which would be tomorrow. >> i sold some yesterday. >> okay, but i still own some. >> all right. steve? >> i'm going to go tapestry. that's a value trade for me. it's popped from the high 27s to mid 30s. >> all right, thank you for watching "fast money." "mad money" with jim cramer starts right now. "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 a little money. my job is not just to entertain but put days like today into context. call me. 1-800-743-cnbc. tweet me @jimcramer. the line is drawn, the curse it is cast. the slow ones now will later be fast. as the present now will later be

past. the order is rapidly fading and the first one now will later be last for the times they are a changing. yeah, just think about it. when bob dylan wrote those words in 1964 i know he wasn't singing about the stock market 60 years in the future, but what can i say? the times they are a-changing, the guy nailed it, because as the federal reserve changed its tune yesterday it destroyed the order of what was working. dow gaining 158 points s&p climbing .26%, nasdaq advancing .19%. but the turmoil underneath was absolutely shocking. this was not a market led by the magnificent seven. apple caught a very bullish piece of wall street research yet the stock did nothing. amazon got slammed off .95%. even though we're hearing nothing but good things about the holiday season. alphabet took it on the chin, down about half a percent despite the generative ai tease. advertisers have been leaving twitter but that stock down a

lot more at one point. microsoft, huge investment in the pioneers at openai. but its stock plummeted 2.25%. nvidia, the king of the semis, but the times they are a-changing. the stock did next to nothing today. only tesla mounted a meaningful rally up almost 5%. is it an aberration? no. it's an explanation. on the last conference call elon musk bemoaned how higher interest rates were causing a slowdown in car purchases. but yesterday when jay powell effectively ended his historic tightening cycle he changed everything for the stock market. now rates are going down again. tesla's biggest worry, well, i've got to tell you, it is gone. remember, one of the main reasons everybody loved magnificent seven was the fact that with the exception of tesla they are immune to the fed's rate hikes. immune. they all had something so special, even when rates went higher their franchises weren't impacted. that's why we love them.

of course the companies won't be impacted if rates go lower either but their stocks will because there are so many other parts of the economy that do better with lower interest rates that the money is going to shift from the magnificent seven as it started yesterday and did today and go to these other stocks. only stocks -- the slow ones now will later be fast. the order of stocks simply changed on a dime and left a host of new winners in its path. winners that had been total losers at 2:00 p.m. yesterday. these stocks were formerly road kill because they needed lower rates in order to prosper. we look at our own portfolio for the charitable trust, one you can follow by joining the cnbc investing club which i wish you would do, and the new leadership jumps out like i don't know, maybe like a bull on a railway. take ford. poor ford. stung by labor costs, walloped by electric vehicle expenses, crushed by extraordinarily high auto loan rates. now, though, there's nothing to pity about ford. it's all changed. as customers can get cheaper

financing. they love the hybrid f-150. and meanwhile the stock sports a 5% dividend yield. right now 5% is competitive with what you can get for short-term treasuries b. once the fed starts cutting rates oh, my. that 5%'s going to look a lot more attractive. and that's how the stock of ford rallied 7.47% in one day. and then there's caterpillar. bears have endlessly -- you think the stock's up more than 6% today because the company's doing great right now? wrong. cat's roaring because of what's going to happen in the future as rates come down. specifically the shorts are just terrified. they're just frightened. they're so scared. they're frantically buying the stock hand over fist in order to close out their positions before the bearish analysts go and capitulate and they'll go from sell to buy. a double upgrade. who can blame them?

not to mention new business for home builders and road builders. that's howing cat's stock could rally a glorious $17 a share. or foot locker. today all sorts of consistent retailers saw their stocks getting mauled. but how about a struggling outfit like foot locker, which is spending its dividend has seen a dramatic deceleration in sales? stock fell from $42 any to under 15 in its august lows thanks in part to worries about how a hard landing would hurt their more downscale customer base. foot locker looked like i agoner despite the hard work of mary dillon the incredible former ceo of ulta beauty who was brought in to work her turnaround magic and succeeded wildly. foot locker's been treated leek a pinata by the analyst community bashing it with one price target after another. today, though, piper saylor perhaps sensing the zeitgeist of the moment upgraded foot locker saying the markdowns would soon

be history and newness would be the theme for 2024. they say the crisis is off the table. no wonder the stock rallied nearly 10%, one of the biggest gains in the index. but my favorites are the two franchises that have been overlooked forever because of higher rates. wells fargo and morgan stanley which both rallied about 6% today. that move got me thinking about wells. now, many of you are probably -- either don't remember or maybe are too young to remember when wells fargo was by far the best bank in this nation. one that warren buffett used to own as a huge position. back in the day wells would always rally furiously at the end of every rate cycle you had to own wells. these days because of all the ne'er-do-wells, all the terrible things they did, most view wells fargo as a prometheus bound in red tape and government investigations. but those are almost over. and now we can see how prometheus unbound works with the stock perhaps headed back to the 60s where it was five years ago, february 8th of 2018. not many large bank stocks can

rally $2.75 in a single day. as for morgan stanley wall street assumed the best quarter was horrendous. stock had been sinking for months and then cliff dived from 80 to 70 after earnings. i defended it saying you have to wait, with a more normal environment it's going to do better. what happens when sheehan data bricks and -- what happens when the fed stops tightening? morgan stanley soars up $5.41. this shocking revaluation's happening everywhere. the solar stocks led by enphase energy they've been cut in half because most people thought it's solar stocks no it's about financing. the solar stocks were plays on interest rates. and those rates got too high. now we know rates are going lower and that's how enphase stock could rally 1% today after nearly 8% yesterday. these are amazing moves, people. some of these are maybe too outsize. you're getting all the performance you could dream of over the course of a month or

quarter or maybe even a year i don't know in one day. one afternoon. it can't stay that way. in fact, we'll probably even see return to some magnificent seven money before they report. although the stocks will likely be rebounding from a lower level. and i don't think the suddenly hard-hit enterprise software stocks will go away that quietly. but the bottom line of this incredibly exciting 48 hours we know that when we have leadership from the banks earth movers and shoe stores that the times they are a-changing. and to me it's a reminder once again you've got to stay diversified because after yesterday there is a pulse outside of the magnificent seven. mike in illinois. mike! >> caller: cramer. how are you? happy holidays to you and your family and all the investment club members and all your employees. >> thanks, big guy. what's happening? >> caller: joined the club about three months ago. i'm real happy. i've been listening to you for probably five years. i finally decided to join. >> thank you for that. thank you.

i call all my friends in texas that i saw last weekend, so many members. >> caller: there you go. listen, i bought walmart back about six months ago. i added to it about two months ago. it has not done well. i'm a little above water on it. but the question is i'm thinking about getting rid of it and getting costco instead. what are your thoughts? >> well, costco reported tonight and jeff's on that conference call, jeff marks. and you know, it looks like they're going to do a special dividend -- look, i happen to love costco. all right? but i think walmart's good too. and costco was at its high and walmart's much lower. i don't want you to sell walmart. i think there's a lot still there. and when jeff marks finishes his wrap-up we will know everything. that's what i'm waiting for. but thank you for the kind words. why don't we go to jimmy in massachusetts. jimmy. >> caller: hey, jim, thanks for having me on. i'm here with my fellow westfield state finance students hannah and eric and we are wondering what your opinion is on macy's with all the talks of buyout from arco and is brigade

capital. >> hannah, eric and mr. jimmy, here's the problem. that stock has now had this run based on rumor. and i don't like rumor. i don't know what's going on. i do think the stock is incredibly cheap. but what happens if they come out and say hey, we're not real? and then the stock goes to 17. and you and your fellow students are going to say why did cramer hose me? i'm not doing that. i'm not a hoser. douglas in texas, please. douglas. >> caller: hey, jim. i think the market is wrong on airlines, especially united airlines. i'm seeing united make $9 a share and only get a p/e ratio of 4 while industry's hanging out at 10. southwest is making 78 cents and they've got a p/e of 40. i know united has a lot of debt but they're aggressively paying off debt and making more money per share than any of their peers. they're rapidly decreasing fuel prices while maintaining robust demand. tell me why united shouldn't be trading between 80 and 100 a share which would really only represent a p/e of 9 to 10?

>> i think it's inconsistency pape lot of times you wake up you see they cut numbers which drives me crazy. but i will grant you this it's up 15% for the year and i think it should be higher. the p/e disparity is wrong here. i think that douglas in texas is very much on to something. all right. the times they are a-changing in this market. and now it's time for the laggards to start leading us. okay? the slow ones now will later be fast. "mad money" tonight, schuy held its first ever investor day here at the new york stock exchange, and i learned a ton about some businesses that they're doing quite well in. then vertex pharma shared a hand. of positive updates on the pipeline that caused the stock to jump higher. and we heard very different stories from dick's sporting goods and academy sports on the state of the business. so which is the better one to buy? i will give you my take. so stay with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on x.

have a question? tweet cramer. hashtag mad mentions. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. missomhi? setng head to madmoney.cnbc.com. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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could chewy the digital store for pet food and supplies finally be putting in what may abe sustainable bottom after three years of declines? chewy came public exactly 4 1/2 years ago and america fell in love with it during covid because people didn't feel safe going to brick and mortar pet stores. once we got through the pandemic federal reserve started raising interest rates putting the kibosh on junior growth stocks like this one. chewy's stock got obliterated. just this week the company report aid solid set of results. a little light guidance for the current quarter, lowered full-year forecast.

okay, not great. but you chewy hosted its first ever investor day right at the exchange. i saw a lot of things i didn't know about this company. i really didn't. let's take a closer look with the ceo of chewy. i want to welcome you back. after the investor day i have to tell you i no longer thought of you as just an auto ship food with some discretionary toys. what i realized is that you could be the ultimate pet health care company. >> that's exactly right, jim. it's nice to be here, by the way. yes, we have a 3-plus billion dollars health care business with margins that are 1,000 basis points higher than our retail business. over the last year we've been focused on building this ecosystem we're super proud to share today. >> i those it was the interest rates and the slowdown. when the fed did raise it did hurt these things. you're talking about an average plan that costs $50 a month for

the insurers, about $600 a year, but everybody who has a pet knows that's a pretty good deal given the fact that you're really playing with russian roulette if you don't have this. >> that's exactly right. insurance is a $4 billion today growing to 7 billion very quickly. and if you look at the united states only 3% -- insurance has penetrated to the tune of 3% whereas if you look at mature markets such as the uk or the australia or new zealand, i mean, there's mid teens to high teens -- >> yeah, 17% for uk. so it's a natural progression. >> it's a considered purchase. and customers want to associate themselves with a brand that is trusted. and we've partnered with two other brands, true panion and lemonade that are best in class, to bring curated plans for customers that are only available at chewy. so we're excited about this vertical. we believe we can help democratize and commercialize insurance where it hasn't been done so far. >> i was making a joke.

i said oh, yeah, do they have telehealth? what, does the dog call the doctor? no joke. this is a gigantic business, telehealth. >> that's exactly right. when you look at -- there's two things going on. one, millennials and gen zs, which are now even a greater population owning pet parents, they are much more propensed toward using technology for their needs. two, when you look at the veterinarian market there's a huge pent-up demand for veterinarians and service levels, sometimes it's hard to get an appointment. and vets are working hard. and at the same time if you can bring a technology like this forward to be able to triage, even if you're not prescribing medicine, when you're triaging and qualifying use cases or traffic that ends up at the veterinarian's clinic, that's a huge win. >> well, let me ask you. let's say your pet gets sick, it's 11:00 and they ate a raisinette. for us there's one -- in brooklyn. there's one veterinarian that's open at that hour. it's about 2 1/2 miles. you have to walk -- you have to,

you know, hand-carry the dog. and i'm like how does this happen? can't we get a vet in the middle of the night and just ask? i can do that with your program, right? >> you can. we have the video feature now available for a bit now. and the take rate has been really impressive. and we are qualifying about 60% of the leads that we get when we triage, we are qualifying those leads back to the veterinarian clinic if required. customers are getting tremendous value, peace of mind, especially during the time at 9:00 p.m. when fluffy eats a chocolate cake. who do you call? you call chewy. and by the way, the connect with a vet program that we're talking about is fully app integrated. so it's like you walk in with a virtual vet in your pocket. >> that's terrific. now, saat the same time 76% ownership, which is money in the bank. nothing's changed there. you had to raise prices for inflation but thantz been like you haven't been able to keep -- >> no, in fact, customer acquisition into ownership is up 150 basis points year over year.

so not only are more customers coming into the program, our stickiness in the program and our share of wallet expansion in the program has continued unabated. >> so everyone seems to -- the bears, because there's a -- there's a considerable short position even down here which kind of doesn't make a lot of sense to me. they focus on the fact that people don't want to spend as much on discretionary items. to me telehealth is bigger than this. to me insurance is bigger than this. it's the wrong focus. i mean, sure, you want to offer it. but it's not the be-all and end-all of chewy. >> no. 85% of our revenue comes from consumables. so food and health care which essentially makes for non-discretionary items where consumes continue to spend. and we're not seeing any kind of materiality in terms of tradedown as well. so when you look at the way that the business is somehow insured from these trends, yes, of course, we're not -- we play in

the same market where discretionary purchases are softening. but for the most part our business is relatively inert, or relatively insured from that point. >> i'm trying to figure out obviously the arc of what i'm asking you is trying to figure out what the shorts are getting at. and to me maybe they're just thinking there's a lot of competition and people don't -- we had this zoom in humanization of pets. and then after the pandemic it went down. perhaps those are the things people are worried about? >> no, what's happening is the level of inflation that's passed through the system in the past couple of quarters has been unprecedented. at the same time the consumer's mindset is distressed. so from that point of view if a pet parent was spending $100 on pet, they are still spending $100 on pet. it's just that 20 out of that 100 was going toward toys or discretionary items and now perhaps $5 is going towards that and the rest are going towards consumables and health. >> well, the food did go up --

>> the food did go up, yes. >> why can't it go back down? >> this category isn't really deflationary in nature, per se. you're looking at branded goods that have a ton of brand power and loyalty built into it. so from a -- we're not super concerned about the deflationary impact. you're not looking at grocery where these types of impact are prevalent. pet just doesn't behave that way. >> okay. honestly, i was so glad you came on. because i realized there's one chewy, which is thechewy i know as a customer. and then there's the other chewy which is the new chewy which is doing incredibly well sbrks that's why you have an investor day, to show these things off. and i think you did an admirable job. there's a lot of things i didn't know. that's sum-it singh from chewy. it's chwy. you should read this. there's a great presentation about what i consider to be the new chewy. "mad money's" back after the

break. >> announcer: after the break, can an upcoming painkiller give extra life to your portfolio? cramer details a pharma stock that popped on good news. next.

let me tell you about one of this week's biggest winners, and it had absolutely nothing to do with the fed's dovish turn yesterday. >> they know nothing! >> i'm talking about vertex pharmaceuticals. long-time cramer fave drug. i've been recommending this for ages and i've been doing that thanks to the strength of its amazing cystic fibrosis franchise for a horrendous disease. but now it's working on something else revolutionary. a non-addictive painkiller. the good news started last friday when we learned the fda had amoved a new treatment for sickle cell disease one joinedly

by vertex and crispr. a gene editing company. it's the first crispr genome editing cell therapy to get fda approval for anything. they work by targeting specific strings of your genetic code that cause some type of disease. and then they replace that sequence with the healthy version. that effectively cures the disease. basically this technology has the potential to fix all sorts of genetic conditions and the first of these therapies is about to hit the market and it is very exciting. but that wasn't actually a huge positive catalyst for vertex stock. in fact it dropped 1% on friday. even though the crispr therapy could have huge implicated for 20 million people worldwide who happen to suffer from sickle cell disease, only about 100,000 are in the united states, the big profit center for the pharmaceutical industry. more important while the treatment's based on a revolutionary technology from wall street's perspective it works too well. you only need one course of treatment and you're cured. finally, it will only be

available at nine treatment centers across the country and has a jaw-dropping price tag of $2.2 million. given it can increase someone's life span for decades you can argue it's priceless but who knows if insurance companies will cover it? so it just wasn't as big a deal as it sounded. instead what we care about is what happened yesterday when vertex announced a positive phase 2, not 3, phase 2 clinical trial results for a painkiller. it was a study on how the drug treats painful diabetic peripheral neuropathy. that's a type of nerve damage that can happen when you get diabetes. there's a whole variety of chronic conditions under the umbrella of prif ral neuropathic pain. so if the drug works for one of them we've got to be thinking maybe it could work for 10 million patients a year in the united states. the key to this drug, vx-548, is that it's not an opioid, so it's a non-addictive pain killer. and the results show it does a terrific job of reducing pain. they tested against a control group that got lyrica, which is what normally gets spriebd v

prescribed for nerve pain. vr tex asked patients to rank their pain on a scale of one to ten and after 12 weeks of reduce vx 548 reduced pain levels by a meaningful amount. more importantly better than lyrica at a good dotesage level. this my friends is a very big deal. in fact i'd argue vertex's new painkiller is the biggest story in pharma aside from the rise of the glp-1 weightloss drugs. yet it is not getting the respect it deserves from investors. maybe they just don't realize how big and important this thing is. >> buy buy buy buy buy! >> let's start with this. the phase 2 study showed vertex's painkiller is just as good at treating diabetic nerve pain as lyrica possibly better. lyrica was a blockbuster drug that did $5 billion in sales for pfizer before it lost patent protection. but i expect this vx548 to become much, much larger than lyrica. if it continues to post strong trial results and eventually get

approved because the world desperately needs a powerful non-opioid painkiller. we have a horrific opioid epidemic in this country that n. large part because doctors overprescribed stuff like oxycontin for years. but also because there's no good non-opioid painkillers. if you're suffering from serious pain you try to power through it with something like over the counter tylenol not kidding you try ice which sometimes works, or you take the risk of ruining your life by getting an opioid prescription or you stop popping the 20 or 30 pills that some reckless doctors actually give you when you leave the hospital. so a powerful non-addictive painkiller would be the holy grail for big pharma. vertex is starting with diabetic nerve pain but the broader goal is a non-addictive pain franchise. they could practically print money, people. and that's why the stock surged from 3.57 to 405 yesterday. this morning laring published a note on vertex titled "pain drug is real and opportunity is

tremendous." where he raised his price target from 442 to 445. he believes the pain program could eventually drive peak sales of more than 10 billion. i think he's right on the money. to put that in perspective vertex's cystic fibrosis business could generate $9.9 billion in sales this year. this has been a huge winner. with cystic fibrosis sales rising at a compound rate of 18.5%. now respected analysts say the new pain franchise could be even larger than the cystic fibrosis and a real company here, people. of course we don't want to get ahead of ourselves. this was just a phase 2 trial. vertex still needs to get through phase 3. and even if everything goes perfectly the process should take a few years. i was surprised they revealed phase 2. i would have done phase 3. but maybe this is a

breakthrough. for example, laringa doesn't expect -- till 2027. while i've recommended vertex regularly for over a decade because of the cystic fibrosis drug including a strong push in last friday's game plan i still think it's a mistake to buy the stock hand over fist after such a move higher like i said it's going to take years before vertex gets fda approval for any kind of painkiller that's why my advice is to put this stock on a shopping list and then wait for the next marketwide sell-off to give you a better buying opportunity. there's no hurry here. this is a very long-term call and the specific catalysts the phase 2 trial date has already come gone. i wouldn't be surprised if the stock comes in simply from traders ringing the register saying i'm bored with this one. but think about the difference between vertex and the vast majority of big pharma companies that are losing patents on the big drugs i've been talking about and don't have anything meaningful to replace think pfizer, okay. vertex still has many years of exclusivity left on the core cystic fibrosis drugs and with its non-opioid painkiller they likely have something even more

valuable in the pipeline that could hit the market well before the older drugs need to be replaced. no cliff. bottom line after what we've seen over the past week i think vertex pharma's future is as bright as it's ever been and i've been recommending it for more than ten years. i like the company more than ever but the stock has run. if you don't already own it put vertex on the shopping list, wait for the marketwide sell-off then pull the trigger. let's go to bill in florida. bill! >> caller: how are you, jim? >> bill, i'm good. how about you? >> caller: doing excellent. what i aprivilege to be talking to you. by the way, merry christmas and happy new year just in case i don't see you. >> thank you. same to you, man. >> caller: yeah. i'm calling about a company named recently by "newsweek" as one of america's most responsible companies in 2024. it has health care investments in the usa, europe, australia and south america. 444 properties leased or loaned to 55 operators and seven under

development and five in the form of mortgage loans. the company is called mpw, medical properties. >> yeah. this has not been one of my favorites. it's got a 10% yield. these guys have had trouble. let me just tell you, i think that it looks cheap but it's not cheap. how about i put it like that? okay? let's go to rob in kentucky. rob. >> caller: boo-yah, oh wise master from derby city louisville, kentucky. >> there you go. >> caller: where the 150th run for the roses will happen next year. >> oh, i didn't know that. congratulations. i love louisville. i've been there many times and been to many derbies and it's really one of the most exciting things in the world. >> caller: greatest two minutes in sports. jim, you have been a long-time advocate for debra cafaro, ceo of ventos. this poor performer's down over 17 -- excuse me, 19% the last five years versus its

counterpart will power being up 27%. i realize the interest rate environment hasn't been favorable to most reitss. so is it time to get rid of this poor performer? >> i think you put it in unfortunately a very for me compelling way. maybe i have to own it's not been as great as i was hoping it to be. you obviously -- rob comes in and he's telling the truth. and i cannot run from the truth. i backed someone. it's not as good a story as i was hoping it to be. how about that? vertex, though, its future is as bright as it's ever been. and it's a stock you want to own. maybe get a pullback but i really think this is special. and i don't think people are paying enough attention to it. much more "mad money" including dick's sporting goods versus academy sports. who's going to reign supreme in the sporting goods cohort? i'm going to break it down, try to learn how to do these things.

you'll love it. then stanley black & decker caught a downgrade from jpmorgan today. >> sell sell sell! >> then why the heck did the stock soar? i'm breaking down the big picture in this one. i do think it's the best tool company in the world. and of course all your companies rapid-fire in tonight's edition of the "lightning round." so stay with cramer. we're trying to get to jamaica. stay close and... everything will be all right. i'm ok. i'm ok.

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in any gaiven earnings seasn we're always on the lookout for wildly divergent companies. that's how you separate the wheat from the proverbial chaff. in recent weeks we've heard very different things from a pair of sporting goods chains. there's dick's sporting goods which did great.

then there's academy sports and outdoors which frankly did terribly. to be fair dick's was in awful shape earlier this year. the stock lost 4%24% of its val in a single day. but i told you it was i abuying opportunity. i've always been backing this company. the stock finally bmted in late october and is now up 36% from those lows fueled in part bit magnificent quarter they reported over three weeks ago. academy sports is a smaller operator with roughly 280 stores across 18 states mostly in the southeast and lower midwest. versus 850 locations with dick's. public lands i don't know and moose jaw among others. sxakd mi sports is clearly struggling. let me walk you through the quarter starting with dick's. 1.7% saimstore sales growth when the adjusts were looking for 1.3% decline. margins expanded thanks to better cost control and big buy back and all that translated into a major earnings beat. that was all the more impressive

because when dick's last reported in august they slashed the full-year forecast and gave tepid guidance for the index quarter. it turned out they were resetting expectations because when the company reported three weeks ago they raised their full year earnings forecast again. since then the stock's rallied more than 22%. i know it sounds like raised, lowered, raised, lowered. just say what you need to know is up 22%. academy sports had far less impressive numbers when it reported back on november 30th. academy sports seeing an 8% decline in same store sales that's not that great and that's even worse than the 5.9% hit the analysts were looking for. the net sales came in light off 6.4% year over year. their margins shrank substantially. in the end their earnings per share were down more than 17% year over year to just $1.38 per share when wall street expected them to make $1.58 and many people have called in about that stock. that's the number in my head about why i said don't buy it. to make matters worse academy sports took down every line of its forecast, every single line. i'm not kidding. interestingly the stock actually

rallied in response to those numbers jumping 8.5% the day after the report. and the darn thing's kept running since then. why? because academy sports has some positive things to say about the cadence of the quarter. how sales trended from month to month. according to them the weakness was isolated to september and october caused by warmer than expected weather and business picked up in late october. their august sales were down mid single digits september sales were down double digits but thanks to the pickup in late october that month was only down mid single digits and the pattern holds and things will keep improving. at the same time academy sports announced a $600 million repurchase program bringing their total authorization to 700 million and that is 15% of the company's capitalization. it's a real buyback. so both stocks are up even though one company lorted a strong quarter and the other didn't. but what do we do with them now? long story short, i think you need to sell academy sports into strength. and if you still want exposure to this industry you should swap into dick's sporting goods, which is still cheap at just over 11 times next year's earnings estimates. while academy sports is even cheaper at eight times next

year's numbers the company's also a lot less reliable. you should always be willing to pay a premium for best of breed and this premium's not even that big. i prefer dick's sporting goods for the same reason it was able to deliver such great results this time. academy sports tends to cater to a lower income consumer making it more dependent on discounting which is a dangerous game for retail. dick's also has more scale which means their suppliers are more willing to give them the best product. for example, they're going to get the best assortment of nikes, better ones than academy. dick's has also invested heavily into its e-commerce business and its omni channel infrastructure over the past couple years while academy sports is much less impressive on the digital front. both companies do have significant buybacks in effect as i mentioned. but as we explained in the past buybacks were most beneficial when the company's still investing in its business at the same time like dick's has been doing. see, there's this new house of sports store concept that's doing very well. stat keeping and live stream forget little league sports but

also provides dick ws a treasure trove of customer data. i think the gameis frankly a game changer. especially if you're a dad and you can't get to the game, which is the story i had unfortunately. then there's the guns issue. i don't want to go to tao deep into this one because it's political. but dick's stopped selling guns five years ago because of the school shooting in parkland, florida. that move cost them in revenue but the company doesn't regret it. i know because i sat down with them several times. academy sports still sells guns. and it's something its customers appreciate. it also comes -- they had to pay $2.5 million to the families of the victim of a serial killer who had gotten their guns there. that is hard for me to stomach as you know. in the end, though, this is real simple. dick's sporting goods just all righted a phenomenal beat and raise quarter while academy

sports missed numbers and cut its forecast. dick's has growth even if it's modest growth right now. academy has shrinkage. even if both stocks rallied in response to the latest quarters it's pretty clear dick's is doing much better than academy yet its stock is only a little more expensive on a price to earnings multiple. like i always tell members of the cnbc investing club stick with best of breed. remember for the past seven weeks this market's been on fire and it's gotten to the point where buyers are taking up not just good companies but now and especially today they're picking up baaed ones. as this rally gets long in the tooth which it will you need to start thinking about whether the stocks you own can keep running in the future. my blanket advice is to stick with quality. bottom line, if you still believe in the sporting goods story you want to swap out of the one with bad numbers and that's academy sports and swap into the better operator and that's dick's. that's a process that we call high grading. and it's what the best investors do on a regular basis. you should do it too. >> coming up, cramer takes your calls. and the sky's the limit.

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after last month's massive solar flare added a 25th hour to the day, businesses are wondering "what should we do with it?" i'm thinking company wide power nap. [ employees snoring ] anything can change the world of work. from hr to payroll, adp designs for the next anything. it is time! it's time for the "lightning round" on cramer's -- play until you hear this sound. and then the "lightning round" is over. are you ready skee-daddy? time for the "lightning round" on cramering "mad money." start with david in florida. david. >> caller: hey, jim, big boo-yah from the house of the mouse orlando, florida. thank you so much for taking my call. >> of course. >> caller: so my stock ticker symbol is mbi. it recently spiked after announcement of a special $8

one-time dividend payable next week on december 22nd. what's your take on the -- >> i think you had to do it beforehand. that ship has sailed my friend. it's already up. let's go to craig in ohio. craig. >> caller: hi, jim. thanks for taking my call. i'd like your thoughts on whirlpool. >> whirlpool's another -- i feel awful about whirlpool that i did not pull the trigger on whirlpool two days ago. this is going to be like stanley black & decker one of the two best ways to be able to play the change of the fed. that's why it's up $8 and probably going to continue to go higher. greg in california. greg. >> caller: hi, jim. today i'm calling about carnival cruise line. i was in it earlier this year but thought it had run aground. so i got out, took a small profit and bought -- but it's winter time now, jim and i'm cold. i need to earn enough to buy a sweater. do i still have time to board this ship or did i really miss the boat on this one? >> i bought a cashmere sweater last week at niemann. i didn't know how much cashmere

had gone up in price. holy cow. i think carnival is my least favorite. i like royal and then i like norwegian and then i like carnival. and i do like the group. let's go to evan in ohio. >> caller: hey, jim, how are you? >> all right. how are you? >> caller: i'm good. listen, long time, second time. we spoke a year and a half ago and i had a question about a stock for you and at that time your exact quote was "that is a sweet one, often overlooked by the market." well, it was 20 bucks. and today it broke 54. and i would love to know if you could get their ceo on the show because this is an american success story. i want to know if i buy, sell or hold modine manufacturing. >> that's right up there with trane and caterpillar. all very good. i think you're fine in that one. let's go to nick in florida. nick. >> caller: ba-ba-ba-boo-yah, jimmy chill. nick in florida. i'd like to say a quick happy

birthday to my favorite tiniest little nephew jace. and a big thank you to you, jim. you don't give the man a fish. you truly teach the man to fish. and you have actually improved people's lives. >> well, thank you. thank you. that's kind of the goal. i want everybody to be better at managing their own. not just me. because that doesn't work. so thank you. thank you for understanding what i'm doing here. and how can i help? >> caller: my stock is a company i've owned with a forward p/e of 17, a healthy yield of 4%. always seems to do well at earnings announcements. my concern is it's fallen behind in the ai race and can it pivot. i've had a nice run-up. shall i sell my ibm? >> no. i think that artem krishman, i think they're figuring out how to use red hat the right way. i think the stock is inexpensive. i hope i don't regret this but i think it's a pretty good stock here and i wish i had pounced on

it for my trust at 145. let's go to carson in indiana. carson. >> caller: go for carson. >> yo, carson, what's up? >> caller: let me get a quick shout out to these indiana hoo-hoo-hoosiers. i want to know your thoughts on draft kings. >> i think draft kings has had a very, very big move. i think at $36 represents a lot of value still but i'd like it to come in more because we liked it much, much lower. and that, ladies and gentlemen, is the conclusion of the "lightning round"! >> announcer: the "lightning round" is sponsored by charles schwab. coming up, renovate and celebrate in how a home improvement stock can give you the tools to thrive. next.

investing is about what could happen, not what's happening right now. this morning jpmorgan published its 2024 outlook for the building products industry. you come across a downgrade in stanley black & decker. they downgraded the best tool company in the world to underweight the equivalent of a sell rating. full disclosure we own stanley black and decker for the charitable trust betting on a resurgence in both professional tool demand and also do-it-yourself demand from regular consumers. so when i saw the downgrade i said to myself i'm puzzled.

quizzical. the research analyst says he believes the estimates on the street are too aggressive because he fears margin compression. in other words, he's predicting a shortfall caused by lower demand and higher supply. that's a deadly combination. nine times out of ten this kind of research would have crushed any stock. but not tid. today stanley black and decker saw its stock soar 5%. on a day when a major house urged to sell. the market is saying this jpmorgan analyst is dead wrong. dead wrong to use the prism he's doing. the analyst says we have, and i quote, a tale of two end markets, new residential rebounds while repair remodel remains stuck in reverse. that made sense before 2:00 p.m. yesterday. the home builders have been roaring and they still are. but you can't look at things in static fashion. things are not reversing. you see, jay powell did something brilliant yesterday to solve the housing shortage. i told you over and over again that home prices are up 40% since the start of the pandemic and that's the bane of powell's existence. he wants them lower.

but there's just not enough supply and too much demand. now, that's in part because the home builders have been so disciplined about holding off on new construction. that's one reason i've liked the stocks all along especially lennar which reported tonight and toll brothers. they announced a buyback yesterday. everybody figured if the fed kept raising rates mortgages would get too expensive and people would stop buying homes. then any new supply would overwhelm the diminished demand and prices would crumble. didn't happen. instead we got the opposite. every time the fed raised rates mortgages would get more expensive but the secular thirst for new homes didn't stop and the price of homes never came down. existing sales, though, usually 90% of the market, dried up. because nobody wants to give up their ultra low rate mortgage that started before the fed started tightening. millions of people bought homes with 3 and 4% mortgages. if you bought a new home you'd be paying 8%. so a lot of existing homeowners just refused to sell. therefore, there was only one way to make housing cheaper. you have to lower the cost of

the mortgage to be competitive with the other mortgages. i know it's counterintuitive for the federal reserve because raising rates has always crushed housing prices. but jay powell finally figured out it ain't working. it ain't working this time because of the low mortgage ralts left over from covid. soon we'll see a flood of older homes for sale as interest rates come down, potential sellers stop feeling like idiots for giving up their old mortgages and housing will return to much lower prices. let's bring it back to stanley black & decker please. before the fed meeting you wouldn't want tools that help people fix up old homes but now with the probability of used homes finally beginning to hate the market you don't want to sell the stock of black & decker. you want to buy it. because when people buy older homes what do they do? they renovate and repair them with stanley black & decker tools. the buyers ignored the sell recommendation and swarmed the stock for that reason. i bring all this up because you cannot have a static view of the market when you buy stocks. this analyst was dead right about stanley black & decker. now jay powell's cracked the code for making houses more affordable by reversing the hold

of mortgage rates. stanley black & decker is too cheap to ignore even as the stock's up 100 to 11, just a few bucks away from its 52-week high which i think it will take out very soon. i like to say there's always a bull market somewhere and i promise to try to find it just for you right here on "mad money." i'm jim cramer. see you tomorrow. "last call" starts now. i'm contessa brewer in for brian sullivan. right now, on last call, call it the home sweet home trade. shares on a tear for company. even tangentially. once-battered stocks roar back. what's really fueling their turnaround. and it may not be what you think. surging markets, falling polls, where the gulf is growing between voters and bidenomics. >> hey, bob. you're going to have company. disney's