Jon and Pete Najarian join forces to discuss and debate their favorite topics, including the hottest stock-specific news and sports! Today: $UPST, $ADM, $NS, and What Wins In the Playoffs
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00:00 M&A is back baby. It is back in 2024 2023 a little bit light
00:04 2024 already starting to rock and roll will at least expose one of those coming up on the Rebels edge
00:11 Here we are
00:26 All right. All right. All right. I got my man mark Lopresti with us. We're excited about the Rebels edge today
00:31 It is the full week this week mark
00:34 That's a little bit different than what we've been doing for the last month
00:37 It feels like feels like we've had 40 weeks forever. But I think we're ready to rock and roll. Aren't we? We are
00:44 It's good to be back on with you Pete
00:46 It was fun covering for you in the last week and change of 2023 when you were in an undisclosed
00:53 Tropical location your tan has not worn off. I of course will be heading in a few hours down to meet the other
01:01 Nigerian brother the older and less better looking one. I'm talking of course of John dr. J
01:07 We are speaking we have back-to-back events for the next six or seven days
01:13 We're gonna be speaking at Sequire in San Juan at the beautiful Condado of Vanderbilt for the next three days
01:20 Then Thursday morning we jet up to Miami for battle fin everybody that watches the show knows about that company
01:25 We'll be speaking there for a couple days then
01:27 361 family office conference Naples and Miami and then back up
01:32 To the frigid north for the OD micro conference at beautiful
01:37 Caesars Hotel in Atlantic City man when I think where I want to be in February
01:42 I don't know about you Pete, but my mind immediately goes to Atlantic City, New Jersey
01:48 Of course what else
01:50 Well, you guys got a busy busy couple of weeks coming up here mark, it's gonna be exciting
01:56 I know you guys enjoy it too. Actually. I mean, oh we all joke about it
01:59 But we all enjoy what we're doing and it's a lot of fun. All right
02:02 Speaking of which let's jump into the Rebels edge
02:04 I'm gonna hit you up with the mark the the macro minute mark and hits here's what I've got for you
02:10 I find it to be very very interesting that as we
02:14 Start to measure things and we're looking for data and all of a sudden we get some of the sentiment data that we've got
02:19 Wow, we're at record highs imagine that and we've got a nice big leap when it comes to that sentiment up 13%
02:26 That's what we heard about last week. So the markets even though the first week in my opinion was taxes now
02:32 I think folks are back and they're back in a big way and they're feeling a lot more comfortable than probably many of those
02:38 At least those negative folks thought when they got into 2024. What say you?
02:42 Yeah, well listen, it's hard to disagree that sentiment print and we love sentiment data
02:47 Whether it's consumer sentiment trader market sentiment hedge fund sentiment
02:51 It's really really important
02:53 It's part of what feeds those fear and greed indices that we also tend to watch and follow pretty carefully
02:58 and look whether you say that the first month of the year the first couple of weeks of the year was
03:02 Tax related or a little bit of the air coming out of the balloon of the Santa Claus rally
03:07 Whether it was capitulation around we're not going to get those rate cuts at the end of March as the futures told us in the second
03:13 Week in December Pete, but man, it just seems like the bulls want to stay in control all-time highs again today
03:21 Let's see how long can last it's the wonderful world of AI now
03:25 We're gonna jump to fantastic futures and the fantastic futures
03:28 There we go
03:34 Always fun. Let me tell you I look at the price accrued
03:37 We talk about it all the time mark
03:38 But energy is such a big factor and we obviously have to focus on that as much as we it deserves and I think it
03:44 Deserves a lot, but I'm looking at the price accrued moving up a lot closer and near that 75 area somewhere close either up or down
03:51 From 75, but I'm also looking at Nat gas, which is down today again
03:56 And it was it was up there at what 330 I think maybe 336 here
04:01 We are now trading at about 240 and it's down another 5% today to get there
04:05 Nat gas going in one direction. We've got crude going in the other and energy is very very interesting
04:11 Part of the markets right now. So that's where I go with my futures. What about you?
04:16 Yeah, listen, I mean that gas at some points got to find a bottom, right?
04:20 I mean so far I've gotten this winter wrong
04:23 Folks that watch the show regularly going into the fall the late fall
04:27 We talked a lot about how the El Nino effect was gonna do with El Nino
04:31 In which is warmer than weather but a lot of precipitation the form of rain but not snow Pete I can tell you if I
04:40 Tilted the camera out my window
04:43 There is still snow and ice all over the damn place here in the Northeast and yet that gas not
04:49 Catching up or seeming to catch a break. I think that's about
04:53 Reserves less so than demand and when it comes to crude
04:57 buckle up buttercup
04:59 the volatility is going to continue whether it's the hoodies or stuff out of Iran or comments from the
05:05 Russians or whatever OPEC's gonna decide to do at the next meeting. I don't think that we've seen the end of volatility in oil
05:11 I think we're gonna see
05:12 Continued movement to the upside and our next topic is actually going to impact that supply demand story
05:19 Which also tends to imply?
05:22 Optionality for oil going in that direction and what mark is talking about is something we teased before the show as well
05:29 We're talking about new star and what's going on with new star energy. I'll tell you what's going on
05:33 We got some Sunoco coming in and saying hey, you know what? We like what you guys do. We really think it's great
05:40 We're gonna get improved
05:42 Free cash flow. We've got a company that's given out about an eight point eight percent dividend yield
05:48 I mean, there's a lot of different factors going in it's going to be an all-stock transaction
05:52 M&A is back mark. I can't tell you but how much we've seen already this year whether it's in the health care world
05:59 It's now in the energy space
06:00 It's I think it's going to be all over the place and a lot of that having to do with
06:04 Where people think rates are going to be going and if we see those rates getting cut and we start to see that in the latter
06:11 Part of the year, it could be a big year for M&A which also could help out somebody like Goldman Sachs
06:16 But as far as new star, this is a big move. It's not only a 52 week high
06:20 It's a four year high and this is going to be a really interesting transaction. What do you think about this one?
06:27 Yeah, listen, we've been watching this carefully and and John and I covered this pretty extensively in the run-up to the holidays
06:35 Specifically covering the Chevron Hess deal that of course a 60 billion dollar deal Exxon buying plan here the biggest
06:43 M&A deal of 2023 in the oil and gas business and it's a combination of things Pete number one
06:50 These big oil and gas concerns are sitting on a lot of cash, right?
06:53 We know that so their M&A capabilities are less impacted by the directionality of interest rates having said that
07:00 They are also the first to step into the M&A for where interest rates seem to finally be coming down
07:07 Not March end of June, you know, I've been saying in the June for like six months or so now
07:12 I don't get everything right, but that one I seem to have gotten right
07:15 And so John and I talked about this quite a bit that we saw first energy particularly upstream oil
07:21 leading the charge in M&A activity in 2024
07:24 Secondarily health care, although what happened with the health care names last week restating earnings
07:31 on the heels of
07:34 Underestimating what the demand for elective inpatient procedures was and of course we all know what happened last week with those names
07:40 Has been wonder if the M&A
07:42 Rollercoaster can continue the ride in a positive way
07:46 But we're gonna see more M&A in oil and gas particularly in the upstream sector. Stay tuned for it. I agree with you full-heartedly
07:52 I
07:54 Absolutely think that you're right on that one dead right on that one Gilead Sciences
07:58 This is one of those mark where it is a monster company. They've got an incredible pipeline as a matter of fact
08:04 They've got 61 trials going on right now and you start to look out and you say okay phase two
08:10 You got 28 phase three. You've got 19. They're doing everything from HIV to cancer to lung to gastro. You name it
08:18 They're there right? I mean, this is a major company, but
08:21 They've got a few issues going on right now. And the main primary issue is
08:26 They've got a drug for cancer that doesn't seem to be any better than what's already out there
08:32 And that's a problem because they spend millions folks and sometimes close to billions in
08:38 some of these drugs trying to get them all the way through from phase three to two to one and getting all the way through and
08:44 Unfortunately in this case it was disappointing that what they got back and that that's why the stocks getting hit down
08:51 10% down wherever, you know call it 10 11% but it's trading around 79 bucks mark. This is a company
08:57 I know pretty well
08:58 They have been kind of stuck in a range for a really long time and then you see some of the other
09:04 Like a Merck and some of these names that have been ripping to the upside Merck today
09:08 Looking right at the 52 week highs and looks like it's ready to baby break through there
09:13 But Gilead just continues to have these struggles and it's it's becoming a problem
09:18 It is but this is you point out Pete. This is a major name
09:23 That's got lots of drugs that are already out that are post clinical that are late phase two or phase three
09:30 This is not one of these
09:32 Smaller cap one or two hit wonders where if they don't get to phase three for the one major drug that they've got in the pipeline
09:39 That's it's kind of lights out. So I don't know, you know this name better than I do
09:43 You might look to consider buying it. Is it close to the 52 low at these levels?
09:49 It's it's relatively close 52 week lows about 72 that's trading last I looked around 79
09:54 So it's a little bit above that still, you know, it's just not really been the great performer
09:59 It's great company in a lot of ways, but even when everything seems to be going their way
10:04 They don't make the kinds of moves that we see in some of the other names like a Merck
10:08 Maybe it's a Bristol Meyer or whatever. You might want to pick up Eli Lilly
10:11 It just doesn't seem to keep up with those names and I can't explain why
10:15 But it's it's been something that's been going on for multiple years for sure
10:20 Interesting. All right, we're gonna jump to Archer Daniels Midland. Now. Here's one mark. That's a pretty daggone interesting
10:27 I mean with your background and all you tell me if there ought to be a little bit of concern here
10:31 The stock is at 52 week lows today down about whatever 20% or something like that
10:37 Why is that and and we all kind of ask that question?
10:41 well
10:41 turns out the CFO has some issues and they put them on leave and
10:46 Outside of that which is already bad enough. That's gonna cause the
10:50 Q4 earnings to be delayed
10:53 That's a big problem mark
10:55 And this is something that ADM is not going to be very happy with and even though they've got somebody that they've put in the slot
11:01 to run the show now
11:03 This could be a problem for an extended period of time. What do you think about this one?
11:08 Is it is it something where you say, you know what once that's cleaned up it could run
11:11 So you start looking at it or do you say I'm gonna back off for quite a while on this one?
11:17 Well, you know listen in terms of timing. I'm definitely gonna back off until we learn more, right?
11:23 This is never a good situation where they say hey, you know
11:26 It's not like the CMO or the director of HR or so. It's the chief
11:32 Freaking financial officer. I'm gonna add an F to that
11:35 It's a CFFO from now on on the rebels edge
11:37 And if you start talking about adjusting Q4
11:41 The next question is are they gonna start restating two three and one of last year?
11:47 Stocks typically speaking you can pretty much guarantee folks when when companies restate earnings
11:53 Previously announced stocks get whacked. It's gonna make today's downside pressure look like a walk in the park
12:00 Now what's interesting on this one Pete is how commodities perform the archaeodandros midland
12:07 One of the biggest concerns in the in the softs right wheat corn things that go into what we eat every day
12:13 Those things tend to go up when a rate cut is is really sort of defined, right?
12:20 I think we're getting to that point futures currently showing 50% or less for March
12:24 I think it should be zero at this point and in the 80s and going higher for June when that happens traditionally speaking
12:32 Commodities particularly softs go higher
12:34 So you might say well this thing's really maybe getting beat up more than it should be and it will
12:40 Experience some upside trajectory on a commodities bump, but man not until I learn more about what kind of chicane or ee or F
12:47 Or ee I won't use the actual word that I like went on in the CFO's office. That is just not good news
12:53 Yeah, that is not good news. And it's one of those that I agree with you
12:57 I think you can be conservative enough to say, you know what? I'm gonna back off for a while
13:00 I don't need to ever buy the bottoms of these things either mark
13:04 I mean, you know neither do you we talk about this type of thing a lot
13:07 We need sometimes you need a turn and a real turn and I think that's what I'd be waiting for in a DM
13:13 All right, lastly upstart now, this one's pretty interesting because we talk about AI all the time
13:18 It's been a huge influence on the markets meta really absolutely through fuel on the fire last week
13:23 Talking about Nvidia talking about the billions of dollars on chips. They were willing to spend for this whole AI world
13:30 We talked about Apple. Why is Apple keep on running to the upside AI?
13:34 Everybody seems to be leaning on AI. Well upstart
13:37 They're pretty optimistic about the AI in the lending space and a lot of people are kind of joining in on that whole thing
13:44 That being said it's still a name that's been all over the map markets never really had a great path
13:49 It's just everywhere it can run it can fall back
13:53 One of the things that's causing the run in my opinion is the amazing amount of short interest
13:57 It's got 35 to 40 percent of this stock is short
14:02 So could you get a squeeze to the upside?
14:05 Absolutely. Have we seen that? Absolutely. Will it continue? I don't know
14:09 Because those shorts can sometimes say well, you know what?
14:14 Let's get back in there and start pushing this thing down even further again because of this this this this this so for right now mark
14:21 I'm sort of stepping away. We did have some call buying in there today
14:25 But wasn't huge and they were looking for something relatively short time
14:29 So they weren't going out and saying hey, look we're going to June. We're gonna buy these calls
14:34 We think this stock is really starting to head to the upside. This was more of a short term
14:39 We think this thing can bump up a little bit because of those shorts
14:42 And I'm gonna take a slightly more bullish and optimistic view of this one Pete
14:48 I mean, it's not just because it's AI and it's not just because it's data
14:51 It's enterprise AI and as we've said and we will continue to say
14:58 2024 is not just gonna be the year of AI
15:00 It's the year of enterprise AI business to business sass based AI where corporations are using
15:06 Artificial intelligence and machine learning large language models to make better faster more informed decisions
15:13 It's not just about will chat GPT and search kill Google's advertising business. Although that gets 90% of the
15:19 Media time when we talk about artificial intelligence and this is enterprise sass b2b AI in a space
15:26 That it's really needed. So they actually provide
15:29 Banks and non-traditional lending platforms think like our friends at Klarna firm the buy now pay laters folks like that to give
15:37 Underwriting data to those lenders based on non-traditional sources
15:42 So throw out your FICO score your credit score and all that
15:45 They're looking at all kinds of stuff like do I keep my phone my smartphone charged at all times?
15:51 To determine a person's credit worthiness. I submit Pete that a time when we have all-time consumer credit card debt
15:58 We are ringing the bell every time that number comes out goes higher and higher
16:01 You saw some of the banks that reported last week setting aside larger reserves for charge-offs
16:06 The demand for what this company does is only gonna increase can they shake off the shorts? We'll see
16:13 Yeah could be interesting and that is a big amount of short interest
16:17 I I don't remember seeing this quite like that mark and except going back maybe to AMC
16:23 Some of those back in those days when we were looking at that and it was kind of crazy and meme stocks all the rest
16:28 Of it. We're gonna hit a little bit of sports. How about this? We are now down to the
16:33 Magnificent four when it comes to the NFL, right? We got through all the games yesterday some great games
16:39 And here's just a real quick recap of each of the four games the Ravens. Why did they win?
16:44 They rushed for 229 yards Houston at 38
16:47 Green Bay had two turnovers San Francisco had none San Francisco won the game. You've got the Lions
16:53 They had zero turnovers Tampa had two. That's why the Lions won the game. These were very close games the bills
16:59 Dominated everything the only problem the bills had was they've had this curse mark for a really really long time
17:07 About kicking and trying to get that ball through the uprights and he had a you had a kicker
17:13 Who is basically lock stock and barrel? He's gonna put it right through and he did not
17:19 They also had a couple of drops that were really bad from from
17:22 One of the best quarterbacks if not the best quarterback in the game right now, Josh Allen looked unbelievable. He runs the ball
17:28 He he can do just about everything
17:31 He's a guy who doesn't mind a little bit of contact which is different for a quarterback
17:35 And obviously GM's don't like that very much. But so now we're down to Kansas City and Baltimore mark
17:41 So I'm gonna give this to you, Kansas City, Baltimore who wins the game and why?
17:45 Baltimore
17:48 I'm with you. I'm with you and I'll tell you what's an easy one. I got one word for why Lamar?
17:53 That's all I gotta say on that one Lions and 49ers. Who do you like in that one?
17:58 That's a tougher one John because these are Pete pardon me because these are two team. I know I know
18:04 We'll edit that out in post. It's a live show
18:06 These that's a tougher one because these are two teams that I really don't have a terribly high regard for
18:13 Although I should probably shut up because any of the teams that I cared about are basically done for the rest
18:19 until the springtime
18:22 But I guess if I had to that's gonna be a toss-up
18:25 49ers
18:28 I'm with you the 49ers were most of this season the best team in the NFC in my opinion and
18:34 The and the only thing that changed a little bit was that's shocking
18:39 Their defense showed a little bit of holes in them
18:42 I felt like against Green Bay Green Bay ran the ball really well against them
18:46 Which is not something teams usually do and that kind of surprised me and oh, by the way
18:51 You got to count them two really good running backs
18:54 Playing for the Detroit Lions when the world tells you that running backs don't matter mark. You need to tell these guys
19:00 Hey, look, this isn't baseball
19:02 This is not money ball running backs actually do matter and if you look at every one of the last eight or if you want
19:09 To look at the last 16 teams in the NFL for playoffs
19:12 All you got to do is say okay
19:13 Who are the top 16 running backs in football because they were the ones in the playoffs. I mean, it's morally
19:18 It's very highly what you listen, although the strength or relative weakness of the defensive line
19:23 I think was a theme that we saw do a big part of the regular season certainly have seen. Yeah. Yeah for sure
19:29 All right. Next we're gonna do one other one and it's gonna be in the NFL again
19:33 So you've got free agency coming up
19:35 You've got the combine coming up
19:36 But most importantly you got the draft coming up after all of that and that's all the way out to me
19:41 But the NFL is 24/7 365 days a year mark. So we know that so here's a question for you
19:48 John's the one guy who's a Chicago guy, right? He played for the Bears
19:52 He still has a home in Chicago or two and the guy absolutely
19:56 Breeze and it lives breeze and everything Chicago Bears
20:00 They have the first and the ninth pick in the draft this year in the first round
20:04 If you are the GM of the Chicago Bears
20:08 Do you keep that number one pick and pick?
20:11 Whomever it is that you're looking and you just think is deserving or do you trade it down mark and maybe get two picks?
20:18 Probably not two in the first but you might get one in the first this year
20:21 Maybe one in the first next year who knows but something like that
20:24 Would you do something like that? If you were the GM of the Chicago Bears?
20:29 Listen, it totally depends on who's on my hot list and how bad I want them, right?
20:34 I mean, it's really fascinating to me to watch and we actually covered the the combine and the draft a couple of years ago from
20:42 A data perspective with with battle fin which was a whole lot of fun
20:45 The the draft actually being the most watched television other than the Super Bowl
20:50 A lot of people actually don't know that but watching how these GM's
20:54 Use and parlay that currency in terms of where their where their picks lie is always fascinating me
21:00 I don't know because I don't know
21:01 I don't know what our beloved Chicago GM has in mind in terms of what his Christmas list was or is
21:08 So it'll be very interesting to see how that plays out
21:12 but I always find it fascinating when they give up that number one slot and either trade down to get a couple more or
21:18 Swap it out. I think the biggest mistakes that I've seen GM's make is trading up
21:23 I think some of the better moves have been trading down and getting more of what you might need as long as it's a quality
21:30 Draft you've got the guys that you want and I think when I look at the Bears, I actually like Justin Fields
21:35 I think he's a heck of a quarterback a lot of people don't so they think that they should stay there and take Caleb Williams
21:41 From USC. I completely disagree with that one, but I was going back and just trying to see
21:46 What does it really mean in the draft when you trade down or if you're the opposite side trading up?
21:51 I
21:51 looked at what they did to get Jared Goff at the Rams the year that he came out and he was the first pick in
21:57 The entire draft and mark you would be shocked go back and look at that one
22:01 You can understand why there are some teams out there that they have a moment in time where they're good
22:07 But then they've got multiple years where they slip because they don't have any picks left
22:11 You know, so, you know, you're you're damned if you do
22:16 And damned if you don't but I think in the case of the Bears I would trade down
22:21 I would love to get a couple of picks in the first round you keep that ninth pick
22:24 Maybe you go a little bit further down to get something else and maybe it's something you really need
22:28 but I've got a lot of opinions on that and I've actually even got a lot of conversations in my
22:34 Still coming up this this offseason or whatever about about football in the NFL. So we'll see how that all
22:40 Who's at the top of the list
22:44 for for me or for
22:46 Or the or the draft if you I'll turn it back to you if you were that if you were that GM of the Bears
22:52 What would you do? How would you use that currency and who you going after? I absolutely would trade down
22:58 I I don't like Caleb Williams that much
23:01 I think that he's a bit overrated and against the the quality of competition they had in the PAC 12 defensive backs
23:08 I don't think it really showed who he was
23:09 I actually think there are some quarterbacks mark that are a little bit lower right now when you look at the draft
23:15 They're probably rated like the guy from Oregon Bo Nix. He's now scheduled to be the number 31 pick in the draft
23:21 That's you know, if you believe these numbers Wow, I think he's much better than that
23:26 So if I got out of first and I got down to like 15 16 and I've already got number 9 pick
23:31 I'm gonna use the number 9 pick on probably an offensive lineman because they're really deep with really good players and
23:37 then I'm gonna take Bo Nix and I'm gonna have a guy who's got the fastest release in college football and
23:43 The most the highest percentage completion in all of college football, but for whatever reason he's like
23:51 Ranked number 31 pick in the draft and number four or five in the quarterback part of it
23:56 And yet they've got some of these other guys in front of them that in my opinion don't have the quality that he's got
24:02 But there's a lot of things there mark
24:05 There's a lot to unpack and it's a lot of fun kicking around football stuff because it's something we can do 365 days a year
24:11 It's crazy. I mean, it's truly crazy and free agencies right around the corner
24:15 So we'll be reading about that pretty soon and seeing who's going where
24:19 Mark really great to have you with us always is great a lot of fun. We have a lot of good stuff
24:24 I tell you what, I think we're gonna see more M&A
24:26 I think that's gonna really start picking up as we get deeper into 24
24:30 We're just barely into it
24:31 But I think that's going to be something that everybody ought to keep keep note of that's gonna be happening mark
24:37 Thanks a lot and folks. We'll see you tomorrow at 1 p.m. On the rebels edge
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