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tv   Mad Money  CNBC  August 5, 2015 6:00pm-7:01pm EDT

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international yield. just for a trade. it's been awful. >> guy. >> defense stocks have been parabolic. i don't think they're expensive. noc get you done. >> see you tomorrow for more "fast money." >> my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain you, but to educate you and put in perspective so call me at 1-800-743-cnbc or tweet me me @jimcramer. behaviors change. people do things differently from the past. younger individual millennials have different habits from us at least from me. sometimes the government can
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just plain out mandate change. all of these things play a role including on days like today when the dow slid 10 points and the s&p climbed 1.3% and the nasdaq gained .67%. [ applause ] some change is glacial and therefore uninvestable, but other types of change are swift. and those are the ones you need to find so you can buy their stocks on. >> buy, buy, buy! >> with abandon. i love behavior change investing. it could be incredibly lucrative and when you have a behavior change theme you can use sell-offs to buy stocks at discount prices that are based on those changes as long as you don't think they're really fads. let's start with the obvious one for today, entertainment. how and what people consume and where and when they do it. today the stocks of traditional entertainment companies like disney, time warner 21st century fox, via com, cbs and discovery got annihilated. [ shots fired ]
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>> i don't have much more to say about disney later, but suffice it to say now that disney raised questions in the conference call with bob iger with david and carl raised questions about how people are consuming television even the most precious and least time-shifted category sports that it freaked everyone out. the thesis people want to watch what they want and when they want to. on the device of their choice and they want to pay less for it than they're currently doing. it's possible that this theme eludes many of the older people out there because they're set in their ways however, younger people including those who are just now engaging in household formation seem to be avoiding a cable hookup the same way that they shooed hard-line telephones not that long ago. instead they're spending more time watching netflix and that's become the de facto television station for the world. a lot of people have been baffled about how netflix already up 150% for the year can keep climbing especially now that it's worth more than cbs and via com combined as they used to be. at $52 billion netflix is worth
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almost as much as time warner especially after today's action when the stock fell 8% dropping to a $65 billion valuation. as a long time supporter of netflix i say why shouldn't it be? i get to watch fantastic, original programming a heck of a lot more for $9 a month. i scrutinize my cable bill and it's more than ten times that. netflix won't be finished running until it's more than $100 million, and no it won't go there on a straight line but it is on the cusp of taking asia by storm and they like bargains in asia as much as everyone else. netflix is on the conference of two huge trends the new frugality and time shifting and it's galloping to the levels where it belongs and it's not just netflix that people watch. they watch the bargain that is youtube buried in the closets of google, but it is starting to be broken out by the chief financial officer. that will be a monster unleashed. google's stock has gotten very hot. they watch free facebook like they used to watch television.
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they park themselves in front of it and stare at it all of the time. remember just last week i blessed everyone to be a total idiot and it was down $82. >> this was an amazing quarter. i'm urging people to just go sell it. go sell it! just go be an idiot and sell it. sell it to 89 because the first amendment allows everyone to do things that are incredibly stupid and that was one of the founding fathers' major principle. >> i studied constitution at harvard law. i know this. i wonder how many of these well-intentioned fools are buying it back at $94.88. it's true. go listen to the activision blizzard call or the electronic arts call. i think people that do nothing, but play video games. i'm watching and how about take two interactive. that's going higher. remember just because you don't play doesn't mean the younger generation grows out. the other day ea reported a number that was weaker on the surface and with big themes like this you have to give it the benefit of the doubt. i bought one of the many call of
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duties recently for a kid i know. maybe it's calls of duty. i should have just bought the stock. activision roared to nearly 12% today oh and they like to shop amazon prime with the free shipping option and something was supposed to break their bank years ago. instead amazon is laughing all of the way to the bank and shopping where you want when you want is endemic and the boxes that i see in front of other people's doors and unfortunately, mine. so is priceline, the cheap way to book plane tickets and make reservations from pretty much everything and it sent the stock up $67 and expedia are both considered terrific bargains and they have excellent mobile offerings and capturing another theme that has no end and let's not forget that united parcel and fedex are part of the trend and when they can't figure out how to handle them profitably as fedex just did it could be lucrative. i like ups more than fedex here. how about the trend to stay fit,
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stay healthy and stay trim? underam our is more than 140 million people strong. it's remarkable and growing at 100,000 people a day. skechers is the number one athletic shoe in the country. nike where do you buy footwear? footlocker and all of those hit 52-week high. people at these thesis missed out on one of the great moves in the last move with chipotle. it's left most of the other restaurants in the dust except for zoe's. take a look at that one. that is kind of a mediterranean alternative to chipotle's mexican fare. they're getting this message and kellogg followed suit from general mills and announced it's taking artificial cereals. who even knew -- who knows what they'll taste like when they get rid of the taste. the days are numbered with these changes and young people know this stuff can't possibly be good for you. they looked it up on the web. same goes for drugstore chains
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and walgreen's and right aid, and cvs took yesterday. you know what? there are now symbols of wellness although it's hard to justify selling cigarettes at wellness stores and something only cvs seems to get. you see the article about how the big banks are lightening the restrictions on mortgages and homeowners didn't retain their value and they were in a bubble and now they're increasing in value and it's turning home ownership into a good investment again and not just a speculative one. when homeowners regard their homes as good investments and some of these companies have international exposure but that's not the case with home depot, and they don't like it as much and the broadway production that's restoration hardware and wayfairs and williams sonoma. it's one of the best offerings of any retailer i follow and the 52-week high. take solar, you would think that with oil plummeting you need to stay away from solar, but first solar rafrms gigantically today, and the government loves solar.
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you want no visibility though? here is a fuel that was declining a few percent a year. suddenly embedded by the onslaught by the epa. coal companies seem to be disappearing left and right. they were billion dollar multibillion-dollar companies just a couple of years ago and now they're delisted and i suspect it will happen to every coal company. sometimes it's know to know the ziet gieft of the moment to get the big gains and that's yet big bottom line is stay focused on themes like how people consume entertainment and travel advice and how frugal posted a great recession and they want to vest in their homes and stay fit, trim and healthy and don't forget to stay away from fossil fuels and go renewables while you're at it. larry in massachusetts, larry! >> a are holy cow, i'll see you there tonight boo-yah. not kidding. >> i'll have to come in from massachusetts on a saturday night after labor day, right? >> i'll stay open late tonight.
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i'll tend bar -- anyway, yes. absolutely. >> caller: for you anything. a little mad math question about humana. with etna reporting a blowout quarter last night and positive guidance and starting the antitrust process on the purchase of human a i calculate a total price to humana shareholders of about 228 and made up 7/8 of a share on etna plus 25. is my math completely wrong? and if not, is there a reason it's hovering in the 180s? >> yeah. there are a considerable group of people that believe this will be blocked by the government each though the ratios are mandated. we spoke to a cigna ceo on another rival deal and he was very confident, but i think the government is too much of a wild card and that's the difference larry. thanks for the nice word about bsm. let's go to himin in new jersey? >> hi, jim. how are you doing?
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>> doing well. kind of been up since 2:00, but what's up? >> caller: well let me tell you i'm a big fabn of you and your show. >> thank you. >> and i follow the stock market and i purchased the chinese behemoth baba last october for around $112 a stock and let me tell you, it's been a big disappointment since then and i'm almost 35% down, and i don't have any hold left in that stock. do you think i'm going to be able to even break even any time soon? >> on "mad money" we do not care where the stock has come from and we care where it's going. if you want to be there you want to be in yahoo. i don't like alibaba and that singles day was the top of the market and i got married. let's go to john in new jersey please. john? >> caller: hi, jim. how are you doing today? >> i'm doing okay. >> caller: i'm doing okay getting ready for football and fantasy. >> both fantasy and reality.
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i'll be in the huddle this friday. what's up? >> caller: what's up with ge? i've owned ge since 2009 when it came all of the way down to the mid-11. my thing when i bought it was buy it and forget it and keep it in the back pocket for the rest of my life portfolio kind of thing, however, i get antsy, and i follow you a lot and follow the show and follow everything with cnbc and i see after it split and after it spun off we have the 25 to 26 range, and it's just, you know one of those stocks. i just want your opinion on -- >> should i take some more? >> think ge is a hold and you have the good yield, 3.5% and they're getting out of finance. look, in the end if you have anything to do with oil and gas in this environment, people will find it and they will shoot it. [ shots fired ] >> and ge made acquisitions in oil and gas and like it or not, no one wants to touch anything oil and gas or get near it. all right. there's power in behavior change investing. i should talk about it more on
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the show and it could do you very good. stay focused on entertainment, frugality, housing, health and wellness and these are teams that work right now. much more "mad money" ahead including my exclusive behind the big breakup. r.r. donnelly has the potential to unlock value in the three-way split and give you a good dividend while you're waiting. is there trouble in the magic kingdom? disney's down nearly 10% today after revenue news but should you let it go in don't miss my take and it will dip from everybody else's. it's the heart of the troubled tech hardware space yet it soared 6% on a solid quarter. don't miss my exclusive with the ceo of abnet. stick with cramer! fitbit tesla and keurig all reporting after the close, but the stock that's got cramer's attention may surprise you. stick around to find out what he's watching on last minute mad. don't miss a second of "mad money." follow @jimcramer on twitter.
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have a question? tweet cramer #madtweets. send jim an email to or give us a call at 1-800-743-cnbc. miss something? head to
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♪ ♪ ♪ just yesterday we find out that rr donnelly and sons rrd, it's generally thought of as the world's top commercial printing company is breaking itself up in a move that makes a ton of sense. i've been a fan of this company for a long time because it's the most trusted name in preparing financial statements for publicly traded companies, but if you watched the show you know i love the idea that r.r. donnelly is splitting itself into three different companies that are easy to understand. one is a financial communications and data services company and there is a multi-channel communications management business that we will go into what all of these mean and the printing businesses for magazines and catalogs. one that's hard to get your head around. r.r. donnelly is breaking itself up into three companies by the end of 2016.
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i think this move could create a lot of value and r.r. donnelly created a solid quarter and off a 37-cent basis and excellent cash flow of growth although the demand softened with an organic revenue decline and let's take a closer look with tom quinlan and we'll learn more about what will happen with a pending breakup. mr. quinlan, welcome back to "mad money." hello, sir. have a seat. the dividend you save will be declared and don't worry for those who want income right? >> that is correct. we know how important a dividend is and as far as we can see for the next year we'll continue to recommend to the board 26 cents a share per quarter. >> i told people you have great cash flow. now you have three different divisions that i had always felt didn't make a lot of sense together, but you had made a compelling case in the multiple times you've been on that you like these levers, so why now? >> why now because custom dynamics are changing and the
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industry is changing and we have the scale. we have a position of strength with the acquisitions that we've done over the years and we wanted to be an integrated communications services provider and the acquisitions that we've done have gotten us there. we acquired consolidated graphics it helped the communications tower. we received courier, it helped the prs company. bound was aligned with financial and we have the technology and the scale and we have the people and the customers to go ahead and break them out. >> i think there are people who said, well wait a second. the organic growth isn't there so what they're doing is they're just breaking it up in order to mask whatever is the problem and that the margins aren't that good and that this is not a good time. so walk us through why maybe these businesses are troughing and you want to be in them. >> sure. we came out yesterday and we increased our margins guidance for the back half of the year. >> the top line is challenged and that's where we erred benefit and the customers are looking to take out cost. i would tell you that most of the earnings that came out this
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particular quarter i wouldn't say that many people had a really robust top-line growth and i don't think we're unusual for that and may consumer spending was .0% and june was flat and the perfect thing about them is we look to save our customer's money and improve their return and when you look at those businesses all three of them are leaders in their particular category. >> but also, i want you to explain to people two are secular growth companies and they're not cyclical companies and people want to hold on to all parts of these and publishing in the communications services and to me i would be saying it could be as much as double-digit growth. >> when you think about the work flow tools that we have and the content management tools that we have and the data archiving and the retrieval that we have. those companies that are out there doing that today, their multiple is probably two times what our multiple is as r.r.
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donnelly and by them being separated they'll be able to have that growth. regulatory issues are not going away and financial transactions aren't going away. when you think about the communications aspect and the supply chain for the fortune 1 1000 inefficient. as you think about that we're with the customers that are growing and we're with the customers doing acquisitions and they need to go ahead and find ways again for them to do it more efficiently. there are so many ways for companies to reach out to their customers. we want to be the ones that are doing that and we want to make it easy for them when they think about their communication piece. they just think of us and come to us to have them help them do that. >> what i try to do and do with all of the breakups is try to figure out enterprise value of the division. using the sales say for the publishing retail centric. i have 3.5 -- i have an enterprise value that i think of
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1.7 -- the finance, 2.2. the customized multi-channel i can get to 5.2 because of the growth. i can get to a 69% increase in value of the stock without doing anything other than measuring how other companies and these businesses are doing right now. >> no look the whole idea behind us doing this was to unlock the value. we think we're good now. we need to shrink in order to grow. >> right. >> and that's the reason why behind why we decided to go ahead right now. we're really from a position of strength as you think about financial, strategic and operational and john white had once told me when you want to do anything, any major change, make sure you do it by a position of strength. >> he's my old boss at goldman sachs. one last question. quad this is a rival publisher had really bad numbers today. is that the kind of company that if you got together with them you could make something more happen or are they just not a player and you're wiping them out? >> i don't comment on acquisitions or the category. my general counsel would not be
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happy with me but what i would tell you is look you need a willing buyer and a willing seller and we'd go from there. >> tom quinlan, president and ceo of r.r. donnelly who never tries to stop putting mono no your pocket. you are getting paid to wait while you do. "mad money" is back after the break. chaos in the magic kingdom? disney drops after earnings, citing subscriber losses and a new take on traditional tv but blockbuster's on deck and some of the biggest networks in the biz. can the company keep the magic going? cramer's weighing in next.
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disney being in the red significantly down about 7% this morning. >> shares getting hit after revenue missed estimates. >> the company lowered its outlook thanks to cutting and foreign exchange rates. >> the entire media complex is getting hit by disney. ♪ ♪ ♪ ♪ when you see disney's stock crater close to 10% like it did today, you have to be clinical and unemotional about the decline because this is not the stock of some ordinary company. it's the kind of stock that you're supposed to buy for your
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kids and then put away. you have to ask yourself has that narrative changed all of a sudden with one quarterly report? to figure out the multibillion question, you have to analyze not just disney's fundamentals but the stock itself. is the decline in overreaction to a minor miss in revenue or is disney starting to repeal the gigantic gains we've seen over the last 18 months and allow me to examine the earnings and the stock itself because it's being left out of the traditional analysis we've heard today. disney had been the best performer in the dow in 2014 the stock started a terrific quarter and all of the way to 122 where it traded before it reported last time. so i could easily argue that disney's stock which was trading at 25 times earnings after that giant move was simply priced for perfection and that's what happened today. when you have an expensive stock you can't afford to lose the essence of the market which is
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exactly what disney did even if it was by a small amount relative to the entire revenue base and that is a cause for concern and i'm not dismissing the decline. most stocks do get cheaper when they go lower and that rule applies to disney's stock, too. now let's deal with the fundamentals upon i can tell you that every single line-item of this disney quarter and there are many line-items from broadcasting cable, to theme park stutdio entertainment and consumer products we saw not better, but much better than expected numbers. for example, while the controversial media group which includes espn and the rest of the company put up 23% growth and that's pretty monumental for non-biotech and non-tech company that gives you a blended average of 17% which is still amazing. >> there's a ton that's good here. now let's deal with the elephant in the room .2. the disappointing cable numbers from the media group that were the a proximate cause.
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he said disney experienced, and i'm going to quote, some subscriber losser. when you hear subscriber you should think bundle, specifically the bundle that includes the espn stations that are so lucrative for disney. when you hear losses you can conclude that customers are not buying a product like they used to or they're just cutting the cord, both very bad for disney and all of cable which is why virtually every entertainment stock was down and down hard today in either guilt by association or just plain guilt. that's the issue i grilled iger on this morning when we interviewed him on "squawk on the street" and frankly, i'm not fully assuaged by his answer. >> the bundle is not going away. the bundle is actually still relatively strong when you look at it given all the competition that is in the marketplace, and you look at what percentage the bundle represents not just in terms of revenue, but in terms of how people watch television. it's still the dominant form of television viewing in the home. given that cable makes up
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46% of disney's operating income there's no doubt that any subscriber losses do matter. more important, disney had broadcasted cable operating income and revenue growth in the mid-to-high single digits not that long ago and it revised that forecast down and i'll quote from the conference call. christine mccarthy, the new cfo said and i quote again, due to the lower subscriber levels we expect domestic cable to fall a bit short of the previous expectations and it was still in the high single digit range. no real ref now of import and here comes the key paragraph, and i quote. we now expect the impact of foreign exchange rates and the cable operating income growth to mid-single digits in fiscal year 2013 and 2016. translation? here's mine. it's kind of off-the-cuff but how about we paid too much for very good sports programming and
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now we are aren't getting the subscribers we need for all that programming and still make a lot of money because they are aren't taking the bundle like they used to and that is why the stock got hammered and much of the q & a dealt with this very issue and showing me the analysts are really freaked out that espn's profits will be slashed because new households and millennials doernt take the bundle the way old households did. maybe they're watching espn on the web or maybe their cell phone and not paying the extra money to get the regular programming. maybe they don't want to pay for the extra espn stations that they don't really watch, but you have to take them with the bundle. without saying so the analyst his to be thinking that profit growth is slowing because espn has been cutting personnel costs and implicitly blessing the high-profile departures of keith ol behrman, colin howard and keith simmons. so is disney in trouble because of the cord cutting? it's difficult to tell.
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ceo bob iger was asked several times in the call by me to break down the operating income and disappointment came from the losses with the foreign exchange thing he threw in. he wouldn't say. given the run in the stock and the high-profile departures investors presume the worst and they're betting that subscriber losses are happening and that the change isn't glacial am any, why tighten the belt and let important, but expensive talent go unless the cost of the sports program has gotten too high versus the ability to monetize it over what could be ultimately a declining number of subscribers. all is not lost with television watching and iger predicted it would go from 5.5 hours, and that means advertisers should be thrilled with the ratings and espn is being helped with the burgeoning numbers from fantasy which do force you to watch the end of the game and the analysts came back again and again to the subscriber loss number and the
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shareholders ran scared because of them. these shareholders they would rather buy the perceived winner of cord cutting and netflix, and sell the stock of disney. look netflix -- including the star wars movie out later this year and the next frozen nemo toy stories, cars and of course pirates. still, the selling is not idle and judging by the frost it may not be over. at $132 it makes sense. here at 110, certainly not as much, not with all of the bad news now out and the good news still ahead. disney announced an increase in the monster buyback from $6 to $8 billion a year and not after it repealed the last good gain from the good quarter. in other words, i do not believe that the three damning words some subscriber losses merit selling disney.
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today was blast day, where emotions ran high and the sellers endured all of the good numbers and the anticipated positives. that's something the biggest buyer and the company itself absolutely won't do. i suspect that expanded buyback will begin immediately and you are at long last getting that break i've always been waiting for. the break in the stock that countsa the viable pullback. today i feel i stand a lobe saying the pullback can be bought. tomorrow, i think i can stand with the buyback and can offset the selling in a matter of weeks sore days. >> no i don't like what i heard espn. it's not ignoring it. the losses can be more than made up by rest of the company, something that the other companies in the industry like time warner 21st century fox, discovery and via com and cbs cannot possibly claim because they like the disney's diversity. here is my bottom line. yes, there are chinks in disney's armor and not enough to dissuade me that over the long
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term this stock remains a terrific buy and it will stay that way as long as ceo bob iger is at the helm. i can go to beverly in alabama, please? beverly. >> caller: hey, mr. cramer. i am such a big fan, and i watch you in the morning on squawk and in the evening with "mad money". >> can't get enough. what's up? >> my question is about hasbro. how much upside potential do you see for them based on their licensing deals with disney? >> i like hasbro very much. it's been a consistent player in the group. i think it's pulled back a nice five points from its high and it's got a good yield. i like your idea. i think hasbro is a buy. >> look. not everything is perfect in the house house, all right? how about that but its long-term story is still magical. when it comes to the recent decline maybe a little hakuna matata. my exclusive with the stock that soared 6% on the strong quarter. what does it is a about the rest of tech? i've got the ceo. then i told you there were two sides to every coin and today we saw the bright side of lower
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oil. oh, how i like the stocks that are shining off of that cheap crude and plus i'm taking your calls and electric fire in the lightning round. stick with cramer. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change.
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we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.
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i heard i could call angie's list if i needed work done around my house at a fair price. sure can. so i could get a faulty light switch fixed? yup! or make a backyard pizza oven? oh yeah. i can almost taste it now. tastes like victory. and pepperoni...
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something big happened today in the tech world and many of you may have missed it and i'm talking about avnet, the largest supermarket of technology on earth as well as a critical technology solutions company. avnet is the top distributor of top components including semiconductors and one of the largest suppliers of hardware software and services. needless to say these have been difficult squares of late with the market putting real pressure every aspect of tech. on top of that avnet only gets 40% of its sales from the
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americas, the vast majority come from overseas which means it's one of the biggest victims of the super freakin' strong dollar. it was a pretty tough year in 2015, avnet knowledge inned to deliver a strong warter. while the company sales came in a tad light they never let it decrease below 9% and 1.16 per share and wall street was only looking at $1.08 and avnet supplies components was a standout here and would have been 7.2% on the constant currency basis and that's really good. you would think it would be a tricky time for avnet and the stock roared 6% higher today. does that mean we finally baked in the negatives related to the strong dollar and the decline of the personal computer and suddenly it can turn around the computer. let's welcome in mr. hamada. welcome back to "mad money." >> thank you. a pleasure to be with you. >> i was reading this in conjunction with comments i was doing with the banking group in europe.
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i just said europe's gotten really good. i'm not saying europe is holding its own. to me, tell me i mean, europe's good, right? >> well i'll tell you what in our components business jim, the answer to that is yes and it's been an extended period of time. they've had solid up to single-digit growth rates for the last eight quarters. what happened in fq-15 for us is in the latter part of fy-15 we had the joint business join us and we had execution on both sides of the house and that performance was a contributor to the overall performance in q4. >> how did you have greater than 50 basis points. not many of the companies i deal with have been able to do that kind of improvement. >> jim it starts a lot of credit goes to the team for excellent execution and it's not just cost management. it's also managing the gross margin in addition to taking care of the decisions we need to make on where we have profitable engagements and where we don't. good portfolio management
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overall with the disciplined expense management and disciplined working capital management all adds up to a good equation for us. >> maybe you can help me with something ut broader than cell phones because that's not what we talk about wo you connected car and connected home. thesor fire, but the companies that are involved with them tend to also have some exposure to cell phones. is the internet and things big enough to offset what some think is a slowdown in cell phones? >> jim, i certainly do believe so. in fact we kind of concentrate so we think of it more as the industrial internet of things. >> okay, and the fact that all of these devices and all of these gadgets in our lives are now going to be connected and ultimately produce data which creates an analytics, as well and you have to secure the entire ecosystem because some of the data is proprietary and wants to be used for certain purposes some people ask me what
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inning are we in in this game? i still think there are early in and there's lots of opportunity to be creative out of force of change. >> i'm trying to relate how much i should say that avnet is an internet of things company because technology solutions, i don't know how much that plays in that world because you still have personal computer exposure. >> not too much pc exposure. a little bit of components for processors and htds, et cetera. i think of the internet of things in three buckets. i think of devices connectivity and the computing piece and the marking business. the known business has been in the internet of things for years. they're very focused on working with the engineers that are developing these devices and adding the connectivity and that's been going on for quite a while. the new piece of avnet bridging over to the great partnerships that we have with the resellers and integrators that are building their an lettics practices to go from device to analytics and as i said provides the security overall.
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that's really the new part of the opportunity for after net and will actually challenge avnet to bridge across the spectrum of resources in new and different ways. >> i'm glad you clarified it for the personal computer because there were some in the conference call and i was going to can whether it was troughing and it doesn't matter that much to you. last thing, m and a and we've been waiting and we've been waiting. i mean big m and a. any chance to see some targets out there? you're the last man standing in these cases. >> we have great cash flow to support the aspirations for profitable growth, jim. i got the question on our call today. i reiterated, we remain open for business on acquisitions and we'll be disciplined about our approach, just like we got with the disciplined and buyback program and we're actively interested in deploying this cash flow for the ebitda and we have to see the path to the sustained returns that we expect and commit to our shareholders. >> thank you rick and thank you
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for a good quarter from avnet. that's rick hamada ceo of avnet. "mad money" is back after the break.
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it is time -- it is time for the lightning round on on-- [ indiscernible ] play until we hear this sound, and the lightning round is over. are you ready, skee-daddy? we start with doug! >> caller: hey jim. boo-yah! >> boo-yah, doug. >> caller: i'm calling from the 12-time national wrestling championship city and 12 bowl games straight in a year. 12 years in a row, and all i want to know is if you can make me some mad money on nordic atlantic. >> that is actually making that dividend dividend. that's doing well and there is a lot of oil being shipped all over the world even though it seems oil is slowing down. i think you're fine. let's go to doug in arizona. doug! >> caller: yes, jim. my question is on chevron and conoco. i'm probably down about $50,000. i know the stock has been hit
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pretty hard and do you think they'll come back? >> oil has to test 43. it's at 45. it's got to hold 43 or there will be another step functioned out and that's what i've been saying on actionable orders plus.dom and buying a little bit and see what happens in 43 and that's where it bottomed before. if it doesn't hold it that conoco will go down each more and people will start thinking that that dividend is safe. let's go to pete in texas. pete! >> caller: yes, sir! a happy, hot boo-yah from sizzling big d. >> nice! >> caller: i need to know about boot barn holdings. >> we liked it and then it was boom. there was a seller that hurt it, but when i went through it i was going through it with some of my researchers and when this big piece trades this big piece of selling and then the stock will be a buy and this wasn't that bad of a quarter.
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>> let's go to pennsylvania please. dave! >> jim, my stock is cypress semiconductor. cy, buy, sell or hold? >> i want you to buy. it's a 4% yield and t.j. rogers is doing a terrific job and i don't want to sell the stock down here. no way. let's go to jane in kentucky jane! >> caller: hi, cramer. this is jane in louisville kentucky. thanks for taking my call. >> of course. >> caller: i purchased some sears stock in 2013 and it's continued to go down down down. the stockbroker says to hold it. i'm going to make money. what do you think? >> i don't see a lot of future there in sears. in the end i go by same-store sales and the same-store sales are miserable and that's the only metric i know how to measure things by. and that ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade. stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals,
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a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.
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mornings. wonderful, crazy mornings. we figure you probably don't have time to wait on hold. that's why at xfinity we're hard at work building new apps like this one that lets you choose a time for us to call you. so instead of waiting on hold, we'll call you when things are just as wonderful... [phone rings] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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here come the buyers right on schedule. taking up the stocks of any companies that smack of high growth or buy commodities by the bushel while the sellers keep taking down the price of anything even remotely mineral, mining or oil and gas related. taking down i should say slaughtering. earlier this week we had one of those market wide sells where every single stock seemed to go down because of the sudden decline in oil. at the time i made the point that there are two sides to every coin meaning the users of commodity should be going up and not down. it's their fuel. i said we're simply seeing the
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same emotional reaction we always get to a furious commodities decline at least initially and that is that the fed will tighten perhaps aggressively multiple times and we force him into a recession and that's what these stocks are telling you. forget the facts or how far-fetched this scenario might be, everyone has the right to do stupid things and we regularly see that behavior in the market at large. sure it is beyond painful if you own the oil stocks. >> the house of pain! >> today we got inventory numbers that showed a decline in crude and oil rallied hard until the dollar went higher which posted an advance and reversed the group hard. chesapeake said everything you didn't want to hear expanding production while losing fortune's doing so and
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all-american holy cow, the pipeline company slashed its outlook on lower crude and more competition, plus the president's waging a war on fossil fuels. he's winning. >>. ♪ hallelujah ♪ >> the market reacts rationally and not stupidly. their earnings will increase and though will the earnings that benefit from a more flush consumer because gasoline is going lower. today is a day when high growth stocks are lovered because they increase in value when inflation is subdued and the earnings we're expecting five years down the road are suddenly worth a lot more if you think inflation will be tame rather than raging. remember something like gold or even oil retains value when inflation takes off, but paper assets and that's what stocks really are only really retain their full value when inflation is suppressed as it is now. it's a subtle point, but i always have to try to make for you. so what goes higher. >> how about costco dollar tree and walmart and pure plays with more spending power because of this price at the pump? how about companies like pepsico, kellogg and the irrepresible clorox three straight days after good quarters there. they're packaging costing more than the goods they sell inside. these companies spend more time -- they spend more to ship
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cereal than to make cereal. the energy required to make package and ship clorox bleach far outweighs the cost of the foul smell and the stuff inside. on top of that low inflation means bioteches and why not go back to regeneron who just reported a fantastic quarter and it got a big drug approval and celgene is higher too. people want to own internet stocks with great growth for the same reason, and priceline just reported and said nothing, but good things and that's perfect. so are facebook google netflix, amazon and after a momentary cvs-related faux the shortfall, the buyers go right back to buy the drugstores and as i detailed earlier they buy anything gaming. it's off the strong projections from activision and blizzard which had gigantic monthly average user growth from the call of duty franchise. why not? fewer dollars at the gas pump. i need you to remember the other side of the coin action intraday when it's really happening
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because what happens is typical of day three after any extended commodity collapse and the bargains that weren't snapped up and i know it seems moronic that you have to wait for the snow to clear that was begging a few days ago, but fear is more powerful than common sense and that's how it always is with stocks, and sadly, for all of those who are trying to get rich carefully that's how it will always be. stick with cramer. it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.
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looking at the stock of fitbit trading down badly in after hours and this is a stock we liked at 28 and said it would get to be the same price as gopro at 50 and that was expensive. we'll speak to james park tomorrow on "squawk on the street." i want to find out yet marketing dollars went up so much and that's what i think is spooking people. speaking of spooking people if we get to below 43 on oil you will see another huge decline in these stocks. the numbers we're getting from the oil companies are almost all miserable, and the numbers keep coming down so i just want you to be understanding that the group isn't done. if it doesn't hold 43 -- whoosh! we'll get another decline including in the master limited partnerships. hey, just telling it like it is. i like to say there's always a bull market somewhere, and i promise to try to find it just for you right here on "mad money." i'm jim cramer and i will see you tomorrow!
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ale narrator) deep in the heart of texas two men carved a fortune from a harsh and unforgiving land: butch gilliam and rooster mcconaughey. butch and i have actually done it all. drilling oil wells... a cattle business... i'm 50/50 partners with one of the world's largest steel manufacturers. no one gave them a damn thing except the moxie to get off their ass and do something. and they did it. (narrator) now they're passing on their success by investing in others... we'd like to make a deal with you. (narrator) but only on their terms. let's get the damn party started! [dramatic music] (narrator) with the help of their friend and mentor gil prather... you can't go into a partnership with any bad feelings. (narrator) butch and rooster bring entrepreneurs from across the country


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