack: you are excited about another sweets company. andrew: hostess brand is a good company known for making twinkies and other products like hostess cupcakes and it has been a growth story. the company has not tried to be a healthy company. it is successful at doing that. introduced a new product called many bunt cakes. the company is creating 20 times earnings, around 10% annually. it is a good play on the snacking trend. jack: always good to have you. roundtable members will give their ideas for the coming week and jack wants to know why a theater operator is buying into a goldmine. happiness. or confidence. but you can invest in them. at t. rowe price our strategic investing approach can help you build
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jack: this week, amc theater company chain not at the top of its game, bought a 22% stake in a tiny nevada goldmine. jack: amc entertainment is build a meme. it got killed during the pandemic, became a meme stock and went up. the ceo sold his shares and there was a cash fall so what do you invest in. and did not describe as an industry blue chip. and highcroft stock, and you
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can think of amc as having more meme stink and other companies, going in the business of transferring to other companies that would like some stink of their own. they are for movies, sit back, grab the popcorn, can't wait to see what they invest in next. it could be meta-verse. jack: somewhere in there i should have shouted stocks but i'm not sure when. no stocks here. let's move to actionable ideas. reshma: mch i is the ticker, us investors who want to plan a recovery in chinese stocks. jack: what have you got for us? ben: eli lilly had 8%, good news from a drug trial for a kidney treatment from bank of
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america, one of its obesity treatments. stock is doing well even when the market was getting killed. look like it is breaking out. top-notch drugmaker looks like stock is getting some love. jack: great ideas. check out this week's addition of see you next week on "barron's roundtable". night. ♪ >> from the fox studios in new york city this is maria bartiromo's wall street. maria: happy weekend to all welcome to the program that analyzes the week that wasn't helps position you for the week ahead. i am maria bartiromo. interest rates up a court appoint central bank except six more hikes by the end of the air. funds founder danna niall on what it means for sky high inflation and the risk of recession. plus oil prices bac


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