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tv   Mad Money  CNBC  March 16, 2017 6:00pm-7:01pm EDT

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and i also think there is good news on the horizon for acquisition. >> xlv. >> and pfizer will get you done. >> thanks for watching. "fast m" don't go anywhere. "mad money" 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 is not just to entertain but to educate and teach. so call me at 1-800-743-cnbc or tweet me @jimcramer. this, this is a purchase loined letter market. it's like that edgar allan poe
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yarn about a letter hidden in plain sight that nevertheless can't be detected because people just aren't looking for it in the right places. we see the same thing happens with this market pretty much every day now. great bull stories passing unnoticed right in front of your eyes. today was no different. even as the dow dipped 16 points, s&p declined 0.16%, nasdaq actually closed up albeit fractionally. let me give you some classic examples. when investors try to figure out why stocks should go up, they begin with the presumption that the united states is a service economy. since two-thirds of our gross domestic product depends on individual spending. but here's the problem. the big time portfolio managers, they don't see any real strength in consumer spending. they don't see it with all the retail store they follow. they don't see it at the restaurants they cover. they don't see it in the home sales. they don't see it in the shopping center, shopping mall, or strip mall real estate investment trusts. they're baffled, confused
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because they know employment is way up and more hiring is supposed to be translating into better than expected service revenues. i feel like even janet yellen, who is doing a remarkable job at the helm of the federal reserve, is confused about why things don't feel as strong in the economy as you'd expect given the robust employment rolls. that kind of came up during that back and forth with the quarter point raise. you hear a myriad of excuses about why the consumer is not doing her part despite having a job. the noisiest answer, the republican answer is obamacare, aka the unaffordable care act, which they're busy trying to scrap and replace, emphasis on the word "trying." they say too much of the consumer's money goes to health care because of the government so people are too strapped to buy anything else. others say it's because of the rising price of education and the shackles of student loans. still others blame the stunted household formation from kids still living with their parents long after they graduated high school or college because of the great recession.
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there's the new frugality theory not unlike how our parents or grandparents or great grandparents who lived through the great depression never felt sure enough to spend excessively or borrow again. and then there's just the plain old chinese and mexicans took our job thesis that helped get donald trump elected as president of the united states. i'm not disputing any of these factors. i'm sure they've all played a negative role. but the simple fact is employment is too strong for me to believe these issues can still counteract what should be a natural uptick in consumer spending. so let's spend some time on this. see, i think the real problem is something else entirely. it's the purloined letter of how this money is spent and where it is spent. and it is spent -- that matters. first there's a massive generational shift that many of the older and more senior trigger pullers in the money management business as well as
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the sell side analysts and even the ceos and fed officials, they can't seem to grasp it even though it's right in front of them. it all starts with your cell phone, especially your apple cell phone. these devices have replaced so much of what we used to do with our time, including what many people half joked was our national pastime, remember this, shopping? people always made that joke. first let's consider the smartphone, the one itself, the actual device. my wife just baud a $750 jet back iphone 7. i had to hear about the price because when you spend $750 on anything except for perhaps a canada goose coat, which she also has, it comes up. she also gave me an earful about all the monthly service charges that seem to come up automatically on your e-mail and you got to pay them for things we know we need but she thinks they should be for free. all together you're laying out close to 1,000 bucks, a g, when you buy this phone. that's real cash that can't be spent elsewhere, but a
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smartphone is simply indispensable. most people can't live without one. an iphone is the most prized and cherished purchase any american makes, perhaps after his car or home. but somehow the professionals, perhaps because they're so wealthy or they get the phone from work, don't realize how much of a regular person's disposable income goes to their apple phone. look at your phone. look at all those apps. today i was watching patty doyle, the ceo of domino's on power lunch. and thinking about the more than 170 points this stock has rallied since we recommended it when he first came on the show when he started back in march of 2010. i'm going to leave out the special dividends but those were helpful too. first doyle fixed the taste of the pizza, which had been consistently losing out in taste tests against the cardboard box it came in. then he turned domino's into a technology factory, one that brings pizzas to your house by creating apps that made it so easy to order via your computer
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or your phone. this new generation, it doesn't like to talk to people on the phone. they like to text. they like to input. they particularly like to go to their facebook page and place orders for pizzas. domino's isn't the only one of course. pretty much every large chain needs to figure out how to deliver its food to you or at least let you pick it up if it isn't going to shrink. there are a ton of companies we've examined including post-mates. they make a living catering to their stay at home patrons. now eating is only one reason to go out. the other is to shop. we were always under the impression that shopping was inure blood. it turned out that's not true. i think we in this nation have had a massive blood transfusion out of type a, b, and o and into amazon blood. amazon has changed everything. we go on our cell phones and we browse and get the lowest price, which is typically from amazon, and we have it shipped to our door. if you live in the city, this is a godsend. it hadn't been all that important if you live in the suburbs until you get a couple of snowstorms, some traffic jams, some difficulties getting
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a parking spot and ultimately even getting in the car became inconvenient versus having what you want delivered to your door when you want it. convenience is everything with these new generations. i don't care about convenience. i don't think about it as much. these people, they're just possessed by convenience. plus what happens if you go out and shop? what happens if you go out at all, unless you're doing pokemon go, it breaks up what you're doing which is bingeing on programs from netflix or playing video games from take 2 ner-two interactive. it's easier for you to check facebook, instagram or snap at home. it's also getting easier to yell at alexa to get information, tell her to do something than to stand up. you don't have to stand up. i got alexa. i've stopped standing. i mean alexa is right there. yeah, it's kind of joined the family. alexa is just as smart as bug and everest. those two knuckle head dogs.
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alexa is much smarter and boy does she ever not beg for food. anyway, yes, there's still some shopping. if you're spending that much time in your house, you're going to spruce it up a little so you're going to hit home depot and lowe's or tgx's home goods to make your surroundings as nice as possible. that's why those three have terrific numbers. goldman sachs took tgx from buy to strong buy today. so what does pry the typical consumer off that couch, the one that she's e poxcied too? trips to theme parks, hence why six flags, universal, comcast ufrl theme parks are jammed to the gills. how about cruise ships? carnival and royal caribbean are like sold out. what's the deal with those experiences? well, they make for fabulous instagram and snap fashion show. they're ideal facebook moments. they're killler selfie backgrounds. before we go out, what do we do? we head to ulta beauty, the only major retailer to hit its
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52-week high today. you think that is just happenstance? or we go to e.l.f. yeah, ears, lips face. elf beauty, which reported a blowout quarter because you can't go out the door unless you put makeup on. you are naked without makeup these days. ever notice? you think i just put this on for the show? i never take it off. it's all over my pillow when i wake up in the morning. oh, sure, you do got to go out for food. so you sha lep to walmart or visit dollar general which reported some terrific food numbers today. i bet you most of the rich guys didn't know they sell food. it's little packages, but, yeah, i mean that food business is growing like wild to meet demands. you think any of these professionals even though what a dollar general or dollar tree looks like? do they even know that it sells food? how the heck do i know? well, the conference calls help, but i like buying the food. all right, this is an alternative, sane business show. pop and i always shopped at
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dollar tree. pop introduced it to me. i mean it's what we did. what are we doing today, jimmy? i don't know, pop. hey, are we going to go to dollar tree? we're going to buy those fake ray bans. and we did that endlessly. let's get some more fake ray bans. they break, so you got to have a lot of them. anyway, how do you think i ended up making all this money? going to whole foods? no! dollar tree. here's the bottom line. the confusion over where the consumer went all starts with your iphone and your netflix and your facebook, and your amazon. hey, fang. yeah, you google things, point of purchase. if you follow that trail, you'll notice the consumer hasn't gone away one bit. she's just not being counted although adobe, which had a blowout quarter tonight, does have the great numbers. she's not being counted because she's hiding right in front of your nose in the last place the professional money manager would think to look. there. david in nevada, david. >> caller: hey, jim.
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thanks for having me. booyah. >> booyah. >> caller: i bought ticker frc, first republic bank a couple years ago. i expected it to go up yesterday when the fed announced the rates and it was the only one in my portfolio that went down. is it time to let it go? >> look, people are greedy, david. david from nevada. although of course this went up. they all went up today because upon further review, people realized wait a second. you don't need that three rate hikes. we'll take two plus this one and first republic is going up. it's a point away from its 52-week high. hold it. let's go to nancy in north carolina, nancy. >> caller: hi, jim. >> nancy, what's up? >> caller: i'd just like to say i appreciate so much that you educate, not just give opinions. >> right. i mean geez, this stuff is so dry. how could you ever listen to a
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one-man show on business if you didn't entertain? well, tonight the price to earnings multiple at 3m -- what's up? >> caller: my question is about taser and the defense sector. it's gone down about 5 1/2% in the last month, but there's no news about it neither negative oar positive. even after trump's budget numbers for defense, it still went down today. so what's happening with that stock? >> i went over the quarter. i mean the quarter is fine. you know, this is like knee jerk profit taking. i'm going to urge you to stick with taser. i think people feel like that they are not winning enough contracts. like they have to win a contract every day. it's a good, well-run company. i don't want you to throw it out. i want you to keep it. all right. it is clear as day, people. you got to follow the trail. the consumer is still here. she is hiding in plain sight where rich people don't know where to find her. on "mad money" tonight, canada goose is selling more than just $900 parkas in new york and toronto this year. after its first day on trading on a really cold day, so lucky.
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i'll tell fu it could offer more than just fluff and feathers. then giddy-up. the four-hourmen tech are riding again. can you believe it? but are they all worth saddling up to? i'll tell you which companies could be riding higher. and fasten all has been constructing a fast and furious rally. so after years of underperformance, is it time to consider this stock you've never heard of? i'm taking a closer look. and i'm entertaining. 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
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♪ oh! the things you say ♪ ♪ oh♪ ♪ ♪ ♪ you're unbelievab♪e ♪ you're unbelievab♪e
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the retail environment may be very difficult right now, particularly for apparel. but today we got a red hot sizzling apparel ipo. it still roared higher. i'm talking about canada goose, symbol goos.
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the maker of ultra-high end outer wear. if you live in new york city, you've probably seen their fur-lined parkas with that little round insignia proclaiming you're a member of a very expensive club. the deal price at $12.78 on the nyse, and then the stock spiked up to $18 at the open. but ultimately closed at $16.08. i got to tell you this is a very intriguing story because while much of retail is in terrible shape here, there are some luxury plays that are doing quite well, and canada goose is the first luxury goods maker to come public in quite some time. so could the stock actually be worth buying up at these levels or do we need to get more cautious after a big first-day run? i think while canada goose may be a wild trader in the near term, this stock could absolutely be worth speculating on. yes, it's a buy, and i'll tell you why. first for those of you who just aren't interested in the fur and down here, let's flesh the story out a bit. canada goose makes fur-lined coats and parkas that can sell
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for hundreds or even thousands of dollars while the company's mostly a wholesaler, it does have two flagship stores, one in toronto and one in new york that it opened last year. what made this ipo enticing to investors? i think some of it is this is the kind of brand that money managers tend to be aware of. these coats are not sold at dollar tree. but that's not necessarily the basis for a good investment. awareness helped push the snap ipo up big in its first day. then the stock's been a wreck ever since. that was those millennials. what's with the millennials? i mean they're like blamed for everything. anyway, there's a lot more to this story than the simple fact that many hedge fund managers and their spouses probably love fur. the truth is canada goose has a lot going for it. for starters, the company has a compelling brand that resonates with its customers because canada goose has built up a reputation for authenticity over many decades by helping explorers, scientists, athletes, and film crews handle harsh environments. they make an incredibly high quality product, and these parkas are generally beloved by
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the people who buy them. plus the company has been expanding from just a wholesaler that supplies various retailers worldwide to having a direct to consumer business where they use the web to cut out the middle man and sell to individuals. and canada goose is very disciplined about controlling the supply of product that they put out so that they can maintain their super high prices. more importantly, the numbers here are very compelling. in 2016 fiscal year, canada goose saw its sales grow at a 33% clip, and in the latest nine months, sales increased by more than 41%. that's a pretty fabulous acceleration, especially when you consider what a warm winter it's been. even after the ridiculous recent cole snap. if you want to know why the stock roared today, keep in mind money managers adore accelerating revenue growth. canada goose has it. meanwhile the company's gross margin has been steadily climbing for some time. you know the money managers like that too. in 2016, the gross margin came in at 50.1, up a staggering 950
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basis points year-over-year, in part thanks to the company's higher margin direct to consumer business. then in the 2017 fiscal year, their gross margins came in at 52.3%. that's up another 140 basis points year-over-year. even after last year's quantum leap in profitability, they keep getting better and better and making it less expensive to put out those coats. put it all together, and you end up with some terrific earnings growth even as it slowed somewhat over the last couple years. in the first nine months of 2017 fiscal year, canada goose saw its earnings rise by 26%. admittedly it's down from an 83% growth rate in 2016, but i wouldn't be discouraged by that deceleration because canada goose only just became profitable in 2015. and when you're growing off a small base, the numbers will always, always, always taper off, okay? once you start, and then hard to keep maintaining that traject y trajectory. combine all of this, though, and
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you've got a company with accelerating revenue growth, rising gross margins, and genuine profitability. that is a powerful winning combination that we rarely see among new ipos. that's what intrigues me so much here. if canada goose can keep executing like this, then i wouldn't be at all surprised if the stock ends up having a lot more upside. and i see a number of reasons why this growth could continue. first, canada goose has developed a tried and true strategy for entering new markets. they introduce the brand, build awareness among a select group of new customers and then use word of mouth to bring in more people, something that works because their parkas are really fabulous even if peta hates them for the fur they use. the company currently sells its merchandise in 36 countries, so they've still got plenty of room to expand geographically. at the same time, canada goose plans to find additional retail partners to sell their wares worldwide, and if the stuff is in more stores, there will be even better numbers. plus even in countries where the company already does business, management believes they have
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tremendous room to increase their market share. we know the company's recent investments in canada and the united states have paid off big time, delivering some truly outstanding numbers. if they can duplicate that success worldwide, this could be an incredible multi-year growth story. frankly i think canada goose has barely begun to penetrate the u.s. in our country they have just 16% brand awareness versus 76% in canada. the company has been doing it's roll out here renal nally starting in the northeast and management sees plenty of room to expand. perhaps more important, the company's accelerating the rollout of its direct to consumer business where they use the website in a couple of stores to sell their outer wear straight to individuals. i've spent a lot of time talking about how traditional bricks and mortar retailers have cannibalized themselves by investing heavily in the web. but canada goose only has those two flagship stores. if their online stores cannib cannibalize anything, it's a
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positive. while this mostly a winter play, they've gotten aggressive about building its fall and spring collections by adding lightweight jackets. management is planning to expand beyond outer wear. i think these guys clearly know what they're doing. my one concern is this is yet another ipo with a private equity sponsor. this time it's bing capital. like i always say in these situations, private equity firms don't always do a great job of making decisions that benefit the other shareholders. and there's also the, look, simple fact that eventually bing is going to have to ring the register, which could put enormous pressures on the shares, but that's fair down the road, something we do not need to worry about right now. let's talk valuation because this is where a lot of guys are telling me, jim, you're wrong to like it. the math is a little rough. but it looks like canada goose is selling for roughly 40 times
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its trailing earnings per share. that's a lot. colombia is at 21 times. still, canada goose has a much faster growth rate than colombia, and i think it could be worth paying up. but remember, a little speculative, but i think it's valued correctly. i mean i think it can go higher. so here's the bottom line. despite its high price tag, i think canada goose has a compelling story with an amazing product and some terrific accelerating revenue growth. while i don't like the private equity ownership situation, you have my blessing to speculate in this stock, particularly if it goes down or even right here, i don't think it's wrong. my only issue, i see so many people in new york walking around with their canada goose insignias on their arms, i'm starting to think everyone has one, including my wife and kid although they ripped off the fur when they found out it was from actual animals. so i don't want do conform because it's gone mainstream. then again, that's probably my alternative sane view again. there's a universe of tens of millions of people who could buy
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one of these parkas before they'd be anywhere near saturation. much more "mad money" ahead. when you think of the four horsemen of tech, do you think of apple, google, facebook, amazon? think again. get in your way back machine. then what the heck's happened at fasten all? you may not know the company, but it's had a big run. and with a interest rate hike officially in the books, do your stocks have what it takes to survive the unknowns in this market? i'll be the judge, when we play "am i diversified?" stick with cramer. your insurance company
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existing customers while aggressively poaching clients from its competitors. oracle has been trying to get in the cloud in a big way for a while now since so many of its customers want to embrace it as a cheaper and better way to store data. oracle has an extremely lucrative old school, on premises software licensing business that's been a huge cash generator, but the company had to work like a demon to defend its turf from various cloud-base the interlopers. unfortunately's oracle's cloud adoption never seemed to matter because the licensing business was declining faster than the new cloud business could make up for. that is until this quarter when two things happened. the absolute dollar growth of its cloud business was twice the size of the decline in the legacy licensing business, and the gross margin for that recurring software as a service revenue increased nicely from the previous quarter. >> hallelujah. >> and that's how oracle engineered last night's earnings beat while at the same time the company started taking some share from old opponent s.a.p.
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wow, that's big. and new opponent amazon because oracle is offering a pretty good web service for its own customers who want to migrate. it was a remarkable quarter for co-ceo satisfy ra katz and mark hurd as well as founder and legend chairman larry ellison, all of whom deserve to be congratulated for the results and the big 27% increase in the dividend. and that's why the stock correctly roared up $2.68 or more than 6% today, which is an enormous move for a $187 billion company. plus oracle is more than 50 billion bucks overseas so if congress ever gets around to passing some kind of repatriation tax holiday, there would be still one more reason to buy this relatively cheap stock with its newer, faster growth rate. that's the re-rating thing. with this quarter under its belt, oracle joinings intel, which bought mobileye for $15 billion earlier this week in order to boost its exercise to autonomous driving, the last really great frontier in tech. while some analysts downgraded
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intel on this move, i think that the company will ultimately be re-rated up because ceo brian krzanich has reinvented the perception of his company as a data processor, self-driving cars are massive data hogs and not just a personal computer chip maker. unlike oracle, intel's stock didn't go higher because brian is thinking long term. analysts are thinking short term. brian is trying to dominate a currently small business that maybe could become a total $100 billion addressable market in just a few years. someone recently wrote in a way low alphabet self-driving vehicle. i can tell you until you experienced it yourself, you may be missing the point of intel's mobileye deal. i think it's brilliant. these two moves are frankly quite reminiscent of cisco's transformation from a plain old hardware business connected to the net to a soup to nuts software analytics and cybersecurity company that can be a one-stop shop for
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enterprises with gigantic internet needs. i think cisco under ceo chuck robbins is about as aggressive a company i've ever seen in silicon valley and i believe its success with these cybersecurity offers is disrupting the entire industry. chuck had to make these moves as cisco's core switching and routing business like intel's p.c. business and oracle's soft wir licensing business had ceased to grow and these companies have been left behind. cisco has got a ton of overseas cash. wow would that be great for them. sacha nadella at microsoft was the first to reinvent one of these old school tech titans. remarkably microsoft missed social, missed mobile, and it missed cloud until the company went in all with its azure line, and that is now a substantial part of the business. so big that it really does move the needle. it's actually a viable competitor to amazon when it comes to web services, and that's simply because nadella,
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who is always welcome on the show as is amy hood, the cfo, decided microsoft had to change or else. oracle, cisco, intel, and microsoft, the old four horsemen oft tech apocalypse are coming back. they slipped up but they always reserved their balance sheets, recruited smart people, and always remained competitive. now they're back, and all four of their stocks are buys. >> buy, buy, buy. >> les in virginia, les. >> caller: hey, jim, thanks for taking my call. >> my pleasure. >> caller: i want visa and it went up $200 a share and then it split for one for. since the split, it's gone up another $13 a share. do you think visa is still a good stock to own? >> let me tell a tale of woe. i had the same thing that you had. i said, wow, i got a big gain. we were telling action alert people, the club members, we've had a really big game in visa, let's move on because the
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legendary sharly scharf had resigns and al kelly was put in. we met al kelly when we were in after and we realized we short changed the man. visa, letter v, stands for victory. linda in illinois, linda. >> caller: yes, jim. first of all, i want to say it's an honor and a pleasure and a bridge privilege to be speaking with you. >> right back at you linda. >> caller: my question is this. i have a 21-year-old granddaughter who i'm in the process of opening a brokerage account for. because she's so young, i would like to purchase her some stock. my question is would you consider at&t to be a solid investment. >> here's the problem. for younger people i really like to have more growth because they've got their whole life ahead of them if the growth stock doesn't work out. but i also like compounding dividends, and at&t's got a good
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dividend because it yields 4.6%. i would like you to buy some at&t and then pick a growth stock she likes. maybe she uses netflix a lot. maybe she's on google can assistantly. maybe she uses facebook. maybe she uses adobe acrobat on one of the creative marketing schemes. let's do one growth and then one dividend. that will keep her much more involved in the process. but thank you for the call and the kind words. all right. they're back! oracle, intel, cisco, microsoft. the old four horsemen of tech ride again, and i think they're buys. much more "mad money" ahead. if you call my appearance on halftime report last monday, you might have heard josh brown's latest trade. i'm not going to tell you the name yet. tonight i'm taking a deeper dive into the company to see if josh's recommendation holds wealth. then over the 12 years i've been doing "mad money," one thing hasn't changed. the idea of diversification. no free lunch. no diversification is one. and all your calls rapid fire on
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tonight's edition of the lightning round. what critil thinking like? what's the va? a basketball costs $14. what's teaspirit worth? (cheers) what's it worth to talk tyour mom?
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what's the value of a walk in the woods? the value capital is to create, not just wealth, but things that matter.
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josh. >> i wanted to very quickly get this stock in. which never talk about it. fastenal. it's an industrial name. >> if you were watching my appearance on scott joseph's halftime report last monday, you might have heard josh brown's last trade pick, fastenal. josh said fastenal has got a lot of momentum even though it seemed to be stuck in the 50 to 51 range in the past month. as is so often the case, i liked what i heard on judge joseph's show, so i wanted to do a deeper dive into what's happening with this company because it's making a pretty stunning comeback since the election. for those of you who aren't
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familiar with it, fastenal is what's known as an mro, meaning that it's a distributor of maintenance, repair, and operation supplies. fastenal in particular is focused on everything from safety equipment, heating, ventilation, air-conditioning systems, power tools, plumbing materials. the reason why josh brown's call struck me, though, it really kind of struck and i said, wow, i got to follow up. aside from the fact i've been following josh, a reformed broker for years, and he's a money maker, is that fastenal's stock has made a remark al u-turn in recent months. it intrigued me. i think it's uniquely representative of what's working in this environment. after rebounding really kind of like crazy in the wake of the great recession, fastenal then hit a wall in 2012. stock rallied just 7%, lagging behind the s&p 500 up 12% over the same period. it did next to nothing in 2013 and 2014 and then lost 15% in 2015. then last year was a real roller coaster with fastenal trading from 40 up to 50 in the first few months before reversing and
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trading back down to 38 in early november. but since the election, like so many other cyclicals, this stock has caught fire, climbing up to 51 bucks and change as of today, including a near 10% rally just since the beginning of 2017. this begs the question what exactly ignited this cyclical's company's turnaround. after years of subpar performance, how has this stock managed to roar higher and more importantly can it continue to do so? first let me give you a little background on this company. like i said, it's a gigantic wholesaler of maintenance, repair and operating supplies. 2,503 stores, 14 distribution centers. the company gets most of its business from the manufacturing and construction industries. that's why we call it cyclical. but fastenal isn't just a distributor of cutting tools, power transmission equipment, raw materials, or even janitorial supplies and office furniture. as an mro, the company also provides its customers with inventory management global sourcing and process mapping solutions as well as a number of
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manufacturing repair services. hey, that makes sense. so much of the equipment fastenal deals in requires either extensive setup or extensive maintenance or both. before we get into the stock's recent rebound, we need to talk about why it was such a laggard for so many years before it turned tiny a rocket ship in november. some of this is simply the business cycle. fastenal is a cyclical company, meaning it needs a strong economy to perform really well. i'm using this kind of as a teaching episode to try to understand when you hear cyclical all the time, you think it's a washing machine. no. this is what happens. this is expansion. while the initial turn coming out of the great recession seems pretty robust, after a few years we ran into all sorts of stumbling blocks. remember the gridlock in washington, crises that helped undermine confidence here in the united states. even if they were issues like greece and didn't have much with this economy and of course endless regulation. regulation. in terms of fastenal specifically, the company rolled out the new initiative a decade ago, so-called pathway to profit, which involved boosting the company's pre-tax margin to
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23% by 2012. to get there they estimated they needed average monthly sales per store of 125,000. with the onset of the recession, that goal got pushed back. by 2011, they were called for 100 to 1 heavy $11,000. but while fastenal managed to get into that range in 2013, they kept struggling to get the margins up and earnings growth began to stall. there were a lot of reasons for this weakness but mostly had to do with not so hot end markets. the customers didn't need as much product. the company was facing week industrial demand and starting in 2014, weak oil and gas demand, not to mention a super fre freakin' strong dollar. plus hiring workers at a time of a sloed, that hurts your profitability. since donald trump's surprise victory -- >> trump stock, trump stock, trump stock. >> -- in november, so many of these negatives have turned into
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positives. after spending years trending lower, industrial production started to pick up. very important since manufacturing accounts for nearly half of fastenal's business, and manufacturing inventories have gotten leaner after hitting multi-year highs in 2014 and 2015. that's a signal that pricing power could be on the rise too. same goes for manufacturing orders. we're seeing improvements in major categories after years of declines. all of this is good news for a maintenance, repair and operation supplier like fastenal. on top of all that, like many other businesses, fastenal could really benefit from the trump administration's fixation on deregulation. something that the president can due unilaterally. he does haven't to worry about congress. remember, congress is in the swamp. i think deregulation is what's driving a lot of optimism people in business have right now, including the customers of fastenal. at the same time it's not like fastenal is sitting around doing nothing. the company has been moving into vending machine business, as there could be a ton of cross-selling opportunities with existing customers. more important, fastenal has
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spent years optimizing its stores. a deca they've achieved by redesigning the stores and hiring more workers to interface directly with exicustomers. last year, fastenal actually opened 40 new locations. most retailers are closing. they've also been rolling out on site locations basically selling these things directly where their clients are doing business. don't think of this as a retailer, though. fastenal is kwr companies go when they want to expand production at a manufacturing facility or put up a new building. see again optimism post-election. optimism post-deregulation. and we know this business has gotten a lot better because deregulation has given business people a much better, more optimistic feel since they no longer fear that they're going to wake up and find government intervention. last june fastenal's daily sales were flat. in january they posted a 3.8% increase. february, 6.1% increase. there it goes. consider the latest quarter, which fastenal reported two
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months ago. while the headline numbers were mixed, a small bottom line beat combined with a tiny top line miss, conference call commentary sounded pretty darn optimistic. one concern, stock is not cheap, but if the economy keeps improving, i expect these estimates will turn out to be too low. here's the bottom line, fastenal was a casualty the industrial slow down that's gripped america, but the company has taken concrete steps to improve its business and now that manufacturing and construction are coming back, now that deregulation is a fact, this stock's coming back too. this is more than just a trump stock. it's a metaphor for exactly what's working in this economy right now, and i have to say that i like it. thanks, josh. thanks, judge. great idea. worth buying. "mad money" is back after the break.
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>> announcer: lightning round is sponsored by td ameritrade. it is time! it is time for the lightning round on cramer's "mad money." that's where i take your calls rapid fire. you tell me the name of the stock. i tell you to buy, buy, buy or sell, sell, sell. we'll play this sound -- [ buzzer ] -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning round on cramer's "mad money." i'm going to start with amy in
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georgia, amy. >> caller: hey, i'm wondering about wells fargo. >> we like wells fargo, especially every single time when they reveal they might be clawing back something from all that mess that happened. they did that today. best performing bank stock. charitable trust owns it. sean in oregon. wow, my daughter is in oregon. sean. >> caller: outstanding professor cramer. a big high desert and cascade mountains booyah. >> that's where she is. fabulous. what's up? >> caller: i love your show. i watch it every night. we're looking at stocks with higher dividends but with interest rates headed up, we're curious about your thoughts on government properties income trust, gov. >> i got to do more work on it because i don't know how much of that is federal. if it's federal we got to be worried because deregulation is upon us. let's go to richie in florida, richie. >> caller: hey, jim. thanks for taking my call. >> of course. >> caller: i appreciate all you do for us individual investors. >> thank you. >> caller: okay. i have a bunch of suburban
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propane stock. i bought it at 30. >> oh, i'm worried about it. richie, i'm worried about it. rusty brazil from rbn, he has done more work on propane than anybody else and i got to tell you it worries me. i think propane is going through the floor. i'm very, very worried about propane. let's go to bill in florida, bill. >> caller: hi, jim. this is bill in st. augustine, the oldest city in the u.s. >> that's right, it is. indeed. >> caller: yes. my question is on the product high crush partners. it's got a rating of four stars on the morning star and with the expansion of the companies in the permian basin, what's your projection? >> we got to find -- no, no. i don't like the sand stocks. i mean they came back, but they moved and now they're done. i think 40s, 50s. we're not going to be needing that much more sand. let's go to cameron in colorado,
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cameron. >> caller: hey, jim. how are you? >> i'm good. how about you? >> caller: good, good. aap member. love confessions of the street addict. >> thank you, buddy. thank you. >> caller: as we begin our 13th trip around the sun and with the recent spill off in oil, i've broadened my holdings with nov. what are your thoughts on this one? >> i think when this g.e. baker hughes -- thank you for being a club member of action alerts plus. i think when this g.e. baker hughes deal is done, the first thing they do is they buy national oil well. i want you to hold on to it. david in. >> caller: thanks for what you do for our home gamer. >> doing my best. >> caller: i got one for you, infn. >> i do not like anything optical. i've been spooked ever since what fin i sar said. i'm going to say absolutely no. >> don't buy, don't buy. >> and that, ladies and gentlemen, is the conclusion of the lightning round! [ buzzer ] >> announcer: the lightning round is sponsored by td
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ameritrade. for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.
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one of the most important lessons i have learned in my 12 years doing "mad money" is diversification. my radio show, real money, which came even before i was doing this show, i was furiously trying to get people to diversify away from reckless and in many cases worthless tech stocks after the dot com boom and bust. people would ask me about their
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portfolio and that's how it started. over a dozen years later, we're still playing it. so this is a special anniversary edition of am i diversified where you guys give me a call or tweet me and tell me your top five holdings, and i'll let you know if your portfolio is diversified enough. maybe you need to do a little work. up first we have a tweet from steve ur not. who tweeted @jimcramer, northeast philly guy, go eagles. i like all of that. #am i diversified? apple, facebook, netflix, broadcom, nvidia. holy cow. i mean is this rich co-tight calling in here? wait a second. okay. wow, okay. we'll make netflix entertainment. nvidia is semiconductor. broadcom is semiconductor. we'll pick one. we're going to go with broadcom right now because we think broadcom is having some good numbers within apple. i can't -- man, i got to -- this
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is like i got to throw every card back here. i don't want to trade apple, but facebook which my charitable trust owns, we'll take that out and we'll put in united health to get a little health care. we'll take nvidia out and put in 3m, get some diversified industrial. those have to be done because this is just -- this thing is one stock, okay? this stock is -- this page is one stock, and it will all go down together, and that's exactly what we're trying to not have because that on a bad tech day, then my man from philly gets blown out. that's why we play. you know what we ought to do? we ought to go to chris in illinois. chris. >> caller: booyah, mr. cramer. thanks for having me back on. >> of course. >> caller: i shave a list for yu here. g.e., cisco systems, raytheon, jpmorgan and merck. >> sometimes life is easy. okay. jpmorgan, one of the finest banks. they have a fort res balance
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sheet. raytheon, excellent defense play. i like general dynamics more. cisco, terrific tech stock. and merck, one of my absolute favorites. mr. fraser is doing a terrific job. we got a drug stock, a tech stock, an industrial, a bank, and we have defense. that's the way i want to play. that -- that is exactly a diversified portfolio that you can live with. chris in illinois has got game. all right. stick with cramer. thanks for loading, sweetie.
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...oh, burnt-on gravy? ...gotta rinse that. nope. no way. nada. really? dish issues? throw it all in. new cascade platinum powers through... even burnt-on gravy. nice. cascade. various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here.
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tech was good today because of that oracle number and because a lot of chatter that the next apple phone is already producing a lot of demand for chips. you know what? tomorrow could be good because adobe reported a fantastic number and adobe is the cloud. i like to say there's always a bull market somewhere and i promise to try and find it just for you right here on "mad money." i'm jim cramer. see you tomorrow!
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>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ with a product she believes will help cat lovers everywhere. ♪ i'm rebecca rescate. i live in yardley, pennsylvania, with my family and my loving cat samantha. a few years ago, we were living in a tiny apartment in manhattan. problem soon as you walked in our front door, you knew we had a cat. you could smell the litter box


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