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tv   Mad Money  CNBC  August 23, 2016 6:00pm-7:01pm EDT

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>> jet blue. underperforming in the airline space. >> what are we listening to? >> zac brown band. >> see you back here tomorrow at 5:00. jim"fast." "mad money" with jim cramer starts right now. ♪ 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 make you some money. my job, not just to entertain but put it in perspective and educate you. call me, or tweet me @gymcramer. at this happy-go-lucky moment it's hard to imagine, let alone remember the terror we felt one year ago during this exact same
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week. i think it's important to get in the machine and do precisely that. why? we are way to quick to call the end of the world in this business and we almost invariably fail to acknowledge the sheer resilience of this amazing market. including today dow inching up 18 points, s&p advancing .20%. nasdaq gaining .30%. ♪ hallelujah during this week in 2015, we were assailed by a combination of fears that led to a decline of nearly 2,000 dow points o'er just six straight trading days. 17,545 down to dow 15,666. including one day where we shed more than 1,000 points. before an afternoon rebound trimmed the decline to a heart pounding 588 decline. it was a stunning meltdown back then. go back to the darkest days of the great recession of 2008 to
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find a worse stretch. for those who don't remember, there was so much going wrong all at once it was hard to comprehend. first the chinese stock market was plain collapsed in a way that totally freaked us out. the communist government lost control of stocks o' s over a frenzied period of speculation. the shanghai composite plunged to 2,965. after its already hideous fall from 5,178 earlier that spring. back then we feared china was experiencing the great -- the economic growth decelerating from 7% down to 6%. >> the house of pain. >> at the same time, we were just starting to fathom the enormity of lower oil prices. in fact, during that awful week, oil broke down below 40 causing investors to tremble about the $300 billion in debt that the oil companies owed to banks and public markets. suddenly we were playing the guessing game of which major oil companies would slash their
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dividend. on the way, of course, to defaulting on all of their debts. >> the house of pain. >> in the midst of all this on the friday before the thousand-point decline, an important federal reserve official, james bullard, gave an interview on satellite radio of all things where he seemed to be making the case for september rate hike. his comments were widely view as out of touch, way too sanguine about the fragile state of the economy. raising rates right into a chinese-led crash of epic proportions. verified by the plummeting price of crude. >> boo. >> i are remember being on the floor of the exchange that horrendous monday, for "squawk on the street" and after -- there's the monday after the interview from friday, i was watching stocks actually opening down 10, 15, 20 points. now, i tried to calm people down by saying it's not the end of the world but i was drowned out by the chicken littles who seem to surface on cue whenever the market is plummeting.
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i made the case of all things, completely nuts dor snuts, do s. i was quickly dismissed. the face of the inevitable collapse we've all been waiting and some have been hoping for. take a look at what's happened since then. i don't just mean how the dow rallied so hard. we're now up nearly more than a thousand points from the tw beginning of the last year's big selloff. first the chinese starock marke never really meant much lower than it did. sure, china's government pretty much mandated stock prices stop declining but it got the job done. chinese officials were talking about investigating sellers and arresting those who would short stocks. of course, we heard the constant refrain that these measures couldn't last. no government is big enough to beat the invisible hand on of the market, right? not right. some governments have the ability to be able to do it.
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this one. how about the iron fist of a totalitarian communist party that controls every aspect of government, every part of the apparatus from the courts to the prosecutors to the jails to the executions handed out to whi white-collar criminals. yep, in china, stock market had finally met its match. oh, and the chinese slowdown we were so scared of, turns out 6% gdp growth is a heck of a lot better than nothing which is what nearly every other economy in the world was giving you. the great chinese stock market crash came to an end just when we thought it was beginning. what about oil? $40 a barrel wasn't catastrophic after at, neither was $30. cash strapped oil companies were able to use the stock market to raise money to cover their bills while they worked to lower the break even cost. a year later, plenty of oil company in this country are making decent money at prices only a few bucks higher than they were a year ago. no major oil producer went
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broke. in fact, as the decline continued, opportunistic investors who jumped into -- >> buy, buy, buy. >> -- the oil stock offerings they used to be able to liquidate their balance sheets to make them a little more liquid so they didn't get in trouble, those people made out like bandits. here's the way i look at it. communism saved the chinese stock market, but capitalism, capitalism saved the oil companies and the fed, it did nothing. did nothing in september when janet yellen got together with her colleagues, she looked at the stock market, figured it out, cautioned the markets were too fragile to handle a rate hike. day stayed on hold. subsequently, they did tighten a few months later. the stock market took a hiccup. let's save that for another day. the fact is the worst day of the stretch did indeed mark the bottom and all that was for naught. i mention all this now because no matter who seems to happen, no matter what data we get, what successes we've seen from the economy, or from individual companies, we still act as if the world is about to end at any moment.
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consider today. we just got the strongest new home sales numbers since 2007. at last, going back to levels we haven't seen since the great recession. we just came through a remarkably good earnings season. it was. we saw revenue growth particularly from international companies, some which are getting their best numbers from europe. last year we only had a few generals that went by the name of f.a.n.g. facebook, amazon, netflix, google. now that we hit all-time highs in the nasdaq composite and the dre breadth is staggering. you name it. all we heard about last year was the narrowness of the nasdaq rally. how many times do you hear people say the broad nature of this one? do you hear anyone hearing? see anyone clapping? it's almost like no one believes the move is real even as the methodical resilient way this market advanced is textbook bullish. i offer no apologies about that
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judgment. in fact, if i feel like i don't point it out, nobody will. the incentives of this business make it difficult to be bullish in public. no one cares when a bear gets it wrong, but say something bullish ahead of a big decline and those youtube clips haunt you forever. once again, we're faced with what some are calling an apocalypse now situation with janet yellen speaking friday. we know there are plenty of bears just waiting to wave the end of the world flag the moment she says anything hawkish. if yellen mentions putting a rate hike on the table in september, it's entirely possible, we'll with talking about how ugly next monday will be, not unlike the monday from a year ago. here's the bottom line. i promise you, if that next end of the world call occurs, i'm going to take out the chart on what happened last year at this time, the breakdown of the crash of 2015 and remind you that three months later, we're pretty much right back to where we started. and while we did revisit the ugly levels of last august again in february, it was merely one
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more fabulous buying opportunity along the way to record highs. nick in florida. nick? are. >> caller: boo-yah, jim. chipotle has been stuck in a rut. the company keeps buying that stock. it's hard to abandon. chipotle, when their own company shows tremendous -- the company also shows profitability. what to do? >> my colleague, bruce, at, just did work on chipotle on the chart. i know the chart is horrible, the same-store sales are terrible right now. everyone knows that. i said you have to wait 18 months since the last incident until we have a comeback. have we waited those 18 months yet? no. don't get too excited until we put that time between us. rick in illinois. rick? >> caller: jim, thanks for taking my call. >> of course. >> caller: i really appreciate you having our backs. i used to feel like an outsider but not anymore. >> thank you. >> caller: i'm a longtime viewer and proud member of action alerts. >> ohhing fabulous. >> caller: my question is about crm. the stock was climbing to 82 recently, they received a downgrade while at the same time ibm announced a seven-year
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agreement for cloud services with workday. jim, my question is, is the fundment l landscape changing for crm or competition increasing? >> workday and crm are very close colleagues. i didn't think the ibm really did affect them. thank you for taking action alerts, the companion to my charitable trust. workday, i am concerned. i saw it downgrade the other day. some are saying sales force has a softer quarter. i have no evidence that's the case. jay in new jersey. jay? >> caller: hey, jim, how are you? >> i am good. how about you? >> caller: i'm awesome. i watched the olympics, you do a fantastic job, man. >> thank you. >> caller: okay. i'm excited to notice mcdonald's at the current levels. now i understand that a few analysts have been bearish on the restaurant stocks, but the changes that mcdonald's are bring to their menu, do you think it's time to -- or do you
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expect more downside risk? >> mcdonald's yields 3%. a lot of people feel steve easterbrook is out of bullets, h he already played the breakfast all day card. i think the stock could trade down to the 110 region but if it gets there, pull the trigger. now listen to me, chicken little, the sky is not falling. remember, the wall street ecochamber can drown out the loudest voices of reason when the calls for catastrophe begin. don't forget your history. i'll be here to remind you. on "mad money," shares of best buy are roaring today. one found an answer. we'll reveal it to you. then my exclusive with the company that gave us everything from cheerios to the pillsbury dough boy and wheaties. i've got the ceo. summer blockbuster season is here. how do you profit from all the movies you want to see? forget picking the winning
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flick. i got a different way to play it. 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 or give us a call at 1-800-743-cnbc. miss something? head to to buy that trp?p?o?gv
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all right. look. like i told you last night, it's time to stop all that hand-wringing about the decline and fall of bricks and mortar retail or the death of the consumer. i'm a big believer in skepticism, but it's possible at times to be too skeptical. time and again we've seen investors write off the american consumer betting retail sales are about to collapse only to be shocked when many of those same retailers produce stellar numbers like we saw this past earnings season. enough of the emotional roller coaster. sure our economy isn't growing as fast as we'd like. you've heard that. wa we've had darn good solid growth for years. people have money to spend. nearly everyone was acting like the consumer somehow vanished
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into thin air. does that mean people have suddenly started shopping again? i think the more likely explanation is the consumer never really went away in the first place. just got more picky. just wanted to shop where she could get her stuff quickly. we let our fears overwhelm our common sense. plenty of retail erilers still their problems, looking at you, target and macy's. like today's rocket launch from best buy after truly blockbuster quarter. i think that's a very good sign for the stock market as a whole. remember the united states is a service economy. so retail's very important. two-thirds of the gdp. tonight we're going off the charts with bob lang, founder of explosiveoptions net and behind the's trifecta stock's newsletter. the recent strength in the group suggests the u.s. economy may be more robust than it appears so why don't we start off by looking at the daily chart of the spider s&p retail etf. symbol xrt. it's the one a lot of people
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follow. they like to get short ore long it. it's made up of the largest names in the sector. first of all lang likes how the retail etf made a w-shaped bottom pattern in may and june. okay? that's a big spring board to the recent rally. a shallow pullback earlier this month. you can see that. it turned o out to be a perfect buying opportunity. this is the textbook definition of a food looking chart. keep this in mind if you see this pattern. at the beginning of august the srt tested its 200 day moving average. okay, that's the red line. it's fwn roaring ever since. it's made a so-called golden cross, the shorter term 50 day, that's the blue, actually moves above the 200 day moving average. that's an incredibly bullish pattern that was just a couple of weeks ago and the retail etf is within 10% of its all-time highs. that was set last year. last week the xrt traded
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sideways consolidating its recent gains. we like that. it's possible this is a nice little pause before the next leg of the big rally. okay. that said. while the s&p retail etf is useful for taking the industry's temperature, regular viewers like you know i'm not a fan of sector-based etfs. i prefer to pick the best of the best. go for best rather than owning everything in a group from the good, bad, to the ugly. let's focus, narrow focus, to standout individual companies in the retail space. for example, one of my absolute favorite companies, get this, nike. this is nike's daily chart. this stock had been in the doghouse going relentlessly lower from mid-march to late june as the shutdown of sports authority, one of their major u.s. distributors, caused a hiccup in their business and everybody else's in this industry. ever since nike reported a healthy quarter at the end of june, stock's been working its way higher albeit in stages. plus the rio olympics that preempted my time slot for the last two weeks. but basically one continuous nike.
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we recently heard very good things from both foot locker, what a great conference call that was, and dick's. also great. they sell aen ton of nike. what does lang think of this chart? well, they just added nike to the's trifecta stock fort polio lang helps run. he's obviously a fan. why? first the stock had a powerful move higher just last week. this was really fantastic. this was after the fabulous foot locker quarter. big money managers are once again adding to positions in this fabulous senior growth stock. second, there's the moving average, we call that the indicator and technicians use that to detect changes in the stock's trajerajectory before t happen. with nike, it gave you what's known as a bullish crossover where the black line crosses above the red one. right there. that's the bullish crossover. you know what, that's one of the most reliably positive things you can get. lang thinks this one could have a lot more upside. wow. this is a big dow stock. how much? okay. the stock's been testing its
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ceiling of resistance at the 200 day and 200 day again is always the red. okay? and it's 59 and change. today nike broke out above that level. now that it's breaking out, lang thinks the stock could easily make its way up to 65. 10% gain. we wanted that, don't we? let's go to a department store. take a gander at the stock of nordstrom. all right? this was rated our top pick in the department store group on june 29th and up 15 bucks or 40% since then. anyway. now, after getting clobbered in april and may, nordstrom made that "w" we're looking for, okay? that's through the end of june. ever since then the stock has been on a huge tear including a monster move after the company shot the lights out reporting a week and a half ago, talked about fashion, the anniversary, all good. nor nordstrom is in the midst of a pendant pattern, that often sends stocks rocketing higher. it looks like a flag pole, sideways, creating what looks
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like a pennant. once it catches its breath, it will two higher. this is an oscillator, it measures the level of buying or selling pressure there a stock. it just turned positive. i know it seems small but it does matter. that's telling you big institutional money managers are buying nordstrom again and buys have the power to propel stocks through the stratosphere. the stock is facing resistance at 54 bucks. once nordstrom breaks out above the ceiling, he's thinking old highs in the 70s. that would be something, right? thought the consumer was dead, they weren't shopping at nordstrom. finally, even the gap, that had been a house of pain for years seems to be getting in on the bullish action. look a the daily chart. ever since it bottomed at may, it definitely did bottom, the gap stock has been churning its way higher. this is one of the cases where the chart doesn't align itself with the fundamentals.
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how the actual business is doing. last week, just last week gap reported an in line quarter and cut its guidance. while the stock initially went down hard, buyers started picking it up. i thought i lost my mind, but i bought a really nice swimsuit at the gap in rome. yeah. like 9 bucks or euros or whatever. now it's broken out to even higher levels. we haven't seen these levels since april. lang likes the gap -- likes that the gap made a higher high on very heavy volume. there's a spike in volume. okay? that matters, too. you mean one of the things we're looking at here is basically a stock everyone's given up on. i like that. money flow. gotten positive. that mean the big boys are buying this one. mack d. bullish indicator. that's something we haven't seen. a lot going for it. now, look, gap's chart, lang thinks it could be a tough one for it to break through its ceiling. where it runs out of gas. jump into the gap rather than falling there.
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here's the bottom line. after spending months of worrying about the decline of the consumer and death of the shopping mall, retail is suddenly back in style on the wall street fashion show. on twitter everyone thinks it's amazing i'm willing to go out there and say this. look at this. the chart, interneted by bob lang, suggests nike and nordstrom could have a lot more room to run. you have my blessing to both of them. they're terrific companies. the fact that a lagger like gap can be a winner in this market, doesn't that tell you everything about what you need to know about the rotation back into bricks and mortar retail? jill in virginia. jill? >> caller: hey, jim. >> jill, what's up? >> caller: i'm calling, i hey, i took a position in riteaid about three years ago and, you know, as you know, walgreens has put in a bid -- >> right. >> caller: it's been not much of anything for the past six months. i haven't heard anything about the merger. >> no, jill, i'm concerned.
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my kpacharitable trust, the tru owns walgreens. walgreens hasn't moved. riteaid hasn't. riteaid, i am, indeed, nervous about because it hasn't what we call close the gap between where it is. i want you to be cautious, riteaid. maybe the government's blocking that deal. we can't tell. you don't bet against america and don't bet against the american consumer. retail is alive and well and the rally is best represented in the stocks of nordstrom and nike according to bob lang. there's much more "mad money" ahead. the big "g" has been outperforming this market. can the company's rise continue or is it in danger of losing its lucky charm? i'm talking with the ceo. epo properties is one of the large effort real estate investor of theme parks, schools, across the country. a potential rate hike coming? i don't know. a company that continues to break new ground. then they're mad as hell and won't take anymore. i'm naming three companies who think their stock has value and
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taking matters into my own hands. i'm going to reveal them soon so stick with cramer. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure.
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appearing in your kitchen for 150 years. their food became a staple on the american table but as tastes evolve, is general mills hungry enough for change? packaged food companies have had truly magnificent runs this year over the possibility that fed chief janet yellen may say something about an imminent rate hike when she speaks on friday. what are we supposed to do with these stock stocks? consider general mills, you play, betty crocker, andy's not too long ago and the huge cereal business, cheerios among others
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including wheaties which includes always the highlights of america's most superb athletes. why not? all right. you know i've been a believer for a very long time for this because ken powell, the ceo, understands what the consumer wants. probably better than any of the packaged food people i deal with. that's why it's expanding the organic business, why it removed the artificial coloring from all cereals. the fact is general mills is up more than 20% year to date. that's stunning. i mean, it is a slower growing packaged food company and it's been roaring like some sort of red hot tech stock. the stock rallied so much its dif yields less than 2.8%. can general mills keep soaring? let's check in with ken powell, chairman and ceo of general mills, find out more about his company, where it's headed. welcome back to mx "mad money." have a seat. >> thank you. >> straight pointblank, so i grew up eating this cereal. >> yes. me, too. >> all right. and i would have said, listen, you take the color out of it, you take the artificial sweeteners, you take the taste and i don't want it. it's been the exact opposite. >> it's doing great.
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>> how is that, how is it possible. >> lots of people, more than half of our consumers said we'd prefer not to have artificial flavors and colors. we took them out. we took them out and business got better. we started listening to the consumer. >> why didn't the taste go away? >> because our rnd people, people who formulate our products around the world are absolutely terrific. and it's very difficult to do, but, you know, this is how you insulate yourself. very difficult problem, but they've done it. the product tastes great. their job one for them, don't have people leaving the business because they don't like the taste. they know that and succeeded. >> i want people to understand, we can use mathematical, use business or tell it pointblank, the swing, what we call the delta between when you took the -- you had it in and took the stuff out. >> yeah. i mean, it happens pretty fast. whether you're talking about artificial flavors. so no, no, no, no artificials -- whether it was that or gluten. free cheerios. we got the gluten out. did that, put them on the market. we started advertising. you see an almost immediate response. things are on their mind. they're listening. they hear that message.
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they go to the store. that's my product. we see the results. very, very quickly. >> the other thing, you have got at the cusp of a lot of things, you dropped something that's less organic, green giant, put a lot of money into ande's, also have emphasized snacks. >> ryep. >> bars. >> yep. >> how do you know all this stuff? how are you so in touch with your cust mu you're able to innovate and know what they want? >> it's been a real focus. an era of high change. our mantra in general mills, listen, get out there, be in the kitchens. find what people want today. so we've really focused on that. we hear again and again i want real food, cleaner food, simpler labels. i want artificials reduced. organic. so we're just listening and we're then responding as quickly as we can. that's led us to more snacks, more organic. more protein. these kinds of things that we're just hearing again and again, this is what hour consumers want. >> at the same time you've taken out a tremendous amount of costs.
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every time i feel like there's no more cost to take out, you still can. why are there so many costs to begin with and what changed technologically to let you be able to do that? >> ten years ago we signed -- it's moderated a little. e commodities, we said it's going to be mid single digits or more. we said we can't just take price increases. we just started to borrow ideas from all raround the world, whoever had good ideas. we brought them into general mills and started to get these ideas. some of it is about reducing complexity. in the business. and fewer skus. some of it is smarter about pricing. some of it is absolutely pure technology in the plants. smarter, better ways to make products. we've used all of these ideas and been very effective at doing it. frankly, as you said, we've been on this run. there's more to go. becomes an innovation process. there's more you can do here.
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>> one of the things you've just done, all, by the way, in a fabulous -- if anybody wants to know more. foundational versus -- this is hairsy in some ways, we think of foundationals as what we had when we grew up. >> internally we were already being very, very clear inside of general mills. some of the brands we think have higher growth potential we're going to prioritize. organic, cereal, yogurt globally is an example. we're going to prioritize them. some of these businesses, fabulous businesses. we have very high shares. little less growth potential. we're going to ease off on those. we made that differentuation. i talked about cereal, snack bars and yogurt as a growth brand. foundational brands, baking mix, pillsbury. very, very high shares. very profitable for general mills. going to grow a little bit less, you know, rapidly, but still a very important business for us. we're just managing the portfolio that way. we're doing it internally.
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we should tell the world, look, this is how we're prioritizing. this is how we're thinking about the business. >> now, one of the things that stock investors, people portfolio managers like is growth. you do not have the hyper growth of a facebook or a google. what you do have is huge cash flow and you've been able to figure out -- how to buy back stock and also offer a great yield. one of the things you've been really amazing at is buying back stock. is that because you recognize something that the market didn't? how did you know to continue to buy? because it turns out to be a great buy. >> look, fundamentally, we have been listening to our investors for many, many, many years. as long as i've been in this job which is almost ten years now. we know that people who buy companies like general mills, look, we want to see that cash return. >> right. >> as you know. some of them want the dividend. some of them are very interested in share buybacks. the point is, we know you have very ample free cash flow and we want to see that come back to us. we just know that, hear that repeatedly from investors and
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that's a reason they come into the stock. we owe that to them. we're focused on that. we spend quite a bit of time on investor day talking about focus on free cash flow, target of returning 90%. last year a little over 100%. it's a commitment that we have to our shareholders and we've done it very, very effectively. i think our dif tend is up 10% compound over the last five years. several billion dollars of cash, you know, share buyback. so it's just part of the commitment that we have. >> okay. one of your competitors, yogurt company, bought whitewave, a company you know for some time. you're now the third largest natural organic. didn't feel the need to participate in that, felt you could tdevelop it, yourself, using the annie's deal? >> create value for our shareholders. we're always looking. we didn't see it in that particular opportunity. if you look back what done over the last five years, very active building scale internationally. we required international
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yoplait business, required yoki in brazil. big businesses. in the u.s. as you already said, very focused on natural and organic. acquired eight, ten businesses there. these are the kinds of things we've done, likely the kind of things we'll continue to do in the future if we find a bigger deal that fits with our portfolio. and that, where we really see a clear path to value. we'll be interested. >> let me ask you, then, irwin simon has been on the show a lot. you're not going to disclose them. they faltered. some people think they faltered frankly because of you, you have big brands and came in and have taken shelf space. is that the kind of thing that would be of interest? >> you're right, i don't want to talk about individual -- so, i mean, look, you've seen what we've done historically. you know, it's got to be right for us. it's got to be something that fits and it's got to be something where we really see how we can create value. you mentioned annie's. a business where we paid a healthy premium for that. >> that is good. >> multiple ways to create value. we took cost out. huge expansion opportunities in that business. that's been a very successful
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acquisition. so that's kind of, you know, the benchmark for us. we're looking for those kinds of things. >> last question. 14 million kids. it's back to school. that turns out to be the season for general mills, doesn't it? >> it's fantastic. we have a fabulous food service business. we have dominant shares in school cafeterias across the country. our cereals lead, yogurt very strong, snacking, huge opportunity for us. great focus over the years. we brought frozen food into the school lunchroom now. so, wonderful business for us. double-digit profit increases over the last ten years and thank you for asking because we don't get enough recognition of the great success -- >> put in the box top charity that you do. i can't resist. i knew trix are for kids. i have it memorized. would i memorize it now on youtube, facebook? you do a lot online. >> yeah, we're trying to get video on mobile devices and so it can be on tv. you know, people talk about
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digital advertising. we're not talking about banners anymore. we're talking about running our video but on whatever device is in that person's hands. people are watching television programs on their phones, seeing our commercials that way. we don't care whether it's tv or phone. totally agnostic. we want them to see that 30 seconds of video. that's our focus. >> well, it has been working. that's ken powell, chairman and ceo of general mills. one of my favorite stocks against "mad money" began more than a decade ago. stay with cramer.
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during the first half of this year, few groups performed better than the real estate invest the trust. as investors flocked to consistent high-yielding stocks as an alternative to the incredible lie low yielding bonds. has the rally run its course? since the beginning of august the group has stalled and wond r if we're looking at a buyable pullback or rotation l. epr products which owned entertainment, recreation and educatio education-related real estate. golf complexes, boy is that hot, ski. the mix has been working. while the stock pulled back roughly $5 from its highs at the end of july, epr has given us an
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astounding year to date. the stock still has a 4.9% bountiful yield. let's talk to greg silvers. welcome back to "mad money." >> good to see you. >> i got to tell you, greg, if you told me when i got in this business there would be a real estate investment trust that would have the level of growth of this, we thought they were just slow growing, i would say, no, it will be just a growth stock. what is the advantage of being a real estate investment trust given the tremendous growth you have? >> i think for us it's being about being able to access this product, grow a portfolio, take advantage of a low interest rate environment, capture spreads and dividends that are becoming -- >> that true. it's the environment driving the stock. a lot of people might think entertainment, recreation, who do these have to do with each other? it's the experience evolution. you're the way to play it.
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probably, what, more than 70%, 71% of your business is just that. >> the economy is moving a little bit from an economy of stuff to an economy of experience. something we can have a communal experience, generally often with food and beverage as a component. part of that. so an activity based. we all still want to be together. we're not going to hang out just in our house. we're able to take advantage of that without being internet sensitive as some other sectors are. >> let's talk about the entertainment, having experience. i like to go to theaters that basically have been reseated. that's an important part. reseated meaning r-e-s-e-a-t-e-d, right? >> we're seeing the amenization of what's going on. we have 25 theaters currently right now in some plan of reseating with introducing the luxury fully reclining seats with expanded food and above be. expanded the demographic. we believe customers see real value. most of these are occurring without ticket increases so
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people are able to come, have a much better experience. they're generally spending more on food and beverage which works for the operator so it's a very much of a win/win scenario. >> there's a lot of consolidation in the business. does that hurt or help you? >> for us we see it as positive in a sense if you think about what's going on with reseating, the number of seats in the u.s. are going dramatically down. >> right. >> so the actual, those of us who have those seats are actually, our properties are actually becoming more valuable. so as we see this consolidation, what we're seeing is what we believe is more opportunity for us to come in, be participate in that reseating formula and grow our business. >> okay. now if we have the millennial experience evolution which i like, but you have education charter schools. how does that fit in with the company that's experiencial? >> for us, again, think about it as one of those non internet directly competitive. this is something you have to be in-person experience for the most part so we see this as a specialty asset, that it's not -- we try to stay out of the
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commodity flow of things to where we can access product. we know how to have a -- we're segmented in three areas. we have people who live, eat and breathe every day. we have a very specialty focus. we understand how to underwrite it, access it and how to deliver these consistent durable returns. >> in the times since we've been following the company, you had a patch of land that turned out to be bountiful, a is a casino bei built. that's a situation where it's a total windfall. does it fit with the core mission? >> probably gaming not. there are people who focus on that. what we did is wanted to make a land investment productive so we ground lieased the property to gaming entity. going to spend $600 million, $700 million, $800 million on top of our ground and adding a water park hotel. it's a win/win. we activate what was a dormant asset, get a very positive return. we're also able to do what is more of our core on the remaining part. >> one last question.
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i know it's a little more complex than i usually ask on the show. because i care so much about your cash flow and therefore raising dividends. you have a piece of what's known as a convertible preferred. if your stock trades up, it would seem to neu might be able to liquidate that preferred and save a portion for shareholders. >> we've started mo eed posting website what the conversion is. >> that's why i wanted to bring it up. >> we're monitoring it and feel strongly given when the opportunity presents itself to convert, we'll take advantage of that. >> that's been a great piece of paper. >> it has been. >> that's greg silvers, president and ceo of epr properties, one of the hottest stocks out there but also has a great yield. "mad money" is back after the break. tomorrow, kick off the trading day with "squawk on the street." live from post nine at the nyse.
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>> they have gotten it down to a science. i feel like i'm in there in the pool. of course, flailing. >> it all starts at 9:00 a.m. eastern.
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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. >> buy, buy, buy. sell, sell, sell. i tell you whether to buy or sell. then the lightning round is over. are you ready, skee-daddy? start with ben in maryland. ben? >> caller: hey, jimbo. >> yo, yo. >> caller: how about a baltimore orioles michael phelps blue craft boo-boo-boo-yah to you, sir? >> okay. i'm from philadelphia. i'm willing to go with it. let's go. >> caller: hey, thinking about box. b-o-x. >> look, you got this thing, he's doing a good job, but it's a high growth stock and people want big earnings, but you know what, speculation -- >> buy, buy, buy. >> i'm allowing it because it does have good revenue growth. let's go to nasir in california. >> caller: yes, sir, mr. cramer, how are you going, sir? >> i'm doing great.
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how about you? >> caller: yes, sir. big beoo-yah to you from san francisco, california. >> thank you. i'll take that. heading out there soon. what's happening? >> caller: u.s. steel -- >> no, we recommend only new corp when we're in the steel group. that's the company that was built to last and doesn't have a debt problem and has good yield. let's go to glory in north carolina. glory? >> caller: hi, jim. i just want to say homegrown to may tomatoes, they're going to extend the honeymoon glow you have going on. >> it helps. >> caller: akrx. now that monaghan has come on board, is that a buy, sell or keep on holding? >> that has actual earnings power. i'd keep that. they're giving me the hook. that, ladies and gentlemen, is
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the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade. but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.
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don't you love it when the people running a company put their money where their mouth is? lately we've seen a bunch of companies implement huge buybackses >> buy, buy, buy. >> to me these buybacks make a statement, the ceo is sick and tired of the market undervaluing his or her stock and not going
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to take it anymore. nothing screams we're too undervalued than a repurchase program that shrinks the number of shares, not issuing more. for example, tonight we heard a great story from ken powell, the ceo of general mills. since 2013, he's taken his share account from 648 million shares down to 598 million shares. that's nearly 8% shrinkage. how about toll brothers? home builder that rocketed up nearly 9% today on a surprisingly strong quarter. here's a company that's not known as a buyer of itses own stock. toll nevertheless took its share count from 184 million to 173 million in the last year. then there's the hottest stock of the session, best buy up almost 20% today alone with fabulous earnings. you better believe the consistent buyback helped contribute to the amazing number. as best buy cut its share from 406 million in 2011 to 320 million today ♪ hallelujah we've heard complaints they buy
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back a stock to create better earnings per share or can't think of anything else to do with the money. it's a sign they ran out of real growth prospects. there's another kind of buyback i absolutely adore. sometimes management simply think the market is judging their stocks wrong. they believe they're not getting enough credit for everything they're accomplishing and terrific execution. they buy back their own stock for the same reason you and i buy a stock, think it's too cheap, deserves to go higher. you can tell from the conference call this morning that best buy sure feels that way. these guys reinvented the company so many times. record store, cell phone store, television store, appliance store, terrific home theater franchise. have they gotten an ounce of credit for it? not really at least until this morning. best buy's better than expected quarter. fueled in part by a magnificent 8% appliance sales. there are a lot of naysayers who got this wrong. you know who nailed it? best buy. just in the second quarter, $219 million to retire 7.1 million of its own shares.
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average price of $30.85. stock's now $39 and change. up 27% from best buy's purchase price. that's an amazing trade. except, of course, it's an investment because it's been retired. same for toll brothers. all right. i'm sure bob toll, founder, got tired of watching the stock of his namesake company lan-- well nice buy. stock's up 21% from those levels. how about general mills? used it call it mills on the trading desk. we heard earlier from ceo ken powell, it has growth galore and cash flow most other businesses would kill for. general mills has a history of putting the money to work buying back stock and paying a terrific dividend. while the stock is up 23% for the year, pretty amazing for a slow and steady packaged food company, i have to say ken powell and his team simply aren't getting enough credit for reinventing this company on the fly, much more natural and organic. third largest natural organic company out there. if wall street is not willing to give general mills a respectable
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valuation, the company is happy to buy back its own stock and repurchased, get this, 11 million shares at $55.18 on average, the latest fiscal year. the stock is up 29% from those levels. once again a really great purchase. all three companies have something. until recently they weren't getting anything clez to the credit they deserved. they helped bolster some already tremendous earnings. way to go, guys. stick with cramer. ♪
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we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. [tires screech] [car horn beeps] [texting keystrokes]
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a year ago today, supposed to bt end of the world. did it really happen? no. what was it? it was a terrific time to buy. on friday we're going to get janet yellen, hey, market comes down, maybe another terrific time. i like to say there's always a bull market somewhere. i promise to find it just for you right here on "mad money." i'm jim cramer and i'll see you tomorrow.
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>> tonight on the profit... i go inside sweet pete's, a confectionary shop whose candy-obsessed owner has created a huge variety of sweets. >> that's the caramel. >> that is good. but with a horrible location... part of location is having foot traffic. and i don't see that here. a partnership gone bad... >> i'm calling you out on your integrity. it's crap. >> and an outdated kitchen that won't allow him to keep up with demand... there is a limit to the output, and you're the limit. if i can't turn this business around... >> i don't see how i can go forward. >> sweet pete's will come to a bitter end. >> you guys misrepresent my integrity. >> no, i'm calling you out on-- >> i'm sorry. >> my name is marcus lemonis, and i fix failing businesses. >> we made $10,000 together. >> i make tough decisions... we'll change the recipes. >> i mean, that would be the last thing i'd want to do.


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