Skip to main content

tv   Mad Money  NBC  April 25, 2012 3:00am-4:00am PDT

3:00 am
>> i'm jim cramer, welcome to my world. >> they're nuts, they know nothing. >> i always like to say there is a bull market somewhere. >> "mad money, you can't afford to miss it. >> i'm jim cramer. people want to make friends, i want to save you money. i want to entertain you and educate you. call me at 1800743-cnbc. today the do you rallied, the nasdaq declined. sometimes you just want to own great american companies, the one that's have been around forever. we want to figure out how to make money in all situations. i know, you're thinking, shouldn't he come out here with an apple in his mouth.
3:01 am
it must seem bizarre that i'm focussing on other american companies when apple is all people talk about these days, and who can blame them up the numbers we got. it was ridiculous. a $12.30 verses an expectation of $10. analyst were guessing, because that's all you can count on with them. plus, apple crossed the iphone nay sayers selling more than the prediction we got today, from the errant analyst. when the truth came out at the bell it reversed today. there had been a lot of chatter about how the ipad sales might be weeker? they're up 151%.
3:02 am
and it would have sold more if there were not supply constrain. if not, apple would have earned $13. wow, i mean $13, that's $3 more than the $10 the analyst were looking for. they made a fortune with everything their selling. gross margins up are 47%. on the strength of iphone sales. so much for the game of trying to divide apple's iphone sales from a at&t and verizon. the old concerns surfaced like in the old days. with the numbers low and must be ignored. i reiterate as i did @jimcramer. apple is an investment, not a trader.
3:03 am
let me put a different spin on the apple o begs. the general feeling i get is the only thing we make better than anyone else is iphones, ipads, and macs. the masses believe that we make nothing else that can triumph what's being made by the other guys. but the winners in today's stock market away from apple say that's a radical misperception, and we underestimate our ability to make things in the u.s. the fact is many of our older executives that work at fabulous companies use the recession to take share, but they also have taken advantage of the federal reserve's policy of low rates to strengthen their own balance sheets and pay down debt while making the best products that
3:04 am
dollars or euros or pesos, or yen can buy. only apple gets attention. we focus on these stocks because this show is about investing, not trading, so we like the juicy dividends without paying up for stocks that might be overvalued. i want to talk about the values right in front of our eyes. we often can't see them because our biases against american businesses behind us to fabulous opportunities that are really out there. okay. let's start with 3 m. here is a company that has remained on top year after year and decade after decade, with a health dividend. today they reported a nice profit with good growth.
3:05 am
as many of the consumer markets are hurting, and asia had a drob, and it still didn't matter. 3 m's markets can still raise their growth forecast for the future dramatically. that's american ingenuity. how about ibm? i don't like the size of this, but you can only take so many in a given day. this is a classic american company. last week i told you that a nice decline would be excessive and you should buy it. today ibm boosted by 30%. it happened right at 9:30. it will boost the earnings and
3:06 am
the earnings are what matters. the stock is an excellent buy, and more on that later. more on itt, i cannot believe hour money this company can make. this is a small cap company, like panera bread or something. a terrific yield and price appreciation, what more can you ask for from this doing. let's go to david -- don't take it personally, honeywell, who came on the show, and also katy eaton. instead of businesses that go where the growth is, honeywell needs to beat higher energy costs.
3:07 am
for eaton, it's power controls that also make emergency use more efficient. fire and safety. all of those markets are hot, which is how eaton can raise it's dive didn'ts at etn too. this is another that can beat expectations and no doubt do so for the rest of the year thanks to the company soon to close with goodrich. then there is ellen coleman. the fabulous ceo that is moving toward trends like health care, increasing food production, saving lives. these things don't go out of style, and dupont which some said lost it's way is a go-to company that makes sense for anybody and everyone to own.
3:08 am
how about chuck bunch? he steered ppg, and they pay a bigger and bigger dividend each year. how can we not give a cheer to bunch and ppg, and let's not forget general electric. when they reported that the market informs a glum mood, but the growth is back at this company. people don't realize they make health care, oil and gas, turbines and aerospace parts. ge has a powerful finance arm, and that has turned around under mike neil who has been working to turn everything in that division around. i don't mean to undercut technology. i get that we have to praise the fast moving innovators. you knowic like starbucks. and apple is the best investment out there.
3:09 am
way too cheap after tonight's earnings victory. when it comes to what i have seen this earnings season, the victors are older household names, companies run by executives who know how to capitalize on weakness, pray on competitors, and take no prisoners along the way. sometimes in the political nonsense and all of the chatter, the federal reserve taxes and whatever, it pays to remember that old companies, unlike old dogs, can learn new tricks, and apple, as great as it is, should not be the only american stock we're focussing on, and investing in for that matter. i guess we have to take questions. why don't we go to andrew in new york, andrew. >> cramer, i'm from new york. >> let's go to the racers this summer.
3:10 am
>> caller: etn can be a little crazy sometimes, but he has been spending money like he's an american express card this week, a black card none the less, buying instagram and patents, do you think if this ipo is a flop he could be a overlook? for the general tech sector? >> that deal better not flop, they better price that when it works, you're absolutely right, it could bo do major destruction to this market even after apple delivers such an unbelievable quarter. look, you can teach old dog companies new tricks. apple, yes it's amazing, we could call this the mad apple money show, but do you mind if i get proud about other companies we don't talk about any more.
3:11 am
that's where i think the real action will be going forward. >> the coming up, love seat? a weak foundation in home sales has made ethan allen a tough sell. and later, did the market miss the real thing this earnings season? cramer is challenging the call in the field that left one worldwide brand out of the spotlight. stick around to find out if the it could add some fizz to your portfolio. plus, technical time, the market is reverting back to the roller coaster ways, and the volatility makes some investors sick, but a few names could be setting up to break out. cramer is showing you how to
3:12 am
spot them when he goes off the charts. all coming up on "mad money." >> miss out on some "mad money?" get a text alert today. text mm to 26211. or give us a call at 1-800-743-cnbc. having one of those days? tired. groggy. can't seem to get anything done. it makes for one, lousy day. but when you're alert and energetic... that's different. you're more with it, sharper, getting stuff done. this is why people choose 5-hour energy over 9-million times a week. it gives them the alert, energetic feeling they need to get stuff done.
3:13 am
5-hour energy...when you gotta get stuff done. [ male announcer ] new from subway. slow-cooked chicken marinated in sweet n' smoky barbecue sauce. merely 6 grams of fat. -can't beat that. -it's smoking! subway. the official training restaurant... of athletes everywhere.
3:14 am
follow the wings. the official training restaurant... greetings from the people here sure are friendly but some have had a hard time understanding my accent. so to make sure people get every word of the geico savings message i've been practicing how to talk like a true chicagoan. switching to geico could save you hundreds of dollars on car insurance... da bears. haha... you people sure do talk funny. geico®. fifteen minutes could save you fifteen percent or more on car insurance. with people spending like crazy to remodel and redecorate
3:15 am
their homes, i think the housing market will turn. is it time to circle the wagons around ethan allen? they are the rare related player that's a outliar. it's actually down 10%. the company that is 249 design centers, and is adding to that every quarter, went on to report a solid quarter last night. -- companies are rolling out a ton of new products as housing is turning, and i think they're ready to play catch up. let's talk to the ceo, for the most exciting time i have ever seen in the years i have followed the company.
3:16 am
>> the company is in major transformation. i know you're guardedly optimistic. you want to see the demand be there for the next two, three, and four years. >> absolutely. first of all, it's always great to see you. >> thank you. >> we just, our released our earnings, and our earnings doubled. and you take a look at every quarter, our earnings have been growing 50-70%. and that's the leverage our business has. as you rightly said, this recession has provided an opportunity to look everything from base zero. >> now, i have been a huge believer that the best way to
3:17 am
tell future performance in the last 18 months, is size of dividend boost. you just gave us a whooper. >> absolutely, a 29% increase in dividends. we also increased about a year back. i think it makes sense for companies to make -- to have cash. you have to have liquidity. you have to have the liquidity to invest in our business. we invested about $20 million in capital expenditures this year. we bought off our bonds, and then we increased our dividends. i think that the opportunities we have i think are good. >> now, i need to try to understand the metric here. i see you opening show rooms in indianapolis, seattle, and minneapolis. you have people designing for you, it seems like it's just the way that apple works with getting people to do apps for you.
3:18 am
>> you know, today, you have to have the opportunity of having good personal service combined with technology. we have 1500 interior designers. this has also given us the opportunity to acquire good people. this last fiscal year we have acquire, but they work for the company, but they're entrepreneurs. we have 200 entrepreneurs to work for the company. we have invested in manufacturing. we have invested in marketing. we're changing 60%. we had to design the products, manufacture the products. make sure the products in our stores are sold. we could have waited to done this in five to seven years. that would be the normal course, but i said no.
3:19 am
this is a rare opportunity to reposition and be ready for growth. we're doing it because we believe we have an opportunity to grow or we would not be making these investments. >> you have to speak about the growth in china, coach was down allot, they think they're not selling enough in china. you're going full bore in china. >> yes, we're fortunately just getting started. we have 17 locations, a great partner. we just, this last quarter, increased our advertising overall. in china, and we had also one of our very strong interior design team was traveling in china the past quarter giving interviewing and building our brand. but we have a tremendous opportunity right here in north america. >> you opened a plant in honduras. you're a great american
3:20 am
manufacturer, is this an opportunity for export? why honduras? >> i tell you they're very important for us as mexico was. mexico, four years back in the middle of this recession, three years back, we decided to expand a small 30,000 square foot plant to a 240,000 square foot plant. others said do not invest, but this plant in mexico is helping our united states plant operate more efficiently because they're doing the work that we have a hard time doing in the united states, the cutting and sewing. in honduras, they're doing things off shore. in honduras, it's in our control rather than coming from off shore where in southeast asia things are getting more difficult. >> more expensive? >> more difficult in the terms of pricing, also sourcing and timing.
3:21 am
we like to have control. 70% of our products are still made in our u.s. plants which is somewhat rare these days. >> you mentioned mexico and honduras, walmart has been caught up in a scandal, how do you avoid this if you're in these companies. >> yesterday we had a meeting, a conference call, and i mentioned to them, and referred to this, reading the newspapers, and i would rather be small than get involved with something that's not right. and that's our philosophy. in the united states, mexico, and honduras people love us. we treat them with dignity, and i'm not interested in doing something in the short term and do it right. >> you have said in the stock market, when it goes up you have more people in the show rooms, is that still correct?
3:22 am
>> absolutely. >> thank you, he is spending the money. you can read the conference call, but i think the future looks much better than the past for eth. >> coming up, upon further review, did the market miss the real thing this earnings season? cramer is challenging the call in the field that left one brand out of the spotlight. stick around. this great reunion in austin. but this year, i can only afford one trip and i've always wanted to learn how to surf. austin's great -- just not for surfing. so i checked out hotwire. and by booking with them, i saved enough to swing both trips. see, hotwire checks the competition's rates every day so they can guarantee their low prices. that's how i got a 4-star hotel on the beach in san diego
3:23 am
for half price. ♪ h-o-t-w-i-r-e ♪ hotwire.com i'm here to unleash my inner cowboy. instead i got heartburn.
3:24 am
[ horse neighs ] hold up partner. prilosec isn't for fast relief. try alka-seltzer. it kills heartburn fast. yeehaw!
3:25 am
♪ thanks. ♪ >> see you around. >> hey, kid -- catch. >> wow, thanks. >> hey, kid -- i always say navigating the earnings season is like crossing the street in heavy traffic. tonight we're introducing a new segment. upon further review where we use the benefit of hindsight to reexamine the earnings reports from last week to see who got lost in the shuffle.
3:26 am
it's easy to see things clearly after time has passed and you have room to think and reconsider and throw the yellow flag. go into the booth, and say i think i found a good one. to kick things back, we're going to go to last tuesday where the best quarter by far was from coca-cola, a stock i moan for my trust. coca-cola reported what most people acknowledge was a darn good quarter. everyone recognized it was better than expected. the stock when the on to close $1.50. not bad at all. after taking time to dig into the conference call, read over the notes, think upon things, mull it over, go under the hood, i realize that upon further review, coca-cola didn't just report a good quarter.
3:27 am
this incredibly consistent beverage giant knocked it out of the park with a stellar thing of beauty corner. you might not have realized it from the headlines, but coke beating it by a penny is not much -- but a 3% price in improved product mix, but this was a completely phenomenal quarter. what makes it so terrific? it's the context. these results are always about context. coca-cola's results were a triumph over adversity. they had been hit with a storm of higher material cost, all the things going awry, gasoline to take it to the store. they would have had a alibi if they had just done okay, if the results were fine but not fantastic.
3:28 am
but i realize they blue away every metric. what will certainly turn out to be the toughest quarter of the year, coca-cola kicked butt. when it feels like the whole world is aspiring against them welcome imagine how well they will do when things get better and things are getting better. the commodity cost pressures are starting to ease going forward even though they didn't have the moderation in their numbers. it made me feel very bullish. so what precisely was so impressive about the results? they posted volume growth in every single regen of the globe. it's the all important key metric that drives growth, and they can leverage their fixed
3:29 am
cost and make big money. they posted higher revenues in four out of five regions. even in north america where we have grown to think of the soda wars like they're done -- an assault. coke and pepsi fighting, maybe even inches and trench warfare in the aisles of super markets across the country. it's 80% of coke's revenues. emerging markets incredible. their bottled water business is unbelievably strong up 15%. the energy drink segment showed 25% growth. just as important, they were in line with the expectations they telegraphed in february.
3:30 am
this was the toughest quarter of the year thanks to the high raw material costs. they indicated things can get forward going better. i believe management here, some of their most important inputs should continue to go down, the price of aluminum down 13%. even the price of corn is falling 2% from last year. that's a big deal because corn syrup is important. none of this is factored into the estimates which makes me think the numbers are too conservative and they might keep blowing away the numbers. so they proved their among the most consistent companies, if perhaps maybe the most consistent company in the world. with amazing execution. that's great all by itself, but context matters here. when you throw in the context of pepsi, trying to find footing
3:31 am
right here right now, last time they announced a restructuring effort, things look even better for coke. as pepsi spends valuable time and resources trying to fix it's business, that means coke can outperform it continually. you are also resulting in coke getting priced earnings multiple which is the name of the game when you're buying the big cap consumer group stocks. this stock may seem expensive here, the stock is flirting with a 52-week high. but think about this, we went way back for this, it's actually extremely cheap. the ko is near a 20 year low. get this, if coke just traded back up to it's 10 year average of 23 times earnings, this is a $103 stock. i don't say it will do it
3:32 am
overnight. it might get knocked down a due times, but eventually coca-cola should work it's way much higher. it has prove ton be able to deliver in the harshest environment. the numbers should billion so good their staggering. pepsi can do tough things, maybe coke comes down and then you pull the trigger. the best quarter a week ago, last tuesday, was from coca-cola, ko, a knock out. that's excellent u results which seen for many to be impossible odds they had to defie. can you just imagine how well this company can do when things are finally going their way? i want to take calls, i want to go to jude in new jersey. >> caller: hi, how are you. first of all, thanks for helping me make some money, and number
3:33 am
two, with the recent acquisitions, will it keep him from being taken over by someone? >> there is a very difficult loss about what you can do and can't do, and i have to tell you my take is, very specifically, you're not owning beam for that, but for the growth, and they made a very good acquisition yesterday. i want to own them for the growth, not for the take out. gloets to bob in massachusetts, bob -- >> caller: yes, mr. cramer, a couple simple questions here. first of all i would just like to thank you for all of your wisdom and insight and sharing your knowledge with the little guy, it makes a big difference. >> everybody is a little guy, i lived in my car in 1977, but i was still putting $100 into my ira. what's up? >> i picked up on b&g foods, their bottom line has been good,
3:34 am
they had a great first quarter, why does the stock drag it's feet? >> i was surprised too, they were not as bullish, but look they didn't say or give you -- how many times do you push it or get fired up, it was a consistent quarter, a good job, it yields 5%, i like it, i still want to own b&g foods. it might be the pause that refreshes, but to me ko is the stock to buy on any weakness. it was the number one story last tuesday, and i think it could be the best when they -- that ladies and gentlemen is the conclusion -- i can't knock it over, i like coke too much. stay with me. >> coming up, the clock is
3:35 am
ticking, call cramer at 1-800-743-cnbc. can he withstand your onslaught of stocks? and later, technical time. the market has been reverting back to the roller coaster ways, and the mind numbing volatility is making some investors sick, but hidden inside, a few names could be setting up to break out, cramer is showing you how to spot them when he goes off the charts, all coming up on "mad money."
3:36 am
3:37 am
3:38 am
remember tweeters, listen up, i'm celebrating my approach to 500,000 followers and it's going on this week. let's shoot for a million, i'm optimistic. it's not whether you follow number one or you have one million, be part of the celebration to win. tweet me at @jimcramer #cramersweeps. as you watch me, soar into twitter stardom, don't fret, you have until friday to get your tweets in.
3:39 am
and now, it is time. it's time for the lightning round. are you ready in here is the lightning round, let's start with johnny in california. >> caller: i'm from sacramento, we love you show, great to have you what's up? >> als transmission -- >> they bring the deal at 23 and now they're neutral at 20 and i'm going to say it's okay to buy. >> caller: jim, what's going on, from florida, listen, i saw this thing on television called the cyber knife, it's known as aray, i bought a ton of it, and now i'm going to sell my house, wife, and cat to buy more. >> what are you a slap chop salesman?
3:40 am
listen, these are medical devices for heavens sake, by isrg, and do it now andly spend you two slap chops, not just one. let's go to abe in california. >> caller: this is abe from california. >> what's up. >> caller: my stock islines gate -- >> yeah, it's way down, people are selling it at 10 or 11, that's a buy. >> jeff in minnesota. >> caller: supervalu. >> everybody hates it, i don't like super market stocks except for whole food social security what you want to own, and that, ladies and gentlemen, is the conclusion of the lightning round --
3:41 am
>> the lightning round is sponsored by td ameritrade. uh. -i don't. -no. ♪ oh!, that's cool, like i said. sweet mamasita [ koch ] a good head on a beer tells you that beer was made with a lot of malted barley. and that's going to deliver a lot of flavor. [ cannon ] a good thick rocky head -- that's really releasing a lot of the hop aroma. you taste the barley, you taste the hops, feels bold. good head on a beer shows that you did your job right and it's going to add to the enjoyment of boston lager. [ female announcer ] been looking for excedrin lately? now for your tough headache pain, turn to the long-lasting strength of aleve.
3:42 am
problem solved. ♪
3:43 am
3:44 am
in a market that's becoming increasingly choppy, i want you armed with every tool we have to figure out when stocks will change course. we have seen pull backs in numerous high quality stocks, and when that happens, the question is when is it safe to start buying? it's talking about something everyone was talking about apple this morning. just this morning, ibm, came out with what i consider -- a 13% dividend boost, and they had add
3:45 am
$7 billion to it's already considerable buy back. as someone who analyzes stocks based on fundamentals, this makes for a fabulous bottom quality. ibm went on to close $1.38 today. that's not much bullish news. so to verify what i think we're seeing, it's not enough to see the fundamentals. so we're going off the charts. we're going to talk with a fabulous technician that runs a website and has her own method for when a pull back might be buyable. okay, to identify bargains, broaden likes to use symmetry,
3:46 am
others call it a measured move. so we're going to use the symmetry term. it's so simplistic it might be hard to believe. when you look at a chart, swings in the same direction will be collar in size. assume the current one will be the same size, and the same goes for a rally. okay. probably sounds crazy, right? like the way you expect a 7-year-old to approach the stock market, but this technique actually works fairly often. and it be a helpful way to identify when a stock falling has reached levels where it's safe to buy. we called the bottom of ibm yesterday, don't believe me? look at this. -- keep an open mind, check out their weekly chart. they were pulling back earlier this month.
3:47 am
when she looks back at past corrections, she finds they have fallen between $16 and $18.28. you can see them all as the horizontal lines on the right side of the chart, okay? based on this projections, she figured ibm would find a floor between 192 and 196. these are the projections to figure out how low they can go. they made a low at 196.70. did you imagine how right this is, just 35 cents above these levels. yesterday, ibm tested her support, and the support line
3:48 am
and it did. i find it very accurate. now that ibm as tested and held the level, she thinks it can troun new highs. would it shock you with what apple did today? she she's can. >> going to 219. it would still be cheap for earnings. you should not abandon ship here. right now she sees the same exact thing happening in an oil company in conoco phillips which we know is splitting. based on the size of past declines, she think that's have a floor of supports between $70 and $71.50. she thinks it can rebound. if it falls believe $70 she would give up, and why this analysis is so hard for me. down here is when i want to buy it, not sell it.
3:49 am
let me give you one last set up. let me show you this chart of the bed, bath, and beyond. this is another stock declining of late. down a little more. people are worried this is like big lots. this is like target, this is a great store. she thinks the stock could bottom between $66 to $67.50. she think there's can be a healthy rally, but if the floor breaks all bets are off. if the stock gets here, i will tell you to buy it. here is the bottom line. based on the measured move analysis of the charts, the
3:50 am
symmetric approach, she sees set ups in conoco and bed and bath. conoco is fine with me, and bed bath is one of my favorite retailers. three good stocks, the technicals and the fundamentals, what's not to like? stay with cramer. >> jim cramer, looking out for you. >> thank you for helping us on the road to average freedom. >> thank you for helping us. >> thank you for sharing your knowledge with the average man. >> i love doing it, and i say thank you, it's great. answering the call of america, week nights -- taste car insurance x. this company has been working to perfect this product for 75 years. ah delicious. very nice.
3:51 am
and moving on to y. it's only been around a couple years. yikes. yikes? yikes. so you chose geico over the competitor... you're not gonna... if you do let me know. no, i'm good. . . . . wow! [ tires screech ] buy one 6" sub? [ tires screech ] ...and get another one free? before 9am. all april long. [ male announcer ] subway, eat fresh.
3:52 am
before 9am. all april long. ent from here to here thanks to my fifth grade teacher. mr. simons was so focused on helping us read; he'd watch our eyes to make sure we were reading smoothly. you'll see how much teachers care... the more you know
3:53 am
you don't go to a group of college students and ask, how many of you use facebook? you don't do that because it's like asking how many of you brushed your teeth in the morning. that's was my experience at harvard this week, and facebook was born there. yet facebook has insinuated itself in every part of the human existence in every single way. especially people trying to figure out brand preferences. i'm going to make an assumption
3:54 am
and judgments that will be considered lightweight and cavalier. but you know what, i don't care if facebook's profit decline verses the previous quarter, or revenues have seasonality. the fact is that the revenues have touched $1 billion for this quarter. and that's immensely -- that's incredible. and the company -- i don't care that their paying for patents. they got to a billion dollars so fast there has to be more behind the story. the fine print of instagram being annoying, how quickly the deal was done, and done without consultation of any board members. what i care about is the fact that facebook has the demo. the people, the advertisers want, and it has them on both the social side and the mobile side in a way that's totally genuine and compelling.
3:55 am
that means if any one bigtizer goes all in with facebook, and it looks like they may be, everyone else in the category has to go all in too. that's what happens when you seek the coveted determine graph take others seek to. i saw nothing in what i read that made me feel any different about the story. so i'm not dissuaded from being involved in the facebook deal if i can get any shares. now that all the know it alls are burning me, defriending me, let's keep in mind that i told you to stay away, i told you to sell groupon, avoid pandora, zynga had no place in your portfolio, fb is not one i'm urging you to sell. they're the real thing, and as of this perspective i'm urging you to buy it unless it's such a
3:56 am
outrageous amount, and i will let you make the judgment. it's too much profitable growth to rooet clients before they made up their minds about what brands to choose for the rest of their lives, for me to stare at and try to get you some shares. [ dog ] i am a pro baller. 11 years playing the outfield, and i got no plans to retire. [ female announcer ] aging may slow a dog down, but iams helps keep dogs playing year after year with our age-specific nutrition. and now, even for dogs 11 and older with new iams senior plus. it helps boost the immune response to that of an adult dog and helps fight signs of aging. [ dog ] i'll never be a bench-warmer. [ female announcer ] new iams senior plus. see the iams difference or your money back. [ dog ] i am an iams dog for life. see? he's taking his vitamins. one a day vitacraves plus omega-3 dha
3:57 am
is a complete multivitamin for adults. plus an excellent source of omega-3 dha in a great tasting gummy. one a day, gummies for grown-ups.
3:58 am
3:59 am
all right, we need to find quality companies in this where did all of the nee -- neesayer goes? china is off the charts, after of of the knew buyers, this is just getting starting. i'm jim cramer, see you tomorrow.

77 Views

info Stream Only

Uploaded by TV Archive on