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tv   Mad Money  CNBC  January 25, 2016 6:00pm-7:01pm EST

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this is a case where we have -- starbucks. i this i it's a case where the thing has run too far. >> welcome back. great to have you back. i'll get crushed for this. amazon earnings on thursday. setting up for another big "mad money" money is 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. 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 some money. my job isn't just to entertain but to educate and teach you. and put it in perspective. call me at 1-800-743-cnbc. or tweet me @jimcramer. in a world where stocks trade in lockstep with each other, totally linked with the price of oil, can any one business leader do enough to break the strangle hold? on a day when the stock market got clobbered dow plunging 208
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points, s&p plummets 1.56%, nasdaq down 1 pant 58% because oil shot down almost two bucks. i believe the answer is a resounding yes. that's yes if the company happens to be mcdonald's. and the ceo is steve easterbrook, the brit who took over the helm of the fast food giant and is responsible for a huge part of the rally from $100 when he became the ce o in march of 2015 to today when the stock bolted to an all time high of $121 before closing at $119 up 80 cents. how many stocks hit a high today? not many. it's hard not to see it this way considering the global same source sales rose 5%. their same store sales in the united states increase add phenomenal 5.7%. that's extraordinary.
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i was looking for 4%. people thought i was having a happy meal dream. how did he accomplish this? first, he decided what mcdonald's needed, could be the united states, was a simpler menu which would lead to fewer mistakes. maybe two or three fewer mistakes in a day which then leads to more customers going through during key hours which then leads to a better mood among the franchisees. you heard me. sounds nutty. a better mood like mindfulness, like karma, like in the now. hear me out. you have to understand mcdonald's is run by a huge team of franchisees who are the players. eastern was the head coach. if you can inspire the players they will work wonders for you and the shareholders. simplify the menu and there are fewer errors then the franchisees will be more bullish about their own stores and put extra people on, make different shifts, make the lines go more
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smoothly. they feel like it matters. it matters more to keep the stores cleaner, get more polish. they get energized. then add all-day breakfast and while many thought it was a gimmick, it is having a huge impact on the numbers. now you've got the mcpick. as anyone watched even a quarter of football knows about. or buttermilk chicken. people love the taste of butter mill chicken. it's a virtuous circle for the franchisees. they see the business getting better so it is worth spend ing time and energy in the franchises to bring in more sales. here's what's amazing. i would say this is only the first quarter for this mcdonald's turn around because easterbrook added a loyalty app. he doesn't have the technology that allows the highway stores to have kiosk so the food is brought to your car. the car lines are so long. some of the things are working
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in one country and they transport them to another. this man turned around europe and is working his magic here in the rest of the world. where are the customers coming from? you know what? i think mcdonald's is taking share from everyone -- even as many millennials say this level of processed food isn't for them. easterbrook has been making the offerings more natural. one of his first actions to say mcdonald's would stop raising beef and chicken raised with antibiotics vital to human health. he has enough fire power to change the world's food chain which would make a difference. far more than chipotle could do but to be sure no one should confuse the two. i don't want to get ahead of myself. what easterbrook is doing is reintroducing two key concep concepts -- value and convenience to the enterprise. they are time honored whether the consumer is stretched in the pocketbook or stretched by the clock. if the place has a convene yent in and out at a good price and tastes pretty good that's a
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winning formula. i don't want to get ahead of myself either. it's not like easterbrook will do something tomorrow to propel the stock higher again. in fact, the stock of mcdonald's would go back to where it was if oil is down tomorrow. but lower oil is actually positive for mcdonald's. puts people on the road. anything that puts people on the road makes it more likely they will stop at mcdonald's but mcdonald's didn't credit the turn to lower gas prices. it said weather helped. let's talk about the other side of the trade. look at the stock of twitter today. this weekend we learned four executives have left including the guy who creates moments which many of us had high hopes for. you are getting incredibly slow user growth. slower than mcdonald's. what does this say about the previous ceo dick costello and his team which is exiting or the current ceo who was the ceo of square. i don't know if i can handle
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that. i want to hear from jack. maybe he's got something to tell us. contrast with facebook which reports on wednesday. you are seeing a super growth. basically it's in the same business as twitter. where is the turnover for facebook? none that i can see. i'm not saying buy it ahead but talking about businesses. at some price twitter is a buy. my charitable trust has a position. the franchise has a loyal following but can't grow and growth propels all stocks higher whether they are oil, financials, restaurants or tax. by the same token you can argue american ex press lost market cap under the ceo at the same time the competitors mastercard and visa have gained gigantic gobs of market cap under a.j. bonga and charlie sharp. one has no growth, the other tw have scads. none of it matters as long as we are in the ridiculous link with the price of oil. we accept the oil has to be
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demand related even after slumberge told us the oppositop. we know anything they can do for the stock including easterbrook in mcdonald's and the fed is bad, too tight. easterbrook isn't about influencing the stock. he's about influencing the franchisees and the company. the stock will come later. his guidance and transformation will generate increasing returns to give the company more money to buy back shares and raise the bountiful dividend. you put this idea away. next time the stock market throw as sale because of the lockstep linkage to oil or the endless negative fed chatter i want you to think about mcdonald's as a place to go, not necessarily as a store but a stock. in my case, i want to go to the store because i love the egg mcmuffin. the stock is a nice after thought. it's on the front burner when
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knocked down by the market. one person can influence the direction of a company and create a turn around to impact the enterprise and the stock. in the case of makds that person is steve easterbrook. all i can say is congratulations, what a fabulous and i think long lasting turn that began less than a year ago. this is the story that can transcend the day to day market which is why you can circle the wagons around mcdonald's next time we have another crazy town day. ken in virginia. ken. >> caller: hey, jim. i have to give you a uva capital one cup winning wahoo-wa-boo-yah. >> that's a lot of stuff. i like it all. what's up? >> caller: ed son, research shows they have 350 patents in solar technology that's reduced for them the capabilitile to make a solar cell from $76. that's why we are down to a
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nickel for solar cell. >> right. >> caller: combine it with david einhorn coming on the board and i think with the leadership capabilities and cost reduction capabilities they've got in the short term, they're going to be the number one player in the solar market over the next year -- >> i will say first solar. you have to go with the best of breed. i read real money and she's been chronicling this. i don't get confidence from einhorn at all. i have no confidence in the balance sheet. i'm sticking with first solar which will go down because all stocks are going town. but i think less than sun edison. kevin in california. kevin. >> caller: thanks for taking my call, jim. first of all, love your book. that's a must read for any investor. >> oh, thank you. >> caller: love it, love it. my question is whole foods. >> yeah. you know, i saw a downgrade today. it basically says none of the things they are doing are taking root. i think the stock is cheap but
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there are a ton of very cheap stocks. remember, the company is buying back stock. today it broke the $30 level and hit the $28 level. if it's hit again the $25, $26, i think you have to take a half position. it could go lower, but geez, the stock -- the company has incredible sales per square foot. i don't believele that management will remain stymied. they are too good. will in florida, please. will. >> caller: jim, thank you. time warner inc., twx. unusual activity in the february, april 75 calls. who will take them out? they're a sitting duck. >> all right, now, we are doing the exact opposite. we are not recommending this on a take cover basis t. company has been buying back stock. it is not expensive on 2017 numbers. to not buy this for a takeover. buy it because jeff buqus who is a great american is generating fabulous earnings and super man versus batman?
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sign me up! phyllis in pennsylvania. phyllis. >> caller: hello, mr. cramer. >> hi. >> caller: my question pertains to morgan stanley. why is it continuing to trade around its 52-week low and how long do you expect this to continue? >> this market has turned on the financials in a way i find shocking. goldman sachs is down so much below book value jpmorgan reported an amazing quarter, stock at 55. this group is in a world of hurt. so i think morgan stanley is trading roughly with them, maybe a little bit worse. i think it is unfair. you know what though? you're getting in front of a genuine buzzsaw if you buy a financial now. one day it will change, but not right now. are these filled with quinoa? i can have them on my cleanse. i just have to get rid of the bread and cheese inside. all right. from a happy meal to a happy portfolio, congratulations to steve easterbrook. this is an example of a ceo who
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knows how to un strangstrangle company. from cot nel to kleenex. kimberly clark is probably in your home. the stock is missing. time to buy or stay away. then winter boots to down jackets, columbia sportswear can protect you from the elements. as the east coast digs out of winter storm jonas i will see how the storm impacts the stocks. and etsy can't craft a turn around. what's next for the online goods emporium? i will investigate. stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
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what do we do with the stock of kimberly clark, the household
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name consumer packaged goods stock. the stock has been holding up well versus the rest of the market. this is exactly the kind of company you want to own if you believe we are headed into a slowdown. kimberly clark reported this morning and the shares went down $4. on what was widely perceived by some, not me, as disappointing numbers. was the quarter that bad? one cent earnings miss. weaker than expected revenues that declined by 6% year over year but that decline was to the super freaking strong dollar. as currency caused kimberly clark sales to take a hit it was a stellar 5%. the problem is this was the quarter where the market and stock and the currency figures only cares about the headline because the strong dollar seems here to stay. do we use it as a buying opportunity with the 2.#% yield? do we get more cautious?
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let's check in with tom faulk to find out where the company is headed. welcome back to "mad money." >> good to be with you again. >> all right, tom. i went through every piece of research other than a couple of line items in latin america and maybe some of the professional division. i thought it was a blowout quarter. maybe you can tell me what others are saying. this is what i want from a company. >> i thought this was a solid quarter as well. our organic top line was 5% with 4% volumele. for the year that's the best volume performance we have had since 2007. we have great momentum in emerging markets like china, russia, brazil. we are winning in the local markets. the strong dollar was a headwind but to over come that and deliver absolute earnings growth while returning cash to shareholders was a good performance. >> we can focus on brazil, a troubled place. i want to focus on china. people worried about china. you say the year of the monkey in china is a good year for
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kimberly. explain that. >> monkeys are viewed as clever. the chinese will occasionally try to position in good years. monkey is one. dragon is the best. if you are in the mode of picking a birth year, monkey is one of them. we could see more live bits in china this year which is great for the diaper business. >> you have a category opportunity, 3 to 4% on averagele. that would be a nice acceleration. >> and we are going into more cities. we started last year at 105 cities, finished at 115. we'll be at 130 cities by the end of the year. we have lots of growth opportunities in china. >> okay. we are trying to get people to think long-term which is how you should own kimberly clark. i'm struck that you are focused on the u.s. birthrate which after the great recession is starting to tick up. >> absolutely. we are seeing a slight up tick,
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consumer confidence is better. the jobless rate continues to stay low. so all of that factors into more confidence about expanding the size of your family. we are encouraged by that as well. >> we all know energy is coming down back to 29 today. it wasn't clear from the conference call or your statements exactly when you will get a nice boost from that. but it's obviously not a headwind for you that energy comes down in price. >> no. we don't use a lot of direct oil. we use a lot of polymer, polypropylene, polyethylene, derivatives. we'll see lower costs for super absorbent and adhesives that are oil based. polypropylene is tougher because the u.s. market is tight on capacity. oil is lower but we won't get the full benefit of that. we are seeing pulp prices lower year on year. again, the pulp guys are mostly outside the u.s. in selling dollars. a strong dollar gives them a big boost in local currencies.
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generally we should see a relatively benign commodity environment in 2016. >> just because i don't want to be pollyanna, jpmorgan does good research on you and says organic top line for professional divisions missed jpmorgan's number by a hundred basis points and 400 respectively. disappointing results in professional. how do you get the numbers turned around? >> professional, we look at it for the year, jim. for the year, we had a couple of points of organic top line. it was a little weaker in the fourth quarter. different causes. in the u.s. distributors took inventories down. our sell-through was at better levels than that. markets like brazil which is big for us, their rc and gdp declined having an impact on overall levels of employment and business activity. a mixed bag. but we have a strong franchise and expect to see that continue to progress in 2016.
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>> at the same time, you know i have been recommending your stock for ages since 1986 when i was with goldman sachs. >> you're a fan, jim. we love it. >> it's been 30 years i have been telling people to buy your stock. it's done well and the reason is you have tremendous cash generation and you also like to return the money to shareholders. this seemed an incredible 12.7 year over year cash operation which your board decide it is dividend. this has to auger well for your return of capital to shareholders. >> i try to remind the team, it's their money. we run the company for the benefit of shareholders. they should get a benefit from it. yes, we believe in a strong dividend. we have paid a dividend more than 80 years and increased it more than 40 years. we'll do it again in 2016. we have a strong buyback program as well as we have excess cash beyond what we need to invest in capital spending. that return of cash to shareholders is a fundamental about us. the best thing people can say about us is we are
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investor-friendly. we try to live up to it. >> look, i think you did a great job. thank you very much for coming on "mad money." it means a lot to us. appreciate it. >> thank you, jim. >> tom falk of kimberly clark. stock was down 3%. if it's hit again, what can i tell you? this is a place where you start guy buy ago position. don't be a flipper, a trader. be an owner. "mad money" is back after the break.
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le.
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let it snow, let it snow, let it snow. i mean, who needs to go to davos for snow? for months now until this very weekend pretty much every retailer under the sun was getting pummelled because the weather was so warm they couldn't move their winter apparel. as the east coast now digs out from one of the worst blizzards in recent history we have to ask if that's changed. suddenly it's cold and some of us need to deal with two or three feet of snow on the ground which begs the question -- is there a decent way to play wint storm jonas or is it just a pain in the neck -- or the back -- that may have ruined your weekend? conventionally you can play it with home depot because they selle shovels. i think the despot is too big to be pigeonholed. uggs has been too unreliable. you could go with deckers but it
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looks like north face isn't selling that well. it is trapped in the conventional department store channels. go with a snowmobiler maker like polaris. no they have been proven to be very bad at forecasting. where does that leave us? how about columbia, the gem of the -- i can't take this. i have to keep it together. as soon as the show is over we return them. that's the big budget we have. our davos-like budget. columbia sportswear, colm, the family-run company led by tim boyle. practically a one stop shop for your winter needs. columbia is a house of brands including montreal, mountain hardware, sustainable yoga and climbing apparel. they have amazing technology. this stock does work as well as sorrel boots and columbia brand. oh, boy, does the wife love her boots. she looked great in them as i
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watched her dig out the front steps and i cheered because i have a bad back. now this company report this is week and a half. it will be, you know, beginning of february. i don't expect anything particularly great though they have been stuck in a horrible selling season this past quarter with the rest before the snow. the thing about the stock market is it's a forecasting machine which means if investors believe that the cold weather is here to stay they will probably think columbia's next quarter could be better than anticipated. in other words this is no good, but the next one is good. it's worth remembering a year ago columbia crushed wall street sales and expectations despite a mild winter because the company made strides to be less dependent on weather including growing footwear at a rapid 45% clip in 2014. thanks to the strength of the footwear and outer wear they delivered excellent results this time last year despite the mild winter causing the stock to soar
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18% in a single session. i'm not saying that will happen again. this has been a tougher quarter for retail than a year ago. it's worth keeping in mind they blew away the numbers last time they reported after the winter got off to a warm start. it could happen. in short columbia, the company, has more control of its own destiny than you think. however, the stock has been at the mercy of the market along with the rest of retail. it peaked at $74 and change at the height of the summer, end of july. since then the stock lost more than 33% of value. why? because the whole market's been in a bear market selling off and virtually anything retail and apparel have been getting crushed. it didn't matter that when columbia reported the third quarter results at the end of october the company managed to turn in better than expected top and bottom line numbers not to mention growth margin expansion and muted inventory growth, 10% year over year. they pulled it off despite a
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warm fall and back to school season considered disapointing for everybody else. columbia sportswear built 14% revenue growth over the same period. vf just 2.6%. macy's 5.2 decline. yes. columbia left them all in the dust. within two weeks of reporting the stock was below where it was before the quarter came out because wall street assumed that there was no way the company could continue to do so well with the weather so warm and so many other retailers struggling. here's the thing. columbia sportswear has moved up the apparel food chain. i think people may not totally understand the transformation. this is no longer a place you may visit once every few years to pick up new boots for a blizzard. sorel is a fashionable brand among women. after all you don't get to have a successful shop in the fancy meat packing district of new york city unless you know something about style.
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although again they are nifty for shoveling, too. there are two key themes here. one, columbia sportswear might be less dependent on weather than you thought. they have been selling yoga clothes since 2014 which means the warm weather at the end of last year may not be the financial death sentence so many people are expecting. i like lululemon. their quarter will do well. we'll find out about columbia sportswear on february 10. the second theme is columbia sportswear still sells cold weather gear like boots, coats, scarves and hats. now that winter has arrived maybe wall street will give the company the benefit of the doubt. i like the company because it uses nontraditional channels to move merchandise. sure, you can find their stuff at bloomingdale's, but with the decline of the mall we now recognize it's important you can buy it online through amazon or zappo's where columbia's products are being sold at regular nondiscounted prices.
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unlike so many oh brands. a pair of women's premium leather caribou boots cost $150 on the sorel site and $150 on sax, too. columbia is a strong e-mercy presence through their own websites where the direct to consumer business grew and through amazon. that's very important in the aftermath of the storm. while shoppers need new cold weather gear they are not necessarily going to want to trudge to the mall or drive to the store with snow on the ground. maybe the car is buried. it's easy to order columbia products directly to your home. that's a huge positive. remember, none of the cold weather positives will be in the quarter the company will report in a week and a half. that will be all about the holidays. based on the results we have seen so far from other retailers the fourth quarter season is suboptimal. that's putting it diplomatically. columbia sportswear can outperform competitors in
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difficult environments and the blizzard is a game changer. others agree with me hence by the stock is down on a bad day. bottom line. i don't think columbia needs blizzards in order to do well. it's a bonus, especially compared to the warm weather we had in the fourth quarter. if you want to play winter storm jo naus columbia is the way to do it. but be careful. put on a small position before the company reports on february 10. no doubt in honor of my birthday. then buy into weakness because the quarter we are about to see won't reflect the newfound winter wonderland positives that abound all over the country. all right. let's go to david in davos -- i mean illinois. david? >> caller: is nordstrom near its bottom and should i stay away from retail stocks? >> stay away. no. nordstrom is cheap. i remember the downgrades. they seemed to be a pile-on. i will never go against them for
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the long term. short term, no mall store is doing the numbers. bob in new jersey. bob. >> caller: hey, jim, how you doing? boo-yah. >> boo-yah. >> caller: what should i do before earnings? >> let's not play it for earnings we have to downgrade and i understand. look, you own skechers for the long term. look what these people have done over the long term. if you buy it now and it gets hit down to 25 are you going to be angry at me? if you are, don't buy the stock. i think it has more downside. i like it for the long term. let it snow! i think columbia sportswear is the way to play storm jonas, not that it needed a storm. but, remember, it's next earnings report, it will not reflect this winter wonderland. that february 10 report won't have the storm. there is much more money ahead. etsy is trying to remake retail but is manufacturing more problems than profits. i'm crafting a thesis. and then the shape of oil,
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literally after good news out of schlumberger whether we see a v-smaped or u-shaped recovery. i can't return them now isle wear them. and tonight's edition of the lightning round. stick with cramer! these are the hands that plow the data, dig up clues, create opportunity, and weave messages that lead to sales. these are the hands of pitney bowes, the craftsmen of commerce. these are the hands, the hands that drive commerce, that build business across borders. these are the hands of pitney bowes, the craftsmen of commerce.
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since the market peaked over the summer we have seen stocks obliterated for all reasons. some cyclical driven by the weakness in economies around the world. some are what we call secular meaning there is a long-lasting, long-term trend putting a damper on the businesses which is not about to go away. sometimes a piece of merchandise is toxic. every so often companies become public that have no reason being public and the stocks are doomed from the start. i'm usually able to recognize these disasters before they wreck your portfolio. that's why tonight i want to revisit one of the ugliest stories out there. not an oil company or mineral but it trades like one. it is an e-commerce play. i'm talking about etsy, the online marketplace for unique, typically hand made goods.
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this company became public in mid april of last year at $16 and nearly doubled to close at $30 on the first day of trading. remember those days? the initial hype was enormous. lofty rhetoric. how they were creating a new economy. you'd think they were reinventing capitalism. a month later on may 15 the stock had plunged down to $20 and change. that's when i warn you i should have done it earlier but that's the earliest i could. as a business they had a lot of problems and as a stock it was untouchable. to quote myself i don't see a path to profitability here and more important, i worry that etsy doesn't care about profitability, end quote. what did make me concerned at the time, they had decelerating revenue growth, skyrocketing expenses and management said their commitment to hippy crunchy values may, quote, negative influence our short or medium-term financial performance, end quote. the bulls thought it could be
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the next amazon or at least a baby amazon for hand made and vintage products. sure it wasn't profitable but it had rapid revenue. sure the company was spending like a drunken sailor but you have to spend to grow. the bulls should have been worried about what if amazon competes against efsy which amazon decided to do. they have performed worse than expected plunging to $7.25 as of today. down 64% from where i said it was a sell in may. off 55% from the ipo price in april of $1. we have to learn from this so no one will make the mistake of buying something that looks like etsy again. of course i don't mean to downplay the good they do for humanity. where else would i have found that needle feltingle owl kit or the like a boss lady personalized pencils i got my executive produce for her birthday or the racy valentine's gift for my wife.
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hand knit hedge hog socks. shh. it's a surprise. she doesn't watch the show. what else went wrong here? on may 19, less than a week after i warned you off this one etsy reported the first quarter as a publically traded company with higher than expected sales and a larger than expected earnings loss of 84 cents when the analysts weren't looking for them to lose a penny fer shore. next day it was down 1% t. kicker came when the "wall street journal" reported that amazon was preparing its own marketplace for artisan goods to compete with etsy. ouch. etsy rebounded back 20 bucks until they reported the second quarter as a public company. the results were more in line but management's guidance wasn't encouraging talking about taking a hit from the strong dollar as well as spending, hiring, decelerating revenue growth sending the stock down to 13 and change.
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in september they had new initiatives partnering with post mates to test same they delivery in new york city and a service to help connect designs and manufacturers. when they delivered in line numbers the guidance was less than stellar and the stock was crushed falling 23% in the week from 11 to 8 and change. fast forward to the new year, declined another 12%. why has it been an awful performer? first off rather than being a disruptor with game changing technology, etsy was disrupted when amazon decided to get in on the business. a disruptor can be forgiven for lacking profitability. when amazon has you in the crosshairs you have to be careful. beyond that many things i initially worried about turned out worse than i thought. the revenue growth decelerated from 44.4% in 2014 down to less than 38% in the first nine months of 2015. the international exposure, roughly 30% of the business was more of a head wind than a tail
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wind because of the strong dollar. that's based in brooklyn or something. there is the issue of timing. i know. in retrospect the ipo in april was lucky. given that the overall stock market peaked the next month and the ipo market peaked in june. they were able to raise $200 million. if they had taken it public at today's price they would be lucky to raise half of that before deducting underwriting costs. it's worth noting the earn ings before taxes, breech united nations or ebitda has been increasing. that's hopeful. with each quarter better than the priest one even as the numbers were decelerating year over year and the ebitda margin increased for the first time since they became public. the valuation is more reasonable at 2.4 times 2016 sales but it's still a slight premium in best of breed amazon which is 2.2 times sales. i know from my wife who uses the site etsy has improved the user experience for sellers but
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amazon got started just in october. we have no idea what damage they can do. it could take a few quarters before we have a sense of how bad it will be for etsy. i predict pain. most important this is still a terrible environment for high risk speculative tech plays. that's what etsy is. if they were doing better yosh we would get love from the market. bottom line. next time you see a fresh faced ipo talking about changing the economy, pay less attention to the words and more attention to the numbers which are what clued us in to the problems with etsy. even down here the stock is too risky or as i say to my colleague david faber on "squawk on the street," maybe it's still too early to own etsy. "mad money" is back after the break.
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>> announcer: lightning round is sponsored by td ameritrade. it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the lightning round on
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cramer's "mad money." i will start with ed in massachusetts. ed . >> headed into the earnings report at the end of the week. where do you think the stock is going, cypress semi conductor. >> the yield is amazing at 5.45%. at $8 i can't count on anything other than to buy the stock. we are in a world of hurt bear market including that one. galan in minnesota. >> caller: hello, jim. >> hi. >> caller: i'm asking you about bsx. >> it's inexpensive. i prefer e.w., they have the better mouse trap. that's where i'm going in the group. dave in ohio. dave. >> caller: thanks, jim. 5/3 bank. >> you know, the banks, i have to tell you. i am just -- i shudder at the banks to say something good about a bank. fifth third is a good bank. i can't buy it now. the group has to wash out and it
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has not washed out yet. fred in florida, fred. >> caller: cramer, thanks for all you do. >> thank you. >> caller: buy, sell or hold -- covanta. >> you know, i got to do a piece on this. it has all these businesses and i don't understand it. it's got a 7% yield which at this point says, whoa, be careful. it no longer says that's an opportunity. it says be careful. the big yields are red flags now in the market. let's go to sid in indiana. >> caller: hey, jim. you've been must watch tv for me since your kudlow & cramer days. >> thank you. >> caller: i thought kroger would be a good place to be in this difficult market and i started getting some in early january. it's been slip-sliding away ever since, down almost 10%. >> this is the problem. everybody thinks it's a good stock. that's the issue. it is a place to hide. i thought it was a good stock. you did. it's a good company but all
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stocks are going down now. it just has to be until we have colllarity from the fed. my checklist is driving stocks down. i think kroger is doing a great job and the market will come to its senses. mike in california. mike. >> caller: jim, america's greatest toy company, mattel, buy, sell or hold. >> i saw the upgrade and it was good. now it has a little pump into it. you have to let the stock come down now. in the end mattel is a good company and i believe the yield is safe but the stock is up and that means it's down tomorrow. i can't make it up. johnny in maryland. johnny. >> caller: boo-yah, jim, from snowed-in baltimore county. >> wow. what's the stock? >> caller: linear technology. >> the stock i like is lrcx. i like lan. that's the company doing the best. they are all going down. that's my favorite.
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martin does a good job. steve in california, steve. >> caller: jim. from california, wondering when is cnq a buy or a sell with the glut of oil? >> you know, i'm not recommending them. i'm not recommend ing fossil fuels, none. i can't. i have enough problem with the food stocks. none. that, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
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sure, oil got crushed today. settling down $1.85 and continuing to te cline after hours. we have short memories and it's important we make sense of the incredible move that happened friday when crude rallied $2.66 after another huge increase in inventories. we have to ask what made that possible and why do i expect the $25 to $26 level may be a decent place for oil to settle down? maybe even a floor. simple. because when oil served as king schlumberger reported an excellent quarter on thursday and spoke on a conference call friday. the giant painted a picture of drastically reduced spending on the part of all oil companies, especially the north american players during the fourth quarter when budgets were exhausted. that plus the fairly significant
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cut-backs in columbia, mexico, brazil and australia made up for robust pumping in saudi arabia and kuwait. given the growth of schlumberger and the excellent management team their comments on the oil market carry a tremendous amount of weight. taken together the commentary was negative about additional exploration and production. therefore implicitly positive for a potential rebound to slightly higher oil price this is year because there won't be a lot of new supply net coming on. as schlumberger's outstanding ceo said on the call, and i quote, we still believe the underlying balance of supply and demand continues to tighten driven by solid growth in demand and by weakening supply as the dramatic cuts in exploration and production are starting to take effect, end quote. the demand side is strong despite, quote, fears of reduced growth in china demand, end quote, as opposed to china's actual growth which is solid.
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that put to lie the notion that they are gripped by the same we see from iron, steel, copper. oil isn't like other commodities. it is a necessity. though buyers are wary about the magnitude of iranian exports schlumberger still expects positive movement in oil prices during 2016. i can't disagree. he's too good, too smart. further schlumberger doesn't expect a rebound in exploration and production budgets until 2017. they would know given the book of business. 2016 will be another bad year which bodes well for the bottom of the price of crude this year. no new nettle oil can be expected to only con line no matter what the saudis who have been driving down the price by over producing try to do. the timing has eluded even schlumberger. it will have to do with the nonopec producer's rate of decline and the deep in financial crisis in the industry.
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deep in financial crisis? keep that in mind. the schlumberger news doesn't bode well for many producers. chief reason the price of oil can bottom in 201 is because of the destruction of so many schlumberger clients but that's my extrapolation not theirs. as rusty brazil pointed out this weekend the futures market is pricing -- this is amazing -- $49.40 a barrel in 2024 which shows while many people come on looking for a quick return few are willing to put their money where their mouth is. the oil men say 60, 70 but the futures say in nine years we'll still be at 45. if you want to continue betting against oil you have to remember the words of schlumberger. there is demand and supply. it's likely to become imbalanced in 2016. want to go long oil on this? absolutely not. i want -- i'm wary and being negative as everyone else given the out lines about supply and demand. i don't like the oil service or
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oil company stock. i do believe we'll see so much destruction that a slob has said you probably want to calle a bottom in 2016. or more importantly, who am i to doubt them? stick with cramer. ♪ those who define sophistication stand out. those who dare to redefine it stand apart. the all-new lexus rx and rx hybrid. never has luxury been this expressive. this is the pursuit of perfection.
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i like to say there is always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer. see you tomorrow. lemonis: tonight, on "the profit"...
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a brooklyn shoe company that made a splash with its dazzling designs. dan: the idea of the company is to use global textiles and global inspiration. lemonis: but the c.e.o. can't stop shooting himself in the foot. dan: my financial decisions negatively impacted the company. lemonis: his lack of discipline has cluttered the shelves with products that won't sell. dave: you know, there's 10 new ideas that come out. one of them's great; the other nine are, like, terrible. just awful. like, just suicidal ideas. lemonis: alienating his partners... david: daniel, i told you this, and you did it anyway. lemonis: ...and pushing the business to the brink. how much money's in the bank account today. dan: [ groans ] not a lot. lemonis: if i can't get him to focus his energy... this store's kind of a joke. ...and start following my process...

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