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tv   Mad Money  CNBC  November 6, 2013 11:00pm-12:01am EST

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or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- my mission is simple. [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? let's start off with tony in to make you money. north carolina. tony. i'm here to level the playing field for all investors. there's always a bull market what's up, partner? somewhere and i promise to help you find it. >> caller: krispy kreme doughnut. >> what was that? "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. krispy kreme doughnut. other people want to make friends. i'm trying to make you a little money. my job is to eductate and teach when that company reported, i so call me at 1-800-743-cnbc. stocks cannot live on growth said back it up and i was right. alone. that stock goes higher. well run company. i need to go to john in california. john? >> caller: booyah from you need growth, plus execution. california. >> i like that. you need for your business to
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hum without a mistake, because if your stock is expensive and >> caller: okay, i've gotten involved with j.c. penney, we it screws up, or even if another got involved, we thought it would be a hit. stock in your cohort screws up, then it's katie, bar the door. got a base hit and we just as we saw today when the nasdaq was down due to guilt by association. wanted to know is it a home run. >> you're right. i hated it all the way down, and then when it got to 13 and ackman sold, i thought it could have a turn and i said buy it and then they did that equity offering and i don't want to touch it. so i think if the stock lifts at all you have to sell sell sell. even as the dow rallied, too let's go to jake in new york. much growth in the nasdaq. consider this show on the eve of jake? >> caller: hey, jim, big booyah twitter, the public servant from here in new york. announcement about anything less >> nice. than flawless execution. one that extends to twitter and go ahead. we await the pricing, and we'll bring you the latest as soon as >> caller: my stock is exo. we have it. today we saw exhibit "a" of a eox, i'm sorry. >> huh? need for a growth stock to execute. tesla. oh, emerald is okay. the electric car company. what gives? with pioneer coming down, i'm how could the stock report better than expected earnings more intrigued by pioneer. i think that actually may be cheaper. i need to go to ben in illinois. ben? >> caller: booyah, jim. and still get crushed? thanks for taking my call. falling down to $151.16 a share? simple, simple as looking at this bald head of mine. i love what you do for us home gamer. notice it has no hair. in the world of stocks no hair
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i'm calling about ew. is beautiful, especially when the stock is expensive. there are only a few stocks that i know it's in a competitive space. >> yeah, that's the problem. in fact, they have great are as expensive as tesla, but science. tesla is valued at a cultish $18 they do have great science, absolutely. but you know what? billion level even as it might i mean, i'm sitting here with produce more than 20,000 cars this year. st. jude and i think that's a better company. that stock got downgraded the it's 20,000. other day and nobody cares. as long as the cars are beloved they kept buying. and the company can meet the patrick in arizona. patrick? demand, tesla was going to go >> caller: hi, jim. higher. my question today is about chesapeake. chk. >> okay. if one thing goes wrong and it was batteries that led to fewer car sales that people were whispering about then it's all in the tank and now i'm back to >> caller: got it last year. over but the shouting. even. hold or sell? >> just hold on the it. a production problem being if it goes higher sell. batteries, not a demand problem eog, we've got pioneer. was responsible for tesla's these are better. sloppily execution. it didn't matter. given the fact that the stock had run up this year, there was we got to stick with best of no room for any hair at all in breed, okay? this quarter. we got to stick with best of breed. even if it had to do with can i go to connor in texas, please. supply, not demand. >> caller: jim cramer, how you doing? especially when we were hearing >> real good, how about you? >> caller: great. that perhaps elon musk would what do you think about a.l.? surprise us with sales numbers >> not bad. of 7,000 cars or more. 1500 more than the company
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actually sold. people have been furious with me they have the planes. let's go to michelle in texas. >> caller: jim cramer, booyah. >> booyah, michelle. @jimcramer on twitter, any minute, people were furious when >> caller: hey, my stock is n they said why didn't i declare that i like tesla the stock. for netsuite. no, i recognized it as a cult stock. >> you know i'll come back with crm. i can't game a cult. today the kool-aid was laced with cyanide, but i have no doubt when the battery issue is can i speak to andrew in my home state of new jersey? resolved the cultists will be >> caller: big booyah to you jim cramer. back in action. >> nice to have you. >> caller: thank you for taking although weakness in another my call. >> of course. >> caller: i'm looking at rite aid. retail drugstores. >> you know what? company that's run by elon musk, reported tonight. this is a strange thing, you can't lose, walgreens is doing solar city. it could cause a second day of selling for tesla tomorrow well and cvs is doing even as both are overvalued on the better and rite aid is not as fundamentals. this is why i keep warning about bad as it used to be. the twitter ipo. and i told you that if it opens up huge versus where it's priced tonight, i will say sell it. if a day goes by where there are for a $5 stock, not as bad as it used to be, it's a reason to buy. buy buy buy. let's take one more. let's go to frank in new york. >> caller: boogie down booyah. >> i like that. we ought to have a drink after work. what's up?
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fewer tweets, twitter will >> caller: i bought a stock. bought 113 shares at $23. i want to know where they're suffer the same fate as tesla going in the short term. >> which one? today. it could trade at the high a few minutes after it opens tomorrow. >> caller: that one is cuda. >> i wouldn't have paid up. then it might be for for a long slog down. which is what happens to the red that segment is so tough. hot social media sites that go it's too competitive. let's wait. public in this era. not a bad company, but it's too competitive. that, ladies and gentlemen, is it can constrain you from making some money. the conclusion of the lightning being prudent can constrain you. round. [ buzzer ] >> announcer: the lightning and remember, if you can round is sponsored by td ameritrade. actually get in on the twitter ipo, actual stock from the banker, you could have a terrific chance of scoring a big gain. but tonight i'm playing dr. cramer. my mission statement is first to do no harm. this one is dicey. if it were my hedge fund and got stock on the deal okay, if the old days before i retired, yes, i would sell sell sell, flip it at tomorrow's opening and i will say that on "squawk on the street" at 9:00 a.m. it's very rare that this happens, but tonight, we have
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the actual proximate causes for two other declines, the junior growth oils and the biotechs. this morning there was a better than reported quarter, but we told you to do some selling in this and other biotechs not that long ago. it wasn't better than expected enough. the froth in biotech, sell sell sell, replete with a gigantic i'm beth... and i'm michelle. and we own the paper cottage. it's a stationery and gifts store. number of hot ipos, vanished quicker than the head on a budweiser and the deflation and anything we purchase destruction were everywhere. for the paper cottage goes on our ink card. so you can manage your business expenses and access them online expanding into even the best of the best, the celgenes, the gileads. instantly with the game changing app from ink. i told you to wait until friday we didn't get into business to spend time managing receipts, that's why we have ink. to sell that one. we like being in business because we like being creative, execute flawlessly. we like interacting with people. so you have time to focus on the things you love. how is it that the imperfect ink from chase. so you can. execution of one biotech, and it didn't, wasn't -- it did what it was supposed to do, can somehow execute the entire group? because the sector pull in this cohort is extraordinary.
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today's precisely why i preach diversification so hard to you. when a less than fabulously better-than-expected quarter, yes, less than fabulously better than expected quarter gets reported for a stock that had run like nps, at which had been up 2,000% coming in, no, i'm sorry, had been up 200%, it's up huge, but 200% coming in for 2013, you get a wholesale slaughter. you can be the judge when we talk to francois nader tonight. he's the ceo of nps. and you can find out whether the collateral damage was a mistake or not. of course, drug stocks abhor a vacuum, and pharma was actually up today. yes, money switched from biotech to merck. then that's pioneer natural resources. the stock of this independent oil company had been up about
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100% going to the quarter. notice the tesla numbers, they're incredible. and while there was no diminution of the forecast that pioneer will dominate, the this veterans day, "mad money" honors those who defend our country's freedoms. by helping defend their financial futures. if you or someone in your family is proudly serving or has served second largest on the earth, in the permian basin in texas, the in america's armed forces, we company by its own admission invite you to join our live studio audience this friday for didn't execute as well as it "mad money," invest in america, would like. there goes the neighborhood as salute to the troops. pioneer's weakness it fell $11.81 extended to the smaller, for tickets go to faster growing segment that trades on net asset value, not earning. like we saw with junior versus senior pharma today, this was a day where the beaten up oil behemoths shined. you want to take one thing away from the show, nobody got hurt taking a profit. consideration nps pharmaceuticals. chevron gaining, exxon up. it's not about growth stocks per se, if you execute well and you're a growth stock, you're still shining. a rapidly growing orphan drug that's the tale which had a developer. i got behind it a year ago. remarkable quarter. and as ceo irwin simon told us, at the time they were trading at every day it dawns on people $8.84. that natural and organic food is thanks to the orphan drugs for not a fad. short bowel syndrome, for those although i'm sure that people who need to be fed through the
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i.v. drip for 12 hours a day, can eat and digest real food and have a regular life. who own whole foods, which offered disappointing guidance it's got approved and last month they submitted another orphan tonight, will disagree with that analysis. drug candidate, and that's for then there's open table, the on-line reservation system hypoparathyroidism. about a month ago, i told you i thought the expectations for all that's so loved by patrons and of the small cap biotechs had restaurants, who can fill open gotten too high. tables to customers, rallied $8.82 on the terrific quarter. you have to take half of your positions because the analysts do we give up on growth and rotate into value? do we forget about skyrocketing biotech and independent oil companies and focus on the tried were then coming out with and true? numbers way too bullish for the companies to meet, especially in i think that's a mistake, too. in the end mutual funds always return to the growth stocks of the case of nps pharma where companies that executed well, including many of the ones who bank of america slapped a price had gotten hit here today and should get hit tomorrow. target on the stock. i don't care how promising a after another day or two i would company looks. if you don't ring the register on that kind of gain you're being greedy. fast forward to today. this morning they reported a pretty good quarter. rather be a buyer of a gilead or regeneron than a seller. in line earnings, higher than that said, these stocks are all about one location at this very moment. >> the house of pain. expected revenues and stronger >> even as they dwell mostly in the house of pleasure typically. than anticipated sales. management raised their guidance. however, when the expectations get too high, including beset by i think the pain is always part of what awaits you when you buy the johnny come lately analysts, sometimes good is not good enough.
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hence why the stock did get growth stocks when you trade crushed today, falling $4.19. during their earnings to the s&p 500. sure, conoco and phillips and keep in mind, though, even after today's session, nps is still up microsoft, they're running a staggering 188% from when we because the well-known analyst first recommended it last year. said the outgoing ceo will be the expectations come down enough you can circle back to this one on the way down. let's talk to dr. francois nader. replaced by ford ceo alan mullally next month. he's the president and ceo of that would be a huge blow to nps pharmaceuticals. hear more about the quarter and welcome back to "mad money." ford but a game changer for microsoft. good to see you. explained by my old friend who has covered microsoft for almost >> good to see you, jim. 30 years and if mullally sells >> did the analysts just get ahead? off the underperformers like the bing, or the xbox, the value because you did better than what would be brought up quickly. you said you were going to do when you were here. >> indeed we did. so a good lunch is really frankly after qualcomm, the chip maker disappointed again tonight, i'm still uncomfortable with most technology stocks. i would rather sell microsoft patient and physicians interested in the drugs. stronger revenue and stronger than buy it up here after that demand. monster move. this is our story. in the end though, a balanced portfolio that has some growth, >> is it possible perhaps that there are not enough new some speculation, and some value, one that can straddle the spectrum of the stocks that patients that have liked the drug? can't afford to have any hair, lest they get a hair cut when they miss, along with stocks >> think about it, we have 3,000 to 5,000 patients that are so cheap like chevron and
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eligible for it and we have 345 prescriptions. >> right. mcdonald's, this is certainly the way to go. keep that in mind before you over a very short period of time. >> a very short period of time. >> i understand you're still -- chase twitter, where we are waiting for the final pricing before it comes public tomorrow. it costs $185,000 to maintain if you already have a netflix or a solar city or a tesla or an this without your drug, so it's not like your drug is uneconomic amazon or a facebook in your and that's why people are not choosing it. portfolio, consider yourself >> that's an important point, covered with the chit in the high growth space of your portfolio. because the payers understood the value of gatix. you don't need another, >> is it an issue of not having especially considering that every single red hot social and enough people learn about it or is it just actually looking really good and there's some mobile and cloud ipo has been people who just -- some analysts who got ahead from what you can cut in half. do in a herculean effort? here is the bottom line. you must accept the risk when you go into the high growth stocks. please understand there can be >> that's an important point. some apples in the growth eden that can cause indigestion. we promised and we delivered and we actually exceeded our internal expectations and we exceeded the revenue expectations of the street. it can be fruitful. >> can you do $198 million after all, adam and eve produced double this pace? 7 billion people and that's an awful lot of success. larry in massachusetts. >> we'll see, 2014 we'll give >> caller: jim, nice job on the raiders, good luck with the you the guidance. packers and a how about a philly/sox series next year. >> i just want to be sure that it's not a smaller market than we first thought when you came
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on the show. >> that would be terrific. >> we don't have any indication i'm taking it one game at a time. how can i help? that it is smaller, and i could add that now we opened international. >> right. >> international is in itself a >> caller: after the hertz conference call, do you agree very interesting big market as well. the big drop was overdone? >> yes, i thought that was >> okay. ridiculous. i was going over that with my friend david faber, by the stock in the doghouse. they need to do a shakeup. they need to change their rental construction business. maybe sell it to uri. december 6th, analysts coming taking a stroll in the garden of up. this is from that. growth stocks, be prepared for did you really submit a 443,000 some risk. page document? >> that's what the fda submission -- >> what the heck is in that? but remember with risk come >> a lot of things, but -- >> who reads -- does somebody read that? great reward. stay with cramer. come on, they're skimmers down there. >> think of the pressure the fda coming up -- oil patch comeback? rising shale player magnum is under, because those patients should be read and fda has to render an opinion within 12 months. >> that's not possible. >> there's a lot of work. hunter has been gushing with gains. can the stock still deliver great returns? but from that, we're very pleased because we submitted the cramer's drilling down with the largest clinical program on ceo. and later prince of the hypoparathyroidism ever. permian? pioneer is drawing position in what could be the second largest oil field in the world has >> for either of these drugs, we helped its profits soar five have to be careful because fold. johnson & johnson is out with a but will falling oil prices put
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the pinch on its growth? don't miss cramer's exclusive. plus, under the weather? nps pharmaceuticals had been on drug, are there other uses for these drugs? i was blown away with how bad what happened to johnson & johnson. >> yes, rightfully so. >> very rightfully so, right? a healthy surge this year, up >> yeah. over 150%. but shares took a nosedive today after it reported. are investors simply cashing in or should you be concerned about its vital signs? all coming up on "mad money." don't miss a second of "mad money." so gatix is indicated for adult short bowel syndrome patients dependent on the support, and with expanding the drug to the follow @jimcramer on twitter. pediatric population. >> right. that's important because that does bring in more people. >> but also, it's important have a question? tweet cramer, #madtweets. because some of the kids die in the absence of the treatment like gatix. >> i think some people at home are thinking why didn't dr. send jim an e-mail to nader just call the guy who at or give us a $33 said buy this stock to this guy and say, you know what? i mean, we're doing the best we call at 1-800-743-cnbc. can. but that's not the way it works. >> that's not the way it works. miss something? my job frankly is to deliver head to drugs to the patients and let the street do what they do best. >> that's exactly what you did. that's why i'm thrilled, because when we were at $8 you did more than "x." that's all i can promise. >> that's all i can deliver.
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>> thank you very much. thank you to dr. francois nader. president and ceo of nps pharmaceutical, it came down, but it did better than we thought. stay with cramer.
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as we await the imminent pricing for the twitter deal, i have to ask, are we doing anything here in american? are we doing anything but watching devices anymore? i think back to what facebook talked about on the facebook
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conference call, when she said that in 2013 for first time people will spend more time with digital media than watching tv. specifically 5.25 hours or 315 minutes a day on digital services versus television. on desktops one in eight of the remember, if twitter opens minutes on facebook. mobile devices one in five minutes. now wait a second. up big, particularly 40, 50, i what else is there time for? would be a seller not a buyer. that's too much risk apropos of the average person sleeps eight hours, twice more than i do. what i talked about at the beginning of the show. and basically a third of the day. then that's another third which is supposed to be spent working. and the last is meant to be play. do you mean to tell me we're on it might open up and then go up facebook for more than half of more and that may make you jump and i'm telling you, please don't do that. thank you. our leisure time and watching television for the rest? i'd like to say is there's always a bull market somewhere i think the secret to the success of facebook as well as and i promise to find it for you twitter, which should price right here on "mad money." momentarilyb or even the yahoo! i'm jim cramer and i will see you tomorrow. or the aol as we heard from yesterday's successful >> [bleep] conference call for the no it's coming right out of the seam. >> that thing's shot. longer relevant company is people are doing far less work >> [bleep] >> i'm seeing a loss of dollars. at work, and far more fooling oh, that's badass. around on the internet. the internet turned out to be the ultimate in trojan horses. >> that's beyond badass. and it looks beyond expensive. >> you're like $1,000 away from
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unlike television which ceos buying a badass car. watch cnbc all day, the internet >> and you're $1,000 away from is something that people expect selling a badass car. [thunder claps] >> there is this huge storm their employees to be watching. coming. >> i did not need this today. with the rain falling, our cars the huge percentage of internet are stuck out here. use is totally prurient and if it floods, man, i'm gonna be out almost 100 grand. [bleep] self-serving or even fun. the last thing you want people my name is jeff allen. i buy, fix, and flip cars. having at work. and it definitely takes away from what you're supposed to be but i don't do it alone. doing. that's the dirty little secret i've got perry... of the amazing medium. how did it happen so fast? how do we know it isn't all hype? you're gleaning a ton of information about how this happened from the recent conference calls this quarter. first, because people have so many devices. the facebook people may want to claim those 5.25 hours of watching for the internet, but i think it's becoming a two-screen watching era. that's how the networks and the cable companies can continue to show incredible growth. no wonder the ad rates from non-internet media have been stellar this quarter. see time warner today and they're throwing a huge amount of growth?
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at t-mobile, which may be growth from at&t or from sprint, there's a huge boost of people watching programming on smartphones and on tablets. some of that might be double counted television, but most is coming from youtube or facebook, twitter, aol's huffington post or other texting and e-mail applications. finally we know from the escalating usage of amazon or sites like zillow, or like we learned -- or yelp the week before, that the retail sites, amazons, people are shopping all the time. perhaps they should be working. the only real loser for right now, has been print. which from these usage data has simply fallen off the face of the earth, as anyone who listened and heard how badly time inc. is doing. all this comes to a simple fact, the reason why we're so willing to seemingly pay anything for twitter, as we wait for the pricing, and have been paying
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huge multiples on facebook, is that the functions are always on and they're not always static. they are operative from the moment you wake up until you go to sleep. i will go a step further. until the internet is blocked at work for anything other than what you're actually being paid for doing, the usage will go higher. the twitter deal will be a success as investors what like the growth path as more and more spend their time on smart phones, checking the web, going to amazon to buy things and checking out sports online. if only one-seventh of the people in the world have smartphones, and the 5.25 hours of the internet expands to at least eight hours of leisure and work, then you can see why people really want the stock of twitter. we're doing less work. we're fooling around on the web. when each company goes to public we'll clamor for them until something better comes over our mental transits. it's here to grow and grow at a pace faster than any pastime in history. stick with cramer. mad about "mad money"?
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immerse yourself into cramer's world. while you watch the sow with z-box. on your phone, tablet or on the web, get sneak peeks, go behind the scenes and join the conversation. download the free app today for the ultimate cramerican adventure.
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how can you tell if a company has changed its stripes? that's a question we need to ask about magnum hunter. it sounds like a dirty harry movie, but it's a small oil and gas producer. magnum hunter has some terrific acreage across three of the biggest shale plays in america. the bakken, marcellus and the utica. the company was troubled by issues involving the balance sheet execution. back in april they fired the auditing firm price waterhouse, even though they hadn't issued the delayed 10-k. and the stock dropped down, as magnum hunter hired new accountants, they got their 10-k out in june and all the accounting issues were resolved benignly. since then, they're one of the best performers in the oil and gas industry. roaring back up to the nearly $7 level even though the latest quarter has hair on it now.
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now on monday, it had a bullish investor day, when they talked about cleaning up the balance sheet and they've become a leaner, meaner exploration company. we'll hear more about it when the business -- when they report their numbers on friday. has the company got its act together? let's talk to gary evans, the ceo of magnum hunter. welcome back to "mad money." >> good to see you. >> it was touch and go and then i read through everything, including your last few reports. i mean, the ones you filed with the s.e.c. it seemed like there was a dispute about the way the accountant was doing the job and it sounded liked the accountant wasn't doing the job. >> well, without saying a whole lot -- >> yeah. >> -- it's very unusual for a company to fire a big four accounting firm. >> that's what freaked us all out. oh, they have to be good. >> where there's smoke there's fire. we hired the top fifth accounting firm in the u.s.
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they delivered an audit. no restatement, clean opinion. >> i'm glad you brought it up because i was worried there would be a restatement. i figured hey, listen, we all like this, we hear a big name, i'll not slag them, but that scared people. >> sure it did. >> obviously. >> scared me and the board of directors. >> i'm glad you mentioned that. >> it was the worst time of my life. running a public company. >> yes. here you are, you know, we figure that nobody fires an accountant unless something's wrong. you got a remarkable bill of health, almost instantly, which showed there were other issues, because no restatement means your assets were whole. >> they're whole, exactly. >> let's talk about the assets. i'm trying to figure out how people should view these companies. looking at earnings is something we should do with chevron. we should look at them with exxon, but we should look at the net asset value of the properties with the younger companies. >> absolutely. an embryonic company like us, we
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are only four years old. we're out buying leases, trying to figure out where to be, and then we start drilling the wells. you start looking at nav. as more companies drill around us in the utica, in the marcellus, we prove up that acreage. and then you start drilling the wells, the cash flow comes in and you start trading on the ebitda. >> when i see the properties you have, i say okay, why do you only have two rigs up there. you have some great acreage. is that because in the end, rigs cost a lot of money? >> well, we have had four or five rigs up there. we don't operate but maybe 20% of those properties. so we're at the discretion of the other operators who have other issues. >> right. you used to call this the $6 million well. >> yes. >> explain to people what the cost is. >> what's happened, especially in the williston basin is costs have continued to decline. we started to drill up there three years ago. they were $9 million wells and
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now they're $6 million. >> that's to drill down -- >> it costs $9 million and now it's $6 million. we're in the shallower part of the basin. we're still finding oil. and at 6 million bucks, your returns are off the charts. >> right. you guys don't seem to be ashamed of some of the other companies about natural gas. you've got a chart here, you're still half and half. >> 50/50. >> is that good? don't you want to be like 80/20 oil? >> i'm very bullish on natural gas, long term. >> okay. >> i think the next year -- two years, gas prices are going to be low. however, if you're in the marcellus and the utica, there's not another gas base than comes close to the low funding costs and the kind of volume. >> can you be like cabot oil and gas? >> and range resources, the same way. both of them.
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those two companies, look at them five years ago, they were $2 billion market caps and today they're 14 and $16 million. they are all off of dry gas. >> where are we in the country about how much oil and gas there really is versus what we thought? because you're even in this montana section? >> no, not in montana. >> where -- >> we are in north dakota along the saskatchewan border. >> it looks to me like there's areas that you're in, that we're beginning to realize have a lot more. >> well, the big boys have moved in our area. continental, oasis, st. mary's. they're in our backyard. so we tend to get into regions early and people go you're out of the fairway and what are you thinking, and all of a sudden -- >> i thought you were out of the fairway, but you're not anymore? >> we have a little bit of foresight. i have been in this business 30 years. >> so what happens next? are we going to have a period where oil is, you know, it's been down a lot, where we're suddenly worried about your hedges. >> well, fortunately, i hedge
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most of my oil around $94 to $95 a barrel. >> win. >> 14 and 15. >> oh. >> so we're protected. same thing with natural gas. we hedged all the gas we could at 412, 402, 405. so we're protected, '14, '15. we've got to undoubtedly find new uses of natural gas. we've got to get gas to the gulf coast. we've got to have lng. this is a world commodity. why not export it to the world? natural gas is being paid for by japan and china at 12, 14 bucks an mcf and we're selling it for $3.50. crazy. >> i understand the future. any time you have a lot of oil and you're pumping it. okay, now we have the whole story. i'll tell you, it did throw me for a loop because accounting irregularities equal sell, but they're cleared up it equals buy. gary evans, thank you. stay with cramer. prince of the permian?
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pioneer natural resources is drawing position on what could be the second largest oil field in the world has helped its profits soar five fold, but will falling oil prices put the pinch on its growth? don't miss cramer's exclusive.
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>> announcer: lightning round is sponsored by td ameritrade. sometimes when you're dealing with a high quality growth stock that's had an enormous run, all you can do is wait for a pull back to give you a better entry point. but here's the rub. when that pull back comes you have to remember it was what you wanted and used the weakness as an opportunity to buy rather than panicking like everybody else does this day. take pnb, in the permian basis, which may be the second largest oil field on earth. the opportunity here is simply enormous. pioneer is sitting on top of vast quantities of oil and doing everything it can to get the stuff out of the ground. but they reported on monday after the close and some viewed it as being disappointing with the earnings per share rising 54%, but still falling short of the estimates. and interstock continues to
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fall, although i think the story is intact. pioneer got a downgrade today. it's overvalued on earning and that took the stock down another 5.6%. to me, this looks like the pull back we have been waiting for. stock's up 86% year to date. remember the story about the net asset value of pioneer's terrific holdings and what a major oil company might have to pay if they wanted to, to step up for a big acquisition. i think the bull thesis is intact and you're getting a gift. i'm not trying to call the bottom. i'm just saying this is not a broken story. as i said at the top of the show when you get the majority moves they're not over in day. let's check in with scott sheffield, the ceo of pioneer natural resources and learn more about the quarter and his company's prospects. welcome back to "mad money." >> thank you, jim. great to be on your show again. >> you can tell me what happened, tell me if i'm wrong. some people say you know what, this company is now mature enough that it's an earnings per
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share story, it's no longer a net asset value story. i disagree with that analysis. what do you think? >> exactly, jim. we had some great announcements over the last couple of days. we found another zone, the wolf camp "d." we had the best well really in the permian basin. over 3000 barrels a day. and the wolf camp d was way above ore expectations. we had a couple of wells that we drilled a couple of miles away. now we have the wolf camp a, b and c and d. and i think our number will be end up being low over time. >> again, i'd like -- for people who did not hear you the first time, or have not listened to me on the show several times, you're saying this one field could be maybe the second largest field not just in the united states, but in the world. >> yes. it's the largest in north america.
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it's the second largest in the world. i think our numbers are very conservative at about 50 billion. we think the numbers will climb on up to 75 billion to 100 billion over time. >> who else is there that -- i don't hear it from anyone else other than you and core labs but there's got to be some other companies that are jealous of your acreage and need your acreage in order to substantially augment their holdings? >> yeah, core lab has done a great job for us. dave and the team at core lab has analyzed all of the core data over the last several years. we'll be coring a lot more wells going into 2014. but i mentioned on your show before, you know, concho is there, apache is there. a very small presence, diamondback, laredo. much smaller companies. we dominate the field. we have about half the acreage, about 900,000 acres. so we're definitely the 100-pound gorilla in this great wolf camp field.
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>> let's go over what the stern agee people are worried about because the stock has been going down. they're looking at production. and they're saying q3 '13 was below q2 '13 and therefore something is wrong. >> yes. at the end of the year, we're estimating about 14% production growth. this was the year with pad drilling. it was a year with science appraising our wells to the north. it was a year where we did have to sell some production back to sino chem in our joint venture. over the next five years we estimate production growth in the 17 or 18% and cash flow per share growth will be in the 20% plus range. that's with a commodity price declining. the strip price for oil, wti today is about $94, $95. it declines to about $80 over the next five years, so even under that scenario, we're still showing tremendous growth. 17 to 18% a year. and cash flow growth of 20% per year plus.
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>> and in your documents you're showing $14 all in for a new well, is that going down? is that what you think will stay the case? because that's still a tremendous profit margin. >> yes. with prices at that level we're heavily hedged.
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right now drilling wells everywhere you could? >> yeah. we found out that exxon has staked their first well in the horizontal wolf camp, next to our hut leases. so they're drilling. i know moxie is starting to stake some wells near our acreage. chevron is building a big facility in midland, a $200 million facility. they have over 3 million acres. chevron is just now starting to drill.
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