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tv   Mad Money  CNBC  November 4, 2015 6:00pm-7:01pm EST

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mcneal who passed away. but go with gilead for the final trade. >> happy birthday, mel. after a move from 130 to 200, i'm taking profits in this blue chip chinese adr. >> and ourbob. i'm melissa lee. thanks for watching. "mad money's" up next! >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you a little money. my job is not just to teach but to educate so call me at 1-80 1-800-743-cnbc.
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or tweet me. almost everywhere i look. of course you can focus on the overall market where the dow dipped 51 points, s&p 500 decli declined. nasdaq fell. or maybe get your hands dirty, go case by case. but the presumption at the moment is that if a company is at all suspect, its stock is either guilty or will be found guilty by association, not to the best performer in the group, but to the worst performer. sell, sell, sell. let's rip down the list. right now there are a ton of drug companies with life-saving formulations that could be worth fortunes. but today a bipartisan senate panel announced it's going to examine skyrocketing drug prices and said they want to grow valiant sell, sell, sell the poser child for more expensive drugs and the private company that started this whole firesto firestorm. at the same time, some democratic members of the house started a task force to investigate the exact same thing. of course, valiant gets smashed for another 6% decline. what else is new there? but you know what happens.
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the market takes its cue from valiant! portfolio manages who own shares in other companies with pricey drugs like the biotechs or faster growing pharmaceutical companies get scared and they dump. sell, sell, sell. regardless of how the companies are doing financially. i have brent saunders coming up and we can ask him about despite reporting extraordinary earnings. some investors are saying uh-oh, i've got to get out of this one before we discover this one is raising prices too fast. we saw a similar thing back on september 21st when hillary clinton tweeted about prowse gouging. it lasted a week and made a ton of sense to sell all things pharma and then buy them back a week later. in the end all the drug. cans were presumed guilty by the market. today i can't say the declines are over given how the news cycles reverberates magnifies this hot-button issue. i can tell you allergan, i think
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this company's worth it. the same guilt by association trade out spectacularly. it kind of blew my mind today. in the media being sos. it turned really vicious fashion. this is really incredible. last night before we leave, cbs reported and ceo les moonves told a perfect tale about rising ad rates and big hit shows, sports, he even talked about how those thursday night games aren't as bad as usual. the stock traded up on his comments. all the stocks traded up on his comments. cbs vaulted almost 3 bucks on moonves's contagious enthusiasm. i wanted to go to work as ad salesperson for cbs after i heard that call. then simply out of nowhere, time warner, which had also reported pretty decent, dropped a bomb! on its midmorning conference call, dramatically lowering. >> sell, sell, sell, sell. >> in sportcast in part because of weak ratings for subscriptions for cable tv products.
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it was a sucker punch! right to the gut, boy, people are really angry, i've got to tell you. instead of reacting to the good news from cbs, the whole group took registry from time warner included cbs which ended up down 29 cents after that magnificent opening rally. it doesn't matter that cbs isn't experiencing anything like that at time warner which doesn't have a bevy of programming like cbs has with the nfl. the group got crushed. who knows when disney reports tomorrow. espn, that programming is expensive. plus disney has a lot of programming that looks like time warner's not-so-hot offering. the stock after opening up a buck nosedived a little after 10:30 a.m. when time warner lowered the boom and closed down $2.29. boy, that's the guilt by association trip writ large. same with oils. both the majors and independents have been showing great
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production growth lately and the stocks have been bid up as people realize that crude doesn't just go down. it can actually rally. but today the price of crude fell $1.50, and it doesn't matter who's weak or too strong. it's like the whole move has come to an end. you want to beat everyone else out the door. i debated taking profits from my charitable trust this morning. by i time i noodled things, i don't think about what was worth selling, maybe, others had already skedaddled. you had to sell the oils yesterday. in this kind of environment, you're always wondering which rally is going to be repealed next, which group will be found guilty. frachl, it's the beginning of november. i worked outside for much of the afternoon. why? because i hate my colleagues? no. because it was 70 degrees and sunny. who wants to own a retailer that's brought all its winter clothes out, when it's 70 degrees outside? you want some macy's? feel good in nordstrom's? penny? i wouldn't. if i want retail, i'll go to the
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inventory list amazon which doesn't matter how sunny or rainy it is. oh, and then this whole foods. disappointing number very evening. we'll speak to the management of the company later in the show. but you know that the natural organic category is going to be hammered tomorrow because of whatever happened in whole foods tonight. guilt by association. i know the industrials have done fantastic since the chinese stock market bottomed. more on that later. are we tiptoeing past the graveyard as the super freak in strong dollar has suddenly come roaring back to life? what do i do with tech? geez, knowing that a skyrocketing greenback is going to cause estimates to be slashed. do we hope nobody cares? or is it a case where they don't care until they do? how about cybersecurity? this has been red hot of late. but this evening, fireeye, holy cow, a highly visible cybersecurity company cut its guidance. you think that people differentiate between fireeye and palo alto tomorrow? think again. not all bad.
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facebook reported dynamite quarter after the bell. homeway, subscription website for vacationers got a big cash from expedia which should cause both being sos to go up tomorrow. that's right. because expedia, people are going to like this deal. that said, though, the pin action off the web, it's always few and far between, not enough companies, they don't trade together. yet the guilt until proven innocent presumption was more powerful than any trend today. and when the guilt comes on it's never just for a day. that means you can expect more selling in drugs, entertainment, oil, cybersecurity, retail and scattered industrials tomorrow and of course cybersecurity which is why if you're a trader, you probably wanted to join in the fray today, if not tomorrow. but if you're an investor, here's my bottom line. don't play the uptrend that's running higher. play the downtrend that's running out of steam which means wait three to five days for this collective punishment to play out. and then pick up what's getting crushed that shouldn't be. by that point all the thns will be pummeled and you can buy the cheapest for less than what
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they're worth, providing you accept there could always be another day or two of recidivism before they find the bottom. let's go to emily in arkansas. emily. >> caller: thanks for being both entertaining and informative. >> that's my goal. thank you. if i were not entertaining, people wouldn't watch. if i weren't informative, it wouldn't be worth watching. what's going on? >> caller: i bought skechers just over a year ago after hearing a segment on your show that indicated tremendous potential for growth. the stock post toned after seeming to confirm that the brand was good like the head of the company said. recently the stock plunged on earnings but has since seemed to stabilize. i'm not sure i'm as confident about the stock moving forward. what are your thoughts? >> well, i think the shoe business has gotten a little tougher. dsw was just disastrous. i was with a good retail analyst. we were both talking about how the weather's not really right. a little warm. skechers admitted that there's a rough patch. if you take a long-term view, i think you'd find that skechers is a better buy than it is a sell. robert in florida. robert.
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>> caller: boo-yah! >> well, boo-yah right back at you. >> caller: cramer, the airline industry doing so well. what's the growth opportunities for the car rental companies? where do i go? avis or hertz? >> i see you got me there, partner, because when you said that the airlines are good, i'm thinking i'm going -- i'm so glad because i'm going to talk about how great delta is. i'm going to mention that i like southwest air, but then you went rental car and that's a whole different kettle of fish. and it's a fish that i want to shoot because i think the earnings are all coming down for that group. there's too much competition. i don't want you to open them. let's go to eric in new jersey. eric. >> caller: boo-yah, cramer! >> holy cow, man, where do we get these callers? it must be someone in the phone room. what's going on? >> caller: what's going on, soul brothers, sticker sol. what's your one-year outlook for the stock and the home building industry? >> a lot of this depends on the fed and the raising rates and i think that they're going to have to because the economy's a little bit stronger.
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my feeling is is that both are great long-term buys because they have good land and they make good homes. that said, when you hear the term long term, it means that i'm not pounding the table for you to buy them. i need to go to lionel. wow! in a state that i'm now quite familiar with, oregon. lionel. >> caller: boo-yah, mr. jim. big boo-yah from oregon, my friend. >> man, you live in the most beautiful part of our country. >> caller: absolutely. god's country, my friends. hey, a question to you, buddy, is lb. i know they had a good run. they're going to be announcing the 18th of this month that a good time to jump in or should i wait? >> listen and listen good. this company is run by les wexner who is the finest merchant in the land. it hit a 52-week high. it did not get on that list by accident. i think lb, every single time it has gone down, i have told you to pull the trigger, and this time it will be no different. let's just say it may be over,
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but that doesn't mean we can't learn something from the pastime. keep your bat on the shoulder, wait for the opportunity to take a swing at buying the best in breed sites. on "mad" tonight, allergan reported a fabulous quarter this morning, but as washington wages war against rising drug prices, the stock took a hit. buying opportunity? then after a difficult start to the year, the cruise lines seem to be showing signs of strength. so is it smooth sail are for royal caribbean or choppy waters lurking? and whole foods just reported, i don't know, but let's find out if it's any good. stick with cramer. don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an e-mail to or give us a call. at 1-800-743-cnbc. miss something? head to
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today washington gave you a gift. a few days later you need to take it. what am i talking about?
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allergan, the farm us pharmaceutical formerly known as activist is currently in talks to be taken over by pfizer reported a spectacular quarter. the company delivered a fabulous 30 cent higher than expected revenue rose by 90% year over year. after these numbers you have to believe that pfizer would be willing to pay a huge amount for allergan. even if pfizer walks away from this potential deal that keeps being talked about, i think the stock can work its way higher simply because of its significant earnings power. but instead of rallying it got hit falling more than $1.50. they announced a newly formed affordable drug pricing task force in order to fight rising drug prices. we know this esche u has crushed many of the stocks. i'm looking at you, valiant, but allergan is nothing like valiant. they invest rather than just raising prices. plus my guess is the task force in the senate will be a little toothless given that the crusader is in charge and even if hillary clinton wins the
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presidential election landslide it's insanely difficult for the democrats to take back one house of congress, let alone both, and i don't think anyone ever wants medicare to actually start bargaining with these drug companies at least in the majority party. betting against allergan has been a bad one. after getting slammed down to $2.52, the stock's come roaring back, although obviously it's been helped by the takeover stocks at pfizer. today you got it. let's check in with brent saunders, the president and ceo of allergan and find out what's next for his company. mr. saunders, welcome back to "mad money." >> thanks for having me, jim. >> i know it's the elephant in the room and i know it can't necessarily be petted, but my colleague, david faber, on "squawk on the street" said you know that allergan and pfizer are talking and it's going to end up being the equivalent of a lot more if there is a deal than allergan's currently selling for. i do have to ask you this. if allergan were to be for sale and if someone was to buy it, i presume that that price would be a lot higher than $3.07 where
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the stock went out. >> yeah, i think that's probably a safe assumption. but just to be fair, we've issued a press release on our early discussions with pfizer and outside of that, there's not a whole lot i can comment on. >> can you give us a little more update -- i know, again, difficult -- on the deal with tva and you were talking about closing the first quarter. >> the deal with teva is on track. we had a good performance this quarter which we announced this morning. we're working well with executives on the pre-integration planning. r&d group continues to fire on all cylinders. so question fully expect that to close in the first quarter and they're going to get a very strong, nice business. >> brent, i want to talk about something you directly point at. you say in your conference call pricing's been in the headlines in the presidential debate. let's not pretend this topic has just appeared in the news. you, one, addressed this head on. and two, you had a strategy, open science at allergan that i think directly -- directly
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contends with what some of these people in congress want to do when it comes to price increases. i want you to just talk about a philosophically for a second because i want people to understand that drug companies just don't sit there and do nothing except for raise prices. >> that's right. look, we are in the innovation business. we have an open science model where we access the broader health care ecosystem to look for innovation to solve for unmet medical need. and look, at the end of the day, if we're going to talk philosophically about this, i believe pharmaceutical. cans have a social contract in america to make sure that we continue to invest money in r&d, to raise drug prices in a very responsible way, and make sure that we can grow our business for our shareholders. and i believe all of those things can live in harmony and the vast majority of the pharmaceutical industry, they actually do. >> well, let's talk about open science in action. something i care dramatically about as the central nervous system. are diseases that don't look like you have a disease, but
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millions upon millions of people have. you've got in sleeding therapy in mood disorders, migraines, alzheimer's disease, talk to me about open science and action means about trying to solve what are the toughest, i think, the toughest diseases to solve. >> yeah, so let's take a promising area where we've applied open science and that's in depression. there are numerous ssris out there and that's been the standard of care for many years, but for many patients, that's not getting them over the hump on this disease. there's still tremendous unmet need. there are horrific side effects that people have to deal with. and so we went out and looked for how can we really make a difference in depression is this this is a massive category with many suffering patients. and we negotiated a deal with a company called norex to end license their best-in-class compounds for depression. now, we are doing the more costly studies, bringing them into phase three. we're also working on moving it from an iv to an oral which takes a lot of formulation science.
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and this is an investment we're going to make for the next several years to bring these drugs to market. but if we're right, we really have a huge impact on depression, and we also have a very large drug from a sales perspective. and so, again, doing something that is really good for people suffering with depression along with creating a return hopefully for our shareholders. >> brent, one last question because i know it's difficult to talk about this, but botox, some said the number wrept that good. i looked at botox. i thought it was extremely strong and there were some currency issues. am i wrong about that? >> no, botox, on an apples-to-apples basis, grew almost 13% in the quarter. there was a currency drag. we will ultimately lapse that. you know that the dollar has strengthened against a whole basket of currencies around the world. but botox is doing great. it's a durable franchise, the number one brand in pharmaceutical in the world, and we continue to expand the indications and opportunities for botox, and we believe we presented today at an r&d day
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here in irvine that we have another multibillion dollar of opportunities just in the pipeline around botox. >> all right, brent, i appreciate you coming in and being as candid as the law lets you. it was a fantastic quarter. september 21st, that was the day that hillary tweeted. we had a couple tough days but the numbers were great. brett saunders, thank you so much for coming on the show. >> thanks for having me, jim. my charitable trust, i think this is the drug company of the future. "mad money's" back after the deck. all hands on deck. after plowing through choppy waters earlier this year, royal caribbean stock has been smooth sailing. is it time to get on board? or is it time to abandon ship? cramer's out to sea with the ceo just ahead. and later, supermarket slump? whole foods has been not so fresh as of late. is it still worth keeping in your shopping cart? or has this stock spoiled? cramer's going one on one with the co-ceo of whole foods all coming up on "mad money."
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we looked back at the charts of many industrial and stock charts, you'll notice they were stuck in a bear market until the
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last week of august. since then, they've been rallying pretty furiously. regardless of the recent relatively anemic earnings reports. what happened during the last week of august that caused these stocks to bottom and then come roaring back to life? simple. the chinese stock market, which had been in freefall since june dropping from the 5100 level to just below 3000. it finally stopped going down. ever since that late august shanghai bottom, the chinese market has rallied hard. it's up more than 18%. and it's taken the stocks of our own industrial and oil companies along with it. some saw it coming. in fact, the august floor of the derided as phony by many, dismissed as an artifact of the chinese communist government's clumsy attempts to halt the run on the exchange. >> boo! >> at the time we were told by myriad of short sellers that such a bottom couldn't possibly hold. skepticism abounded.
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we heard that no government was so rich or powerful enough to stop the decline in its own stock market and that chinese rules banning selling or even making it a crime wouldn't stop the bear from romping through the entire shanghai exchange. but phony or not, the chinese stock market never went lower than that last week of august. and it's the only explanation for this miraculous pivot in our own industrial stocks. before that floor was reached, china had been front and center as a gigantic systemic risk for the entire world. the shanghai composite fell so far, so fast that i think the fed kept a potential interest rate hike on hold simply because of the escalating bear market. not only that, but during the freefeel leading up to the bottom, we began to hear bum rellings that a place called glen corps might actually blow up. it was thought to have racked up billions of dollars in debt. debt that it might not be able to pay back. dealing a blow to the entire financial system. at the height i heard people
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speak of this glen corps as a james bond villain. not unlike how goldfinger was going to bring down the western world. ♪ of course, fort thox with nuclear waste. well, now look boack. no, mr. bond, i want you to die. they arrested people for spreading truth about stocks and they managed to stuck down insider selling. you know what? that's the kind of lockup that i like! they backstopped every stock that could take the shanghai composite down and calmed things to the point where the index is now up 500 points from that bottom. not only that, but consumers accelerated, starbucks, apple, alibaba all of which had amazing chinese consumer numbers. all in the wake of that shang lie floor. last night we got good earnings from none other than glencore. the company raised a ton of money and it looks like it can pay its bills back without much
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trouble. no one is declaring it clear. it seems fanciful. let me give you my bottom line. sure, keep deriding that bottom in the shanghai composite, but the truth is that when the chinese stock market stopped going down at the end of august, it caused a rally in our industrials that continued to this day. the systemic risk from either china or glencore has dpli diminished. it's amazing that this one index could have that kind of power. but to deny its reach seems dead wrong especially when you look at the move we've had one that dates from august 26th, 2015, the exact day the shanghai market stopped going down. let's go to jorge in kentucky. har hey. >> caller: jim, good evening. listen, they just had a very good quarter, reported very nicely. what do you think with the headwinds in china's economy, how we should play tupperware? >> first of all i'll tell you smears some people and management teams able to transcend these kind of headwinds and one of them is absolutely rick goings who was on our show. and i've got to tell you, it
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sounds a little glib to say don't worry about it, rick will take care of it. don't worry about it, rick will take care of it. walt in washington. walt. >> caller: hi, jim. i love your show. >> thank you. >> caller: i bought -- you're welcome. i bought skyworks in july for over $100 a share before the august meltdown, down 20%. should i hold? >> first of all, we do not care where a stock has come from. we care where it's going. i think skyworks which pete did $112 in june has now come down so much that it would be a mistake to sell it. but you must understand, i don't expect a quick back up. why? because it's cohort of the high-growth semis has been supplanted by the likes of none other than intel and texas instruments in the hearts and minds of many portfolio managers around the world. a risk from china and a collapse in a major commodity have subsided, and that's given new life to beaten-down industrial stocks. starting august 26th, that is. on "mad" tonight, the tide seems
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to be rising in the cruise lines, but can a company like royal caribbean keep making waves on wall street? i've got the ceo right from the bow of the ship. whole foods co-ceo is conducting his company's conference call, but in a few minutes he'll be talking with me. and i'm taking your calls rapid fire in tonight's edition of "the lightning round"! stick with cramer! tomorrow, kick off the trading day with "squawk on the street." live from post 9 at the nyse. >> i just said you know what, i'm going to be in a cbs sitcom. that is my goal. i want to be on jon stewart again because that would be fabulous to reprise that appearance. >> it all starts at 9:00 eastern. if you're eligible for medicare
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chances are you're looking for a part d prescription drug plan. so here's a friendly reminder. medicare open enrollment is here, and ends december 7th. so now's a good time to look at an aarp medicarerx plan, insured through unitedhealthcare. there are two great plans to choose from, each designed to help meet the needs of people just like you. with the zero dollar deductible plan you could start saving with the very first
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prescription you fill. so call unitedhealthcare today and learn more with this free information guide. it has a summary of plans and benefits. aarp medicarerx plans offer many ways to help you keep costs down. like paying zero dollars for a 90-day supply of tier 1 and 2 prescription drugs with home delivery. if you're eligible for medicare, remember... the open enrollment period ends december 7th. so call unitedhealthcare now. ♪ the cruise line stocks are back and better than ever. after a rough start to the year, this whole group has been roaring with royal caribbean. the second largest player in the space leading the way as the stock is now up an astounding 48% from its lows this spring. it's one of the best performers in the entire s&p 500.
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some of the strength is simply because fuel is a huge cost for these companies which enmoos that with oil in the mid-40s, the cruise line operators, well, they're going to make a fortune. but it's not just cheap oil driving these stocks. it's the new worldwide bargain-driven consumer. just consider the incredible quarter royal caribbean delivered a magnificent 13 cent earnings beat on a $2.71 basis. that's a remarkable feat when so many businesses in the travel and leisure space have been missing estimates. royal caribbean's net yield, it measures how much the company makes off of its passengers increased by an astounding 5.1% on a constant currency basis. i'm not used to something that big. more important, they nounsed a $500 million buyback. that's why the shot shot up more than 3% on the news. i think it's got more room to go. don't take it from me. let's get it from the ceo of royal caribbean from the deck of an then of the seas docked just down the road in new jersey.
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welcome to "mad money." >> thank you, jim, and welcome aboard anthem of the seas. >> well, i like what i see. can you tell me what is on that ship that would not have been on the ship that i took five years ago. >> oh, my goodness. it's so much. it's all about choice. and in fact, jim, i don't know why you're not here today. but we've got so much to do. you can see behind me, we have northstar which takes you up 300 feet. you can do surfing on board. you can do sky-diving. maybe you'd have trouble but some of your producers could do it. you can do almost anything you want on board. it's an amazing the way these ships have evolved. and the reception we've gotten here is probably one of the best ship introductions i've ever seen. >> now, one of the things that i think royal caribbean that's for the talked about enough is the technology put on board. you are in many ways the technology leader on the cruise ship. how many points of contact? how many internet of things do you have on royal caribbean? >> well, actually, that's one of the things we call it the smart
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ship. one of the things we did was we involved so much technology. first of all, you can get very good broadband here. we have more high-speed internet on this ship than every other ship in the cruise industry combined. your check-in is a brez. in fact, there is no check-in. you just show your pass and walk on. you can organize your day, organize your dinners, organize your excursions. everything on your iphone or ipad. it's just -- you can do anything you want, and it's so easy. so that's one of the things that makes the ship different is the technology. >> now, i want to talk -- i see it's packed there and i look at all your different cruises. and other than perhaps some area of the world that's a little bit depressed, your cruises are packed. and i'm trying to get it to zeitgeist to that. is it possible that post the great recession, people have identified certain particular bargains. it may not be at the stars. the malls are often empty. it may not be on certain things
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they used to do where they would -- you know, stay at home. but when they're on vacation, they go on a cruise. what changed here, sir is this? >> well, i think that the change is two things. first of all, we've offered so much more. the food is better. the choice of alternative kinds of foods. the activities, the entertainment. we have just exploded in all those areas. the other thing that's happened is that people have begun to realize all that we offer. they can go new places. you don't have to pack and unpack. and so we've had just an explosion in the attractiveness. so it's a great value that people used to think was too expensive. our object ufsh is to make it maybe a little bit less of a great value because we're frankly too cheap today. but we're moving it up, and yeah, it's been transformational. >> you're the leader of no discounting. i mean, even though i know that you're -- there's probably some business you lose, you have put a stake in the ground, haven't you? >> well, we did decide that people were really being turned
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off by the used car lot type of bargaining at the end, the last few cruises before the sailing. and so we really did put a stake in the ground. and so we're going to be specific. and in the short run, that may cost us a little bit, in '15 and '16, but we think in the long run, the customer will like it because they know what they're buying. they don't have to haggle. the travel agents like it. and we like it because in the long run, it means you get what you pay for, and you're happier about it, and we make more. >> richard, one of the things that's happened in the last year is that the chinese government has really dissuaded people from going to these casinos. from going to mccal and gambling. but they don't mind them taking trips. as a matter of fact, they're actually encouraging i think the kind of travel that royal caribbean has. are you able to meet the demand of what i see in the next three to five years of what the chinese government wants people to do which is to take trips like yours, not to go gambling? >> well, i think it's interesting. you know, cruising for the first
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time appeared in china's five-year plan as an important part of their economic development. the whole concept of the kind of vacation where you go just to have a good time is really toughly novel there. and we're exploiting that. the growth has been tremendous. we do have casinos on board, but this isn't a gambling junket. this is a vacation. mostly with families. and that business has grown for us at a rate of 45% a year for the last three years. looks to continue to grow, and i think the government wants to encourage that because one of the things they appreciate is how much of an economic driver this is for china. so it's good for the people. they get a vacation, a great vacation, at a good price. it's good for us. we make a nice profit from it, and it's good for the economy of china. so that's why it seems to be so successful. it's taken us ten years to get here, but we're now here, and we intend to build on our success there. >> one last question. when you have an area that is
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soft, i know you're very committed to brazil, latin america. are you able to ship ships from that area over to china where obviously there's much more demand than you can handle for 2016 bookings? >> unfortunately, south america has been a difficulty. the economies there, the weak currency, you mentioned brazil, the currency is down 50% over the last year. and so frankly that's simply not viable in the long run for us. and yes, we are shifting ships. the whole industry is shifting, and so whereas we're growing 40%, 50% in china, we're actually dropping 30% or 40% in latin america. and that's too bad. i hope it will come back. but that is one of the beauties of the cruise industry is that we can shift ships around to where we're wanted. >> well, mr. fain, thank you for coming to us from the deck of the anthem of the seas. great to see you, sir. and thank you for coming on "mad money." you're a new guest and i really loved having you.
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thank you, sir. >> thanks, jim. thanks for having me. >> one of the best ten performing stocks in the s&p 500 and you can see why. they've got a bargain that people want. "mad money's" back after the break.
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it is time. it's time for "the lightning round"! buy, buy, buy! and then the "lightning round's" over. are you ready, ski daddy? we start with dave in ohio. dave. >> caller: dave, thanks for your insight and help over the years. with walgreens purchasing right aide, various approvals, you recommend buy, sell or hold? >> i'm not going to tell you to buy it because i've been telling people to buy it for a very long time. i think some deal gets done if not by walgreen then by somebody else. john in new jersey. john. >> caller: hey, jim, how you doing? i just wanted to know real quick, should i trim any of my microsoft position to get into abdi? >> that's tough. i really like microsoft so much. abbvoo abbvooif drug, it means that it's going to go up.
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abbvive reported a great quarter. let's go to matt in oklahoma. matt. >> caller: hey, jim. just wanted to question you about one oak. they increased their dividends by a cent up to 61.50s, and they also beat their recent estimate in earnings. so weights your feeling on one oak? >> i think the group is in a bearish phase. it's been one of the horrendous bear markets within a bear market which is the partnerships. that said, i think if you sit tight and own it, you're going to do fine. i would not pull the trigger and get out. let's go to dave in illinois. dave. >> caller: cramer. every time i look at your favorite stock, it's been beating the market. halo. >> oh, man, i really like that company. i think that this is -- of the recombiant, of the really highly speculative internet companies, i did this bible,
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this one is one that i want you to own. how about craig in oregon. craig. >> caller: big buckeye boo-yah there, jim. >> okay. >> caller: sinclair broadcasting. spgi. >> it is so well run. this is maybe the best broadcasting stock that nobody talks about. i hope it pulls back so i can do a buy, buy, buy and tell people to buy it. it's incredibly well run. carl in pennsylvania. >> caller: boo-byaboo-yah, jim. altoona, pennsylvania. >> i can't recommend, when i see that 12% yield, i think immediately red flag and i can't understand the portfolio, so i'm not going to recommend that. and that, ladies and gentlemen, is the conclusion of "the lightning round"! >> "the lightning round" is sponsored by td ameritrade. icke what's up with these things, victor? we decided to give ourselves stickers for each feature we release.
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we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.
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what the heck is happening at whole foods? earlier this week "the new york times" ran a story titled "wall street sours on whole foods market." and after the company just reported after the close, the story seems impression. it's worth remembering that the stock has been in the doghouse for ages. down 39% going into the close. but it seems the pain is not over yet for the year. when whole foods reported 30 cents per share excluding a couple of one-time items when walmart was looking for 34
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cents, negative same-store sales growth, down 2% for the quarter and down 2.1% in october. plus guidance for 2016 was well below what analysts were expecting. hence why the stock has gotten slammed in after-hours trading. the company got a bunch of initiatives they outlined to fend off the competition and turn things around. that's why i want to take a closer look here with walter robb, the co-ceo of whole foods market to learn more about the quarter and what comes next. mr. robb, welcome back to "mad money." >> thank you, jim. glad to be here. >> you outlined a series of initiatives that seem to me to be directly responsive to what customers want. but at the same time, you say that you've always been aware of what the customer wants. i'm wondering whether somehow there's been some disconnect between what the customer wants and what you give them because same-store sales should not be declining like this if they love the company. >> well, it was a tough quarter, and we own it. there was -- you though, we have some headwinds from the comparison year over year about
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150 basis points. but any way you slice it, they're not what we want. they're not what we expect. and we outlined today the steps we're going to take to move it forward. we still have 8 million customers a week coming into the store. we still have lots of strengths as a company. but the steps we outlined today are what we intend to do to kind of regain the momentum with sales. >> obviously, you're putting your money where your mouth is. you're actually borrowing money to what looks to be to buy back stocks. i can calculate you might be buying back as much as 20% if you put all that money to work. why buy back the stock until you know that things are going to turn? >> well, first of all, i mean, we indicated today on the call, if you -- that we think that there's some indication in the first five weeks of this reporting period, there is some stability there. and that would express some confidence that we may, you know, we may be close to the bottom or see the bottom. but we also talked about fundamentally taking $300 million of costs out of our structure over the next couple years. and that's a very concrete step
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as well as the vote of confidence that the billion-dollar buybacks, which we, you toknow, are going to dos the time is right to do that. but i think it does indicate overall hopefully a confidence this team has that we have -- we know where we are, we know the steps that we need to take and we're going to back that up can with the confidence we think our stock is a good buy at this level. >> let me ask you something. you often talk about -- you know i've talked about it on the show -- that you have a tremendous generation of cash per square foot. and you also have amazing operating cash flow. is it possible to think, walter, that perhaps you're making too much money per square foot and that if you cut prices more dramatically, then customers will stop going to kroger or walmart and come back to you? >> well, you know, our strategy going forward is a combination of reducing prices, centrstrat c strategically and upping our promo and also more importantly communicating our differences -- our differences and our quality standards and our transparency. so is it reasonable? i think what's reasonable is so to take a strong, aggressive,
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incremental step in this direction, which i think this plan we outlined today does, and make sure we're understanding exactly how the customer is responding to those steps before we take the next set of steps. and i think just blowing out the p&l down to the bottom, that makes no sense from any perspective. and i think taking these measured steps make a lot of sense. combining with the fact that we think the buyback of our stock and upping our communication and marketing is a good combination. >> look, i visited the time warner center the other day to look at the store because i was hoping that you would come on. and then i spent about four hours at the brooklyn store, which is a thing of beauty. and frankly, for the life of me, walter, i thought the prices were low. i thought $3.65 was cheap. the places were jammed. i don't get it. i don't get the disconnect between what i see and the numbers. i mean, are there some stores that just aren't doing well because the two that i go to, obviously small sample, are packed with people who love it! >> well, thank you very much. you know, i do appreciate your bringing up the fact we're far
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more competitive than people give us credit for. and the $3.65 is competitive with any grocer in the nation. you know, i think you do have -- you have a broader set of metrics to look at this company. understand the quality and the strength of whole foods market. it's got great sales per square foot. and yes, they may come down some over the next couple of years as we adjust to a more competitive marketplace which this marketplace is fundamentally shifted on its heels overnight. you know, so certainly there's some moderation there could be -- we're still 2x the supermarket industry is where we sit right now. we've got a very strong balance street, very strong cash flow and the in-store experience that you rempsed, i feel the same way. when i go in there, i get so pumped up from the experience that, you know, i sometimes wonder what, you know, what the others are seeing. but the fact is, we've got to bring the two together, line them up and execute a whole lot better than we have the last few quarters. >> my last one i went to was a beautiful day. i sat outside, had some beer, ate some food, i had the exclusive brand food. it was delicious.
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you're doing $5 billion in that. i mean, clearly that's a restaurant chain in itself that people would pay a fortune for if you broke it out! >> well, what we're saying today -- it is. it's a big part of our business. it's a differentiated part of our business. we're going to bring us some additional leadership talent which we'll be excited to announce next month. it's going to help us to really take full advantage of that piece of our business. and by the way, our exclusive brands in and of itself are bigger than the other brand out there that's trumpeting the size of their exclusive brands. ours is bigger. and so we've got pieces of this business which really will lend themselves to communicating more clearly the quality, the differentiation and the offer there. and it's on us to do a whole lot better job of doing that. but you're right. i mean, we're running busy, busy restaurants across the company. >> and, well, the new concept 365, where will we see it first and when can we do a show from there? >> that's a good question. the first one will open in
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april. silver lake in los angeles. and we've got two more following that. and we should talk about -- we should talk about that. >> well, i sure would like to. i love going to your stores, walter. i always think it's got to be the quarter. maybe this is the one. walter robb, crow ceo of whole foods market. thank you very much, sir, for coming on the show. >> thanks for having me on, jim. cramer, you are super. you are awesome. >> i'm a first-time investor. >> thank you for inspiring many he to get in the game. >> your show is the best. i am so glad you're on tv. >> i want you to know that you have transformed me. thank you, cramer.
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after the bell we got an amazing quarter from facebook. they're doing everything right. the ad revenue's coming through. they're doing smart things now that are producing revenue later. that's exactly the textbook of what you want from fb. let's talk about whole foods. i said this quarter would not be good. the quarter was not good. i said that they would get it together with the next three, six months. i think that's going to happen. we're going to look at this stock between 25 and 28 and make some tough decisions given the fact that they're buying back so much stock themselves and taking real costs out of the entire face of operations. i'd like to say there's always a bull market for you somewhere. i promise to help you find it right here on "mad money." i'm jim cramer. i will see you tomorrow!
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one weatherman in just one week to bring you the weather from all 50 states. >> nice hat. >> nice goat. >> roker >> wait, go up! [screams] hi, i'm jay leno. >> all: hi, jay! >> hi, everybody. how you doing? and this is a show about cars... it's fun to drive cars that are really different. i never knew the beach could be so much fun! and motorcycles... [revs engine] >> all: whoo! >> and well, anything that rolls.... like driving a two-story building. [brakes screech] oh, my god! strong as an ox! explodes... i love the smell of napalm in the morning. >> yeah! >> or makes noise. >> you ever run a drag strip? >> no, i haven't. [engines roar] this is "jay leno's garage." >> start your engine. [engine purrs] [tires squeal] [police siren wails] >> get out of the car, sir!


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