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tv   Mad Money  CNBC  April 25, 2016 6:00pm-7:01pm EDT

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>> goldman sachs, just because i don't like what bove said about it. >> final trade fueled by dislike. >> i'm
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we are bomb line number, even if the sales numbers disappoint. it doesn't seem to matter though. as the stocks with strong earnings are indeed winning. even if the the revenues were not extraordinary at all. in that sense i think worst putting out they are winning in a pretty heartless way. through massive layoffs. in fact, i think this earnings season's theme song should be hit me with your best shot. by pat bneitar. ♪ hit me with your best shot. ♪ hit me with your best shot
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♪ fire away >> that's karaoke "mad money" style. sadly the companies firing workers, the most aggressively have some of the strongest performing stocks. these stocks do much better than you might expect. what has been the best since earnings season began? all aboard. revenues were down 6% led by coal which keeps getting hammered. however, it translated into a huge upside surprise. as norfolk southern earned $129 per share. the street was looking for 97 cents. the number of people laid off, the average head count declined by about 1099 positions. this is not, this is a sad story that i'm telling.
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i'm not trying to -- just saying this is the correlation i came up. with union pacific was not much different. they will us that the total training was down 22% year over year. 22%. so despite almost every single cargo line being down, over the next two days the stock rallied through 83 to 89. on that best shot. not to be outdone. csx goes from 24 to 27 in large part because it is taking a tremendous. a cost. 13% head cap reduction there. fewer employees than last year. it has a terrific rally. second best performing group this earnings seasons, it is the banks. yeah. the banks. they've gone from 13 and change to 15. no coincidence they've cut that
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costs. bank of america's head count is down 7,000 year over year. morgan stanley took out a 27% head cut reduction in fixed income. awfully hard to make money there. goldman cut its force by 10%. jpmorgan added employees but the head count is still down 4,000 from the year before. they keep getting leaner and leaner. that's why the stocks are going hard. before leveling off a few points the last couple days. this company has fired an stounling 42,000 people since the peak in 2014. 42,000. i double checked and it then i triple checked it. including 8,000 this quarter alone. it took tough actions which is
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how it was able to buy back 7.1 million shares. it is at nearly $79 now. a 475 million cash outlay that was very well spent. even though competitor halliburton has been encumbered by the takeover, stocks still are 28-40. they've cut their head count by roughly 33% since the top of 2014. can you imagine? caterpillar is up year to date and i think that's because of the early retirement of employees and the closing of plants. 670 jobs since the january north america. it was a very disappointing guess. i think management is taking extraordinary action for a
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growth company. they're laying off 12,000 people. the to know is up 24%. if you license to the conference call, one of the highlights it was 42%. yet the ceo got the head count down to 9,200 with 1,200 fewer employees. that's horrendous in terms of the costs but undeniably good for stock. companies are making a fortune by firing people. how about the flip side? what tech stocks have been the most beaten down? i would say the, the revenues weren't that great. but also because spenlss controls seem out of whack. how telling is that it the head count was 64,115. that's up approximately 2,300 versus last quarter.
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the majority were high priced engineers. didn't alphabet get the memo about shrinking the grow? despite all the layoffs, last week's jobless the numbers were at a four decade low. 247,000 jobless last thursday. given faye collection the small business processor has said there is barely enough, we have to ask ourselves, when where are these people getting hired? what are they doing? we know unless they have a computer science degree, slim pickings out. there how can you fire away and get higher stock prices? when investors want to see, they want to see expense reduction that leads to cash flow. do you really think there's any
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wonder about the poor performance of the airline stocks? i think it is the inability of a couple of airlines with the work reductions. it leads to stock declines. not advances. the money is not flowing to the bottom line and too much is being wasted. for this day and age you're paying people too much to do jobs that others will do for less. we don't necessarily want to break little hearts. but unless they fire away their stocks are not going anywhere. and heaven for bid any ceo who goes on a hiring spree. then you get the worst of all possible worlds. you get the plunging stock. i suspect we'll hear from more
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company. let's to go jake in illinois. jake? >> aid quick question about dunkin' donuts. when i bought the stock it had a preece tag of $47. do you think it will go any higher? >> i saw a nice support on it. and i think that the stock has been stalled. starbucks has fallen out of favor and i think that's ridiculous. starbucks is best of breed and that's what we recommend on "mad money." phil? >> a big boo-ya to you, jim? how are you? >> i don't know. they pay me $64 million but i don't feel like playing. >> i'm calling on my apple watchful i don't know if you can hear me. hopefully i'll give tim cook some luck when they have earnings coming up. >> it isn't about luck. it is about performance. i hear you. >> i purchased it when it was down 10% from the high.
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around $84 or so. since then stock has declined like 9%. i know they have an upgreat. i'm curious if should i sell off. >> obviously there's the death of the mall story floating around at all time and some curious things. i think it is a good retailer. eas i don't care for mall retailers, to be honest. it is the companies firing away that are also seeing the stocks take off. how about higher gross margins? wall street has no heart. i don't know. otherwise, well, you know what we get. coming up on "mad money," more flicks are moving to the bigger screen. should you be buying a ticket? don't miss my exclusive with the ceo of imax. then the airlines, is it time
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for to you book a different position? plus, up over 60% year to date. i'll tell you if the company is become a comeback. >> don't miss a second of "mad money." have a question? tweet cramer. send jim an e-mail at cnbc.com or give us a call at 1-8743 cnbc. miss something? ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.
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summer's blockbuster season, hollywood released a new franchise. this year we have a new independence day. the people are packing into the theaters. is it time to circle back to imax? people love to watch the most explosive action movies.
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with more than 1,000 screens across 69 countries, imax has a very strong first quarter last thursday. higher than expected revenues at 48% clip year over year and coming off two very strong weekends with the new iteration of the jungle book. they still own 70% of imax china. a good thing because movies are booming in the china republic. can imax get it going again? let's take a closer look. welcome back to "mad money." >> thank you. i've always loved imax the product and the stock is great. when you came on last, we said it was too correlated with china. and we were movie about the movie schedule. five years have movies coming out just ripe for imax.
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>> you put this chart on that showed how closely it was. you were right. conservative old hong kong. >> right. very important. u.s. listing style. the stock is up over 40% from the ipo. guess what. the chinese love it. the u.s. investors say, i know china better than the chinese do and i know china better than the imax financial result and they've been wrong. it seem interesting that japan and europe have come on strong. >> even china has come on really strong. we just reported last week and our china results were up around 40%. our box office versus the year before.
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europe we're going crazy. scandinavia, we had no theaters there. we just opened huge theaters there in stock home. when you have china in your name, that's all peel want to hear. this isn't hike you're not taking advantage of an artificial decline. a lot of people who work at imax are bummed out. i say you should be happy when you're buying in your stock and you think the price is well worth buying, buy and it stick around and this time the market will catch up to reality. >> you're doing it at the right price. sometime stocks get hit and company can't be there when that happens.
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i think you can't just time it all the time. if write that smart i wouldn't be doing my day job. if you're patient and you know your company better than anyone else, it will pay off for you. >> let's talk about timing. it seems like it has become, the schedules are very in sync with imax. >> that's not a complete coincidence. the studios and the big name filmmakers really want an imax release. that's how they attract fan boys. marketing and punt. so frequently they'll move movies by a couple weeks, it used to be two block busters were on the same day and now if i warkts i can get imax release. you have jungle books, captain america, jungle book, then right into alice in wonderland and
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independence day. not just the kinds of of movies but the way they sequence. >> tell people what it used to be like. we were used to fretting that there wouldn't be any big -- >> in general the blockbusterization of hollywood. >> i want to steal that. >> as long as you give me some credit. >> i like that. >> what they've discovered is with all the new distribution platforms, video on demand and cable and alls kinds of release windows, they need to be big budget movies. the studies are making less movies and bigger budget movies and that plays right into the sweet spot. >> tins has movies every quarter. people don't understand.
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some other company might have been imax competitor. but you have a real ecosystem going. it would be hard to crack into what you do anymore. >> the key to it is the brand. we went to box office. it is a hard thing to climb over. you can't start a network and say i'll go compete with them. >> i find there are a lot of had movie experience that's are not imax. >> if you want to have movie seats and they're 60 years old, that's fine. if you want at this time way the director wants it to be seen. part of what is motivating this are the big name directors. when clint eastwood is making his next movie, it will be like when it lands in the water. unbelievable. did you see it?
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>> i haven't seen it. i talk to him and he said it is crazy. >> that's the ceo of imax. tons of information. coming up, the signals are piling up from across the economy. numbers hidden inside caterpillar's quarterly report. car sales and statistics in china. it could be pointing toward one key takeaway. cramer reveals the impact to your portfolio. just ahead.
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we've now heard from all the major airlines and after seeing each of these quarters, i have one question.
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how is that it southwest air, simple, is doing so well when united and continental are doing so poorly? we tend to think of the airlines as a group that trades together in lock step. either they're all thriving or they're own struggling. and we see real differentiation where southwest is crushing it. they're doing okay and american airlines and united continental are having real, real problems. so tonight i want to explain how there can be such a remarkable diverge enls. especially in wake of what i thought, candidly, really kind of stunning interview with southwest ceo dwar keller on friday. the really curious thing is that you can't guess the quarters by
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the headline numbers. in terms of sales or earnings, they give you the bottom line beat. not that much stronger and weaker looking. weaker looking. we've approached the gigantic beat. wow! when you look at the stock, they tell a very different story. americans saying 4.5%. united continental. southwest gained 1.5%. that's because the key metric that's matter most are not the revenues or earnings. stop trading on those revenues and earnings. what they really follow these stocks care about, above all else is something called prasm. passenger revenue per available seat model. prasm it how much each one is
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making. when you look at the passive revenue, it is clear the wholesale was not so hot for some. united earl. but they did the best. not great. but superior to all the other majors. that's why it went up and the others went down or treaded water. so the southwest, the others have significant and national exposure. it's been the strong dollar. that could be getting better. that's just one piece of the puzzle. another major reason for performance. and that's the company's superior cost. it is another key measure.
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this is catch. casm. take a look at this chart. you can see how southwest airlines has been outperforming the rest of the industry. over the last two years the stock has doubled. american air has vand. advanced. how about the specifics what sets these apart? remember how american airlines, it was reported, most was thank to a 34 cut. i still believe in the hair i am on service. i wouldn't surprised if it could box. it a good thing southwest has an
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active hedging. so while southwest didn't benefit as much as some of the others, they won't be hurt as. now that it is in the low 40s. southwest understands the cheap oil. not all the airlines agree. i read through these calls. they're like for instance on the conference call, there was an extended rim about how loyal prices are bad complicated. you know companies are having trouble when they try to argue that one of the dloinls, what else? labor issues. the company has managed to while
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those two are still trying to southwest has a generous pocket sharing you may not str off with that strength. >> i give all the credit to our people. we have great cost and great service. >> as he put it in the conference call, i love this line. we're not at war with our people. we are at war with our competitors. they're all trying to be friendly with unions. we have guys who make friends at southwest with their labor force. to understand it, here's suffering dramatically from the
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prolonged weakness. you would think the airlines would experience a downturn in the tech business. right? wrong. in response to a question, bob jordan, the chief commercial said houston and midland both look fantastic. throws the two most oil dependen cities in texas. and jordan had to reiterate that houston is doing very well. a company like continental which makes it five times as a major source of weakness in our quarter. hard to believe they are talking about the same city. that's how much stronger southwest. one last thing. the fact is the company have made these acquisitions and have struggled to make them work. that's especially true with the
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united continental. they get the free ride on everybody else's consolidation. love the stock. incredible value versus the stock market. the airline are cheap because the earnings estimates will need to be slashed going forward. i don't think that's the case with southwest. i would be a buyer. let me give you the bottom hine here. a rising tide lifts all ships. but once the tide goes out, that's when you find out who the real winners are. and southwest is the undisputed champion. i think the other airlines will have to know that. second, american, couldn't in any eventual. good guys, you want best of breed. which is why you want to own southwest. brian in ohio? >> i'm looking at u.s. fuel. they got hit big down today.
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i need to know if it is down 27 or 7. >> this is one of those where you have to say, all right. i missed the move. let's go elsewhere. that move came because of some tariff that's obama put in that kind of shocked peel. people thought that obama is such a free trader that he would never do that. the move has been had. i hike it is a long term play. marty? >> i would like to know the outlook for oil in particular, murphy oil. is it a dog or a cadillac? >> it's okay. look, we own occidental. why oxy? 4% yield and a really great balance sheet. that's the one we prefer. southwest air has the right labor relations with management. and that's one of the reasons it was good. so all need is love. couldn't resist. southwest airlines is the undisputed champion in the airlines. i say stick with the best sgreed
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do not put luv for sale. much more "mad money" for sale. could the companies reach the opening? and the two things about this earnings season that are impacting caterpillar and gm. and rapid fire. the lightning round! you shouldn't have to go far
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because we should fit into your life. not the other way around. what the heck is happening? 65% gain just since the beginning of the year. here is a company that lagged the market pretty badly for the last couple years. it was down 2014 and lost 30% of the value in 2015. want to know the darn thing? it is simply another cyclical machine that has been roaring. that has been a powerful prop to this market ever stinls down trodden industrials bought them in early february. and it is about as cyclical as
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it gets. so you would expect the stock to rally i know what the other back in style cyclicals but here's the thing. they have managed to leave all the other companies in the dust. pretty darn good. you can rent well. that move, that means this move isn't just about the prospect of a better global economy. it is about a specific turn-around in the early ins. this company is going through a transformational break-up. one that i've been add indicating for years. it was a bizarre mismatch. they made all sorts of cranes to tower cranes to mobile cranes for construction. about they homeless a food service business that made beverage machines for various
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restaurants. can you imagine two businesses with less in common? who buys a gigantic piece of construction equipment and then wants a salad bar with a sneeze guard. the combination didn't make sense. if you're trying to invest in food service, why would you want the cyclical crane exposure that makes it super sense i have to swings in the economy around the world. if you're trying to invest on a deep cyclical, the whole was worth much less than the sum of its parts. so i was incredibly relieved when it said it would sell off less than a year ago. it took a long time for the corporate divorce to go through.
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the food business now traces a separate entity. michael, frank, sam. the new one is a pure manufacturing service in cranes. one overly complex and confusing company has become two separate companies that are straightforward and easy to understand. and the break-up couldn't have happened at a better time. the stocks rallied more than 30% the spinoff on march 4. the shares going from $4.04. in reason years, the crane business has been crushed by lower oil prices. the company used to sell lots of rough terrain cranes. now, obviously i don't see oil heading back to the old highs any time soon. but the price of crude is up big from the january lows. i wouldn't be surprised if it could work back to 50 based on stronger chinese demand. plus, right when we started to get singles.
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whil thing aren't so hot right now, we could be looking at trough numbers. sales and earnings could be headed substantially higher as the year goes on. that's what we care about. not this quarter. a ton of value. there's much more to this turn-around than just the break-up. one other key competitors. we all kind of struggle over the name. zoomlylion. it offered to pay a huge premium. if the chinese are willing to acquire terex, it is easy to believe someone might want to snap up manitowock. but perhaps most important, it
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is doing everything it can to make the comeback a reality. in december we learned that barry pennypacker was taking over the crane size. business. and he has tremendous experience in turning down, he ran the industrial maker. and boosting the operating barges to booflt he has a knack for making it more profitable. gardener denver you got taken private for a 39% premium. so he wasted no time outlining his plans to turn around. when the company reported in late january, not long before the food service spinoff, he laid it out as a pure plain crane business. he can create the next generation cranes, give next generations what they want.
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in short he wants to make it into a lien clean machine. for example in january the company forecasted 4% operating marges. pennypacker said he could only get it to the double digits even when the sales are not so hot. we don't have a clear time line on how long it will take. we've already seen significant improvement in the few months since he took helm. all right. and finding new manufacture efficiencies. that's just the tim of the iceberg. however, it has rallied dramatically of late. you want to miss the best part of the run. tough question. the turn seems vex for real. at the end of the day, it is incredibly cyclical and
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downright awful. in the fourth quarter, they were down 38%. if anything. what matters is whether or not things are improved around the world. if you believe that the reason rebound in oil and various minerals that the global economy is getting stronger. then it is absolutely worth owning. if you believe europe is gaining strength and china is turning. that it will go higher later, not lower. the thing is you have a ring to register this baby. the whole point of spinning off the food division was to turn it into a pure cyclical. so i would snap up some shares and then wait to process the results before buying any more
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of this classic old mind industrial manufacturer. "mad money" is back after the break. the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
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it's time! and then the lightning round is over! are you ready? time for the lightning round. let's start with joe in new jersey. joe? >> caller: hello, cramer. i want to say your staff is great and very helpful. >> fabulous! >> my stock is cvs. >> they're both great companies. i say, buy buy buy! in hawaii, aaron. >> caller: hey! aloha from bright and sunny hawaii. >> mahalo! >> caller: i wanted to ask you about tri-point group. >> no. i think what you ought to do is you should be buying kb home.
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the cheapest. not the best but the cheapest. best of breed is lennar. >> caller: from florida gulf coast university. thank you for calling in. how can i help? >> caller: i was wondering, do you think ecsi? >> got a nice yield. i have to do work on this. i am so petrified about the energy business and renewable energy. i have to do more work. i'm saying it was such an explosive situation. >> caller: jimmy james. pleasure to talk to you. outr. buy, sell or old? >> it is like trading down in the draft. i don't want you to do that. you need best of breed.
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>> let's go to daniel in colorado. >> you want to be with hewlett-packard. how about richard in california? >> caller: yes. boo-ya from the central coast. >> what happened to enterprise partners? they just all trade together. that's the problem. it is more powerful than any individual stock. if you want the best in brd. epd. enterprise product. and that's the conclusion of the lightning round! here at the td ameritrade trader group, they work all the time.
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sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. years ago, i was starring in a allergic to other cats.cat opening - slash - closing night it hit me: hats for cats. everyone said i was crazy. when i went online. i got my domain, catswithhats.com from godaddy. now these things are fee-ly-in' outta here. got a crazy idea you think you can turn into a success? we know you can and we've got a domain for you. go you. godaddy.
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i know the market looks sub optimal for most of the day but the messages we're getting from individual companies are far different from what you might have seen on your screen today. when in doubt i say go with the raw data. go with what the company. they are telling you on their conference calls.
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the world is getting better. china's bottom and europe is getting a head of steam. and oil. and that's because of the rising demand. these two threats are important to keep in mind. we go right into the height of earnings seasons. they're very contrary. but it is unmistakable. let me go through some of the more important conference call. when caterpillar said three times china was getting better for them. caterpillar has seen a gain in the recent improvement commodity prices. it is much more positive. even in france. in the southeast and southwest. it is the most encouraging. we know that china is increasingly spending more money on demand. one way they're doing it is by
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spending on health care. we know they went to sell and how about health care? do you know it was up 14% in china. that is driven by mission machines. some very strong chinese orders for automated control. sxheen he's aircraft sales increased by double digits because of strong flight hours in china. but this gem took my breath away. if there were any reason to surprise me in the past quarter, it was europe. so you're not hearing that. right? kin, they reported year over year. the king penn was adamant that this would be a good one. we expect market conditions to
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worsen further. he said a full scale cash crisis. north america has had an 80% drop. the first down 50%. russian and china building drilling less. why? they can't pay the bills. time they point out that demand growth remain solid and there's very little excess supply other than saudi arabia who wants a piece of the iran deal. here's the good news. the magnitude of the exploration production cuts are so severe that it can only accelerate production declines and the upward movement. that's right. the world will be pumping a
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fewer million battles a day while demand is going up 1.2 million barrels. tonight saudis can do that. i think it is safe to say oil is done going down. that we're not going to see the $26 level. in many ways, these are the signs that explain so many of the moves the industrials and the oil stocks and the banks. things are indeed getting better globally stoffel shift to industrials stocks has not run its course yet. the rest of the world is strengthening. you know what? that's a very good sign for many of the stocks. stick with cramer.
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♪ >> narrator: in this episode of "american greed"... safe money specialist paul kruse promises big returns, while stealing his clients' life savings. >> he was arrogant, he was greedy, and he was evil. >> narrator: money starts flowing. >> $400,000 in, $400,000 out. >> narrator: and kruse lives large. >> he was dating an exotic dancer and actually was paying for breast augmentation out of these people's hard-earned money. >> narrator: his assistant says he makes an indecent proposal to her teenage daughter. >> "i'll buy you a bmw if you would show me your boobs." >> narrator: and she's left with only one choice. >> taking his ass out. you want me to put that more mildly? i'd rather not.

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