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tv   Mad Money  CNBC  April 19, 2018 6:00pm-7:00pm EDT

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margins are better. they're involved it's a nice dip. >> thanks for watching meantime money. meanwhile, "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 isn't just to entertain but to teach you call me at 1-800-743-cnbc. or tweet me @jimcramer has the bull finally met its match? will this market be laid low by a toxic mix of inflation and higher interest rates? >> the house of pain.
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>> that sure felt that way with the dow declining 83 points. s&p and nasdaq 7.8% and down substantially more than that what gives thanks to a nasty combination of the yield and ten-year treasury approaching 3%, a series of disappointments in the consumer product space, some amazingly fast growth in personal and corporate spending, a rally in commodities and a pickup in the trade war with china, we got hit with a flash flood of selling in a number of key groups even as the averages rebounded nicely near the close let's unpack the parade of woes and figure out how low they can take us. the trade war is getting ugly with china far more important is the action our government took against zte, the big chinese cell phone company not allowed to buy high technology from america for the
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last seven years china struck back with the commerce department saying it's going to block qualcomm's acquisition of nxp semiconductor. this is pure tit for tat as far as i'm concerned qualcomm and nxp have so little overlap. totally arbitrary and capricious that's the point that's why it had an impact on the samant the semiconductor stocks they were reeling from a slowdown, something that is blamed for a shortfall today it didn't matter if the semiconductor was a potential acquirer like broadcom or texas instruments or the epicenter of the blast. or something in between like inindividui nvidia for micron. they all got slammed and turned into a second day of pain.
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aslm holdings reported a good number second half blip in orders the tone was jarring the problem is in a trade war with china there aren't enough publicly traded winners. it's mostly steelmakers like nucor which we'll hear from later or alcoa but there are a lot of publicly traded losers. rather the semis were the stocks of the consumer product companies. procter & gamble delivered subpar 1% growth and talked about some vicious competition particularly in grooming, think gillette the stock got shelved finishing down 3%, pretty amazing for them nasty and anyone in their line of fire got mauled as colgate and kimberly-clark know all too
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well morgan stanley slapped a sell on them it daaled the valuation a stretch. it's a lot less stretch with the stock down 6%. even the tobacco companies got pounded. we thought they were immune. philip morris, the huge international sell willer marlboro had a shocking drop and stock plummeted 16%. altria got laid to waste falling 6% and the whole world suddenly realized they make cancer sticks who knew there was disruption as e-cigarettes are taking their tall on the fatal attraction to ordinary tobacco when you're in these consumer goods conference calls, they're so bad you have a constant theme running through, inflation it's usually centered on freight and not enough driver to take the goods to the factories inflation is hard to ignore when oil is challenging 70 bucks on a tear of course today is the day that
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oil investors chose to take profits. so you have this bizarre situation with the transports were going down like the grudging recognition of how oil has run and oil stocks were going down because oil couldn't maintain its miraculous move of course, there's scuttlebutt about rising tariffs they don't have that hutch to do with consumer package goods but get lumped in. retail should be swell as we heard from american express. credit card use is way, way up but the news didn't help the sector at all. it didn't because jeff bezos took this moment to say how there were 100 million prime users now. throw in the collapse of bon ton and distinctly amazon and sends shivers down the spine of anyone who owns shares in any chain store. the effs that link them, even the ones doing incredibly well everyone is fretting about inflation and remember the death star known as amazon has been
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keeping prices at the retail level way down and that's squeezing everybody's margins. that's how bonds can sell off with the yield on the ten-year headed toward 3% and repeat of what caused this market to fall apart back in february right before, right before the eagles won the super bowl, now immortalized by super bowl lii a video about the run to the tree fifth giving coach pederson a pep talk can you remember last friday when people lamented how the banks stocks weren't worth owning now a four rate hike from the fed. led by jpmorgan but aren't enough bank stocks offset the carnage. higher rays may be good for banks but bad news for everybody else especially home builders pulverized by the large increase in lucmber money flows back to f.a.n.g. remember how many time f.a.n.g.
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has been pronounced dead a positive note how we expect alphabet to report a miserable number more about that later in the show never forget the "a" in f.a.n.g. i coined it is amazon, it's not apple. no, you know i like it apple was kneecapped by an iphone obituary from mizuho research we haven't had one of those in a few weeks. another's overdue. like to talk to people who stop me on the street a couple of guys wondered if this was the end, the end, my friend, second reference in one month to jim morrison who i loved. i settled on the ball of confusion by the temptations that sadly remains much too relevant why confusion because of inflation we're out of control and the banks, they would be the last stocks to rally my bottom line the consumer package goods haven't been safe for ages when rates are rising their 3% yields don't save you. sure, there is a cell phone slowdown yes, we got inflation built in
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chiefly oil but a little inflation is not the end of the world. not when it's a side effect of a robust economy in a strong consumer thank you for that unique insight to caused your stock to roar 7.5% today. overall i'm cautious huge competition for club members knowing that and the positives outweigh the negative but the bull can't triumph every day. calvin in my home state. >> caller: hey, jim, skee-daddy. how are you? >> what's happening with you >> caller: everything is going excellent. you know, my question is point largest theatrical exhibition company in the u.s i mean, movies like "the black panther" breaking so many records and "avengers: infinity war" on deck and the dividend paying 4.5% and opening a movie theseers in saudi arabia, i just want to get your thoughts on amc theatres >> i think the stock has bottomed i think it got oversold and
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bottoming. i'm not a huge fan of that in part because i was recommending epr and that turned out to be terrible that was not because of cinema but i think it's by the bottom rich in wisconsin. rich >> caller: hey, jim, big boo-yah from rich in green bay. >> green bay, this could be your year, right? i don't know you cut one of my faves. what's going on? >> caller: with the recent downgrade by goldman sachs to sell and aluminum prices soaring a good time for long-term investors to add to their positions in pepsi on the putback. >> i saw that downgrade for pepsi and thought it was appalling. that said, look, packaged good stocks are tough we've own pepsico for years and years and we're not going to sell it. if it really gets hammered right now we'll buy some that's my plan scott in new york, scott >> caller: hey, jim, b-b-boo-yah. >> what's going on >> caller: trading at 10 1/2
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types next year's earnings and the p.e.d. ratio of about 1, have the earnings estimates on autozone finally come down far enough or will the death star -- >> i think the earnings haven't come down enough this is amazing. we just see these industries that we never thought could get amazon and then they do and we keep trying to pick the bottom this company bought back a huge amount of stock and i like it. i have shied away from when amazon is firing because the force, the shields don't protect anybody who is in the direct line of fire still a lot of confusion in the market but we have a robust economy and a strong consumer. i am cautious. but the positives, i like them more than the negatives. "mad money" off to the races when it comes to the first trillion company on earth. close race but which company could be the first to cross the finish line and it might surprise you then we open the new front in the trade war you might not even know about it other companies taking a hit and with the ceo of nucor to see how steel tariffs are helping the economy.
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so, stick with cramer. >> don't miss a second of "mad money. follow @jimcramer on twitter have a question, tweet cramer, #madtweets, send jim an e-mail to or give us a call at 1-800-743-cnbc miss sometnghi, head to once there was an organism so small no one thought much of it at all. people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's
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not small at all. energy lives here.
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i want to be someone who cares. >> boo-yah and they're off. yep, it's a race to be the first trillion dollar company and the handicap is showing a close contest. right now there are four companies running on this track. first you got the favorite apple with an $877 billion market capitalization but apple followed by three companies that are close together alphabet, 757 billion. amazon, 754 billion and microsoft and full disclosure i own a whole concept to morgan stanley which published a piece saying 3x preview milepost along the path to 1 trillion the analyst incredibly good put the idea in my head as he
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speculated aboutthe other thre horses that's me. going into the race, when the horses were still in the paddock apple seemed like such a favorite that it wasn't even worth betting on, sure enough when they came out of the gate a month ago the handicappers didn't think it would be close that's how big a lead apple had on the field jockey tim cook looked like eldon going away but cracks in the story. namely apple's new iphone x had tepid sales and it could possibly maybe be made up by the lucrative service revenue stream i like so much or the possibility of a gigantic return of capital perhaps as large as 1$100 billion in the form of buyback organization dividends and kept them in the lead but this morning we got a piece of research that shortened apple's distance from the pack rather dramatically i will say it got to ten, the story is it's not the x that's tepid. it's the 8 and the 8 plus might
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miss too goes a step further and says whatever money apple returns to share hold series already baked into the stock the other horses are coming on strong last night amazon's jockey jeff bezos penned a note how amazon prime has 100 million -- 100 million paid prime members globally bezos says the company shipped more than 5 billion items and more members joined prime than in any previous year amazon had been burdened by heavy weight namely a president who wants the company to deal with the u.s. post office to rip it up. amazon doesn't collect taxes on third party sellers responsible for more than half the units sold supreme court is category a situation. if the president stops tweeting and court rules in favor of third party sellers amazon's lucrative web service's business stays strong, trophy goes to amazon you can't count out microsoft. morgan stanley points out near term results should support a path to $1 trillion cap and as a
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handicapper from way back i have to agree jockeys switched the company's focus from a slow-growing windows product and enterprise software to the cloud. namely their incredibly fast growing azure business. a stock i always thought could one day be neck and neck with apple if the ladder slipped up alphabet has come back into the race after a series of lost races where it was hung on guidance but today deutsche bank comes out with a piece entitled google can beat a low bar in 1x '18 by, the gist, deutch thinks the hot money is going elsewhere and odds have gotten so long you can have a dark horse backed by a potentially positive tone by google cloud, youtube and search yep, in-line quarters what he's saying is could push this stock, who is going to win? midpoint of the race anything can happen
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right now, though, amazon is the one that could break free, break away from this three-horse pack to challenge apple can it overtake the favorite not if apple surprises the upside this quarter but if it misses and amazon delivers, the roses may very well belong to jeff bezos much more "mad money" ahead including my take on the new front in the trade war that seems to be heating up and a lot of naysayers i'm talking to the ceo of one company who is welcoming the trade war. what happened to the stock of united rentals? the company reported strong numbers but the stock took a hit. what gives i'll talk to the ceo stick with cramer. imagine traveling hassle-free with your golf clubs.
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it might seem like the trump administration's trade dispute with china has cooled down over the past couple of weeks
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the president has certainly eased up on the incendiary rhetoric and let's say outrageous tweets. but i think that's a misreading of the situation instead we've opened up a new front in the trade war and while it's quieter than all the bo bombast about tariffs there are still a ton of companies that can get hurt we needto defend ourselves the new front, technology. last night i talked about the commerce department's recent decision to ban all sorts of component software sales to zte. the big chinese smartphone maker. and how this ruling eviscerated the stock of acacia communications which is one of their largest suppliers. that's the tip of the iceberg. the federal communications commission voted unanimously to move forward with a plan that prevent federalized subsidized telco companies -- some major chinese players. it's not totally wound-sidone-s.
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the chinese ministry of commerce announced it has antitrust concerns about qualcomm's acquisiti acquisition. it's been approved by every other relevant antitrust agency on earth i think it's pretty transparent. an attempt to retaliate for the actions our government took earlier this week. from a legal perspective one of the most ridiculous things i have seen. from a geopolitical point it's a smart move they're showing they can hit us right where it hurts in the stock market as this ruling sent the stocks of call committee, nxp off 5%. wow. in short on the tech front the raid car is getting serious and we need to think what else could be vulnerable if things keep escalating how this is playing out, to start with the u.s. commerce department went after particularly bad actors and the chinese smartphone maker hot
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water for years because it was illegally selling american technology to iran and then lying about it to the regulators the executives who lied were then rewarded so the commerce secretary wilbur ross decided to ban american companies from selling zte components or software for the next seven years. on the one hand zte definitely deserves some kind of punishment but given the timing this seems to about denying them our technology they raised billions, billions to build a ag wireless network in china and now it's going to be difficult for them to do it because they won't have our stuffer. the thing is we had pretty good pretext for going after them then the fcc decided to prevent telco company from purchasing companies that pose a national security threat to the integrity of our communications networks you really need to read between the lines. it's a shot at huawei in case
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you haven't heard it huawei makes smartphones and telco equipment. other companies looking to expand in america. they have been trying to sell its smartphones but earlier at&t backed out of a deal with them probably as a concession to our government's security concerns memo to the white house this is indeed how you fight a trade war. you don't make big pronouncement, just quietly use regulatory agencies to make our add ver s-- adversaries have a harder time doing business the qualcomm and it's semiconductor merger by the way was announced october 2016 and a lot has been held up because of the chinese stalling one of the merits, the ruling i thought was insane nobody was worried about antitrust issues let alone
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chinese antitrust issue, especially since these are not chinese companies. qualcomm is all about cell phone technology nxp makes chips for automobile, autonomous driving there's almost no overlap. hey, that's why qualcomm did the deal for heaven's sake and wanted to diversify away from the cell phone makers. pure retaliation from china and it's chilling. if the chinese will block any merger that will be brutal for the stocks in the group. makes the whole cohort less valuable so what happens if this keeps escalating you know, my colleague at the street eric johns penned a fantastic pick saying if they could impact u.s. tech company, he points to four specific ways they could hit back. with m & a reviews and notice it had could get stalled. prescient. maybe in someone in the chinese
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communist party knows about it this means you have to worry about any merger with a company that does a substantial amount of business in china he thinks we need to be concerns about contracts dealing with 5g wire al wireless technology. the fcc moved to potentially block tell crow purchases by chinese firms. who is to say the chinese government won't retaliate against our own companies like cisco or juniper i like cisco i think juniper needs to be sold there are already restrictions our companies need to apply for an exemption if they want to sell the stuff to the people's republic these could be hard story come by for example, intel is trying to build an advanced semiconductor plant in china but who knows if they can get it done in this environment finally mountains out that the chinese government -- the government loves to organize boycotts whenever tensions flare with
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japan or south korea the communist people gets them to do a boycott. if the nsa spying uproar there was a steep doctor drop-off in u.s. enterprise software to chinese companies. we probably haven't gotten to it but this is china's ultimate weapon president trump can tell people not to buy chinese merchandise but we loive in a democracy no one has to listen to him. when the chinese government tells their citizens not to buy american it's a different story. do you really want to be the one guy breaking a boycott in an authoritarian communist state? i don't think so remember, this boycott option could be much bigger than just that some bad publicity hurts them. here's the bottom line, just because we're not talking about tariffs every day that doesn't mean it's somehow over it's still very active it's hot it's just that the action shifted to the tech front for the moment you need to watch this very carefully or else you might end
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up like shareholders in acacia or qualcomm and that's a very difficult place indeed let's go to d.t. in illinois d.t. >> caller: jim, big boo-yah to you. >> well, good to have you. what's happening >> caller: well, my question is regarding square i'm looking for a good entry point into, you know, payment services, banking sector, i just wonder if you think that's a good investment at this point and could it even have some extra upside with a big coin play or should i stay away from it pop some competition from amazon >> well, the stock is up 46% in its trade line but square is excellent. if you want to buy something, please, please, please just buy a little and maybe comes in. jack dorsey is doing a great job and great job at twitter he's doing a good job now and tell you sara fryer, the cfo is
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one of the best out there so i like square. can we go to shawn in new jersey shawn. >> caller: hey, jim, how are you? boo-yah to you how are you. >> i'm good. how about you? >> caller: doing well. want to let you know we genuine appreciate all the work and investment advice you give to help expand awareness about the overall stock market. >> you're terrific it's a hard job. i made a mistake yesterday in skechers on the ones i do okay, thanks, you make me feel good. what's going on. >> caller: air products. apd. they recently opened up and expanded hydrogen dispensers to china. do you think they have any potential exposure also i know you mentioned young hedge fund managers looking to go into alternative energy other than natural gas, if you thought there was potential risk as well and what the potential upside could be for the company they have flexible finances.
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and high difficuvidenddividends. >> it's a neighboring company where i grew up. it does -- look, what we're doing with it we're telling club members any company has exposure to china, be careful air product does have chinese exposure so all i can say is be careful. it's a tough time. the trade war shifted to tech. you will end up like the owners of acacia if you don't watch out. i'd be crying here today much more "mad money" ahead. steel is a hot product but what is a company like nucor see in the space? i'll talk to the ceo and united rentals is falling despite reporting an earnings beat i'll sit down with the ceo and rapid-fire, tonight's edition of "the lightning round" so stick with cramer. thhas the marke
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mind nucor put in a solid quarter gives an incredibly rosey forecast and not just because of president trump's steel tariffs. they haven't kicked in yet and the stock goes down. these tariffs will be positive for the steel industry but nucor's shares are flat and wall street doesn't seem to care. the company posted a one-cent earnings beat higher than expected revenue up 16% year over year but the guidance has me excited its earnings are expected to increase significantly compared to the first quarter margins and profits were by far the strongest in the first quarter meaning the tariffs may be beginning to work
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let's talk to john ferriola. he's the chairman and ceo of nucor. learn more about the quarter and his company's prospects now that our government is finally doing something to level the playing field. mr. ferriola, welcome back to "mad money." >> hi, jim how are you? >> i want to be sure about something. you gave a rosey forecast but what happens if our government does not back up the strong talk it's had that is trying to make it so we have fair trade. >> it would be extremely disappointing. we need the president to fulfill his commitment and not let the day of may 1st slip any further. frankly, his credibility and the credibility of america is on the line here. so we expect him to do what he has promised to do, we expect him to honor the date of may 1st and install either a tariff or quota to those countries that haven't been able to negotiate a separate agreement on that date. >> do you think that the u.s. economy is strong enough that nucor can still do terrifically even without these, even though
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you and i both know there's still a lot of dumping going on. >> there's absolutely a lot of dumping going on in the first quarter imports took about 25% of the market share in our first quarter and to your earlier question about can nucor do well despite awhat happens and the answer is absolutely yes all you need to do is look back at our performance last year but particularly in the first quarter when we were operating in an environment in which imports still took 25% of the market, we operated at 92% capacity utilization we had a very solid quarter. just about all of our cylinders of our great company are running full steam we had a good quarter. our teammates did an outstanding job. >> one of the things i keep hearing, you know what, these tariff, the price of steel is going too shoot up now, there is tremendous demand but there is this notion out there which says there will be a
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huge shortage. would there really be a shortage of steel >> there is going to be no shortage of steel. people can get steel if they want to bring steel in and need to bring steel in they can bring it in. they simply have to pay a fair market price when they bring it in i like to tell people when they say is there going to be a shortage of steel i tell them there will be no shortage of steel. now, there might be a shortage of dumped or illegally traded steel, but there will not be -- there will not be a shortage of steel. people can get it and bring it in they pay the tariff. they bring it to a market price and they can use the steel >> we visited a plant in louisiana with you which a novel way to be able to make steel you have one offshore. how is that doing now because we always thought that could be incredibly lucrative plant for nucor? >> it's been doing very, very well we had a great first quarter at that plant we faced some challenges when we started up and still have some challenges that we'll have to face down the line but we've been focusing on the
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three key elements of a successful plant operation, people, the process and the equipment. we ran in the first quarter, the first quarter of our plant was the second best quarter in its history in terms of production, in terms of profitability and in terms of operating utilization rates. so, shipments were up. production was up. and frankly profitability was up very well in the first quarter so, it's running better. and frankly it's had a big impact for our company on being able to limit the amount of prime scrap we've had to buy allowing us to control our scrap costs. >> right, john, one last question you have a number of projects at work u you have some tremendous demand and operating 92% what are the hottest areas for nucor right now that are going to be really good that you felt so confident about saying that the second quarter will be great? >> well, probably the hottest
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measures we have and i should start by saying, frankly all of our markets including our downstream markets are doing very, very well. strong backlogs, good pricing, but when you look at it in terms of our best operating business units right now i would say it's a flat products, plate, sheet products, our long products are more challenged but doing well particularly our structural business is doing very, very well and the first quarter but what excites me when i look into the second quarter, what i see in terms of the pricing and demand volumes increasing as we went through the first quarter and continuing into the second quarter, we see a very strong backlog quarter, order entry quarter and improvement in our margins in the second quarter. >> let's leave it at that. i hope the government backs up what they said they'll do. it's such a great thing to have big manufacturers open new plants and create the lowest cost steel in the world if we just give them the chance. that's john ferriola, chairman and president and ceo of nucor,
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a company i have liked literally since it became public "mad money" is back after the break.
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it is time time for "the lightning round. >> sell, sell, sell. >> buy, buy, buy [ buzzer ] >> are you ready, skee-daddy austin, in texas austin. >> caller: i'm a college student. this is my second time calling the show thanks for everything you do my dad and i talk about your show almost every day and love your passion for investing >> i am thrilled i am thrilled to hear that what's the stock >> caller: the grubhub >> you know what, i've been riding this grubhub for a long time and i've read a couple of dunn do-- downgrades. bears make money but pigs -- so, no robert in california robert >> caller: hey, jim. boo-yah. >> boo-yah >> caller: about some stock a couple of months ago should i keep it -- >> swap out and get t-mobile
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ledgers could have a better quarter. florence. >> caller: thanks for taking my call lgi homes. should i build or should i go? >> you know what, everyone is blasting home builders because of higher rates and very low and because of lumber. i have to tell you one of my faves. sanjay in connecticut. >> caller: boo-yah, mr. cramer i appreciate all the teaching that information i get from the show in december 2017 you had talked about a pharmaceutical company called acardia pharmaceutical. i bought a few shares but recently it dropped more than 25%. what is your guidance? >> i saw -- we had a big run-in. i should have said bring the register cnn report was so devastating i don't want to touch this one now. just devastating report. to thomas in north carolina.
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thomas >> caller: hey, hi, jim. boo-yah. i'm from north carolina, born in philly and raised. go eagles. back at the end of december, $31, it seems to have fallen tremendously for pilgrim's pride but looking three to five years out. >> so many things wrong with that by tee to five years out i would rather own tyson jackson in indiana jackson. >> caller: hey, jim. how are you doing today? >> not bad how about ou >> caller: pretty good i was wondering what your thoughts on j.b. hunt and a pretty strong industry. >> i thought it was good the stock went up. i'd stick with it. steve in new york. steve. >> caller: yes >> go ahead, steve. >> caller: hello >> yes, steve. you're up. it's jim. >> caller: oh, hi, jim this is steve from long island >> okay.
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>> caller: first of all thanks for all of your insight and for navigating us through the maze we really appreciate it. >> thank you making some mistakes but i appreciate that. what's up? >> caller: about a year and a half ago you recommended a stock called optco and i think it was a pharmaceutical company opko and bought it at about $8 it went all the way up to 20. >> i know. >> caller: on a day that it did phenomenal then it went back down to 9 so i jumped in again. then it went to 7. i jumped in again and now it's down to 3. >> yeah, what can i tell you i've been waiting for phil could come on. he hasn't. when he does we can reconfigure. fred in ohio fred >> caller: b-b-b-boo-yah jimmy. love your show thanks for all you do. really appreciate it love your knowledge and the books. they're great. >> thank you thank you.
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>> caller: all right international paper. time to buy? what's going on? >> the stock has come down big and regard it as an amazon trade. world commerce a lot feel it's going to slow down i say ip if these prices are u is a very good buy would love to see mr. sutton come back. mike in wisconsin, mike, mike, mike >> caller: hey, jim, boo-yah from maribell, wisconsin i make chicken boo-yah and you have a standing invitation to join us. >> what a nice offer >> caller: i'm sorry go ahead. >> i was going to go to barzan miguel maybe this will be more fun. what's going on. >> caller: alaska airline, i've owned it six months. i would like to get your take. >> used to be the best then they made that acquisition and we haven't really gone back to it. the opposition was just not great and i can't recommend the stock here
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let's go to chris in new york. chris. >> caller: hey, jim, how are you doing? >> i'm doing well. how about you? >> caller: pretty good just wanted to say thank you for everything you do and all your advice we love you up here in buffalo, new york. >> oh, man, my friends, long suffering buffaloians. >> caller: go, bills winnebago. i took a position a couple of months ago and the stocks went down do you think there's further downside or are we at a bottom >> this group trades so, so badly. i mean i just keep hearing glut, glut, glut in the last six week, glut i got to find someone to dispel the glut i can't push it and that, ladies and gentlemen, is the conclusion of "the lightning round. >> announcer: "the lightning round" is sponsored by td ameritrade what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you
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through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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told you it was a confusing day. what happened to the stock at united rentals here's a high quality equipment rental company i have a been recommending for ages. i told you it was a much better buy than caterpillar what happens they report what i thought was a real good quarter. delivered a monster 41 cents earnings beat higher than expected revenues. strong number and announced a buyback and debt upgrade yet it got slammed to 6.5%. why? maybe because management decided
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not to raise full year guidance. maybe this made investors nervous the rest of the year might not be as good as the first quarter. so did the market make a mistake? are you getting a rare opportunity to buy a stock that is almost tripled in the last o two years? let's check in with the ceo, mike kneeland. mr. kneeland, welcome back to "mad money." >> thank you >> in a vacuum i'm reading through the conference call and saying, you know what, these guys ex same-store sales up bing, volume up business n nonresidential, industrial grade, oil and gas and look at the stock and say stock's wrong or i'm wrong tell me your depiction of what happened with this quarter >> i think what happened was i was very pleased with it number one, we achieved three critical thing, i think, very fundamental to our industry, saw rates improve and used pricing
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improve and time time was down a little tick. >> that freaked people out but, you know, there are a lot of reasons why that could be. >> that is a second highest level we've ever had in the first quarter. so i don't know how the overreaction or reaction in the marketplace -- i can only tell you what we see in the market is a really solid 2018 -- the whole year looks very solid for us >> well, then should you have raised guidance? >> well, we don't. we don't raise guidance in the first quarter. you know it's a seasonal aspect to our business. first quarter being the lowest the next 45 days into the second quarter is going to be the most critical for us. as we think about that we'll make the aucoins djustments what we see gives us confidence on our guidance that we've given for the full year. >> that's a real buyback you didn't announce a buyback to be able to say if it gets to 130 we'll be a buyer
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something like that. >> no, this -- we've already achieved several buybacks and we've already done $2.3 billion worth of buybacks. it's really our capital allocation and excess cash flow we have. >> okay, then i start thinking, okay, maybe someone is worried the tariffs are rising the price of steel andmakes it so you have to pay too much for your equipment. you get it back on the back end if you sell it you got good rates i thought that was a nonsensical reason that i heard today about why your stock got hit. >> we haven't seen it. to your point, we have great relationships with our vendors we negotiate well in advance and we secure our purchases for the full year. so it's not going to affect us. >> okay, now, i like something that wanted to point out these analysts don't, you have a competitive slide and investments in technology, all the companies i follow that are doing much better than everybody else invest in technology, big data what are you doing >> so for us we started out with
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telematics and put it in our total fleet and came at a cost, not only a cost to install it but actually a cost and annual basis. >> it does what for our viewers? >> it does a lot of different thing, one it eliminates any waste trying to locate a piece of equipment it identifies whether it's low on fuel, whether it needs service. so it helps us but also helps our customers more importantly >> okay, now you have a consensus forecast for u.s. construction put if place but i see some of these numbers, i think you're doing much better than a lot of market, oil and gas, super for you, right? >> it's been super but i can tell you right now what used to be about 11% of our business is only about less than 6% of our business still growing. >> right. >> but it shows the fundamentals of the economy still solid. >> nonresidential terrific. >> nonresidential is doing exceptionally well. >> okay, so, look, you've answered my questions. i think that a lot of times what happens, mike, it's been a great stock and there are people who always think, like i heard all
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day today it's got to be over. it's been too good it doesn't, right? >> no, it doesn't. i mean, if you look at all the leading indicators, all of them, they're either at record highs or damn close to it and i will tell you everything i see is going to point to a solid year don't have to listen to me listen to my competitors. >> it does come down to in the end it's empirical that same-store sales figure. how much better it is than last year at this you have to explain. >> oh, again, getting rates in q1 with the weakest time in the season is to me a telltale sign. >> well, look, i'm so glad you came on. you spend -- i announced that you're on tonight and i'm seeing people posting, this is it he got it wrong. no, stocks can be wrong. it's been wrong a long timing. we've seen that and what it's done, it's tripled that is mike kneeland from unga
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united i'm sticking by what i said about cat and uri. mike, thank you so much. >> thank you, jim. these two men built their
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all week cramer sits down with some of the market's most influential players. join "mad money" for must see interviews you can't afford to miss i don't think the consumer product stocks are done going down yet their yields are measly versus the ten-year trading at 3. be vigilant unless you want to own them for the long term i like to say there's always a bull market somewhere. i promise to find it right here for you on "mad money. i'm jim cramer i will see you tomorrow.
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