Transcripts For CNBC Mad Money 20160621 : comparemela.com

Transcripts For CNBC Mad Money 20160621

Vote in the European Union makes you numb. Were dealing with total overload at this point. We have prominent rich people that dont care about stocks. We have Hedge Fund Managers talking about how the pound sterling will crash. We have wall to wall coverage of this event in every periodical. More than i can recall when portugal, ireland, italy, greece and spain were about to go belly up a few years ago. I think theres a real possibility we could be taking something that isnt a big deal. At least most certainly for the u. S. And turning it into one. If major countries had truly defaulted during the euro crisis a few years ago i think we could have seen a collapse of the western world. This issue again could easily have rivaled the panic of 20082009 in our country. Im choosing not to worry as much precisely because everyone else is. It will be my job to recommend the stocks that shouldnt have been hammered because they had nothing to do with britain. Of course, we have to wait for the people who have decided they had nothing to fear but fear of brexi it itself to panic and dump their stocks for this exquisite buying opportunity. If you dont wait for the selloff, you may buy too high. Everyone else seems to be waiting for brexit to play out. Im stuck watching companies that report numbers and theyre either not so hot or theyre being received poorly. Take two that reported today. Carmax is disappointed with very slow same store sales. While they were proud of the results themselves, i remember the days when things were spoken hot at this company. They sold a lot of used cars. That is bad news for this industry, that many believe is peaking. Lennar, saw stocks sore at the opening. It came right back down to earth and then some. The Market Reaction i felt was way too negative. I cant tell the market what to do. Perhaps the gross Margin Expansion doesnt occur. Im glad that after the close, kb homes put up these numbers. Thats a lot of the economy there. At the same time, both canadian pacific, the giant railroad to the north and westerner, the about a heamage Trucking Company said business was sub par. Leading to giant declines in the stocks. Canadian pacific was hurt by the wildfire out west. Westerner owned up that the business is simply sluggish. Fedex closed on the quarter, it wasnt enough to please the critics. You put it all together. Theyre all painting the same picture janet yellin did. Congress is not as strong as it was. And to me, thats far more important than the brexit vote. Oil had been down badly, managed to cut the losses. The rebound was helped by a stunning statement from slumb slumberge. Nearly doubled u. S. Oil production are 20 to 30 below break even if thats the case, Oil Production isnt going to go much higher thats certainly good news for the oil patch, as is the work that schlumberger is doing. Now, this turn drove pioneer natural i told you last night, to buy that one back to the price it did, that giant secondary last week. Up more than three dollars, stunning move. Once again, a sluggish economy creates more buying in the stuff you buy. Begged people yet again to sell jm smucker. Stock rallied again. Meanwhile, a pair of stocks that hadnt been able to get out of the way, facebook and apple. They saw some good news. Stocks went higher. Facebooks instagram revealed it past 500 million users. Apple got the green light to open some Retail Stores in india. A lot of it was held back to say theres nothing new in the iphone 7. The Crucial Company to watch right now is microsoft which paid billions for linkedin. A business that was growing much more slowly than instagram and saw its stock rally above where it was i told you they needed to buy growth. Theres a real scarcity of cloud social and mobil stocks out there many people thought microsoft overpaid for linkedin. How much longer can this darn twitter stay independent . Doesnt it make you think about it. We know twitter is announcing long video. We know its cache. Twitters still got that part time ceo. Does he get up in the morning and say, should i go to square, should i go to twitter . What should i do today . I dont know. Maybe its the calendar. Who knows. Maybe well go to the other company, get those credit problems worked out. If microsoft stock rallied, how about google or facebook, they could shell out 18 billion for twitter. Microsoft has enough cash, they could combine twitter with linked in. Adobe reported numbers tonight that werent enough to satisfy those that no one could do. Biotech has become the best house in a rough neighborhood. This is the address of biotech. The bloodletting is extraordinary. Maybe you have to feel the pain of those that own valiant which seems to have a stock thats disinterest greating before our eyes. I dont like swimming with jaws. Just plain nasty. Heres the bottom line, lets circle back to the only story that matters to everyone else. Brexit. And i want to leave you with a question that ill be posing quite a lot on friday morning. What does a decision by the u. K. To leave the European Union have to do with the price of bristolmyers . The answer . Nothi nothing. Caller big giants fan from new york, i have been a facebook stockholder since the ipo days. Ive seen big gains. Is it time to sell . And do you see a stock split coming soon . Stocks play i dont wan to look, everybodys decided the stock is as bad as apple stock lately. You have andrew saying, its overvalued. I dont know, how about we take a longer term view of facebook, its doing quite well. How about that instagram. Facebooks finished. We cant buy any stocks here. Sean in new york, sean. Hi, dr. Kramer, thanks for taking my call. Of course. Being an it major in college, i cant help but notice the future Growth Potential in cloud computing. Of course, my question is in regards to the sales force. I like the growth, but im uneasy about the Insider Selling and how close it is to a 52 week high. Do i buy now . Maybe you wait for someone to get a chance to be disappointed off brexit. Everyone tells me, you know, the worlds going to come to an end on friday. If it is, that may be a good time to buy sales force. What do you think of xerox . Their spin off. I thought it was going to be better. I thought the xerox spinoff was going to be good. No one cares for it at all i got to tell you, i kind of believe in it. Its not working. Patrick in texas, patrick. Love the show, recently picked up a couple of your books, started reading get rich carefully and im thoroughly enjoying it. I was wondering about netflix and what do you suggest . They are shelling that netflix. The stories, amazon coming after them, you have to be worried about international slowing. Theres a piece yesterday very negative about the growth rate. I have a feeling this stock is going lower. And oh, thats it. Should the u. K. Stay or should it go . I got to let you know for a lot of stocks. The price of natural gas has been on fire. Over the last few months. Does it have the fuel to continue rallying . Or is it running on empty. Polaris makes some of the coolest toys adults can buy. Is it time to look elsewhere for new wheels. Dan pulling the curtain down on act one of its 30 year run. As it begins to split itself into 2. Ill tell you what it means for investors. Stick with cramer. Atand that horrible smellstee are really good at hiding. Vice, oh, boy. There it is. Ohh. Ooh. [ gags ] so when you need a house cleaner or an exterminator, we can help you get the job done right, guaranteed. Get started today at angies list, because your home is where our heart is. And well have to use like double maybe more im going back to the store . Yes you are. Dish issues . Get cascade platinum. 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Over the last few months and particularly the last three weeks, the price of natural gas has been on fire. Rocketing more than a dollar from its february lows. Its up to 2. 75 as of today. So does the natural gas have the fuel to continue rallying thanks to the record breaking hot weather or is this running on empty. Were going off the charts to answer that question. Carly is a brilliant technician who is the co founder of my colleague at realmoney. Com. Garner totally nailed the recent commodity breakout when we last checked in with her back in march. She said the whole complex is ready. Given that track record, what does she think of this breathtaking run in natural gas . Long story short . Garner is skeptical that this move can last. You know what shes thinking . And what are her reasons . Why dont we start with some context. Gas is especially hostage to weather patterns. The fuel suffered massive losses. People needed less fuel for heat. Lately weve reversed those losses because of this historically hot and dry summer, which is everyone burning lots of electricity to blast their air conditioning. Natural gas has displaced coal far faster than anyone realizes. Whenever we use power, the price tends to go up. Theyre feeling the summer heat. However, as much as garner is enjoying the run, he thinks the commodity is about to peak. And her view, the market is over estimated the demand for natural gas cooling purposes and underestimated the power for seasonal tendencies. What does she mean by seasonal tendencies. Take a look at this natural gas. This is an unusual chart. Based on the last 15 years of data. Rather than depicting prices, it shows us probabilities. The axis will show the time of the year, but the y axis ranks the odds being in a relative annual high or low. With 100 representing a typical peak garner points out that Natural Gas Prices firm up during the spring. In anticipation for the summer heat. This rally rarely lasts. In most years, Natural Gas Prices begin to sag in mid to late june which is where we have the highest probability of a peak. If this seasonal pattern holds true, the commodity is nearing its highs right now. How reliable is the seasonal pattern . Get this. In the last 15 years, october natural gas has declined from october to december. From july to september, they have fallen in 13 of the last 15 years. What about the weekly chart of Natural Gas Prices. While the bulls have been running the show lately, and you can see that, natural gas seems to be running out of up side. The percentage oscillator, tracks whether natural gas is incredibly overbought. And its currently in the high 90s, thats very very overbought. Meanwhile, the relative strength index, another important momentum indicator, that tries to indicate change ahead of it is nearing 70, that would indicate a dramatically over heated market too. Garner notes that in the past, natural gas has been stopped in its tracks. You can see, boom down. Here down, its a great correlation. Natural gas prices will be facing resistance. The down trend dating back to june 2014, represents a ceiling at 225. Can you see the ceiling right here. Two mid2015 swings high. Bringing in a resistance level at 310. Thats about as high as it gets. In short, natural gas can rally another 20 cents from here, but then garner thinks a reversal to the down side. It can break out at 3 per million or btus, garner says this would be more likely more than the bulls can handle. Especially when you combine them with the already over bought nature of the commodity. Throw in that nat gas almost always peaks near the end of june. Its an interesting setup, isnt it . Here you can see that natural gas has been roaring, its very simple as part of an expanding trading range pattern. Garner says this very pattern suggests the commodity will turn less than 10 cents above where its trading right now. This natural gas rally is going to run out of steam sooner than later. Maybe you take a look at chess peak. Maybe thats too high. What happens if the commodity peaks sometimes. Based on the long term trading channel, possibly could fall down to 2009 to 218. That would represent a full retest of the spring lows. Its possible it could sink back below 2. Garner doesnt think thats likely. We have been experiencing some abnormally holt weather. With all the seasonal factors going against this fuel. Garner doesnt want you getting complacent. Especially since natural gas is heading lower real soon. Were probably about to go through the hottest summer on record, which should lead to surging demand for electricity and natural gas. Much of this is baked into the price of the commodity, the charts in the seasonal patterns suggest that natural gas will peak soon. From then on, its likely to get slammed until the fall. Given our track record, i think it might be a good idea to take profits. Nobody ever got hurt taking a profit. Theres much more mad money ahead. Including my take on a company that could be the king of the road this market. Grab the keys, taking a road trip. A major american conglomerate is splitting itself into two companies. Ill tell you how the millennial mindset is impacting the market. Stick with kramer. Tokyostyle ramen noodles. Freshly made in the japanese tradition, each batch is small. Special. Unique. Every bowl blurring the line between food. And art. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door. Get your first two meals free blueapron. Com cook. How is that that polaris can be having such a tough time . Stock down 40 over the last 12 months. While one of the largest makers of atvs has a rise in return over the last several years. Before we get to what sets these two companies apart, a company that getting 78 of its sales from atvs, snowmobiles and motorcycles. At the same time, theyre a domestic company. Generates 70 of its business throughout the u. S. Thor industries was born in 1980 when the founders decided to buy air stream. Since then, thors made a strategic acquisition, to the point where its one of the Worlds Largest manufacturers of rvs, travel trailers, fifth wheels and specialty trailers. Now that you know what were dealing with, lets dig in. It sounds like a weird story from viking mythology. First its worth pointing out, from the generational bottom in 2009 through the end of 2014, it was polaris leaving thor in the dust. The latter gained 476 . Last year, polaris gets a tongue twister, they got polax plunging. Thor held steady. Polaris down another 3 . Part of the issue here, is simply that polaris stock got way too overheated in that monster run from march of 2009 to november of 2014. Polaris got hit with nasty head winds a year ago. Creating a perfect storm that cut the stock in half from its highs. Polaris highlighted a number of internal factors that drove the stocks awful performance last year. Resulting in even higher costs. Scott wine called it, and im going to quote him, one of our most disappointing executions ever. On top of that, theres the inventory issue. As it boosted production aggressively during the boone times of previous years, in 2015 there wasnt enough demand to serve up all this additional supply. They had to offer rebates on their all terrain vehicles. In addition, management acknowledged theyve done a lousy job of forecasting the results. Even worse, polaris has quality issues. They had to recall atvs, due to fires. Tragedy and it hurt the brand. Then there are external factors like the super freaky strong dollar and then theres competition from the likes of honda and yamaha. Both of which benefited from the weaker yen. We didnt have much of a winter last year. How can you expect to sell snowmobiles if theres no snow. Thats the reason they had to cut their guidance in the middle of the quarter. In short, polaris is real life proof of murphys law. They dropped the ball repeatedly, and the result is the stock that justifiably has been pummeled. Four industries, a very different story. Where as polaris has been trying to expand overseas. Thor is all american. Their products are made in the u. S. , almost entirely sold in the u. S. And canada. While they may get a boost when the Global Company is doing well. Thats going to influence when the rest of the world is doing poorly. Then theres the competition. Polaris has been eaten a lot by its competitors. The rv industry is basically a slap happy ologopoly with ford controlling 7 of the market. Plus, thors rvs have been spontaneously catching on fire. Catching on fire for sales, not catching on fire. At the same time, thor has made a conscious effort to sell its business in recent years. Polaris continues to diversify in more and more categories. This complexity is what led to polaris paint debacle. Thors been doing a pretty good job. Benefiting from a number of tail winds. They acquired postal aluminum. Part of an effort to control costs by bringing elements of the supply chain in house. More and more baby boomers are retiring. Leaving them with lots of free time on their hands. On top of that, because these recreation vehicles are real gas guzzlers. The lower price of oil has been a positive for them. And a variety of reasons like the zika virus. Domestic travel has become a lot more attractive in the u. S. That helps thors rv business. The most recent quarter reported a couple weeks ago, was a fabulous beat. Even after the huge decline in polaris in the last two months, the stocks are valued at the same level. A little over 12 times their 2017 earnings estimates. Thor is doing much better. They deserve to trade at a premium here. There are too many moving parts, too many questions. If youre looking to own a maker of leisure equipment, i say pass on polaris and give thor a chance. If the u. S. Economy slows substantially, these two will be in the doghouse. If you believe our economy is doing well enough, to keep rv hope alive as i do. May i speak to ed in pennsylvania. Ed . Jim, how are you doing . Im on fire, how are you . Depends on what you tell me. Will i get to stay up all night tonight and thursday night. I get to pull two all nighters, i love that. Calle

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