3-Stock Lunch: Eli Lilly, Paypal, & Paramount

Welcome back. Time for today's 3 stock lunch. And Boris Schlossberg is our trader today. He's managing director of FX strategy with BK Asset Management, also with CNB CNBC contributor. Boris, welcome to you. Let's start with Eli Lilly. Today, President Biden and Senator Sanders have continued their push for lower drug prices. They are now citing the high cost of weight loss products in an op-ed. Should that dent the shares in your term potential? Yeah, I think any kind of a pullback here is going to be a great buying opportunity. I mean, Eli Lilly is the leader in this space. Zeppound and Manjaro have multi year multi bagger of investment opportunity because they're just such an incredible drug. I've been making an argument with you guys for a while. The GOP one is a much bigger investment opportunity than GPT 4 for the near term. And I think these, you know, these drugs are are here to stay. And of course the best way to play them is going to be Lilly. So any kind of a dip I think is going to be great. But in this case as well, look, it's up, it's doubled over the past year. You don't think it's too expensive? It's too expensive, of course, in the near term. But if you're looking five years forward where they're going to have this massive global scale, remember obesity is now a global problem, not just the US problem. And the amount of revenue they're going to be able to generate off this product I think is going to be tremendous. So I think if you have a three to five year forecast going forward, a vision going forward, you'll be very, very well served. Lily, what are prices get capped? So if prices get capped, ironically enough, I think it may actually expand the market, right? So you have lower prices, maybe, maybe you're going to have more, more people willing to take the drug because there's such a huge demand, they can't fill it. From everything I see anecdotally, it's three to five to, you know, sometimes six week wait on, on the pharmaceutical side to fill the the drug. It's, it's just, I think a tremendous buying story and it's always buying stories. You know, you get really, really big moves on the stock and they're always underestimating the power of them. I think pricing of GOP ones, no. Okay. Up next, PayPal getting an upgrade from Susquehanna to positive from neutral, citing valuation for the upgrade following the stocks recent decline. So Boris, what's your trade on PayPal? So this is a really interesting story because yes, from a valuation point of view, five time cash flow, 13 times earnings, it looks kind of really good. But I think from a secular point of view, I am very, very cautious on the stock. PayPal has a lot of competition right now. It's #7 in China, very much at the bottom of the seller in the in the leading place where there's digital payments and with Apple Cash coming out, I've seen the Apple Cash demo very slick. The ability to be able to to pay somebody out of messages, kind of very slick. I think it's very, very hard for these guys going to be to compete going forward and to me, in order to be able to to get long on the stock, they're going to have to see actual customer growth instead of just financial engineering. And until that happens, I'd very much be a hold. At this point. It's just a hold. Let's move on to Paramount then. Tons of news surrounding this one today. What's your trade on the stock Trading currently a little over 10 bucks a share. So I think this is a stock that's given every trader and A and a suitor PTSD over the last couple of years, right? I mean, we just had so much drama and disappointments going back and forth. The problem paramount I think is a really interesting punt because this clearly has tremendous amount of assets, but at the same time all sorts of legal problems because of the arrests on family having near universal control or total control over the voting. So at this point, I think you know the story here that Barry Miller and IAC, Barry Diller, I'm sorry, and IAC may may have an interest if they could come to a deal that certainly would give it a huge boost. The stock I think has a potential to be a $15 takeout stock. So there's a great punt. But at the same time, you have to very much walk into with your eyes wide open. And if it doesn't work, it could be dead money going forward. Dead money. The dreaded words, Boris, We hope not. Thank you for your time. It's good to see you today. Good to see you guys. Bye, Boris Lostberg.