Halftime Pt. 2: The Consumer Contained?
Shares of Tupperware Brands were off in midday trading Tuesday after the company's second-quarter results missed market expectations because of declining profit in Europe and because it forecast weak earnings for the third quarter. But on the Fast Money Halftime Report, CEO Rick Goings says Wall Street simply misunderstood earnings.
The Orlando, Fla.-based company known for its colorful food storage containers posted a record quarter, according to Goings. He says four of its five business segments across the world posted gains in Q2. While other global companies slowed, he says Tupperware remained strong. TUP is currently trading at 10 times earnings with a 2.3% dividend yield. And while 15% of its business comes from North America, Goings says its American investors who don't understand the company, its brand and how earnings were reported.
Goings played down an accounting error found at its Russia unit, even though the company's quarterly results were hurt by an $8.8 million, or 14 cents a share, one-time charge.
Tupperware today, says Goings, is not the Tupperware of yore a la June Cleaver on Leave It to Beaver.
"It's a different product line," he says, adding that in France, the best-selling product is a gourmet steamer that costs $150. "We changed the the product line, We changed the party—It's a girls night out."
Watch the full conversation with Goings by clicking here.
What's the Trade?
Trading at 10 times earnings with a 2.3% dividend yield, Patty Edwards of Storehouse Partners likes Tupperware's story and says she might join the party.
STEEL NAMES PUSH HIGHER
Amid a sea of red, steel names are seeing a push higher despite a weak earnings report from Steel Dynamics early Tuesday.
The pop, explains Brian Kelly of Kanundrum Capital, is coming from an upgrade by UBS. It says Schnitzer Steel Industries saw a slight uptick in scrap prices, which correlates to the economy and is a positive sign. It's not long-lived though, Kelly says.
Regarding the copper trade, he says there is a differential regarding Asia and Europe.
"You can buy copper in Shanghai cheaper than you can buy copper in London," Kelly says. "So there's a little bit of an inventory shift going on. I think that's where the shift is coming from there."
UNUSUAL ACTIVITY: WEATHERFORD
Weatherford rallied nearly 5% Tuesday following its earnings release, which said North America looks pretty good despite the impact of the moratorium.
In the pits, Jon Najarian of optionMONSTER.com says there has been heavy activity. On Monday, there was a lot of buying and that was a good tell. The stock is now reacting "extremely well" to nice guidance going forward. He thinks WFT is the strongest stock in the sector.
TAKE YOUR POSITION: YAHOO!
Yahoo! is expected to report quarterly earnings after the bell Tuesday. Shares of the Internet company fell 18% in the past three months.
There are some positives in terms of advertising rates, says Patty Edwards of Storehouse Partners, adding that the stock is trading at 20 times with rougly 10% growth. But he remains uninterested in this Internet play and says, ""There's more exciting things out there and I just don't feel the love."
Anthony Scaramucci of Skybridge Capital, however, takes another view. He says from a valuation perspective, Yahoo! shares are cheap. The Hedge recommends buying a package of tech stocks, including software, hardware and search engine plays. These companies, he says, don't have legacy pension issues.
"These are the stocks that are anchored to potential global growth," says Scaramucci. "When the economy starts to grow again, you want to own a package of these sorts of names."
But if given a choice between Google and Yahoo!, he added, he would pick the former.
POLL OF THE DAY
David Einhorn, a value investor at Greenlight Capital, bought Apple in the second quarter. He cited the company's $40 per share in cash, which when backed out of the share price gives it a price-earnings ratio of around 15. So we wondered, are you buying Apple with Einhorn?
CALL THE CLOSE
"If we rally, you sell it," says Brian Kelly of Kanundrum Capital.
Jon Najarian of optionMONSTER.com thinks Kelly will could get his chance to sell, predicting the market may push higher.
Anthony Scaramucci of Skybridge Capital agrees with Najarian and thinks the market could go up.
Patty Edwards of Storehouse Partners is staying hedged.
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Trader disclosure: On July 20, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Jon Najarian owns (IBM); Jon Najarian owns (TXN) calls spreads; Jon Najarian owns (WHR) and short calls; Jon Najarian owns (GS) and short calls; Scaramucci Owns (GS); Kelly owns (BP) puts; Kelly is short (GS)
For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (INTC) for clients
Edwards owns (JNJ) for clients
Edwards owns (JPM) for clients
Edwards owns (MS) for clients
Edwards owns (PEP) for clients
Edwards owns (TXN) for clients
Edwards owns (WMT) for clients
Edwards owns (YHOO) for clients
Edwards owns the S&P500 for clients
For Anthony Scaramucci
SkyBridge Capital own (GS)
For Brian Kelly
Accounts managed by Kanundrum Capital own (TLT)
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Accounts managed by Kanundrum Capital own (BIG)
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Accounts managed by Kanundrum Capital own Japanese Yen
Accounts managed by Kanundrum Capital are short (BA)
Accounts managed by Kanundrum Capital are short (USO)
Accounts managed by Kanundrum Capital are short (GLD)
Accounts managed by Kanundrum Capital are short Aussie Dollar
Accounts managed by Kanundrum Capital are short (AMZN)
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CNBC.com with contributions from Reuters wire services