CNBC’s Brian Sullivan and the FMHR traders weigh in on legendary hedge fund investor, Leon Cooperman’s top picks, including Qualcomm, Wastson Pharma, and Western Union. Also, the cloud play on Intel ahead of Microsoft’s Window 8 release.
Full video and transcript below:
all right, carl. in fact, thanks so much. a special edition today of the halftime report. live from the delivering alpha conference here in new york city hosted by cnbc and institutional investor. you’re looking at a live picture of the summit where right now some of the world’s most renowned investors, including leon cooperman, blue mountain’s andrew feldstein and jim chanos are sharing some of their best ideas. we’ll hear from henry kravis when he delivers the keynote address. traders to here to analyze their best ideas and give you some of their own as well. there’s also a lot of news coming today from capitol hill where fed chairman ben bernanke is testifying on the economy for the second straight day. we’ll bring you any breaking news from his testimony. first, let’s get straight to news. leon cooperman just broke here with where he’s seeing opportunity right now. brian sullivan just gave you his top picks. let’s go through them and trade them with our group today. a1a group, capital one, express scripts, metlife, qualcomm. he did go through a large list of names. watson pharmaceuticals. western union. guys, you could certainly focus on qualcomm which is getting a nice lift today. that stock is up nearly 4%. it’s been a long-time holding of mr. cooperman, anthony. it’s a stock that a lot of hedge funds have favored for its mobile play, it’s tied to the apple ecosystem and many of the others as well. there’s a new product cycle coming for a lot of these smartphones. particularly apple. they’re going to play the earnings momentum on that stock. the one i like the most is express scripts. irregardless of who the next president is, they will do well with whatever the health care legislation turns out to be. so those are two really good high quality names. pete, what name among the many that mr. cooperman went through just a few minutes ago here at dliring alpha stands out to you the most? anthony talked about qualcomm. that one certainly sticks out. these technology names are always something you’re interested to know where the big fellas are actually shifting their money around. i’d even stick with watson pharmaceutical. great company. one of those in the generic space. we talked about big pharma. this is one of those names you sometimes forget to mention. they do an outstanding job. look at these valuations. i like this name. i’m not in this name. i’ve been in it in the past. i’d also highlight halliburton. beaten up. we’re seeing that sector see a lot of activity when you’re talking oil, gas, everything this feeds into it. on the capital one financial story that’s a stock today down 2%. leon cooperman as i said just unveiling that as one of his top picks here at delivering alpha. as i mentioned, the interesting note here is that consumer finance protection bureau takg its first enforcement action today against capital one. ordering it to refund $140 million to some 2 million customers for what it says was deceptive marketing practices. of course, richard cordray chairing that. some interesting news on a day when leon cooperman lays it out as one of his top picks. brian kelly, any thoughts on that? or some of the other names on this long list from lee cooperman? capital one is the one that really struck out to me. the first thing i thought when i saw that fine was, okay, how are they going to generate earnings now? do they have to redo their business model in a way that they can generate that extra dollar? 140 million, not a giant fine for a company — or not a giant hit for a company like capital one. but it would be interesting to see as mr. cooperman goes on whether or not he has thoughts on is — does their business model have to change? or is this just simply an annoying bit of a fly they’ve swatted away. let’s be clear. he clearly had this as one of his picks before the cfpb came out with this enforcement action today. i do wonder, perhaps we’ll catch up with him after the fact on what he still thinks of that company. mike murphy, your thoughts on some of lee cooperman’s top picks? let’s also just lay out the fact that many of the picks that lee cooperman made at last year’s delivering alpha conference were big winners. when he speaks, the market moves. yeah, scott. absolutely. leon definitely has the ability to move the markets. i think halliburton, as pete said, i think halliburton really sticks out to me because energy has been such an underperforming sector here. halliburton under 30 gets really interesting. i like that call on halliburton. also gannett. look at gannett. situation that a lot of people have written off for dead. newspaper publishing. but dividend of over 5%. i think that’s something that i think you can read into a little bit for dividend holdings into next year. a little bit of what he’s thinking there as far as taxes go. yeah. it’s good to note here that stocks are at session highs right now. that best ideas panel that lee cooperman is on continues. we’ll bring you some of the other picks from the likes of jim chanos, kathleen kelly, bob capito and andrew feldstein as well. as soon as they mention names you need to know we’ll bring them to you. let’s focus on the markets for a moment and touch the action. stocks as i said now at session highs rallying for the second consecutive day. this is chairman ben bernanke, fed chairman bernanke speaks and earnings top estimates. the hidden story here is that revenues are weak. 55% of companies that have reported missed revenue expectations. that’s well above the 30% average. pete najarian, how do you size up what’s happened with earnings thus far? you had a name like bank of america today, i heard one analyst say the quality of earnings wasn’t all that good. then you have a honeywelcome out and raise the low end of its target. everybody’s been coming on the television telling us just how bad it is in the global economy. europe is going to drag everything down. europe, of course, is going to be a drag. also slowing in the asian markets. a lot of these quality companies have managed to either move it up on the margins, some of the revenues have been light, some of the revenues have been a little better. but across the board you look at the intel numbers last night. i actually thought they were outstanding. you can love the way this management has been able to direct this company, a monstrous company. the pc exposure world. but it’s the data center. that’s where they’re getting the growth. they are moving into mobile. they are moving into storage. they are getting themselves into the cloud space. because of that, that’s why some of these names can continue to improve. so important, let me just say, it’s great to have you here. because you have your ear where the hedge fund managers are on a daily basis. we’ve got some of the top ones in the room around the corner here. i’m just curious when you get the earnings story that starts to trickle in where these guys are on a larger market sense. lee cooperman, for example, says he’s moderately constructive on the market and lays out the reasons why. what are the other big hedge fund managers talking about these days? it’s a very mixed bag. macro guys this year down 0.5%. equities up about 4.2%. that’s certainly trailing the market by half. you’ve got a mixed bag going on in the hedge fund community. to address what pete is saying, i actually like the revenues. you’re saying, geez, revenues are 55% underperforming. when the economy is only growing at 1.3% and the earnings are still coming through the way they are, this is magnificent for the long pull. i think that’s why guys like lee cooperman are constructively bullish on the markets. if, in fact, we get some economic positives and some growth, these guys are like coiled springs. these large cap, low multiple growth stocks are like coiled springs. i think that’s what you’re hearing from the hedge fund community. murphy, take a look at the earnings story thus far. where are you focused? bank earnings maybe not as bad as some people had thought. throw out bank of america. perhaps you’re not satisfied with the quality of the earnings. do you go and buy a jpmorgan, goldman sachs or some of the other financials now based on the numbers that came out? we haven’t, scott. but i think you can. you look at a jpmorgan. that, i think, sums up what anthony was just saying about the entire earnings season. jpmorgan you heard for weeks was going to be so bad. london whale loss was $2 billion. it was $5 billion. it was $20 billion. you heard rumors how things were going to be so bad. you got a peek under the hood, things weren’t that bad. when you see companies like honeywell come out today, stanley today, the industrials, xli today up almost 2%. i think that’s an area to look at. the banks, i think there’s a little too much risk there. i wouldn’t buy bank of america. but if you had to buy one bank here, scott, i think you’d look at the jp morgan. i was going to push you a bit. if you say bank earnings were okay, you kind of like them but haven’t done anything, i was curious what would make you buy one of the banks in the landscape of challenged earnings going forward, revenue issues and the regulatory issues, i should say, and some of the other overhangs that are with the financials now? i think when you look at it right now it’s just not an area you need to be invested in. i would look at starting at the top at something like a jpmorgan if you got a little more clarity. we’ve spoken about it a few times on jpmorgan. i want to know when are they going to reinstate that stock repurchase plan. sure, i’m going to miss three or four points. when they announce that it’s going to be big news. that’s when i’d rather be involved in a j prgs morgan. there are other more compelling areas to invest in now. scott, i’d rather be involved in jpmorgan when i see a selloff. 36 seems to be a cap. it gets up there and seems to pull back. i think it gets down underneath or near $34, again, that’s the buy. the clarity we’re going to get, mike, is going to come likely in the fourth quarter when they do start to enact some of the buybacks. last quick comment. i want to hear from brian kelly as well. go ahead, b.k. sorry. sorry. but look at — we talked about the earnings. obviously they’re better than what people expected, lower expectations. bup what companies are doing are cutting costs. which also means cutting jobs. which means not spending as much money. so they are healthy. they are lean. and like anthony said, they are spring loaded for recovery. but you need to have a recovery in the economy. that’s probably thege bigst thing out there. so from the global macro space, the sand box i play in all day long, yook at a tremendous amount of head winds out there and you just have to wonder, you know, dow up almost 100 points right now. what’s driving this? i’d have to say it’s a lot more short covering and people concerned that they’re going to miss the next move than it is actually, i think these earnings are going to be sustainable. i’ll tell you one of the things that’s driving it. that’s technology today. that brings me to a stock we haven’t even talked about yet. pete, intel. what’s your take away? people weren’t expecting much going into this report. jim cramer told me this morning he likes what he saw. do you? absolutely. they managed themselves in a very difficult pc environment right now. but they’re showing you where they’re going to get that growth. they talked about the ultra books. they’ve talked about the server market for quite some time now. if you’re looking for cloud plays, in my book right now, best cloud plays out there because of the fact that they are going to be feeding the chips that are going to be going to the servers that are going to be feeding into the cloud. because of those reasons, intel has plenty of growth in front of them. i think over the next five, six, eight quarters. for better or worse, murphy, intel is as tied to microsoft as anybody could be, right? i mean, it’s one of the points cramer was making to me this morn ing. whether it’s the big tide of windows 8, if that’s a runaway success as many people have talked about it is going to be, that’s got to be big for intel. absolutely. look at intel here. i’m not in the name right now, scott. it’s a great place to hide out as you wait for the windows 8 news to come out. intel is paying you over 3, almost 3.5% dividend. look at the quarter y got. it kind of sums up the expectations that are out on the street right now. intel as you said, nobody was expecting much from them. and they put up a good number. i think microsoft is going to be similar. when you see the release of this windows 8, at the beginning of the year everyone was talking about how great it was going to be. as the months have gone by, you’ve heard those expectations get scaled down so much. i think there’s upside to windows 8. i think there’s upside to intel also. judge, also look at ibm after the close today. take a look at ibm after the close if you like that space. they’re reporting earnings after the close. they are definitely in the cloud space. they are definitely in everything that intel, all the cylinders that’s firing in intel, ibm should do well as well. not in the afterhours. look at them now. i went into ibm today for that reason. after intel’s numbers, that put me right into ibm because i think the numbers are going to be good. we got to take a quick break. technology, industrials, energy leading the markets to the highest levels of the day right now. quickly pointing out that halliburton is up almost 2%. that was one of lee cooperman’s top picks today. also note that crude oil was a touch 90 for the first time since may. we continue to monitor the fed chairman as well. the other big event is happening in washington, of course, where he is testifying on capitol hill. let’s listen in quickly and the halftime report continues live sometimes investing