tv Mad Money CNBC July 2, 2013 6:00pm-7:01pm EDT
abercrombie & fitch. >> hewlett packard. >> no fast. we will be back here on friday at 5:00 as normal. don't go anywhere. mad money with jim cramer 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. 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 trying to save you a little money. my job is not only to entertain you, but to educate you. call me at 1-800-743-cnbc. so what do you do with the seemingly terminal situations? oh, you know what i'm talking about. sounds like nokia, blackberry,
groupon, zynga. what do you do if you're attracted to them because they're trading in the single digits or because you use the products around like them? what a downer kind of day, when the stock market with the cairo on its mind, the climb before recovering near the end of the day with the dow fouling 43 points, a little 0.5%, don't you think it's worst asking to take a shot at these beaten up stocks just in case there's something there. >> hallelujah. >> first it's important to keep an open mind. we learned that with groupon. a company that i despised from the get-go because it had way too much hype versus the business model. i told people to jettison the stock because i didn't like the management of the coupon company. at the end of february, the ceo, andrew mason, whom i didn't care
for gaot cashier and he was replaced. did i didn't know koskie from adam. but ted leansus he was someone i had dealings with. that guy i thought of ted -- ted was -- if there's a word for him, that word is money! and frankly, i didn't care one bit what groupon was doing with mason at the helm. who cared. so when mason got the boot, i said it was time to stop selling the stock because it had some bucks in the account. more than a billion dollars to be exact. it had ted running the joint. what the heck? there's no way ted would lend his name for a total joke. he wouldn't do that if he thought it would go under. why not walk away? groupon has been cleaning up the act and now it's got a restaurant reservation system
and a high-end business to speak of that actually might make sense. i don't know if we can take on open -- the primary entry, we heavy had them on tv a bunch of times, but he wouldn't attempt to do something he thought he could get beat in. that's not his style. that's what you learn when you're been at it as long as i have. my biggest mistake? i only said stop selling groupon. don't buy. i didn't tell you to buy buy buy as the stock has doubled since then. today, andrew mason unveiled an album. it's called hardly working which to me sounds down right autobiographical. i like that irony. that switch told you it was time to buy! which leads me to zynga. last time we learned that the former head of microsoft's entertainment division is taking over the troubled gaming company from mark pincus, who couldn't
lead. hey, by the way, how clued was he in? i did trounce him a couple of times at words with friends, although in a degree of candor, my daughter was actually running the game. she's a facile anonymous, she was at the controls there. anyway, that's how i won. when we dissected it on "squawk on the street" this morning, my colleague gave it favor. asked if it was too early to buy zynga. see, that's been a long-running joke with me. too early to buy zynga. well i said no, it was time. i thought he'd fall out of his chair, but the new ceo is at the top of the game. microsoft's entertainment division is a huge success and the only reason you don't know that is that because the rest of microsoft is so darn that even 40 million subscribers to xbox, that's more than netflix has, gets lost in the shuffle of windows. again, zynga has had all sorts of problems. it's hardly not broke. nice cash.
more important, even though it's up 6.51% today off the news, matt rick who developed need for speed and the simms before he grew xbox based to almost 7,500 consoles it's insanely positive. don mattrick as the ceo is a spectacular coup for the company and mark pincus. this is great for the future prospects of zynga. do you know who said that? none other than jeffrey katzenberg, who happens to be the ceo of dreamworks animation. that's amazing, katzenberg he's money. he's one tough guy too. how about this one. as a founder i know from experience that the right successors to accelerate the growth of the company and the strong record demonstrates he can balance big-picture vision. that's a quote from reed hoffman, another one of my heroes. what's the cofounder of linked
in who is on zynga's board of directors. hey, if zynga were the ship of fools or the "titanic" of gaming, believe me they wouldn't be making the effusive comments. they could be cutting and running, and do you know why? they have way too much to lose. zynga has the dam figured out, plus no one told you this. but a couple of weeks ago, they bought spooky cool apps founded by joe canacow. i think online casino style gambling has a huge following. i know others -- i don't bet. i know others will love to get in any game that has a real casino feel, preferably of course without the smoking. zynga, it's not too late to buy and the way the insiders talked about they'd be fools not to buy more stock. so i'm saying zynga is okay to
buy. how about nokia? i don't know. i doubt initially even as microsoft ceo carries around the nokia phone with microsoft's operating system. talk about a solo endeavor. this week, nokia bought out the stake for $2.2 billion. so much for that obstacle. i imagine how cool they could be when they merge with microsoft. the downside is limited. i count myself as no long ear seller. i like the speculative situation. too much smoke has to be some fire. last but not least what about blackberry? i don't like the idea there could be some views about how they were doing ahead of the quarter announced last week. that means management didn't have control of the situation. or it wouldn't have let expect anxiouses get this far out of the hand.
i have to tell you, thurston hines is a nice guy. he's a nice guy. but i don't know if that's what i'm really looking at to run blackberry these days. maybe we need to someone to come in and break it up in easy to swallow parts and say, you know what, ten bucks, i'll take 50. like an auction. 15, sold to you. here's the bottom line. after the missed opportunity with groupon, zynga is under the new management, nokia is on a good call option and as for blackberry, call me when it finds a don mattrick or ted or maybe even a meg whitman. she turned around hewlett-packard. you'll find me recommending that one too. how about brad in california? >> caller: dodger blue greens from beautiful so cal. >> a pleeg of his own. >> caller: that's a good one. yep. we're lucky. okay. i wanted to ask you about standard pacific. i know with the recent run-up with the down turn a couple ten
trading days or so ago. it's come back to earth. >> i think this is -- i used to say when i was at my trading desk it's it's not a place. there will be a moment out in time when this stock is going to be a buy. that's going to be the next quarter. you have to wait for the next quarter before you can pull the trigger on this stock. because people don't believe anymore in the housing recovery. i do. but you'll mark time to go down until the next quarter. and i need to go to ross in maryland. ross? >> caller: hi, jim. i'm the first-time caller. i regularly watch your show and i listen to your advice. i apply it to my objectives. and that has -- approach has really worked for me. thank you very much. back in november of 2009, you commented on and recommended bte, it more than doubled by december of 2011. it was up in the 50s. and now it's back in the -- around the mid 30s. what do you think?
>> i decided to pull all my recommend eight about the canadian trust about a year ago. i just feel they're too hard and too many accounting issues and i don't want to get our viewers involved in the situation where when they buy, they have to go to their accountant. so i am not a follower of baytex even. i think i'm offering individual advice on canadian equities and i can't do that because they all have tax issues. let's go to gerald in south carolina. gerald? >> caller: hi, jim. big fan. can't wait for your next book. >> thank you very much. >> caller: i'm calling about pandora. yesterday morgan stanley upgr e upgraded it to overweight to online. some analysts are making the case that pandora could be the next netflix given the extent of its content consumption. i wanted to know what you think about this. >> i think the stock's had a big run. i think the stock got hit in a
lot of short selling when apple said they were coming after them and now it's had a big run in the 19. i think you have to wait for a pull back because someone is going to downgrade the stock and you'll get a better chance to enter it. i hear you. the netflix comparison doesn't seem that wrong given the subscriber growth to pandora. sometimes you have to check the pulse of the flat line stock. it's inspired me to look at zynga which i now like. that's big change for me. i don't really care for blackberry and nokia, i'm calling it an honest to goodness call option that's worth buying. "mad money" will be right back. >> coming up -- cereal killer. from fruit loops to frosted flake, they have helped to beat the market this year. tonight, cramer's pouring over the details to find out if it could continue to go -- >> snap, crackle, pop. >> or if it will spoil when he heads off the charts. and later, stock car. the market may move fast.
but tonight, we've got something a little quicker. what do all those logos on the cars say about the speed of the recovery? cramer's one-on-one with the man behind the wheel of nascar. plus, time to clock in? half a million businesses across the country relay on paychex to get wages to their workers. but can this payroll player help your portfolio bring home the bacon? cramer gets the real read on jobs in america and takes the pulse of the economy when he talks to its ceo. all coming up on "mad money." don't miss a second of "mad money." follow @jim cramer on twitter. have a question? tweet cramer, #mad tweets. send jim an e-mail to firstname.lastname@example.org or give us a call at 1-800-743-cnbc.
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after the massive dropping over the course of may in the first two weeks of june, a rebound started last week and may have ended with today's hideous reversal. the wall street fashion show has clearly entered a new season. there's a reason i like to use that analogy. the bond market equivalent stocks were very much a stop. and interest rates began to rise in may and thin the group went out of style. meanwhile, the industrials and the banks in the old-school tech stocks are in vogue. but what about the supposedly secure, consistent defensive stocks? where for example do the food companies now fit in on the runway at the moment? tonight we're going off the charts to answer that question. with the help of tim collins, a brilliant technician and my colleague at realmoney.com, the paid sister street. some of the packaged names can still rally.
and despite the fact that this group has already come up enormously since the beginning of the year. and the main driver of that rally -- people reaching for yield. it pretty much evaporated into thin air when rates skyrocketed. that's right. some of the higher quality food names can roar here, starting with kellogg. the company behind kellogg's, apple jacks, cocoa crispies, special k, eggo waffles and my favorite, cheese-its and famous amos, many other brands. look at the daily chart. even though the stock has had a tremendous run this year as you can see. i mean, look at this. nice, huh? that's up 17% since the beginning of 2013. collins think the rally might not be overment he's the only guy who i know feels that way. he feels like the next leg of the stock moves could begin right here, right now. i mean, like storm. maybe even already. the reason, there's a key crossover happening. in the moving averages.
specifically, kellogg's 13-day, okay, that's in green. moving average, very short term measure of the stock's trajectory has crossed over the moving average. that's right there. okay? that's measure of the medium term measure. medium term measure. the 34-day. when the shorter 13 day moving average goes above the longer term 34 day one, then take this like colin, that's about as close as it gets to the chart flashing buy buy buy. then it becomes a sell. on this chart the 13-day is in green and 34 day is in red. while it's a small dot, i'm referring to just a very little thing that's now obscured by the arrowhead. you might be able to see that the green has indeed crossed over the red. buy buy buy. now, this crossover happened yesterday and the 13-day moving average remained above the 34-day which is a big deal obviously. collins wants to wait one more day to make sure that the crossover holds before he gets super bullish.
hey, who can blame him? in late may, these gave you a false buy. that was a false buy right there. yeah, it was a false bullish crossover. it only lasted for two days before it was followed by a bearish one. he wants to wait for three days. main three will get us there. well, the trouble with kellogg's, he urges you not to overthink things. kellogg has been caught in the descending triangle pattern with support, and it's the resistance at 65. kellogg broke out above the $65 resistance level and that's a big deal. he sees only one more ceiling left for the stock and because clear sky, wow. he thinks it will go much higher. that's the high of $66.38. that's less than a point above where kelloggs is trading right now. in short, this is the chart of a stock that's breaking out. and after today's move, collins thinks it's safe to put on half
your position if you're looking to buy. so now he's won you over hopefully. if you want to buy a hundred kellogg, buy 50 tomorrow. this pictograph might give you a pause from last august through this past april. talk about straight line. however, collins points out it's occurred here. given that it was trading sideways and you see the flag, you know? i mean it's july 4. kind of an analogy. the stock has been consolidating the gains and collins thinks that can be a positive. look at the top of the chart. this is an important momentum indicator that's what you need to know. during the whole period of consolidation, mr. kasix had pulled back and it's begun to rise again. see this slight inflection? you know that is? a sign that kellogg is gaining momentum. based on the daily chart, collins remember he said $70.50 over the next four to six weeks,
8% gain. not bad for a slow grower. and basically weekly chart he thinks it will go to $77 by year end. now a gain of 18% on top of the 17%. that's stupendous. considering the low risk that kellogg engenders given the production line. all the brands i mentioned to you, they don't fluctuate with the economy. hasn't kellogg's come up too far too fast? it can keep rallying now that it's no longer in style at the wall street fashion show? well, collins has answers to those objections too. now look at the kellogg's performance relative to the s&p 500. hey, you know what, kellogg's has actually underperformed the s&p 500. so much for the ballyhoo that it's straight up. we're starting to see an aggressive accumulation of stock. this is the line. then it's gone on here, the seller, buyers, now it's just buyers. there's one last important thing happening. it looks to collins like kellogg's is about to break out of a down trend, relative to the
s&p 500. the overall market thinks they can dramatically outperform the key benchmark. it's not just kellogg. collins is looking at another iconic food name that everyone is pretty much jumping on about. he's looking at jm smucker, the maker of jellies and jam along with jif peanut butter and folger's coffee. this is a company that's been a rocket ship. check out the daily chart. you can see the stock is heading up for the exact same move. honestly, if i held this like this, you might have thought it was kellogg's. at the moment, smucker's 13-day and 34 day are edging higher and when that occurs, you get this green dot right there which could be tomorrow, that's going to bring it up momentum to bring it up past the stock ceiling
resistan resistance. if than has then collins believes that smuckers will make a bee line for 110. i want that gain. plus, the weekly charts is similar to kellogg's. this is really interesting. it's the exact same pattern. ride a monster rally from last august, okay, then this past april followed by three months consolidation. there's that flag pattern again. the stock could be ready to resume the run. he thinks the next stock coup 118, 13% of where it is. these are food stocks for heaven's sakes. here's the bottom line. the food stocks may be no longer red hot when it comes to the fashion show, but based on the interpretations of the charts both kellogg and smucker, two that no one expects much of right now, they could be ready to roar. this is an extremely controversial view, people. because the market will be down right shocked if you got a big upside move from kellogg's and smucker. me, i wouldn't be surprised if collins is right. given how predictable his prognostications have been when
he came to me and suggested this and i laughed. then i dug into the charts. i think he's going to be right. jeff in illinois, please. >> caller: boo-yah, cramer. just looking for your opinion on campbell's? >> they have similar charts to the others but not the consistent growth, so therefore, i say no to campbell's versus the other ones in your supermarket. vincent in virginia. >> caller: boo-yah, jim. i know you jersey boys like your dunkin' donuts and what do you think about jim horton's? anything to know investing in a company based in canada? >> nothing proprietary. the thing wow need to know we are in a doughnut bull market, which includes horton's and dunkin' donuts. do you know what's held up the best in the sell-off?
krispy kreme. it goes to 25. barbara in my old home state of pennsylvania. >> caller: yes, a fan. i want to know about texas road house. >> it's putting up good number. it's a buy. i think noodles has gotten oout of control. i like the situation there at texas road house. i like bloomin'. those are two hot stocks. wa wall street has moved into a new season, but tim collins thinks the package foods can rally. focus on smuckers and kellogg. he said they're going up very big, very fast. after the break, i'll try to make you more money. coming up -- stock car. the market may move fast. but tonight, we've got something a little quicker. what do all those logos on the cars say about the speed of the recovery? cramer's one-on-one with the man behind the wheel of nascar. next. [ male announcer ] this store knows how to handle a saturday crowd.
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>> time to talk nascar. no, this is not a deviation from our mission of helping you try to make money in public traded companies here on "mad money." sometimes as is the case with nascar you have a privately held firm that's so well connected, so culturally relevant that it's more than worth our attention. nascar is the second biggest sport in america, behind only the nfl in terms of popularity and television ratings. you may not realize this, but nascar outperformed the nba playoffs in terms of ratings this year. naturally, stock car racing is at the forefront of innovation in the auto industry and nascar is the king of branding. you go to one of the races and it's a sea of logos. as of now, there are 117 fortune 500 companies invest in the this sport. so let's talk to brian france, the chairman and ceo of nascar. mr. france, welcome to "mad money." >> thank you. >> i don't know if many people would have the pulse of this many americans as you do.
you get to see the spending on merchandise, you get to see the spending of companies. is this a sign your numbers that america is doing better not just nascar? >> i think so. i think it's still cautious out there. companies as you see the 3m and many others that we do business with, one in four fortune 500 companies they're more cautious now though. but they're starting to understand that the economy is what it is. and they're making bets and we're very happy that they're making bets with us. >> given the fact that your ratings are way up, would someone who came in 3m on the hood, would they have been able to benefit from the fact they got in before ratings were up and it happens to be that, wow, it was a bonanza? because does this cost as much as it used to? >> it does. but we're delivering more robust rights with each deal. and ratings are going to go up and down, based on match-ups and interest, story lines and so on. and they look at things over a long period of time. 3m has been with us over a decade. so they know that ratings are
going to be ratings, but the value's always there, because they get to brand right into the playing field. that's the most unique thing in sports. >> one of the advertisers you picked up is sherwin williams. he was a housing resurgence in the company. did they come to you? >> i think a little bit of that and they're seeing our fans are their customers and that it makes sense. then they like the national footprint that nascar is able to give them. >> one of the things that's changed i think for nascar is that your demographic has changed. it looks more like america in 2013 than -- certainly more than you certainly -- than it used to be. what does that do for the advertisers? >> well, it's good. we're zeroed in on the hispanic demographic, we're up 20% in that market alone. doing great things with mexico. carlos slim has been a big help to us, to attack that market. and it makes sense because these are family people.
they love auto racing and we ought to be attracting more and more hispanics. and african-americans and we are. >> okay. here's a tough one. a lot of the athletes, big-name athletes, nfl, we read about them doing some terrible things. now, i know that there's the vast majority are good. baseball, some guys doing terrible things. your reputation is one that guys are willing to put m&m's on their jackets. goodyear, toyota. people are willing to affiliate with your guys because they don't seem to get in trouble. >> you're right. they're not just a sponsor in the stadium somewhere. you know, they're on the cars. they're on the uniforms of the drivers. so that comes with a different set of standards, and fortunately most of the time our drivers try to meet. >> now, women. one of the things that -- a lot of friends at espn. one of the things they were saying is you would not believe the amount of participation in
women watching. you have had a big jump. >> well, danica patrick has been a big help. >> it's exciting. hey, listen, the pole thing is very cool. >> and we're gender neutral. about 40% of the fan base is females. a lot of families come to the events. they make a vacation around it. it's not uncommon to see kids, you know, mom and dad, everybody coming to a nascar race. >> now, that again would be in keeping with what we have been saying is that there are certain vacations that have really come to fore. theme park. so i have been recommending cedar fair and six flags. nascar fits into the depiction of that not that expensive
vacation that a family can go to. >> that's part of it. we have events all over the country, we don't have hometown teams per se. >> right. >> so people do make vacations out of it. our biggest state is an example for the daytona 500. pennsylvania, ticket base customer. wouldn't think that, but it is. >> i didn't know that. >> one of the things we learned, they have a lot of different things that came about that in technology that we ultimately are able to use in the regular way. what are we learning from nascar that we're going to be using in our regular life? in our regular car, in our homes? what is the technological innovations that you're showing? >> a lot of things. we have some of the best innovation companies,3m is one of them. cafe standards they're using so much technology now and into the future. >> do you make the cars safer with things you've learned? >> i think so. we have safer barriers that we have developed. we have got a track-drying system that cuts the drying time of an event down by 80%. >> that's amazing. >> that's good on roads or bridges or a tennis tournament
or two. >> next contract you can ask for more money? >> we'll try. that what's we'll do. those discussions are going on now. >> terrific. that's brian france, chairman and ceo of nascar, which is doing fabulously and is certainly attracting some of my favorite companies to advertise. thank you so much, sir. good to talk to you. stay with "mad money." ♪ ♪ unh ♪ ♪ hey! ♪ ♪ let's go! ♪ [ male announcer ] you can choose to blend in.
"lightning round" is sponsored by t.d. ameritrade. >> it is time, it is time for the "lightning round." buy buy buy, sell sell sell. and then "lightning round" is over. are you ready? "lightning round," why don't we start with charlie in illinois. charlie? >> caller: hey, jim. hey, listen, i know you get a lot of kudos and thank you all for what you do for us. i want to say your phone staff is some of the nicest and most
polite people i have come across. so a big boo-yah to them. >> absolutely. they do a great job. every single day. that's not an easy job. thank you. i'll pass it on. how can i help? >> caller: health care solutions, mdrx ticker symbol. >> been doing well since the new management. but the new management is the best of all scripts. i think it's okay. charlie in florida? >> caller: yes. wft. >> i have never been a big fan of weather ford, because they have had some accounting irregulariti irregularities. i did like the company but they're -- they're being examined in informal inquiry by the s.e.c. on the accounting methods and accounting irregularities equals sell. i think the stock is very cheap. had to sell some for the charitable trust. let's hope it's cleared up. but that's the truth.
accounting irregularities, sell. let's go to yosha in new york. >> caller: yes, doctor, i'd like your prognosis for x-1. >> 3-d printing is a very, very competitive business right now. so i'm not going to recommend it. i see the stock is a rocket ship. i don't want rocket ships right now. i have too many problems. jim? >> caller: yes, this is jim o'donnell. how are you, mr. cramer. >> i'm fine. how about you? >> caller: i'm fine. my concern is with bank of america stock. >> bank of america. if you like it, you will love wells fargo which is what i have for my trust. wells fargo goes much higher. emily in rhode island? >> caller: boo-yah. i had a question about linked in. >> a lot of people feel like that that last quarter was not that good.
i think they're doing some spending in order to dominate the category. buy buy buy. i think it's an opportunity to buy. i think it's well-run company. let's go to david in maryland. david? >> caller: hello? >> you're up. >> caller: all right. >> go ahead. how about a stock, dave? >> caller: hello. >> go ahead, dave. >> caller: i'm calling about amd. >> i saw it was down for first time today. you know what buy buy buy buy? this stock is inexpensive. got a bunch of gaming consoles in the next quarter. i think that amd can go to five, and therefore own it. jim in illinois? >> caller: jim, enjoy the show very much. >> thank you. >> caller: sir, i was wondering about navistar. >> navistar is one of the situation, sure, maybe they get it together, but then cummings goes to 120. the reason you buy cummings is because of problems at navistar and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by t.d. ameritrade.
coming up -- time to clock in? half a million businesses across the country rely on paychex to get wages to the workers. but can this payroll player help your portfolio bring home the bacon? cramer gets the real read on jobs in america and takes the pulse of the economy when he talks to its ceo. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases.
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the most important piece of data coming out this week by far is the labor department's june nonfarm payroll numbers on friday. if you want to get the jump on the monthly employment report it's always worth talking to paychex. the payroll processing company with the focus on small business. now paychex just reported last wednesday. numbers, people thought they were a bit lighter, well, let's just say they earned 34 cents. like a 3 cent miss on revenues that were a tad light. up 6% year over year. the most important metric is paychex payroll which increased by 1%, a sign that the clients didn't add that many new workers. on the other hand, there's an interest rate component too.
paychex gets paid, then it sends out a bunch of checks to the employees of the clients, and then they get to collect the interest on the money. when the interest rates begin to rise, something that could take a while, the earnings will get a boost and they're paying you with a 3.5% yield while you're waiting. so let's check in with marty mucci, to learn more about how his company is doing as well as the employment situation here in america. welcome back to "mad money." >> jim, thanks for having me. good to be here. >> i have to tell you, on the one hand, i listen to the fed the fed is saying, look, things are getting better. we have to be really worried about low interest rates. then i look at what's going on in the country which is what you had, the empirical data that you have and it's not just -- it's just not happening. >> i think it's the 13 consecutive quarter that the paychex are up. it seemed to drop off a little
bit in the fourth quarter for us. that fiscal quarter. and, you know, one quarter doesn't make a trend so let's see what happens in the first quarter. we're still hopeful that it w l will -- it will bounce back a little bit. >> well, i think you're modest. you said you didn't bounce back for us. it didn't bounce back for anybody. i mean, you're taking your fair share. it seems like the business creation environment, it's just as if no one wants to start a new business. >> well, i think, you know, you have made many points over the last few days. i think regulations hurt. i think there's health care reform that's starting to scare new business start-up. there's other regulations and taxes and changes going on that do scare you. temp hiring is up. you can see that. so i think people are cautiously moving forward. i'm pleased with housing, you have talked about it, prices are up, inventory's down. as new houses build a lot of jobs come around the housing for us. >> it seems, marty, there's so much on the cusp here. you talk about what your company
can do if you're going to start a business, you want paychex's advice on the health care. you want -- >> right. >> you want paychex advice on the defense of marriage strike down by the supreme court. maybe these are things that say, you know what, i don't want to start a business. who knows what kind of rights you have to give people. who knows what kind of benefits you have to give people and maybe it's better to wait and see. could that be what's happening? >> well, i think you're exactly right. i think there's just so many things going on that new entrepreneurs or businesses, you know, we also see businesses not starting that second business, opening up the second pizza parlor or the second office. you know, i think they're just being cautious at this point. particularly with health care reform. now, we feel good. i think it's real opportunity as you have said for companies like paychex because we have products that we're rolling out in september, october time frame when this really heats up to help them to decide what to do, when to do it and try to make it easier to help their employees.
>> in a piece put out by credit suisse, one of the negatives they said rate pressure in the insurance business arising from the affordable care act will impact 2014. they're calling it more of a near term head wind for paychex. that didn't seem right to me, but maybe it's right to you. >> no. i think what's confusing there is the rates from carrier -- the commission that we earn will drop a little bit. however, the opportunity is much larger on the other side of that for clients who want insurance. our insurance agency, the paychex insurance agency hit $100 million in annual revenue and well over 100,000 clients. we are feeling good about the opportunity. yes, carier commissions will come down a little bit. but that's well off set by the opportunity in front of us. >> that's important because there was some confusion in the research. i think a lot of people felt because the two -- the five-year had a little bit of inflection and the ten year went up big in
yield. somehow that would affect you, but you guys are way too conservative. you're not putting the float in the ten-year, right? >> well, the portfolio is split. on average $4 billion out there. it's split between short term and long term. so the short term when they start going up every 25 basis points is worth $5 million to us in revenue. that's good. the long term, it takes longer because as they mature obviously then we start to see the impact of that. so that'll take a little longer for us to see. but to me, at this point it's all -- upside. >> yeah, i think that the analysts -- everyone got ahead of themselves. bernanke said it would get better, they all felt you'd be able to make more money on the new rates. i follow every word you say closely, these guys go at ahead of what you were saying. >> i think you're absolutely right. you know, the short term rates haven't gone up so that's where you're going to see it fast. and that's not happening yet. i think it's going to happen, but it hasn't happened yet.
the long-term just takes time. it takes time to turn around. but we're feeling good about it. but i think they got ahead of themselves. >> i think everyone has been reset and now is the time to buy some paychex. marty mucci, president and ceo of paychex, thank you for coming on the show. >> thanks for having me. >> i love it when they reset the expectations. all the in analysts ahead of what they're saying. now you get the stock cheaper. time to buy paychex. "mad money" is back after the break. stay connected to cramer on firstname.lastname@example.org.
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are you as tired of the parlor game about what's driving this market as i am? when i wake up these days i look at china to get my usual dose of disappointment. then i look at how horrible europe is and how the latest fed guessing games are going on and then i look at how stocks are doing. that's exactly what i'm told to do by everyone i listen to. and precisely that order, frankly. some people have told me all i have to do is to monitor japan. and others say that china is in charge, and if they implode, we're through. people's republic does seem to be a ticking time bomb, especially if they need to repatriate u.s. bonds. and then italy will get europe going again, which therefore means we'll see a turn here. but i keep thinking of new rules in offense. that's right. if you started the process by looking at the point of view from who has the best new restaurant chain or the best
growth in biotech, in other words, you would be more u.s. stockcentric. fortunately, i was able to see a valuable piece of property and you caught a 55% gain as it was up another four bucks today. i only recognized that because celgene is down the block from me. and also because my mom died of kidney cancer, personal insight that drew me to onyx's franchise which is a break through drug for kidney cancer. which has been a death sentence for many before this. and noodle, when it started trading it hasn't looked back. it's infuriating to me. i'm blaming the fact i missed this in the parlor game of international finance. there was too much going on, i was too worried about the ten year. i knew that noodles might be the hottest concept out there. you can't get into the joint. "new york times" say the hottest trend around is noodles. i know the noodle business seems still born but the concept is a
winning one. the ipo itself, hey, lost in the hand wringing over whether the fed was tightening or not. although my colleague herb greenberg does point out that noodles may not have the same store sales growth that the market is reporting. $8.73 run-up. this is a bad sign for a stock picker like me. you have to take advantage of the free money. lately it's been in the ipo market. the noodles deal, i always talk about this, when you have had it with stocks and ipos are being cancelled. you have to know what the chain is like and no one i talked to had even -- about -- well, everyone was focused on the fed and the obsession. no one was talking noodles. yeah, this was a real wake-up call to me. a real wake-up call to get the international focus, no matter what because that's where the money is. it does keep you from thinking about what moves the stocks
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