tv Mad Money CNBC April 17, 2013 6:00pm-6:55pm EDT
useful. the best youre's- i almost said it. i don't know if they can actually -- apple. i said it! what can be said that hasn't already been said about this freefalling tech company with the greatest products in the world? how about this? apple could say we're going to double your dividend, buy back a quarter of the company. that surely hasn't been said. i don't think there's an analyst who hasn't pulled the jason, freddie krueger slasher -- what have they z i've been looking at what they've been saying. they've used machetes to cut numbers. chainsaws to cut numbers. they've used ginsu knives to cut numbers. scalpels, k bars, bowies, meat axes, guillotines, even chippers, shredders to cut numbers! and they're still not low enough. they're still not deep enough to keep anyone from still going even lower as you forecast. you would think apple's going to report a loss, for heaven's sake. especially after watching the sickening slide of apple supplier cirrus logic today.
after it's said there's been a lack of demand from a key tuft. who could that be? a name. the other night i joked that apple's becoming the jcpenney of the tech companies. while i meant it tongue in cheek, which seems to be a shocker for some on twitter, @jimcramer. lately, apple probably wishes its stock, which declined an astounding 23 points today, would be more like jcpenney, which has become like a stone wall. ever since ron johnson hit the road. who else can do no right? how about the oil companies? now the united states produces so much oil we don't need to import as much as we used to, as floyd wilson of halcon told us last night. we bringing the price down with our our massive supply. ohmowners heeleding their breath hoping orders won't be kansd as we wait to hear numbers from schlumberger.
and intellectual property service king coral labs. how about the mineral and mining companies and the equipment makers who supply them? can analysts cut the numbers fast enough there for freeporter qatar pilar? the former makes copper which i gather from the stock price isn't being used by anybody anywhere, not just pennies. then again, wait a second, they seem to be not using aluminum either, judging by the price of alcoa. it is all about the haves and the have nots. and all that's happened during this down turn is that the distance between the two has become wider and the gulf deeper. here's the bottom line. on days like today we just need to break out the list of thes have, the companies that can do no wrong to know what to buy, and the have nots to know what to sell. one day the have nots will get cheap enough to buy. but in the interim i'd rather swim in the love canal, bathe in sherwin williams paint, and drink spent fracking fluid than try to catch the bottom in the have nots. although as we all know, at some
price they just might be right. arthur in indiana! arthur! >> caller: yes. jim, big fan. listen to you. and your advice, brought capital whale and the price went up. money, money, money. and it's now looking at the oil price, gas price has been coming down. it went up to about 70. it's going down. do i take the money off -- >> you should ring the register. korm, that stock is up huge. i don't want you to gef up that gain. take half off the table tomorrow morning. let the rest run. chaitanya in minnesota. >> caller: this is chaitanya from minneapolis. what's your take on cirrus logic, crus, after the company reported a weak quarter due to inventory reserve and also i lackluster first quarter outlook? >> when you live by the apple sword you die by the am sword. and cirrus logic makes sophisticated sound systems
apple uses. until apple pulls out of its tailspin you can't own cirrus logic. sorry. let's go to darren. in the gamecock state. darren. >> caller: hi, jim. ba-ba- ba-ba-ba-boo-yah. i need some help. >> perfect. all right. >> caller: i took a long -- i took a position in cls at $20, about 500 shares. at $18 i bought 500 shares. got a 3.5% dividend and i don't mind waiting but what do you suggest? >> well, i've got to tell you, this is a business, the iron ore business, that ever since they did that -- well, this stock has been -- it feels very terminal but it's not terminal. and i know there's a lot of iron ore that can come out. but i've got to tell you, $17. i don't know if i would sell it. it's kind of low. i mean, it's really low. anyway, it's all about thes have and the have nots. when it comes to stock, for now it's sherwin williams paint. that's the fracking fluid
cockta cocktail. and you know what i say? time for some boat drinks! "mad money" will be right back. >> announcer: coming up -- core holding? energy development in the u.s. continues to grow. so cramer's drilling deep into the understand to find you the best plays on domestic oil and gas. tonight, can coral labs power higher despite the steep decline in oil? cramer's earnings exclusive with its ceo is next. and later, home grown? the stock may be a newcomer, but you'll recognize the brands behind realigy holdings. from coldwell banker to century 21, they're synonymous with real estate. housing starts at their best levels in nearly five years. can this company capitalize? cramer conducts an open house with the ceo just ahead. plus, don't let the market pullback send you into a panic. call, e-mail, or twe tweet @jimcramer and let wall
street's sharpest mind make sure you're prepared in "am i diversified?" all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an e-mail to firstname.lastname@example.org. or gi1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
it's really about technology. because none of these unconventional shale plays would matter if we didn't have the tech to make it economical to drill it. what we really have is an energy technology revolution and these advances aren't unique to north america. they're spreading all over the globe, and who's spearheading this transformation? who represents the vanguard of
the oil revolution and its intellectual property? easy. that's core labs. clb. i like to think of it as a technology company that happens to be in the oil service business. core's proprietary technology helps oil companies figure out where to drill. it also helps them squeeze more crude out of existing reservoirs. now, core labs got hit hard today, down $3.41, 2.63%. the company just reported a terrific quarter. 7 cent earnings beat off $1.15 basis. revenue coming in higher than expected up 11% year over year. and raising its guidance for next quarter. don't have a lot of companies doing that. i think the stock bounces back and then some tomorrow. typically core labs is one of those stocks that seems to get hit every tile time it reports, though. we've got to figure out exactly what's going on and don't worry if it doesn't go up immediately. i don't know fuel get a post-quarter sell-off this time. it just doesn't seem possible. this stock has given you 109% campaign since i got behind it february 2010. up 11% since we spoke with the ceo at the end of january.
let's check in with david dem sher, ceo of core labs. find out more about the company and where it's going. welcome back. congratulations on an amazing quarter. >> thank you, jim, thanks for having us back on "mad money." and yes, we did put up some really good numbers. >> a lot of times i try to figure out which is the standout but every description, reservoir production and reservoir management all hit records. so how would you describe what is the real driver of your guidance to the up side for next quarter? >> yeah, jim, if you look at, for instance, on reservoir description, this is being driven by deep water internationally. so when we look at some of these deep water plays, presalt, offshore bralz, offshore west africa, those are big drivers. also the job anadarko's doing off east africa. noble energy in the eastern part of the mediterranean. chevron outside of the gorgon project in western australia. that's a big driver for reservoir description. in production enhancement more of the deep water gulf of mexico.
these lower tertiary plays. our technology's playing a critical role in trying to recover oil, more oil and gas somefrom some of these lower tertiary reservoirs. these reservoirs are undersaturated in natural gas and the expansion of natural gas is a big driver of oil to the surface. so we're coming up with a technology where we can inject certain gases, certain cocktails into the reservoir that will drive more oil and gas to the surface. increasing recovery rates from somewhere maybe around 10% or 15% to get them in excess of 20%. then reservoir management -- >> sir, that was staggering. when i read that in the release, i said you mean 80% of it's still down there? >> yes. this is a crude oil that's very unique in nature and very undersaturated in natural gas. so what our guys are doing in our reservoir fluids laboratory is experimenting with this crude oil so we can change its properties by injecting gases into it that will make more oil flow to the surface and increase its recoverability. jim, some of these fields have 5
to 6 billion barrels of oil in place. and if we can increase the recovery factor by an order of let's say 100%, from 10 to 20, that's an additional 500 million barrels of oil at somewhere around $100 a barrel you can see it adds up to be quite a figure. >> now, you mentioned a couple companies. i know that mexico really freeing up its government, really changing the pemex strategy. if mexico were to go full bore, is that indeed the largest oil field in the world that has still got a lot of oil in it? >> well, their deep water prospects are very good. if we look at the golden lane in the gulf of mexico, it does wrap around from offshore louisiana, offshore texas right around to mexico. they have not yet really exploited their deepwater deposits. they're going to have to use additional technologies. and we'll be there to help pimex exploit that over the next decades. >> last time you were on, you teased us, you said there could be another bakken, another
eagleford. we have since interviewed a number of ceos and asked them about that. apparently, it is true, and no one will tell us where they are drilling it. but do you feel even better since the last three months with looking at your technology that bakken and eagleford are not alone in this country in terms of the big finds we could be having? >> that's correct, jim. i think our exact words there was one and possibly two additional large tight oil developments left in north america. i saw your piece last night with floyd wilson, and he does a great job with petrahawk and healthcon. and the reason why you're not seeing a lot of companies divulge these plays is right now they are actively getting their acreage positions. until acreage positions are fully filled they will not divulge where these one, possibly two new plays could be. >> i knew it. i thought it was monterey. but you know, i know you're not allowed to say what it is. i appreciate. you could always nod when i say monterey. technology evolution continues as a bank of america, merrill
lynch report says it's -- what are they worried about? they're worried about competition. i've gone over every technology we have. it is patented. and no one else has it. is someone sticking up for you that we don't know about? >> we sure don't know it. when someone talks about competition they always point to competition in the reservoir description area. one interesting note on reservoir description, that for its tenth consecutive year-over-year quarter margins have increased. so if there's competition out there we really don't see it and we see marge pinz in that business going up again next quarter. so that will make it over 11 quarters in a row. so almost three years where margins have expanded. that's usually not a business that's under attack from competition. >> there are only a couple companies -- i often mention a lot of companies have buybacks and then you'll look at the number of shares that they have versus, say, the last two years, and it's unchanged because they're issuing a lot of stock options. your buyback would have bought half the company four years ago if we look at how much you
spent. >> that is correct, jim. if we look at the three financial tenets by which we run the company, number one is return on invested capital. that's exactly hee dick bergmark, our cfo, and i get paid. so that's a very important metric to us. secondly is maximize free cash flow. and you can see this quarter we turned 23 cents out of every revenue dollar into free cash flow. and thirdly, and most importantly, returning that excess capital to our clients, to our shareholders, excuse me. and since we started our shareholder capital return program, we've returned over $1.42 billion to our shareholders, and that adds up to about 37 million shares. we started with 83 million. we're down to 46 million. we will continue to run this program. very strong. >> one thing i need people to understand. we had brent's under 100 in west texas at 87. they don't call you and cancel their reservoir description program with you and reservoir management when they see oil drop a few bucks, right? >> well, that's right, jim, if
you look at us we're international. 80% of our business comes from international and is crude oil related. so these are long-term projects. so our stability of our revenues is a lot higher than some of the other oil field service companies that are mainly based in north america. so when we look at these large-scale crude oil projects, the development of the presalt offshore west africa, these are decadal projects. and small movements in crude prices on a daily basis do not affect these projects. so if crude was to go low for a long period of time, yes indeed, we would be affected. but as it stands right now, all projects internationally with brent at around10 and wti around 90 are fully funded. >> one last question. i'm looking at eagleford. i'm looking at bakken. 750,000 barrels a day. when we were up there it was only 500,000. i'm thinking about the one, maybe two that you're mentioning. and i am thinking energy
independence for the continent in three to five years. crazy or realistic? >> jim, i think we're headed in that direction. three to five years might be a little optimistic. but if there are additional plays out there that are of those size, certainly that's going to advance us a lot in that direction. so when we look at the continent and you want to include certainly canada, the u.s., and mexico, it can head us in that direction. >> david demshur, president and ceo of core labs. congratulations, david, on another amazing quarter. and for people to understand it's a technology company in the oil patch and not a wildcatter's friend. thank you. >> thank you very much, jim. our ninth visit was just fantastic. >> you bet. great quarter. okay, guys, this is what it's about. proprietary technology in a growth business, which is oil. this is not a company that is cutthroat against halliburton, baker hughes. it's the one everybody uses. david demshur, president and ceo of core labs. going higher.
>> coming up, home grown? the stock may be a newcomer, but you'll recognize the brands behind realogy holdings. from coldwell banker to century 21, they're synonymous with real estate. as housing starts hit their best levels in nearly five years, can this company capitalize? cramer conducts an open house with the ceo just ahead. [ male announcer ] there are people who find their own path.
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and more volatile by the day. can we just take a breath for a moment and remember that despite all the worries there are still parts of this economy that are going strong? like housing. a totally domestic industry. not france, not generation not socgen. that's not going to be droild by european woes or a chinese slowdown. they have nothing to do with each other. the housing comeback is still with us. as we know from yesterday's terrific housing starts number. and this is the kind of huge multiyear theme that's going to keep powering forward no matter what you're fretting about. take a look at this chart of new housing starts. you can see that we're very much on the upswing. but we still have a long way to go before we reach the elevated levels that we saw back in 2005-2006. so how do we play the housing resurgence? right now what do we do? what can we snoen what about realogy? a huge realtor that's the world's largest fran schooizer of residential real estate brokerages. coldwell banker, century 21,
sotheby's, better homes and garde gardens. last year this company was involved in more thain quarter of all domestic home sales transactions that involved the broker. they are that big. they came public back on october 27th. i got in back of the stock at 27 and this stock has given me a 24% gain, which is very nice, at it's lagged the big online real estate names like zillow and trulia. earlier this month realogy issued guidance that wall street viewed as being disappointing. the company is still looking to see sales volumes increase in the low to mid teens going forward, and that's pretty darn good. then realogy did a secondary last week selling 35 million shares at $44 each. if you got in on that deal you instantly made money as the stock has done a nice job holding at that level. there was nothing disappointing about the quarter. just more gibberish from people inclined to be bearish because they simply don't believe in the cycle. probably never bought a home. i like the story. let's take a closer look with richard smith, the chairman and ceo of realogy holdings. find out more about his company
37 welcome to "mad money." >> thanks, jum. >> have a seat. when the company went public it was an immediate hit but there have been skeptics. they always sate same thick, late innings, eighth inning, ninth inning, we're done. i showed ut chart, housing starts. how if we're not even near where we used to be and yet affordability was so great are we almost done? >> if you overlaid that with existing homes, you'll see a very similar trade. we are at the beginning of the recovery. in the third quarter of last year we called the early stages of recovery. we got fairly strong in that commitment in the fourth quarter and we're very bullish now. remember, we're in a seven-year trough. we're coming out of a seven-year decline. unprecedented in the history of residential real estate. >> even in the '30s, were we that bad in the 'dhirts? >> no, we were not. we certainly have never seen a price reduction as we saw in this correction. this isn't a downturn. we view this as a housing correction. so when you have an asset that's correcting that substantially, you've got a long ways to go
before we are anywhere in a position to be bearish on housing. >> do you think there are people in the country who no longer think owning a home's a good idea or does your work show you that people think it's even a better idea than it used to be? >> it's hogwash. there are a number of surveys that have been conducted. cnbc did one. recently. the all america economic survey. and what, 78%, 79% of those surveyed said owning a home is important to the american dream. there was a survey done by pew research in march. 81% if given the choice would own rather than rent. listen, there's a time for renting, a time for owning. we all experience that. so i don't think this is a rent versus own scenario. this is a life cycle issue. and we've all got to rent and all got to own. >> your company used the downturn to get bigger and to make more share. so coming out of it versus where you were in 2005-2006, how do you compare your company now versus then?
>> we took $500 million in costs out of the company. we took advantage of the opportunity. and we did it in a way by preserving revenues. so we are in a much better position to capitalize on the recovery. and that's going to be evident in all of our forecasts going forward. >> do you think if we got an immigration bill there would be people who would come back to the market that had been trying but are afraid to go get a documented loan? >> perhaps. i don't think that's the big issue right now. >> what's holding us back? >> the only thing that's holding lending back is the extraordinarily difficult underwriting standards. under dodd frank there is a definition that's to be determined. that's qualified zrechx mortgage. until they define that lenders are lending to the highest underwriting standards. they're afraid of the put-back risk. if the t's not crossed, the i's not dotted they prospectively will get that loan back. our average fico score for our book of business is 760. >> that's ridiculous. the only people who can get a loan are the ones who don't need
it. which makes me -- i know in your new york offices the percentage of people buying all cash because they don't want to deal with the system is off the charts. is that nationwide? >> it's unbelievable. >> all cash, right? >> we have markets where it's 80%, 90% all cash. >> where? >> miami. >> 80% to 90%. people skipt bank entirely because they know it's ridiculous. >> they're probably refinancing at some point. but they're showing up at the closing with cash. now, that's not the national average. the national average is probably somewhere in the 35 to 40% -- >> that's still way too high. mortgages are a great bargain under the tax code. >> it's extraordinary. >> are they going to get rid of the deduction? >> i don't think so. it by far impacts middle america more than anyone else. if they tweak it, it will be on the edge. but listen, mortgage interest deduction has been around over 100 years. i don't believe it's going anywhere. >> demand outstripping supply in your last conference call. you said that. even better now? >> it is. >> is there a housing shortage, sir? >> absolutely. >> there is? >> it's worse than any of us imagined. >> what states? >> let's look at new york city
as an example. there are money venturi -- >> people are knocking on people's doors who do not have signs. i'm not kidding. >> i know. i know that to be the -- we tell them to do it. they're literally trying to convince you to sell. now, the seller's got to convince themselves that they can actually get the price they want. and that is starting to change. i mean, you're seeing extraordinary price increases. we have markets where prices are increasing 25%, 30%. and they're still behind 2005 and 2006 levels. >> with rates. one last question. there was an onslaught in the previous decade by guys trying to do it themselves, guys who cut the commission down to 2%, the foxes. what happened thome? >> they're all out of business. >> why is that? >> that's because the model doesn't work. we would adopt a similar model if we thought it would work. but it doesn't work. >> because housing has to be sold. >> correct. >> richard smith, chairman and president of realogy. i hope you understand why i think this is a great story and why i am such a bull on housing when all i hear are bears. stay with cramer.
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today. liberty mutual insurance -- responsibility. what's your policy? a week from today we'll be packing our bags and heading down to villanova for the return of the back to school tour. so if you don't have your tickets yet, head to madmoney.cnbc.com and sign up. i can't wait for the show. i've already begun starving myself so i can stop at geno's for a cheesesteak whiff on the way back. and now it is time for the "lightning round" on cramer's "mad money"! take calls -- sell sell sell -- my staff prepares the graphics on the fly. play until we hear this sound and the "lightning round's" over. are you ready, skee-daddy? start with bubba in minnesota.
bubba! >> caller: boo-yah, jim! from st. wheel, minnesota. i'm checking on a p.r. -- i mean p.e.r. -- >> sorry, chief. >> sell sell sell! >> that's sandridge. and sandridge didn't do what we wanted with this trust. you can't own it. i need to go to samuel in georgia. samuel. >> jim cramer, thank you for having me. >> my pleasure. >> caller: i just needed to know, aig has made a turnaround somewhat. does aig, do they have a decent strategy for -- >> they're going to keep bringing up value. bob benmosche is the guy. i say -- ♪ hallelujah thank you, benmosche, for what you did for our country. let's go to mark in new jersey. mark. >> caller: hey, babady-boo, zimba-boo-yah to you. >> that's a jerz yea guy. >> caller: how are you? >> good. >> caller: i bought that viral
pharma which you recommended and i was wondering what was cooking to see if they'd gone down a bit. >> the market's been -- stay long that stock. let's go to charles in texas. charles. >> caller: howdy, jim. from the great state of texas. i was curious about stat oil. >> stat oil's a buy. norway's got to come here. i think norway's going to be a buyer for halcon. it does have a good yield. it could happen. hk. floyd wilson. let's go to clarence in texas. clarence. >> caller: jim, this is clarence. i'm a first-time caller. what do you think of rockwell collins? >> rockwell collins was hurt today by the textron news. people ex-trap laitd the problems at textron cessna to rockwell collins. i actually think rockwell collins is a buy. i'm not going toex trap lait what happened to textron. you go to tom in michigan. tom. >> caller: gentext. gntx. >> i don't want to be levered to
the auto industry. i think that stock -- it is time to ring the register. you can buy lower. jan in florida. >> caller: hey. this is jan from pember pines, florida. how are you doing? >> real good. how about you? >> caller: wonderful. a while back you said to buy buy buy. travelers insurance. trv. i listened to you. i picked it up in the low 60s. it's sitting around 85. what should i do now? what are your thoughts? >> i would actually buy more. i think j. fishman is the best -- no offense, mr. benmosche, but jay fishman is -- i know he would agree with me. the ceo of travelers is the best there is. it's going to 100 is my bet. and you can go to roland in california. roland. >> caller: hey, cramer. a big boo-yah to you from northern cal, you big skee-daddy. >> that's me. what's up? >> caller: my stock is performant. i'd like to know your thoughts.
>> i don't know it. i've got to do some work. look at that. they stumped me. what can i say? when i get to villanova, that won't happen. let's go to chris in nevada. chris. >> caller: big boo-yah, jim, from the of las vegas. >> oh, man. i was born a gambling man. >> caller: calling about tmac. it's been a week now -- >> taylor morrison. tmhc? that is taylor swiftly morrison going to 25. i like the home builders, too. and i think that stock is special. and that, ladies and gentlemen, is the conclusion of the "lightning round"! >> announcer: coming up -- don't let the market pullback send you into a panic. call, e-mail, or twe tweet @jimcramer and let wall street's sharpest mind make sure you're prepared in "am i diversified?" ♪
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and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline. and we never stop looking for a better way. it's how we've grown into america's largest domestic airline. we are southwest. welcome aboard. all right. maybe this market's lost some of
its exuberance over the past few days. maybe we haven't been seeing some of those record highs that become so common that they're almost yawn-worthy. commodities have gotten hammered. and you definitely want to cry when you look at a gold chart or even an oil one. west texas closes at 86. but we also got some super housing start data this week, which is all great news all around. and all because housing punches above its weight in terms of the economy. earnings season is in full swing, which gives us a lot to look forward to. wondering how you should guard against these ups and downs? that's right. you do diversification. so let's get to the wednesday game that everybody loves and play "am i diversified?" this is where you call me, give me your top five holdings i tell you if your portfolio's diversified enough, maybe you need to mix it up a little. why don't we start with a tweet, frankly? this is a tweet @kyleshoren. "fave segment is am i
diversified? facebook, waste management, pinnacle foods, chicago bridge and iron, and occidental. am i diversified?" so these are all names that my charitable trust owns. stephanie link, co-portfolio manager with me. can you believe this? here's someone who clearly takes the service. facebook, that's called technology. pinnacle, that's duncan hines. waste management is just a terrific, terrific company that produces more energy with methane gas from landfills than solar does. oxy petroleum, a good company, needs to be better. chicago bridge and iron. unfortunately, i'm going to do something this gentleman doesn't want. you cannot own oxy and cbi because the oils are trading together. so we're going to get rid of this one and what we're going to do is we're going to go buy some merck. and then we've got diversification. ♪ hallelujah >> i want to go to gary, please in california. gary. >> caller: mr. cramer. how are you? >> real good, gary. >> caller: gary johnston from
california. >> perfect. >> caller: you're the swami of the stock market, sir, and i need your help. >> i am here for you. >> caller: here we go. am i diversified? unh, united healthcare. c.o.p. conoco. b.a., boeing. nflx. and mlnx. >> netflix and melanox. what have we got here? united health. health care. dow jones industrial name. netflix, we know what that is. everyone uses netflix, don't they in conoco phillips is oil and gas, charitable trust name. boeing, aircraft maker. and melanox is a semiconductor company. tech, health care, entertainment, oil, and aerospace. i say hallelujah. ♪ hallelujah >> i need more callers. why don't we go right now, why don't we go to fred in iowa, please? fred. >> caller: ba-ba-ba-boo-yah. the great and powerful cramer. question. i just sold some 401(k) stock
recently. and i thought instead of putting it in a bank at 4% or in a mason jar i'd go ahead and listen to you and i would buy buy buy. so i went out here i got five i've got questions about -- >> okay. but nobody gets to see the wizard. but go ahead. >> caller: my favorite food in the morning is dunkin' donuts. dnkn. the other thing i've always said to do is buy more stock. i went and bought some beemis. >> bms. nice stock. go ahead. >> caller: ands there been so much talk about the government lately. and i thought i burn a lot of gas and oil i might as well buy some. so i bought kansas city. ksu. the way i'm going to get it is transport it. so i'm going to go ahead and also get it from trp, transcanada. that seems to be good enough. for an afternoon snack my favorite thing is cupcakes and twinkies. so i bought flour, flo.
and i got additional ones but i'm bem embarrassed to say what they are because of the way the stock market has been lately. >> what i can tell you my friend, my good friend, is you've got horse sense! duncan brands is -- i think it's so great. some people sell because you couldn't buy duncan brands. kansas city. terrific railroad. i was surprised norfolk southern hung in there today. i mean, it was down a little. flours foods is a food company. food, rail, pipeline, packaging, you've got a coffee company, and i say -- ♪ hallelujah well played. well done. don't forget to tweet me @jimcramer on twitter. i was really feisty today. "mad money's" back after the break. the "mad money" back to school tour is in session, and this time we're headed to the city of brotherly love. if you're a student at villanova university and want free tickets
intel. they all had dead horses called out. dead horse that's were repeatedly beaten and flogged by analysts, who just couldn't resist giving them a beatdown. what is a dead horse? might as well also be what we call an elephant in the room to mix animal mefrs. it's something the analysts are all worried about, that the company doesn't want to talk about or thinks is being overemphasized wrongly by the bears on the conference call. it always comes up the same. you hear on the call say i don't want to beat a dead horse, but -- and then the efrnt surfaces. take johnson & johnson. the quarter itself was an excellent one. mostly because with the exception of medical devices the drug and consumer franchises were quite strong. and while i was incredibly impressed by the both of some of their franchises, prrtly oncology and neuroproduct science sales. the nature of the medical device numbers, hips, knees, and the like totally freaked out the analysts on the call. i don't know if this is because many analysts were trying to model all the other device companies using j&j as a template. maybe they were concerned that
surgical procedures were down, something hca the hospital company flagged the other day. maybe they were trying to figure out if it lost share, possibly because of the lawsuits and negative publicity. they weren't clear about their motives but the takeaway was this division could be the achilles heel of johnson & johnson. i think the critics were myopic and the growth of the other businesses plus the strong balance sheet, the dividend boost and the distancing of the recalls in the consumer product aisles of the drugstore were more cogent. judging by the direction of the stock it looks like i'm right. they beat the dead horse and it didn't matter. what about yahoo's dead horse? user engagement. you clean up the junked up website, will more users come and therefore your advertisers will be happy or will you be giving up revenue for no reason? analysts kicked this conundrum around again and again on the conference call. suffice it to say as a veteran of these wars from my other job on the street.com what matters is organic growth. and yahoo's ceo, marissa mayer is making the right call on this one. but the analyst community
disaxwreez with me and for the moment they may be the victors in this debate while mayer and i are the losers. intel. here's the company that's the best manufacturer in the industry. andy grove the former ceo might argue the company is the best manufacturer in any industry. they're spending a fortune on capital goods and not getting the bang on the buck they used to. the dead horse here is whether intel is spending too much on its future without a payoff. i thought when the company decided to cut its capital expenditures plan by a billion down to 12 billion it would eliminate the dead horse factor, but the opposite occurred and the analyst community was just not appeased. given that intel's spending three times what it used to on equipment, even as its sales dropped, to a rate last seen four years ago. it was a harsh part of the dialogue. if you run the company, dead horses are the bane of your existence. they simply destroy the narrative management is trying to deliver. in the case of johnson & johnson it didn't matter. the company was so poorly managed under ceo alex gorseky's predecessor the much lionize the william wheldon for heaven knows what reason there's nothing but
net going forward. but their management didn't get the better of the analysts. despite beating expectations in a big way their stock did not react as they hoped. for yahoo and intel they didn't beat the dead horse. the dead horse beat them. at least for now. stick with cramer. it's as simple as this.
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at duck after the bell sandisk a roller coaster but i think the number's pretty good. ebay also a roller coaster. i also think the number's pretty good. and i think people selling those stocks, they could be misdirected. i like to say there's always a bull market somewhere, i promise to . >> evening. i'm larry kudlow. this is the kudlow report. cnbc's sue herera joins me tonight on the set for our special coverage of today's events in boston, washington and wall street. let's start -- >> with a live report from scott cohn in boston. he has the latest on the bombing investigation. good evening, scott. >> good evening. a news briefing originally thought to happen this afternoon
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