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tv   Mad Money  CNBC  May 5, 2017 6:00pm-7:01pm EDT

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our time has expired. thanks so much for watching. for more optionsing a, check out our website. in the meantime, have a great weekend. see you back here next friday. "mad money" with jim cramer starts right now. 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 some money. my job is not just to entertain, but to educate and tweet you. what the heck is it going to take to get this market really going. the house managed to pass an
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obamacare repeal yesterday. a very strong jobs number, with unemployment at an 11-year low. but the market meanders during the day. it just wasn't the huge upday that i think you could have expected given all that good news, bought rights now we're caught between those that think the economy isn't all that strong, as demonstrated by the weakness in the commodity complex versus retail sales. what could tip things in favor of the bulls? if the white house and congress can come together on some kind of tax reform, this market would roar if they would pass what our president describes as the biggest tax cut in history. although have you noticed he
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tends to you hyperbole? however the markets clearly skeptical of washington's ability to get things done, because otherwise the averages would have soared instead or just bide their time and go up at the end of the day. we're still in earnings season, which is now back to its garden hose status, instead of the fire hose numbers we have gotten used to. things start early, 6:00 a.m. on monday, when becky sits down with warren buffett as they talk about the world as oracle's buffet season. he sold a third of his stake in ibm. i wonder if that's all he has in store for us as far as the margins. it's always been a fools game to
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invest in stocks when becky sits down with buffet. i wonder what he'll say about coca-cola's new transition. wha what about the leadership at wells fargo. buffet's aura usually lasts about 24 hours, then it's back to business as usual. first we have newell branch, you might remember this as the old newell rubber maid. mi my travel trust has been pulling back a bit. if you're selling to target, for example, no matter how good your products are and newell's products are good. newell's products don't have any
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borders and if the company is still able to cut costs in its merger to jarden. it could be a reset quarter for newell. then again if there's enough innovation, there's climbing sales numbers. is it too soon to find out if jarden is still -- any newell pay too much given declining store traffic? as for international fragrances and fashions, you want to sell more products, you make it smell better and taste better. iff is a creative company that's been around forever, and by the way, it's been a good buy for everybody.
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cz disney has been a rocket ever since last quarter. in the last few days the street's gone bearish on disney, partly because of a highly visible espn. i like to look at the broader franchises, though, i'm not changing my mind about the stock. disney is a buy, given it's fabulous movie schedule. if you don't believe me, buy half before and buy half after, if you're thinking this is the right level. price line has got a similar business model to expedia. therefore the online travel will be just as big as price line. when it arrivings back up after some churning. the stock of electronic arts has a similar pattern.
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active vision blizzard -- finally there's last year darling, nvidia, earlier this week they presented a disappointing quarter. i think the company's business, whether it be gaming or data is very strong. i just don't know how weak the hands are of those that own the stock. i expect good things from nvidia, but not have everybody else. looking no further than f norwegian cruise lines. we also want to hear from mazor robotics, whi robotics,. mazor is in it's infancy, and we
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like any device that helps doctors perform back surgery with better outcomes. there are two others of import. whole foods, and snap. i think the challenge of whole foods is real and the desire to put the company in play is serious enough that its might be addressed head on and harshly by its ceo. what about snap? i think this has decent ad numbers, snap's setting itself up into the trade of the numbers, if it stays here it could go a little bit lower. thursday is retail day and i'm adopting the views of the
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analyst that came on today. remember the latter is less of a function of the ball than a function of the strip, it's reliable, it has a large di tend, buy back, all covered. i just don't know whether it be matter if the jcpenney has a stolen upside. i think this will be better, this goes up and you won't make any money. here's the bottom line, as the market fights the earning period, investors are waiting for the real story on taxes. but let me let you in on something. if you hear two words, boardser and tax, it could be a very long set of months before anything gets done. we're going to annmarie in new
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york. >> caller: thanks for taking my call on cinco de mayo. can you help me narrow down my price on chipotle? >> i want you to think resurgence, i want you to think after 18 months the company is back on track and it's doing a lot of good things, will it ever get back to where it was? i'm betting with the people at chipotle. >> caller: i'm wondering your view on callaway golf. >> it had a good quarterer and typically people get behind it on multiple days. i think it can run here. steve in florida. >> caller: here's a gator country boo-yah for you.
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>> i think you scooped everybody else with tim cook's reveal of all the domestic jobs apple is creating. i have a couple of quick questions for you. but first the stiing along at t podium. please don't quit your day job. seriously. turn it to the income side of our equity portfolios, my stock is w.p. carry, i dropped it a while back. i kicked up carrey when it was at a 52-week low. >> i think you're good on it. i think, you've obviously done more home work on this than i have done, if that's the ratio,
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then that will be fine. it was the ones that were retail and restaurant related. investors are of weight in washington. if anything happens the animal spirits could return. tonight i've got a steel cage death match. find out which companies could steel this standard. i may have left my heart in san francisco. i actually think i did. but i brought back some investing ideas. and cinco de mayo is here. i'm getting in the spirit when i go off the tape. so stick with cramer.
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the whole commodity complex has been beaten down lately. i want to talk about another sub sector that's really been struggling. the steel stocks. last week one of the most important players in the group u.s. steel reported a hideous quarter. and it's stock fell off a cliff. dropping from $31 down to $22 in one single session. that was just brutal. naturally the negative pin action took down the whole cohort, but not all steel makers are created equal. some are a lot more equal than others, when you look at the major american steel players, and you got to think ak steel, new corps, and the trouble with u.s. steele.
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what you see is a wide group of companies with the same character characteri characterist -- with have heard from all four major steel makers at this point and it's clear that the best of breed players are doing a lot better than the worst of breed ones, in other words new corps and steel dynamics seem to be in pretty good shape, they're both up for 2017, while u.s. steel and ak steel have been put through the meat grinder. how is that possible? i mean steel is steel, isn't it? well, it's a little more complicated than that. if you're going to get into the steel business, there are two ways to manufacture the stuff, ak steel and u.s. steel are what we call traditionals. they buy up iron ore and they turn it into steel.
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new corps and steel dynamics use what they call minimills, they buy up scrap steel. melt it down and mess around with the carbon content and mill it out. so far this minutminimill playee doing baern better than u.s. steel. you might think the weakness in u.s. steel and a.k. steel is something new, but the truth is it's more like a return to form. for the last decade, this whole group has had some serious difficulties. the steel makers peaked along with the rest of the economy in 2008, they were crushed by the great recession. when they started bousing back, the commodity market -- all the
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emerging markets they started to slow down. the chinese government start subsidizing steel production, china then dumped their steel all over the world at depressed prices, including right here in the united states where they really did some damage. the big 2016 rally in steel came when president obama finally put his foot down 14 months ago and slapped some gigantic tariffs on steel. after the commerce department determined the chinese steel makers were dumping product at a loss here in order to take market share and possibly even force their american competitor s out of business. but this kind of thing can only fuel a rally for so long. eventually it baked into the stock prices now that u.s. steel's tariffs have an anniversary, we need to evaluate the steel companies on their own
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merits. when you do that, it's clear who are the best players and who are the worst ones. wall street expected them to earn 32 cents a share, instead, you know what they did? they lost $1.03. wall street expected them to generate $2.9 billion in revenues, instead they did $2.7 billion. management estimated an increase of $1.27 thus the vicious decline that dropped the whole group down. er how about ak steel? wheel it's latest quarter wasn't so bad as u.s. steel's, it could hardly be worse. the fact is that the stock is actually down more than at the beginning of the year. forced down from 5 to $4.83 as of today. when the company reported, the
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quarterly results were fine. they beat a better than expected revenue. but management gave some bearish guidance for the next quarter, thanks in part to the weak automobile market. we said that that market has peaked in response to stocks shed 10%. new corps, which you may know as being a company that was threpo less than two weeks ago, their sales are up 30% year over year. management said business will improve over the next quarter, isn't that the exact opposite we heard in u.s. steel? new corps stock rallied 5% on this good news. that might be because it reported on the same day that the trump administration announced it was going to protect our steel industry from
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competition. which could allow him to apply much broader tariff than the ones obama applied last year. but some broader based tariffs if we get them could give these steel companies a boost. and it's sales came in much higher than anticipated, up 36% year over year. just like steel corps -- consider all this if we're going to rank the steel makers, we know who's at the bottom of the list, u.s. steel is in the worst shape of the force, ak steel is not much better. while nucore and steel imports -- certainly helped the whole industry, but commodity
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players are certainly more vulnerable to competition. so nucore and u.s. steel -- nucore has better management, slow cost and a more consistent track record. that's why i have been telling investors to buy it. ooze for the stocks, this is very much a you get what you pay for situation. nucore sells for 6 times next year's earnings estimate its. the stock sports a decent 2.5% yield and i bet if business stays strong right now, they could declare a special dividend. they declared that in the past. in the steel space, x n us-- mu
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more "mad money" ahead, i'm giving you my postgame wrap up after my fabulous trip out west. today i'm sitting down for a special cinco de mayo interview. news that warren buffett cut his take in ibm. i'll tell you how you should view the stock going forward, and it's got a surprise kicker to it.
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you think traffic's bad now, the future's going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it.
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♪ ♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪ energy lives here. whenever i come back from san francisco, i always feel an enormous respect for what the people out there are accomplishing. whether it's going to the top of
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the tower in san francisco, or chatting with apple ceo tim cook about job creation and a beautiful patch in the company's soon to to be old headquarters. or how to demodmem advertise mo every time i go to cnbc's west coast bureau to a string of shows from san francisco, i come back renewed. i love business, i love what it can do. put great products in the hans of consumers, that seems likes it should always be the point of business. in every profession i have practiced, we have had unbridled cynicism, when somebody says they're going to put a billion
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dollars in a fund to advance manufacturing in america, my inn inner cynic says, why not 2 billion or three or six billion? and here comes an executive out of nowhere, giving a billon dollars out of nowhere for job creation. these days apprenticeships really only work if you're a plumber or an electrician, right? but an idealist would say, yes, that's it, dream dreams, take the moon shot, be like bobby kennedy, one of my childhood heroes. there are those who look at things that are and ask why, and i look at things that never were and ask why not. if technology is go to put
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millions out of work, let's find new ways to create jobs. o this is important stuff, people. so what's dan schuman really doing at pay-pal? he's making money for shareholders. however what he's really doing is simple. he's democratizing the way we handle money. i never knew about paypal until my youngest daughter told me she was using it to buy things on amazon, wanted to know why i wasn't. i didn't know about venmo. this is the digital revolution, when paypal is going to put the cash on your mobile or desk top whenever you want itted a wherever you want it. it's a business that's going
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like gangbusters, here's what you don't know about dan. some big-time cynical wall street analysts never stopped giving him a hard time, telling them that visa or wells fargo or google or a host of other strawmen who turned out to be good partners would destroy paypal. they have reiterated these claims all the way up and then one day they changed their minds when this stock went up a few points. they did the short sellers bidding and then ski dadled. i have lived through several downgrades by expedia. he's hungry, he's determined and he ee's winning with every divin coming on.
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that's the vision of a brilliant immigrant who came here with his family to escape the iranian revolution. right now you can tell any device to order or cancel flight or hotel reservation. what you really want is a device that can cancel one plane and book another at the same time, always scanning for the best options available, that would be the ultimate inconvenience. the cynics think that skbintel played too much for the -- i think if you take intel's legendary manufacturing prow session, you might get the next semiconductor maker with the best chips. clorox which is in san francisco is taking advantage of its low
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kar indicati location and innovating, it's about innovating a prublg that's so good that you'll -- when the ceo tells me to try one of his renew life probiotic products, and now i'm hooked, why? because i feel better. as for apple, i'll be honest, i want to be as skeptical as possible, not cynical, when i sit down with the ceo of the largest company on earth. i do ask these yeses. but you know how i do it? respectfully. developing products that we can't live without. millions of jobs through the app store, just goodness.
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now there's no need to play gotcha, because there's nothing to get. tim cook's been a marvelous steward, i don't know about you, but it's hard to count all the ways apple has changed my life. how about 51 million phones that he sold. i could have railed about how that's a sign that it's all over but the shouting, company's finished, the best stays are behind it. but that's not respectful. even worse, it's dumb. so now i come back to the grizzled world, the world where i made money from moving mayber here to there, even if there was the right direction to move
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the -- the bottom line, let me close with a new spin from an old saw. go west, young men and women. go west. try your best. one day i hope to show you the respect you'll have everyoned, just like these dreamers who were kind enough to share their time with me in a deservedly humble but proud fashion. >> caller: i have a question, box, i bought them on the ipo first opened. they're finally back up to where they were, should i hold on to it? >> they're about to really start generating a lot of cash flow, aaron levy is doing a lot of good stuff. i do not want to leave this horse right now, i their he's doing a good job.
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>> caller: it's steve from massachusetts. thank for taking my call. >> of course. >> caller: two thumbs up, one the president of cramerica. what are your thoughts on the electronic arts? >> they report next week, i like electronic arts, they're going higher. i have nothing but respect for the companies i spoke to out west. those successful dreamers should be a motivation to you, go west. it all started with the hit show entourage. don't miss my sit down with the ceo of avion tequila. and all your calls rapid fire, in tonight's edition of
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"the lightning round." so stick with cramer. meta appetite control...
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as far as i'm concerned,
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there's only one way to celebrate cinco de mayo. i i think know agent about tequila. but if you want a real expert on the business, you need to talk to tiequila avion. some of their products have selling so well, that thiey're currently seeing shortages. so let's take a closer look with jenna fagnon. welcome to mad money, great to see you. >> great to see you too. happy cinco, by the way. >> can you explain why this drink which has been around forever suddenly took off in america and is still not done?
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>> i think tequila is outselling vodka, with growth rate almost five times, it's the players to be. >> was it endorsement? was it the sense that this is the ultimate mixed drink, i see people drinking it straight. >> i think a lot of it was the vodka, people wanted some flavor. vodka is still the number one cocktail in america, and you find more people are sipping. >> it's an inefficient price, i mean we charge a great deal for this. we do that because there's to me a scarcity school. y >> we don't have forecasts, because it's taking off. >> that's a good problem. >> it is a good problem on the one hand, but it kills the other side because you want to have product for the consumer.
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this is the ultimate sipping tequila and we cannot keep it in stock right now. >> is this new since we have seen you last? >> this is what's going on with millennial's, they're liking flavors and they love tequila as well. these two young mexicans introduced they have churros. now you can drink good tequila and have it flavored. obviously avion is at the high end. but here's what we thought was interesting at a price point for that millennial consumer. >> you still have celebrities who you're not paying drinking this stuff? >> that's what it's all about at the end of the day, it's just about creating love for a product and they latch on to it. one thing that we really love
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about our product. we're the most inefficient tequila producer. it's this hand crafted small batch and that's what people love, but at the same time, the accountants hate it. >> that's certainly true. but the hot, what we have found as hot as these are mescal is hotter. >> the mescal trend has been fascinating. >> single malt so much. >> the smoke flavor think think is alienating for some people. with a good tequila, you can have a couple. sp. >> what's the breakdown of men and women that you see. >> someone was just saying that their girlfriend loved avion and
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loved tequila. it's almost 50/50. >> do people understand, they want a margarita with this, it's too good. >> funny enough, this is one of my favorite ways to have this is in an old fashion. if you're from mexico, you know repasado. >> one last question, how big a day really is cinco de mayo for avion. >> today we found that tequila is year round, you have probably seen it with your bar, it's no longer a cinco de mayo and a summer thing, people want to sip it all year long. >> it's a great brand, you've done a remarkable job, it's very hard to crack in and you've done it very successfully. that's jenna fagnon, ceo of avio new york city.
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avion new york city. new york ci. . . . . . . . . . . . . . she looks years younger than she should.
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it is time for "the lightning round." [ buzzer ] and then "the lightning round" is over. are you ready, skee-daddskee-da? we're going to sheldon in tennessee. >> caller: my company is arconic, i'm getting inundated with personal phone calls, what is your take on this. >> the current team kicked out kleinfeld, the team with elliott has a real shake them up attitude. i'm going with elliott's guys. marty in virginia, marty. >> caller: first time caller. should i buy hclp? >> i think oil is going to have to reach $44 again before it turns around.
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>> this is don in greenville, colorado. the investors extraordinary, i have an executive order for you if you ever retire. >> i'm not going anywhere. >> caller: what do i do with bristol myers. >> you can hold on to it, the cancer franchise is great. i want to see what else bristol has, but i would not boot it here. jason in new jersey. jason. >> boo-yah, jim, from the jersey shore. how are you? >> what's up? >> caller: i'm calling about pete cedar fair, fun. let's go to art in new mexico. >> caller: jim, good evening, here's an oil field boo-yah from lee county, new mexico. we're in the permian basin oil
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field. my tech tonight is team, tisi. >> we got to wait, because there's so many high quality oil companies that are teetering, we don't need to go down the food chain. let's go to louis in maryland. >> caller: i got a boo-yah for you. hey, jim, this is louie from maryland. i want to thank you for all you do for us home investors. thank you for entertaining us, i'm calling about xon. >> this is a real spec and it's not clear if it's going to pay off. let's go to kirk in florida. >> caller: hi, jim. boo-yah. i'm inquiring about floor & decor. >> we did not get to an ipo on
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flooring dynamic. i need to go to connor in washington. >> caller: hey, jim, big fan of the show. giving you a georgetown boo-yah. >> what's up? >> caller: i'm looking to make some bad money today, jim. i have been hold on to gilead. >> this is what happened s wh you're do a whole lot of nothing with your cash, a whole lot of nothing. that concludes "the lightning round." >> we can be the ripple in the pond, because those manufacturing jobs that are around, because it builds up a
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service industry that's built up around them. if you take a look at intel's history, we have always manufactured the majority of our products here in the u.s. still to this day, 70% of what we manufacture is built right here in the u.s. >> i really think we have to be ready to develop a new workforce in our country, get ready to build millions of new jobs so i brought him an idea which is a $5 million apprenticeship opportunity that we can bring in apprentices so we can retrain. >> that we have a lot of innovation in an environment that i would characterize as innovation starved. >> digitization is redefining g i the financial services industry, i think there's going to be more change in the next five years than has happened in the last 30
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years. and that's because of mobile. well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. hidden in every swing, every chip, and every putt, is data that can make the difference between winning and losing. the microsoft cloud helps the pga tour turn countless points of data into insights that transform their business and will enhance the game for players and fans. the microsoft cloud turns information into insight.
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do you sell ibm just because warren buffett sold a third of his position? do you dump it because he dumped it? let me ask you a question first, did you buy ibm because oracle owned it? if so, please leave, and don't let the door hit you on the way out. you should be embarrassed if you
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bought it because of him, you never knew what europe doing. ibm has now had 20 quarters of revenue declines and buffet junk under estimated -- as long as ibm kept returning capital from dividends and buy back, he was thrilled, he talked about owning more and more of the company because of its shrinking share cap. he wasn't sold on the strategy, because the strategy wasn't paying off. i get it. i didn't like ibm until two quarters ago when it became -- and producing a sizable amount of growth. you just can't see it because the legacy businesses are so darn weak. now we're at a critical moment for ibm, i always felt that as
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long as ceo was the largest shareholder of warren buffett. more important, i'm hoping that she and her team now feel liberated by buffet's share, they have returned so much money to the shareholder that they haven't done the transition they really needed to do to wire an adobe or a twitter. something so cloud based that it would change the company's complexion overnight. ibm will tell you it spent billions and billions making acquisitions. i have always regarded this as a strategy that keeps the people in the stadium happy, but don't draw new investors. ibm has the freedom to explore
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the path i have repeatedly looked for. it can still buy twitter to take advantage of all of its ability to keep track of its feedback from customers, plus the message function to stay in touch with them. it's a company that in one fell swoop would be a lot more social, cloud and analytic. the only reason you would laugh at the idea is if they merge watson with twitter, ibm could figure out a course for its clients that would be so much better than most of the analytics out there. i know ibm won't take my advice, but i do know this, twitter of today is much better than the twitter of a year ago. the current course isn't working when it comes to the stock or the flag planner in cognitive and analytics, buying twitter would be just the move it needs
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to do to say look at us, we have the knowledge, the smarts and we can integrate this raw platform into the new ibm, not the old one that bought stock but gave you no dividend. it wasn't enough to keep buffet, now it's not enough to keep others either. so why not go for a smart transformational acquisition. stick with cramer. with e*trade you see things your way.
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well apple's stocks screamed two points because the quarter was quite good and the next could be better. how do we know that in olead which is a big supplier had unbelievable numbers. there's always a bull market somewhere and i promise to find it here for you on "mad money."
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i'm jim cramer and i will see you on monday. lemonis: tonight, on "the profit," a chain on pet supply stores specializes in wholesome food. lisa: our biggest thing is the nutrition for the pets. lemonis: but the business is anything but healthy. giovanni: it's embarrassing. i'm right back to where we started. lemonis: the stores need an overhaul. -this how you manage inventory? -giovanni: yeah. -lisa: yeah, i mean -- -giovanni: this is our weakness. lemonis: the employees need leadership. i've never been to a meeting where there's no agenda. giovanni: i think you're being a little unfair with how this process goes. lemonis: and the owners need to lose their self-righteous attitude. as a retailer, you have an obligation to deliver the consumer the choice to make that decision on their own and not for them. giovanni: oh, my gosh, that -- i'm -- lemonis: if these owners can't take control, their dream of creating a retail empire


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