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tv   Mad Money  CNBC  January 31, 2017 6:00pm-7:01pm EST

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>> organic chemistry. that's why i'm not a doctor. >> look at the reversal today there. >> our thanks to gene munster for manning the red phone. see you tomorrow at 5:00. matt "mad money" starts 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 is not just to entertain but educate and teach you so-call me at 800-743-cnbc or tweet me @jimcramer. you heard the slogan make love not war. when it come to trump's
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business, it's more like make love and war. look, a lot of people are baffled by the way trump deals with business leaders because we've never seen anything like this before and when people feel baffled, they sell stocks. the nasdaq declined .02% today but the president's make love end war is a lot less puzzling once you come to grips with what he's really doing. for example, today the president meets with big pharmaceutical executives and condemns them for being too greedy at the same time he praises them. if they hire more workers in the u.s., everything will be fine. the drug stocks get hard when trump talks about outrageous price increases and rally strongly when people realize he didn't threaten to use the buying power to drive the prices lower. one of the best drug rallies we've seen in years. how do you characterize the
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industry in hard to tell. but this is the pattern for months now. trump is at war with lockheed martin and greg hayes from united technologies about offshoring american jobs in the carrier plant in indiana and suggestions people buy carrier products made by united technologies after hayes keeps 1,000 jobs going to mexico. same thing with boeing and air force one. he bashes the company and gets price possessions and loves boeing. it's all negotiation. so far none of the instances hurt the stocks of company. in fact, they have gone up. there is something lurking freaking out executives and shareholders. they are worried president trump may be willing to sacrifice whole international markets that companies have fought hard to penetrate in in order to further the job's agenda. we keep hearing that trump might get us into trade wars that
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would cause real earnings carnage, not the one off stuff like what he did to lockheed or boeing or united tech or drug companies. it's about real earnings, real earnings, as in taking numbers down, the kinds of things that are long-lasting. if you're concerned this president will start trade wars, i got real bad news for you. it was under siege in trade wars, we're just not fighting back. got our hands tied behind our back or at least we didn't fight back until he took over. he's been operating under the assumption that we've been losing these trade wars for years and he's done with that. he wants to start winning even if there are up front casualties this morning peter navarro, the head of the trade counsel bashed germany for using a d based eros to take business from the u.s. now it's an open secret that the european central bank is keeping the eros lower to make the export more competitive for
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sellers. that was fine when europe's economy was on the verge of collapse but so much better now and european inflation is at the highest rate in four years. there is no way the eros should be this low. this is one of the things our government would never talk about. you don't attack your friends in europe, particularly the germans, at least until navarro spoke up. not a coincidence president trump had an hour-long phone conversation and two days later unloads on german chancellor angela merkel's trade policies. they had a special relationship like the long-standing relationship between the u.s. and britain and as far as trump is concerned, the germans take the jobs. that's what matters. how about china? american companies spent years developing relationships to sell everything from fried chicken to diapers to lattes to shampoo to cell phones to the chinese people. it's the biggest consumer market in the world.
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but you know what we're starting to figure out? trump doesn't care about those wins. he cares how china is taking so many manufacturing jobs and the chinese are down there giving us the business. i think this president would sacrifice the end roads the consumer package goods and technology and industrial companied made to get the chinese to stop dumping goods and start playing fair. of course, if you're selling soap or tooth paste or tractors or trucks, you don't want to hear about the u.s. cracking down on the chinese. that could take dimes, quarters, maybe dollars of earnings out of your per share numbers. so let's use the elephant in the room for a glorious thing that happened, apple. we got an incredibly strong number from apple tonight. cramer fav where i urged you to own it, not trade it. and sure enough, despite many people feeling that the best times are a long time ago, you got much better than expected
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iphone 7 sales and plus, that fantastic camera, which works so well with snap which caused the average selling price to spike higher for this amazing stat, a 10-year-old product plus the service revenue keeps growing and growing and 150 million direct and indirect subscribers worth more than $7 billion a quarter. that's the same size of facebook. it was a fantastic report complete with a monster cash position that could be repatrioted at terrific he low levels if trump gets his way. here is the rub, if trump presses those countries who trade with us for real concessions, then you have a form of risk that apple investors may not assume exist. i think the president recognizes that both china and the u.s. have to be allowed to win, and if that happens, and apple gets relief, i see apple stock trading to the old highs as the iphone 8 comes out. but again, trump is not
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concerned about that and not worried about starting a trade war. he wants to stop the trading predators could be made up by tax cuts and deregulation and patriotization in a sense you can say he's breaking some eggs that will give companies ultimately fabulous american omelets down the road. what if he fails to get his agenda through congress. when trump fires the acting attorney general to defend against legal challenges banning i immigration, does that set back the business agenda? is the purpose of him sacrificing plans that could set him at odds from members of his party. that's the real issue. we know there is a stick for our companies but what if the
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president can't deliver on these other issues that he can't pain on. in other words, make war not love but if the love can't be delivered, i think that's why we went down and why we have been stalled and despite true blowout quarters, we may stay stalled until we're sure these trade wars don't result in real trade barriers going up with real earnings per share coming down while the hope for corporate tax relief cavalry doesn't arrive in time to save 2017's numbers. kathy, in new jersey, kathy? >> caller: hey, jim, first i want to thank you for educating us. very much appreciated. my question is, what is your future take of free po port-mcmoran?
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>> it's an increase in worldwide trade and had a very big move anwhat we discovered is when you have stocks with monster moves, it's in resting mode. if the stock goes below 15, you can pull the trigger because i see a resumption of worldwide trade. i think growth is coming. eric in new york, eric? >> caller: hi, dr. cramer, this is an honor. thank you for taking my call. >> thank you. >> caller: i got a question about suncoke. first, i want your opinion and there was a recent irs production that it's not qualifying income. i doesn't understand what that means to suncoke. can you step me? >> i can't help the fact it's part of a convil luted str
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structure. the partners with the responsible ceo and a great balance sheet, that's going to be able to play deregulation and they move oil. they move refined products -- they -- these guys are moving around oil, around the continent, which is exactly what you need. they are in the storage transportation. don't fool around with the guys that have the bad balance sheets, please. is the president a friend or a faux of business? sometimes we can't tell even though he's a pro-business person and that's why we're stalled and we might be until we're sure of the love or the war. sure, a soda might be empty calories but this stock could be a different story. tonight, i'm pouring over details to see if coca-cola can bubble up. after the president met with industry executives, i'll tell you how to play.
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by the way, al ccoa released th first earnings report as a company pushing for leadership after the close of today's trading. i've got the exclusive so stick with cramer. >> don't miss a second of "mad money." follow at @jimcramer at twitter. send jim an e-mail to mad money at or give us a call at 1800-743-cnbc. miss something? head to mad
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. what do you do if you're worried we could be stuck in the midst of a sustained sell off? this is likely to be a garden variety pull back but this is a brave new world where almost anything can happen and it always pays to be prepared. what happens if the trump stocks, the war hire when the economy improves go out of stale on the wall street fashion show because people have gotten more concerned about the state of business in this country going forward.
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again, i'm still pretty confident that the trump tripod deregulation, repatization and lower court for taxes will come to pass. it is a gop congress but the president's economic agenda seems like less of a sure thing than it did a week ago. that's why i'm always preaching about the diversification. if we believe the economy is about to accelerate in a big way, you should have something slow and steady in your portfolio that can out perform if it's wrong. sure, the food and bevry stoc b stocks have lost appeal since the election but that's the point. you can't invest your money into red hot trump stocks because that's the textbook definition of putting all of your eggs in one basket. diversification means when the market takes it on the chin like we've seen over the past couple sessions, you'll own something capable of hanging in there or going higher, so many of the trumps got hammered.
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so what's managed to go up today? coca-cola. a classic stock that works when the economic environment becomes more uncertain. that's why tonight we're going off the charts to take a closer look at the stock of coca-cola, ko with the help of larry williams, the technician trading futures, commodities and stocks for more than 50 years. not only has he written 11 books but created indicators we use all the time including some named after him like the williams percent or oscillator. we talk about that really often and he's got his own website where he teaches people to become better traders. i really he's practically the god father. i said when williams tells us he likes something, it makes you want to do homework because his instincts are tremendous but don't just take it from me. bakt on october 25th he pointed out a bizarre link between costco, yes, the shares of
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costco and the u.s. dollar. historically when the dollar is strong, costco stock tends to be strong, too, which makes sense because they get a descent amount of merchandise from overseas but plenty of companies told have a stronger positive correlation with the dollar simply going by the actual exposure to the currency. nevertheless, williams spotted this pattern and it with a more traditional reading of the charts made him think costco was heading higher. sure enough, he nailed it at the time costco was trading at about 151 and now it's 164. we own the stock from my cartable trust which you can follow by joining the club. surpi say costco should have more room to run. among so many technical wins, it makes me want his opinions about coca-cola seriously and he noticed
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patterns that should make it head higher this is a call every bit as controversial and against the grain as costco recommendation. take a look at the weekly chart. look at this weekly chart of coca-co coca-cola? not the action in the stock itself, but this line down at the bottom of the picture, okay, which shows the seasonal patterns in coke stock based on how it's done historically. williams points out coca-cola tends to have two strong season patterns. first the stock can rally in february. pretty interesting, right? it also tends to go higher in the fourth quarter. given that february is certainly right around the corner, williams believes the seasonable factors are very much on your side here if the calendar is any judge, this could be the time right now, tomorrow morning to buy coke. look, i understand why you might be skeptical. it certainly won't work every year.
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sometimes they buck the seasonal trend for any number f reasof r but if you bought coca-cola every year for the last decade, this would have made you money. it suggests at least for the moment the odds are at your favor, second, look at the second pattern that williams spotted. this is quite exciting. this is straightforward, the relationship between coke and sugar prices. check out this daily chart illustrating the price of coca-cola and the price of sugar. no surprise the world's leading soft drink maker spend as fortune on sugar and decline in sugar flows right to coke's bottom line. williams is analyzed this pattern and noticed that there is lead time of roughly 70 days between what happens to sugar prices and what happens to coke stock. so this red line in the chart is not the actual price of sugar. it's the price of sugar pushed forward by 70 days and when you
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look at it, when you look at the correlation, it's pretty darn incredible. bizarrely when you shift sugar by 70 days, you get the opposite of what you might expect. when sugar goes up, coke stock follows 70 days later but as you can see, it's been a pretty reliable indicator so far and given the action for 70 days ago, sugar prices 70 days ago, coca-cola stock is due for a nice rally as long as this pattern holds true. should have did that. the charts are interpreted by larry williams suggests this could be the right time to buy coca-cola. if you believe the trump rally has gotten off track, coca-cola is what you should be buying when they think they should deliver a good quarter but if you think it's a pause in the trump rally, the on reason to own coca-cola would be for the purposes of diversification and income as 3.37% yield and
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interest rates have been going down. here is the bottom line. larry williams has a terrific traffic record and thinks coca-cola is headed higher. i'm more skeptical. if you think they will get red hot again, coke oca-cola is a high-quality company and you could do worse. if only so you aren't keeping your whole portfolio in a single trump basket. much more "mad money." no baseball bat moment when trump sat down with the pharmaceuticals and the stock survived one more day to thrive. could it be time to consider playing the space? do not make a move. things are certainly getting hot as a push for leadership change gains steam with elliott management announcing after the close it's nominated five independent nominees to the board. i'm sitting down with the ceo and a year ago the best play you never heard of. it reported what i dubbed the perfect industrial quarter.
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that's quite a series. i'll reveal which company i'm talking about ahead. stick with cramer.
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is the president's bark worse than the bite? sometimes it feels that way like today when he met with big pharm executives and jawbones them about charging less for the drugs. the u.s. government is the biggest buyer of drugs out there and tremendous bargaining power but chooses not to use it letting the drug company set pricing. every other country on earth does the opposite. they set the price for the drug companies. however, trump doesn't -- clearly doesn't want to do that which for the first time seems at odds with what he campaigned on. i think this is an important and positive departure for a president that's been sticking to guns on his campaign promises, at least so far.
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i wonder if vice president pence, the governor of indiana, great defender of lily based in the home state pointed out all the good the industry does and if the government uses bargaining power to push prices too low, pharmaceuticals will spend less money developing drugs highing fewer people. they didn't use the phrase big pharma is getting power. trump told these companies if they built here, he'll support a faster track fda that will lower the cost of the approval process, a process that can cost between 1 to 2 billion to get through. while trump softened his tone, he didn't let the industry off scott free. he said he won't tolerate price increases but this is something the pharmaceuticals have came to grips with. it's not the worst-case scenario. more good than bad, which caused the first pharma and biotech rally in ages. the best gainers. all that said if the president
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isn't about to go to war with the big pharma, this industry has too many negatives. there is a lot of invasion and growth. there is a cyclic l rotation going on that left the steady stocks behind. there are disappointments galore within the group. it's anti cancer franchise where they continue valent or patent protection, it's $3 billion multip multip multiple sclerosis franchise. i've been adamant there are two industries that largely need to be avoided during the trump administration, pharma and retail. the head winds are too great. as for retail, it doesn't have head winds, it has gail force winds going against it. look at under armor which reported severe disappointing earnings today and gave you a huge guide down from the
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expectations, which had been guided down recently just a few months before, plus under armor's chief financial office stepped down, talk about red flags. stock lost 23% of the value. insult to injury because retail in general is facing a stay at home consumer who when she does shop, wants to shop on amazon why walmart will give free two-day shipping on anything $35 or more. they are issues on taxation and american jobs and might include an unfavorable tax regime and nobody imports more than retail and compares and shops on amazon and stays away from bricks and mortar and if this is meant to entice you to buy, that's a suboptimal group to invest in. if it rallies, you trend. it didn't pay to own the banks. other times it didn't pay to own the oil or industrials. right now i think avoiding these two sectors, retail and pharma seems like a good idea unless
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you have special situations even if trump didn't give the wood to big pharma today, who knows what will be scheduled in the regular beauty executive bpadgent. >> caller: trump made headlines again this morning saying he would lower drug prices in that exact same speech he talked about speeding up the fda approval process for new drugs. does this make therapeutic md more attractive or has the whole sector became a no fly zone? this is a one-day phenomenon. i've got to tell you, i think that buying a therapeutic md is not where you want to be in this group, which even the finest stocks in the industry are taking a hit. sure, the president softened the tone but that doesn't make pharma more attractive.
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pharma and retail are two sectors you shouldn't emphasize. much more "mad money" ahead. the first quarterly earnings and did investors like what they heard or did a battle over the leadership put everything at stake? i've got kpt clthe exclusive wi ceo. does the stock have the right tools to head higher? your calls also, rapid fire in tonight's edition of the lightning round. so stick with cramer. >> tomorrow, kick off the trading day with squawk on the street, live from post nine at the nyse. >> this is the domino's pizza video game selfie snapchat facebook economy where people go home and just have pizza and beer. it's like an anti al yankovich. >> doesn't sound bad to me. whal?
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on a perfect car, then smash it into a tree. your insurance company raises your rates. maybe you should've done more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™. liberty mutual insurance. what's happening in our arnc, the maker created when the old alcoa broke up in november.
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arconic, the exact opposite. alcoa stock soared and arconic barely moved. open shareholders seem to be an open revolt. the close firm elliott management has three bored seats and nominating five independent directors and they take particular issue with the leadership of mr. klinefield and elliott's words, quote, prolonged disappointing financial results combined with the damaged credibility of the current management have created a circumstance where by arconic will never approach the potential under the current ceo. the interview was taped immediately before this when news broke. we discussed the potential for a
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boardroom brawl as well as earnings in line. take a close look at the interview. mr. klinefield, welcome back to kw "mad money". >> jet engines, airframe, huge part of the business, how are you feeling about it? >> well, when you look at our numbers, i mean, revenues are flat, profits are up, margins are up on all, balance sheets and productivity throughout. i'm clearly making good progress here. there is still more to do and we can do more then the market situation, aerospace in 2016 was difficult. we believe that it continues with 2017 on two fronts, one is the destocking on the airframe side and the ramp up issues on the aero engine side and we believe this is going to continue through 2017. >> you don't think that when you hear boeing and general electric say things are getting better, you could be on their coat tail so to speak?
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>> well, look, it is getting better and we are doing a lot and what is best to help on this front. at the same time, the expectations for the ramp up are also very, very high. the good news is the auto book is full, so there is a lot of work that needs to be done but at the same time, the technology is very new technology and the supply chain is a long supply chain so everybody has to do their job. it's getting clearly better but it's work. >> autos, staying strong? [ laughter ] >> well, yes, it's -- yes. >> and still weaker. >> yes. >> on the automotive front, we think we have seen a very, very strong environment in the u.s. in the last year and i think most people expect this to stay on this level but not to grow any further and then when you look at heavy duty trucks and trucks and trailer, we believe
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that this continues to be challenge, probably not as challenge as 2016 where we saw more than 30% drop but believe it's going to drop a little more in 2017. >> all right. now, midwife the company you created a division that a lot of people are excited about, alcoa you own 20%. what would you do with the shares you own? is this the time is right to sell the stock at a high and bring in proceeds and fix the debt, pay down debt? would be your plan? >> well, we've said already, i mean, we created the 19.9 retained interest because of the situation to make sure that we could go forward with the separation. the separation we did at a time when the commodity prices were very, very low. the debt carrying capability of alcoa was very, very low. therefore, what you see today on the balance sheet is not a normal debt level for arconia but elevated and we did this to
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make sure the separation could happen. we retained 19.9% interest. i'm very happy we talked about how optimistic i was all the time on the recreated al cow what portfolio. i'm very happy to see commodity prices go up and at the same time also the stock going up and doing well. and we've said publicly, we have 15 months time here if we wanted to have a text benefit, if we use it to pay down debt and in total, the retained interest can be sold in a five-year time frame. we look at it when the opportunities are right and look at what we do with it to get shareholder benefits and said we'll use it to pay down debt, as well as buy back shares but we will look at it the moment when we do it and evaluate it at the appropriate time. >> all right. headline, wall street journal, shareholder group targets leader of al cow whkoe alcoa spin off. you have a fifth date. what do you say to those who
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challenge your leadership after you split the company up and the company has done well since the split? >> well, look, i mean, there has been a lot of shareholder created through the separation. if you look at alcoa shareholder, they have gained roughly 221%. the close of the first trading today is more than 19% increase. so i think nobody argues this was the right move for everybody, you know. at the same time, you also have to see 2016 was a difficult year for people are pointing at the difficulties that we had in some of the markets and under performance and we are fixing them and getting to them and fixing them and we adjusted guidance last year and which we basically had to do after what we saw in the marketplace, marketplace weakening we just talked about there. all right? so those are some of the frustration, some of frustrations, you know that we have executed all the time
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against all the head winds that ever came against us and we're totally committed to do that. we're focused on getting the operational efficiency up and focused on getting the margins up and focused on -- >> are you ready for a challenge to your leadership that may even extend to inside the boardroom and out? are you ready for it? do you want to stick around for it? you created a lot of value. is it time to admit to declare victory and move on? >> look, jim, you know what we have done here in alcoa to create alcoa and arconia to be successful. i have passion to drive it to the next level. i fully agree with every shareholder there is a lot of value to be created and we'll get the creation of the value. we talked intensely with the board engaged with many shareholders. we are very, very open to listen to the feedback and incorporate that into our actions. >> how about your meetings with
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president trump? have you been able to convey to him about the state of the aluminum industry in general? >> well, arconic is material diagnostic and why we choose a new name. we're nickel and titanium and fabricated goods. this is invasion company and technology company. i was very encouraged that the first business day of the new president he chose to meet for breakfast with a group of many ceos here in the u.s. for us the u.s. is a very important place. i've been very optimistic and that's why we put our money there and spent more than $3 billion in the last years in the u.s. and roughly about 60% of our revenues are in the u.s. this is a very, very important market and place where we employ a lot of people, 22,000 people here and i think we can continue to do better and i was happy to have the president listen to those ideas, how we can do
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better all together here. >> okay. once again, february 5. the names come in. there will be a challenge, u wh what are you going to do? there will be a challenge. >> look, we have to look at it and we, as always, the board and management will engage with shareholders. we've done that. it continues to listen to what we have to say and then we will come to a conclusion, you know, what is best and to, i hope, that this will be joined agreement and how we go about it. the good thing here is there is a principle agreement that there is a lot of value that can be continued to be created and i hope that this will be possible to do jointly. >> all right. let's leave it at that. chairman and ceo of arconic. thank you for coming on "mad money". >> thank you. in line, slightly but you understand that there are some people who will challenge. it's going to be rather rapid in
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the next six days. stay tuned. my travel trust owns it. not doing a thing with it. stick with cramer. t'co
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it is time, it is time for the lightning round. >> buy, buy, sell, sell, buy, buy. >> and then the lightning round is over. are you ready? time for the lightning round. michael in new jersey, michael? >> caller: hello. >> michael, you're up. >> caller: hi, jim. look, first hv ti-time caller. love your show. my question is tech resources. >> if you think growth will continue, this remarkable stock is going to keep going higher. i have to prefer free port, fcx but if you think the world goes higher, tech goes higher with it. jay in california. >> caller: boo-yah. >> boo-yah. >> caller: i want to know about molina health care. >> let's understand each other i am only recommending one in that
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group and that stock is united health. unh, which i think you can go up ten points and hmolina mianders >> love it. how can i help? >> caller: jim, we want to know about royal caribbean cruise lines. >> it's terrific. why am i partial to carnival? donald does a remarkable job. that's the one i want to be in. jake in pennsylvania, jake. >> boo-yah. >> doing well, how about you? >> i'm doing well. by the way, smx. coca-cola brand and convenience stores vently entered the fuel business. and 52 week and five-year low. and the industry.
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>> look, i appreciate that. i think and that is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. . at wd m cred tto o tcoeony,, l.athtara
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ever since the election this market is full of anticipation. specifically the president trump's probusiness policy. what if all this political stuff, what if many already in great shape. whatever heavy industry is doing is at fault. that may not be true across the board but i got to tell you after numbers we've seen this earning season, it's true in individual cases, exhibit a, illinois tool works. itw. the high quality maker, last april illinois tool works is the greatest industrial company you never heard of. it's an incredibly well-run company with a stock that's a real juggernaut. ever since the market wide bottomed eight years ago, ipw
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turned a phenomenal buy opportunity. what i recommend is ten months ago it was trading at just under $105 and now at $127. you got yourself a 20% plus gain. now even though illinois tool works spiked higher in the aftermath of the election like so many other industry jeials d it spent much of january doing nothing until last week when illinois tool works exploded higher in anticipation of a fabulous quarter and then when the company reported on wednesday, thrilled by the numbers put up. you might not have noticed since the stock rallied on the news but that's just because ipw had spiked up before the -- before. spiked up three points before the day it reported. ordinary when a stock runs going into earnings, tends to get hit with profit taking afterwards,
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not here. the results were so strong that the stock just kept on climbing. i got so far that this is the perfect quarter and the current weakness with the stock down a buck 59 today. that's perhaps the beginning of a buying opportunity, that's why tonight i want to explain what made this quarter so great, how illinois tool works managed to do it and most importantly why it will continue. first, let me give you background. what a boring name. serves a host of different end markets and cost 57 countries. products involved in deep sea oil rigs, wind turbines, automobiles construction, aerospa aerospace, mobile devices. i can spend the segment listing everything. they got a great website and fasteners, power train and refueling systems for cars, ovens, refrigerators for restaurants. do -- i want one of those. diagnostic machines that ensure
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the safety of airplanes, suspension bridges, welding gear, semi conductor equipment. this might seem like a complicated products, the truth is that ceo scott santy spent the time streamlining. in the past the company's growth is driven by acquisitions but under santy's leadership, organic growth and the kind you make yourself much more valuable than buying and it made the company more efficient. not only that but illinois tool works got out of 32 different businesses with low margins in ordinary tore fer to focus on te business and spent years cutting costs to become a leaner, meaner, more competitive industrial. it exited not so hot businesses to double down and boy, oh, boy, is that strategy paid off? illinois tool works is delivering excellent numbers for years now but this latest
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quarter of the company reported last week is the most compelling evidence that management strategy is working like a charm and we do have the industrial champion of america, itw. however, you may not notice the greatness of the results at first glance because the headline numbers are misleading. according to headlines, illinois tool works earned 1.39 per share. although when you exclude someone-time items, they earn a 1.45. that's a 17.9% growth rate from an industrial. meanwhile they came in 3.9% versus last year. what matters to me, it had 2% organic growth, which was at the very top of the previous forecast and the self-help initiatives bear fruit. operating margins 21.8%. it is very hard in this atmosphere to get that done. on top of that, illinois tool works gave bullish guidance for the next quarter projecting 1 to 2% organic growth and earnings right in the middle of what they
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were looking for. given this company's track record, i would not be surprised if the guidance turns out to be conservati conservative. itw reiterated. again, i think there is good reason to believe that these are low numbers because the forecast doesn't include uptick in the company's industrial. that means if the economy gets stronger, fairly likely, or get a big increase in oil drilling, very likely, then the estimates here will once again prove to be too low. how do they do it? what's the secret sauce here? a lot of the strength comes back to the factors i talked about when i recommended itw last year. for example, illinois tool works has a philosophy that's entthe they do business. the notion that a typical company gets 80% of the sales from the customers or 80% of the sales from 20% of the products.
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once you figure out the key customers, you focus on everything you can to to sell them stocks and figure out key products, you stream line them to make them profitable. sounds like a new-age thing. it's real because the results speak for themselves. at the same time, illinois tool works is very selective about the businesses it gets into. take the company's welding division which is one of the weakest ones over the past couple years. itw built a portfolio best in case welding branch which allows them to offer one-stop shop for automated welding services and during the downturn, it stayed strong. this business could be ready to rebound thanks to the trump administration's embrace of pipelines. i think it will sore. in short, illinois tool works the company is fabulous. what about the stock? using the mid point of the guidance, itw trades at 21 times this year's earnings estimates although again, i think it's the
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2018, if the remarkable itw trades at a small premium, that is ludicrous. here is the bottom line, if you didn't listen to me when i recommended itw, it's not too late to buy the stock. the latest quarter was fantastic and remains relatively inexpe e inexpensive and the team will continue constant improvement not for months, not for quarters, but for years to co c. the market loses faith in the trump agenda but an industrial that will put big points on the board, either way i don't want to jinx it but santy is bill belichick and these guys are like the patriots, perennial champs, they know how to win. stick with cramer.
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here is an idea, don't trade apple, own it. i like to say there is always a bull market somewhere. i promise to find it just for
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you on "mad money." i'm jill krm cramer. i'll see you tomorrow. ion dolla" we're talking about making you a bigger company. fertitta: if these family businesses want a shot at the big leagues, they'll need to lose their mom and pop mentality. swordbill coming through. a seafood distributor prone to petty fights and rookie errors. dude, the skin to skin, seriously? that is a stupid mistake. this is when it starts getting rowdy. fertitta: a cocktail innovator, long on flair but short on flavor. ooh, lordy! i mean, i'm sweating right now. it is so hot, i need some water. if they prove they can deliver, i'll help them grow. guys, this is what i do. while i'm growing my business, i grow other people's business with it. if they don't, i can only wish them good luck. i don't think i'm gonna be able to do business with you.


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