season, like we know that in july. oh, yeah, that's why we're all going hand-me-down. we're using last year's ring binders and chewed-up pencils with worn-down erasers. and of course, we're sporting those old mike vick nikes. can you imagine? second, tech's rolling over. witness apple, the leader, doing nothing. the rest of the stocks spent, dragging, overdone, finished! stick a fork in them! third, china. still, china still. that market just got trashed. >> the house of pain. >> and the word was that china's full up, it's done, it's not buying anything anymore. yeah. don't even pass the hoisin. the mineral trade is over. oil is plummeting from mectionz 70 to the mid-60s because the

chinese have left the building. fourth reason for the sell-off -- credit woes! big credit card defaults, worrisome. really scary! fifth, the cash for clunkers program. whoa! people are foregoing other purchases. they're not shopping at target or home depot but at gm or ford, because cash for clunkers is borrowing sales from everything else, including cars down the road! demand pulled forward! nobody will buy a car next year! there will be no customers left. finally, socialized medicine is coming. ♪ and it will make the government -- >> they know nothing! >> -- the insurer of everyone who can't get insurance from the enemy, the united healths, the

etnas, the signas, the humanas and the wellpoints, and we the taxpayer will have to foot the bill! >> house of pain. >> all right, now, 24 hours later, 3% later, what's changed here, 24 hours? how can we go up 83 dow points today if the consumer's on death's door, china's finished, cash for clunkers has killed cash for ipods, mittens, maybe mitten clips, computers? we canceled back-to-school season and we will have to go to france to get an appointment to see a doctor not of our choice. okay, let me give you this witness for the prosecution's view of things. first, today, target and home depot just joined kohl's and walmart saying that sales and profits are getting better. to me, target and home depot close to -- that is retail, isn't it? i mean, if we're not going to have a back-to-school season, wouldn't they know?

walmart and target are the two biggest back-to-school stores in the country and they say they're encouraged about back-to-school season. memo to editors and writers on this, do your homework. you're not listening. second, tech's rolling over like beethoven, which ain't that bad. the mobile internet is tacking, the leader of the mobile internet is apple. boy, i guess that will still go down. wrong, up four today, a colossal gain because we've heard antidotal evidence that the iphone is taking names all over, canada, europe. the darn thing isn't even in china yet. generals lead, others will final. after the close, cramer alert, hewlett-packard reported what looks to be a nifty quarter. it's imperative that the bears find something wrong here. i'm feeling good about it, feeling good about my charity tonight. we'll pen something tomorrow saying the same. three -- oh, my god, after four days, look out! [ gong ] china's back in the building!

the barometer of economic health that is oil has soared back to $70! i believe the chinese are just pickling, which will be a continual theme of tonight's show, pickling. and that means they're playing hardball trader with the world's producers of fertilizer -- think p.o.t. -- copper, think scx, iron, think rio tinto. part of it claims walking away from the table or claiming you don't need anymore. it's a great way to knock down prices. only essential as a command economy like red china can pull it off. can you still call them red china now that they're our chief debtor? maybe we can only call them sir. it seems that this pickling, tough haggling for raw goods, has ulz fooled people. don't believe me, i consulted the cannon, the definitive text on this. andler's passage of arms describes chinese pickling over rubber with the commies playing hardball with the producers in malaysia and traders in

singapore and pantsing them both. hmm, how old's this text? ambler penned it in 1967, when the chinese are really communists. for 50 years we've been fooled by these chinese capitalists, bumbling economists. four, credit woes. we just got debt out of citigroup and american express shows a dramatic decline in the percentage of deadbeats. that's a change. defaults going down? media don't want to touch that one. boy, we've got to foment something new. reach for citigroup on that data alone. i would say buy, buy, buy. fifth -- cash for clunkers? oh, no, gm announced they have to put more people to work because of it. oh, geez. wait a second, wasn't gm supposed to be a giant government feather-bedding and gold-bricking operation? they're putting people to work? ford's raising production for 2009. must be alan mulally didn't take the government's money. how could ford do that if we borrowed sales in the future? how do we spin that negatively? don't worry, they will.

finally, socialized medicine? it dropped over the weekend in favor of, huh, united health and etna and signa and humana and wellpoint. grassroots rebellion a bummer when you want change. so, with the objections conquered, you can see that those bulls who had morphed into bears were stampeding right back into bovine form like something out of the metamorphosis. that's why the dow rallied 85 points and the sell-off that i told you would be shallow, well, it was. here's the bottom line, every argument for the bears have of selling the view that things are okay and getting better has been totally rebutted by this great market, which wants go, of course, to the land of 1,000 bull dances. the bull prosecution rests. all right, let's go to pat in illinois. pat. >> caller: cramer, you're a wall street hall of famer. >> well, thank you very much! did i make it first foul or was it the veterans committee?

>> caller: first round. >> thank you. thank you. >> caller: making some moves, also, thank you, boo-yah. >> well, you're welcome boo-yah. i'll give you one of those. >> caller: all right, thanks. jim, i like the agreement between nokia and microsoft. do you support the software on smartphones as a catalyst for nok nokia's costs, which i think is oversold short and long-term. given this agreement won't bear fruit until some time next year, do you think this takes too long to develop? >> yes, i do. i think that nokia is a loser on the sell, sell, sell. i think that they are becoming a motorola this next generation. you want smartphone, you want brains, you want apple, period, end of story! this market knows how to put the bears in their place! you had a pony like bony maroney in the land of 1,000 bull dances. and yes, the prosecution rests! "mad money" will be back after the break. coming up, is it time to taste what this food manufacturer is cooking?

as this stock flirts with its 52-week high korcould it go hig? cramer with the technicals in "off the charts." plus, tool time. has the battle between two home improvement giants wages on, cramer puts them head to head and decides which one could make you mad money. and later, the wizard of wall street kicks too t into high gear to give your stocks their final judgment on the "lightning round." all coming up on "mad money." i'm racing cross country in this small sidecar,

but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate.

with built-in access to bbbb. tonight we are crossing the lancy, the ultimate pickle film with a special pickled edition of "off the charts." we've got dueling chartists tonight, two technicians who are

squaring off on whether we can turn jars of pickles into jars of cash by buying private-label pickle-maker treehouse foods, ths, for all of you home gamers. it also makes baby foods, soups, jams, jellies and salad dressing, making for one unappetizing sandwich, even as i think it may be a delicious stock. we're huge sponsors of treehouse which has had a big run and is one of the few stocks to go higher during yesterday's brutal sell-off that shaved 186 points off the dow. that piqued our interest, because when we see stocks that can buck the gravity of a down 186-point day, we know we might have a rocket on our hands. now, i've recommended treehouse a number of times on the show as a trade downplay because it's private-label grocery. see, look, you can put your brand -- obviously, it's not called your brand. if you go to the store, it's kroger brand, not your brand,

but these products are 25% to 50% cheaper than name brands with higher margins, meaning more profits from every dollar of sales for supermarkets like your brand albertson's, your brandcosco, walmart. i said treehouse was a buy at $25 in march of 2006. then again i reiterated $30 on november 20th of 2006. went back to it at $24 august 14th of 2007 and $24 again on the september 16th at 2008 and i did it again march of this year, $26. given how bad the market is, that ain't bad. now treehouse is up in the trees. it's trading at $37.50. that's a 40% run from the last time i gave it my blessing. now, most of that run happened. remember, going "off the charts," shortly after the company reported a blowout quarter. see, the company reported a great quarter right there. that was august 6th. and then it immediately exploded

up here, peaking at 38%. since then, treehouse stock has meandered slowly lower. so, it's a move which included a 76-cent jump today now over? if the stock hadn't backed down, or does it have room to run? so, let's go to our dueling chartists to find out. first, i have allen farley, okay? he's my colleague at thestreet.com, writes the daily swing trade newsler. i'm chairman of thestreet.com. he thinks the technicals look good for treehouse. farley thinks the pullback from $38 -- that's right here, okay? is what technicians call a bull flag correction. that's some priceless technical gibberish, so let me translate. when a stock has a big, fast run-up like treehouse has had and then it pulls back on low volume, okay? as treehouse has done, that's a bull flag. to chartists, it indicates there

aren't a lot of sellers, just a decline in demand, and it can mean that the stock will have another big move up. farley thinks that could happen. he suggests buying treehouse when it breaks out higher, okay? next things could take it to the 40s, but if that takes a while, it could go lower. and he thinks that at $35, you've got to pull the trigger again. that's first support level. in other words, there really isn't a level where he doesn't like it. buyers start coming in and he thinks that will prevent the stock from going $35 below it. i think farley might be right about the bull flag, but since i'm an investor, not a matador, i wanted a second technical opinion on treehouse. dan fitzpatrick, another great technician and a fellow colleague at real money, the pay set where i blog, he disagrees with farley. he thinks treehouse is overextended. it's way too high above its 200-day moving average. that's a long-term technical measure of its trajectory, for him to feel right about giving it thumbs up, and we like fitzpatrick.

he thinks the bull flag pattern, it's only potentially bullish. we need to see a breakout happen before he feels good about it for the pattern to be complete. and that would show that the buyers are back. i think by the time that happens, it's going to be too late, fitz, but he thinks the upside's minimal, so he's a bear. when technicians disagree, what do we do? we fall back on fundamentals. the private-label thesis is still very strong, because private-label products are a great way for supermarkets to make more money. see, it's not just a trade down play toward cheaper products that will evaporate when the economy improves. it's what i call secular growth trend towards more private-label foods. treehouse is one of the biggest winners. 61% of its sales are from private label products to grocery chains. 20% of sales, private label to food service companies. there i want you to think cisco. that's the syy, not the csco kind, and also mcdonald's. thanks to products and commodity costs, treehouse margins

expanded by 275 basis points. authentic wall street gibberish for 2.75 percentage points in the last quarter. that's a big increase in profitability. is it too high? well, here we don't use charts about why it's too high. we use fundamentals. it sells at 16 times earnings, but the ceo expects earnings to grow 26% for the next three years. growth managers wouldn't hesitate to pay 20 times for this. that means that the right flag will be the bull flag, especially because i think earnings growth is going to send treehouse to $45. that's 21% higher than it is right now. so, i've got to disagree with mr. fitzpatrick and his bearish formulation of the bull flag, and i'm going with farley and his trend-setting bull flag. don't think of this as a food stock that's getting too expensive. think of it as a growth stock that's still too cheap. in the past, treehouse has grown by making lots of smart, small acquisitions to expand its private-label products. it acquired ed smith for jams

and sauces, dom's canned soup and baby food business, which it helped expand it beyond pickles, come closer to being a one-stop private-label shop. that's how i think of it, but it's been two years since treehouse's last acquisition. on the conference call, for the blowout quarter that caused this big move here, the ceo sees as many as 13 potential targets. that's unbelievable, in the next 6 to 12 months. the company's got the money to make these kinds of purchases, plus it has the security. i mean, because the stocks have so much. every time it makes an acquisition, this company's stock goes higher. so, we've got a bunch of catalysts ahead. here's the bottom line, the technicians may disagree on treehouse, but the fundamentals are strong and the bull flag for this pickle stock i think could be real, meaning a big move is coming. it could be in store for this swiss family robinson meets correspondencing de lancey pickle stock. stay with cramer. coming up, tool time, as the

battle between two home improvement giants wages on, cramer puts them head to head and decides which one could make you mad money. and later, get instant access to the prodigy of profits on an all new "lightning round." plus, have an appetite for profit? cramer's going one on one with vng foods ceo dave winner to see if they've got the right ingredients on the executive decision. all coming up on "mad money."

to make money in the market, you have to recognize that execution matters. the company that can out-execute its competitors will have a stock that will out-perform its competitors. and nowhere is that more clear than in the head-to-head competition we're seeing in home depot versus lowe's. on monday, lowe's reported an

absolutely horrid quarter and got hammered when it told wall street to lower its expectations. why? what's the problem? to ask lowe's, it's the do-it-yourself consumer. blame the customer. she's all tuckered out. the stock has plummeted 10% since then. >> the house of pain. >> then today, home depot reported a quarter that looked actually pretty darn good, and even better it raised numbers! ♪ hallelujah >> hmm, lowe's blames the consumer. me, i reach another conclusion -- the consumer's going to home depot. and why the heck not? home depot's executing on its plan. looks like lowe's doesn't even have a plan. in fact, i consider home depot

the executioner. lowe's is marie antoinette. how did this happen? for years, we always thought that lowe's was the well-oiled machine, while home depot was self-destructing, courtesy of its ceo, bob nardelli. bob moved into wholesale at the top, cut costs by cutting customer service -- >> the house of pain. >> he knew nothing about retail, nothing about what the consumer wanted. he had no merchandise, no eye at all. i can't believe he didn't obliterate home depot. perhaps a testament to the brand that was superior, no doubt like cramer fave mason storm in "hard to kill." it took six years to get wise to this guy's act before he got the boot. and while a picture is worth a thousand words. yeah. in his place, the man who has turned it all around, frank

blake, the ceo. blake's number one priority coming in was improving customer service, and it worked. he's a great manager. implementing the restructuring program that now is causing home depot to beat earnings, cut costs, closed expo. that was that high-end home remodeling center. shut down underperforming stores, something that most retailers are slow to do because it makes revenue growth smaller. many managers are addicted to higher sales even if they make less money. the company is now closing so many crummy stores that they will now net add fewer than ten this year. the right merchant, mixing a right mix of low-end and high-end products. on the conference call, they said this quarter was the best in recent history of exceptional in-stocking. they don't just have the stuff, they've got the right stuff. because of the downturn, the percentage of professionals versus consumers shopping at home depot has declined. professionals have been pretty hard hit. but if the economy improves, the professionals will come back and

give home depot's margins an even bigger boost as they buy more and more stuff and they buy expensive stuff. blake's great at controlling inventory. that's the nemesis of all retailers. that's one of my themes. inventory fell by 9% this quarter, even as home depot sales also declined by 9%. that's perfect. they're on plan. meanwhile, lowe's has been doing almost everything wrong, merchandising. it's more subject to demand for bigger ticket items. this is a lot of wrong time for that. furniture, appliances. they're 30% of sales, and that's just not what people are buying right now. the average ticket price is down 9% at both companies. plate give you a totally antidotal example. i needed patio furniture recently, so i went to lowe's where i actually bumped into someone i know from my hometown. he was checking it out. i was checking it out. when i saw this set i liked, i was embarrassed that i was thinking of buying it because as my friend pointed out, jim, that stuff's really expensive. lowe's, i bought it, but i can't believe how many money i paid. ouch. i had to pay up.

hey, i was desperate because i was throwing a neighborhood bash that you weren't inviting to. lowe's, i thought you were a discounter. at lowe's, inventories rose 3% last quarter on a 4.6 decline in sales. that's awful. despite lowering sales growth yesterday, it's still planning on putting up 62 to 64 stores this year, 45 next year. it should be shutting them down for heaven's sakes! lowe's is growth at any price. home depot's clearly the better company. how about the stock? we always like the accidentally high yield, which was at 4% weeks ago when i bought it for actionalertsplus.com. stock's getting recognized. yield's 3.3%. stock went up. still bountiful for a yearly. that's what attracted to me on the stock, which is why i made it such a huge position in my charitable trust. and i can control -- well, you can look at it, www.actionalertsplus.com to see what i'm up to. is it too late now to guy? hardly. before nardelli almost destroyed the franchise, we used to call home depot the home dust spot.

it was that powerful. we are seeing how well they can do when things are terrible. can you imagine what this company can do? it raises numbers in this environment. can you imagine what will happen as things get better? and they are getting better. sure, i wish it will pull back, but perceptions take a long time to change. i think most professionals thought lowe's had left home depot in the dust. they didn't count on blake saving home depot after the catastrophe that was nardelli. they didn't count on the greatest retail revival i can recall. given that we are now just recognizing the winter and new despot, i think it's time to buy despot. home depot is better than lowe's, both as a company and as a stock. despite what happened, i think the next stop's $30. why don't we take calls? why don't we go to bob in illinois? bob. >> caller: hey, jim. >> robert, what's up? >> caller: i've got a question about owens corning on how they

would benefit from the stimulus package, not only from home ins populati insulation, but industrial insulation. could they benefit quite a bit? >> i think so. michaelthalman, who's been on our show. he was recently on the wonderful and fabulous ones, "street signs" with erin. he has got a terrific situation going in terms of conservation, okay? in terms of -- you know, because of insulation. but he also said that housing starts not being up is going to hurt the numbers. i think the good is overwhelming the bad. by the way, when speaking of owens, owens illinois is a company that makes glass, also very environmentally friendly and is a huge beneficiary of the decline in natural gas. i point it out because why don't i mention owen wilson? a bunch of owens sitting around talking. nick in texas, nick. >> caller: yes, sir. >> excuse me?

>> caller: i said a big boo-yah from dallas here. >> oh, boo-yah right back at you! >> caller: all right. my question is, with kids coming back into school and with the market kind of sliding towards the adult market with, you know, gains up and the wii being so popular, that combined with, you know, you can go to walmart or target to buy a game, but if you go to gamestop, you could bring that game back and get store credit and then spend even more money there. >> yeah, nick, that's an old story and everybody knows it, frankly. i think you make some good observations, but those are observations that have been observed before. i am not saying that you're an apostle of the obvious. i am simply saying that we know a lot about gamestop and we don't think here that it's going to go much higher. i'd like to go to joe in florida. joe. >> caller: jim, boo-yah from ft. richey. >> how's the weather? clear up down there yet?

>> caller: it's starting to now. in florida we have a rain storm every afternoon. >> gotcha. how can i help? >> caller: first of all, thank you for sharing your knowledge and expertise to all of us. >> thank you. >> caller: i have a question concerning jcpenney. >> sure. >> caller: i'd like to know if, while the retail sector is down right now, do you see them gaining at a greater pace than their competitors? >> yeah, yeah. i've got to tell you, jcpenney had a really good month of july, then they reported, everybody freaked out, thought the guidance was real bad. i think like altman, i said earlier i thought they had lost their way. i think that was too harsh a judgment. i think the manhattan store's doing well. i think they're coming around. now, now that kohl's has moved, now ha home depot's moved, now that walmart's moved, target's moved, i've got to tell you, i think jcpenney can play catch-up and it is a buy here. home depot versus lowe's, it's all about execution. and the key executioner, the top one is home depot. hot dog, we call it on the floor. stay with cramer.

coming up, try to keep up with cramer as he takes your calls "rapid fire" in an all new "lightning round." and later, have an appetite for profit? cramer's going one on one with b&g foods ceo dave wenner to see if they've got the right ingredients on the executive decision. all coming up on "mad money." oof!

i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac!

♪ well i was shopping for ♪ which one's me - a cool convertible or an suv? ♪ ♪ too bad i didn't know my credit was whack ♪ ♪ 'cause now i'm driving off the lot in a used sub-compact. ♪ ♪ f-r-e-e, that spells free credit report dot com, baby. ♪ ♪ saw their ads on my tv ♪ thought about going but was too lazy ♪ ♪ now instead of looking fly and rollin' phat ♪ ♪ my legs are sticking to the vinyl ♪ ♪ and my posse's getting laughed at. ♪ ♪ f-r-e-e, that spells free- credit report dot com, baby. ♪

it is time! it is time for the "lightning round" on cramer's "mad money"! what's that? that's rapid fire calls! one right after another! you say the name of the stock, i tell you whether to buy, buy, buy, sell, sell, sell. i do not know the callers or the

questions ahead of time. my staff plans this for me to reply. this sound and then the lightning round is over. are you ready, skee-daddy? it is time for the lightning round on cramer's "mad money." let's start with mike in new jersey. mike! >> caller: jim, a big new jersey boo-yah! >> exit 14 on the turnpike there, partner, what's shaking? >> i'm wanting to hear from you last week, ubs downgraded or dropped its target on r.i.m. from $90 to $88. then today somebody popped it to $150. the stock is hovering around $70 at a low point and pops up to $150. >> this isn't chinatown. it's one of those. i have to tell you, i personally feel that research in motion is just okay. i cannot get in the way of apple. i think apple's data for the smartphones is so explosive that i am going to continue to say

sell, sell, sell to research in motion and buy, buy, buy. i want to own so badly this apple for you instead of r.i.m. how about kathy in colorado, kathy? >> caller: hey, boo-yah, jim, from beautiful colorado. >> a mile high boo-yah. what have you got. >> caller: wind stream. how are we feeling about today? >> we had the decree co-on and the ceo said the dividend was fine. we're talking about a small yield. i'd like to get in touch with him again that was a while ago, last year. but as long as he said it was fine, i've got to say it's fine. i think the guy's a stand-up guy. who am i talking about? jeff gardner, president and ceo. how about bill in california? bill. >> caller: professor cramer boo-yah. >> oh, thank you for giving that, chief. what's up? >> caller: you got it. a couple weeks ago you were talking about an ipo called mdn. they got hit a little yesterday.

i'm wondering if this is a good point to try to get in on the stock? >> skip, i would get in. my friend bill ford is the key man there and he has always been good for his partners and for the people who buy the stock. it happens to be very fit. it's been stalled because obviously the health care plan, the health care revamp is also seemingly stalled. it doesn't matter. emdeon has potential. i would use the weakness to buy. it how about theresa in tennessee? ooh, volunteer theresa. >> caller: actually, it's an ole miss rebel theresa. >> oh -- >> caller: i'm sending you an ole miss rebel hottie tottie boo-yah! >> caller: smoke show boo-yah! >> caller: thanks for everything you do for everybody. my question today is on intercontinental exchange, another southern town. can you give me some of your

thoughts? >> this is a very, very tough one, because i loved it when i was at georgia tech and that was a different market, and we had to say no to a lot of these stocks after the big decline. i think it's an important exchange. i think it's okay, but i can't get behind it, theresa, i really can't. i'm going to say don't buy. it's a different changed world. gary gentzler, who's running it is of great substance and he will do a great job and that might mean not everybody makes as much money in that game as they used today anthony in massachusetts. anthony? >> caller: what's going on? >> yeah, how about down by seven? go for a wild card boo-yah. that's a reference to the red sox. go ahead. what's the stock? diana. diana's okay. i just went through the trade magazines and once again i found that nordic american tanker -- i know, it's a broken record, but that's okay -- is doing better than everyone. this is a trade publication that

i get. you take the n.a.t. dividend. i trust it more than dina. i am still going not with diana, but with north american tanker, and i think you should go with cramer! >> the "lightning round" is sponsored by td ameritrade. ever want to look over the shoulder of a seasoned stock trader? well, here's your chance... i'm running strategy desk from td ameritrade to set up a trading strategy based on how i think the market's trending-- right now i'm looking at a 20-80 stochastic cross. now, i could be running multiple strategies... my own tweak or some combination-- but for now--this is good... this is strategy desk, advanced technology for traders from td ameritrade. it's designed specifically for traders. with strategy desk i can compare the 20-80 with other strategies and back-test them all. multiple strategies. multiple stocks. over time. and i can look at that at the symbol level

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with stocks as a tickle, it's crucial to always pick the right one. most of the time when you want to invest in a company, when we talk about it on "mad money," your best bet is just to buy the common stock, but sometimes you get more and better choices. take b&g foods. this is a company that makes its money buying neglected, underdeveloped brands from much bigger players -- kraft, pillsbury, nestles, that are frankly too big to care, and then turning them around until they're much more profitable. and then it returns those profits to shareholders in the form of a notoriously b.i.g. juicy 8.1% yield. now, you might know b&g. kind of like conagra, they have all these great foods you don't

know as b&g. i'm sure you know ortega, big in the aisles. cream of wheat. how many times has your mom made you eat that? i actually like it. farms of vermont pure maple sugar. this is -- i think this is almost everybody's jam, isn't it? los palmas chili sauce. the beans are my fave, i have to admit, down there. and emeril branded sauces. it's b&g's line. and yes, because we are crossing delancey all night, b&g pickles, best there is, no offense to vlasik or clausen. it immediately goes about cutting costs and growing profits, but while the slash in jobs last year, it also slashed the dividend. we had a 7.5% workforce cut, but a 20% dividend haircut, more like a beheading. b&g benefited from lower commodity costs and management gave a strong outlook for the third quarter when it reported second quarter results on july 28th.

let's say you like b&g businesses like we do. the next question, is what's the best way to approach it? what do you own? shouldn't you just buy the common stock? trades under the symbol bgs. or how about something i think's even better, a hybrid security that's a combination of b&g's common stock with the bond, one that has an even bigger yield than the common alone. and it's really out-performed over the longer term, the common. for that, i think you should look at the enhanced income security, symbol eis. this one trades under the symbol bgf, boy girl frank. each year, b&g's eis is a combination of the common and the bgs, and the principal of b&g's 7% senior subordinated notes. i know i'm using terminology here, but it's important because of what you're about to hear. you're then getting an stock with an 8.1% yield that combines

with a bond of a 12% yield. so you get a yield of 9.7% the current price, more than the common. see what i'm getting at? this is interesting, right? even better, the enhanced security bgf has historically out-permed the common stock. since may 23rd of 2007 when the common started trading on the new york stock exchange, the common's down 23%, assuming you reinvest the dividends, but the bgf, the hybrid's down 5% with reinvested dividends. the s&p 500 was down 35% in that period, dow up 32 portion. the bond portion of the security protects you from declines. since the market bottomed march 6th, the common has been on fire, 120% up with reinvested dividends. the hybrid up, better hann a sharp stick in the eye. a great bull run. over the longer term, i think the hybrid does well. howev however, i would only buy the hybrid for your i.r.a. because

it's interest, but you don't have to pay the taxes. one potential problem, bgf may not be around much longer. starting october 30th of this year, b&g foods can redeem the 12% senior notes that make up the bond portion of the hybrid security. it has to be at a 6% premium, though. the worst that happens is they call the security, meaning they force you to sell it back to them at 106% of the principal value. you collect the premium and you're simply owning the common stock. it's important to own the right security. i know that sounds like gobbledygook, but when it comes to your i.r.a., i'm trying to find the highest safe yield. i think it's the bgf. the hybrid security has that, but i have concerns over the dividend for the common stock and whether or not the hybrid security will be around much longer. so, let's hear from david wenner, ceo of b&g foods. mr. wenner, welcome to "mad money." how are you? >> good. >> good to see you. give me the progression of what happens. you contact a big food company that has a brand they think's

under-performing and you make an offer for it? is that the process of b&g? >> typically, it's an auction process. they put the brand out for sale, we participate in the auction, and if it's the right price, the right value, we try and be the buyer of that brand. buy over that brand. we bought things like chemoof wheat from kraft, ortego from necessarily and turned those around and done really well. >> why don't you in terms of a branding campaign, why don't you let us know it's bng's cream of wheat or ortego. >> we think they stand on their own. ortego is a great name, cream of wheat is a great name and depending where you are in the country, the pickles are a great name. >> he licenses his name to you. >> we have licensed the right to make shelf stable foods under his name. we work with him to formulate these products and take them to marke

market. >> recently you had a quarter where one of your products had a problem procuring raw goods, maple syrup. how could this get in the way of all these great brands. >> that product there is dependent on supply of maple syrup owl out of quebec. the crop was bad out of quebec and we suffered a 15 month period where it's been hard to get and very expensive. that's changing. we had a very good crop this year and pipelines refilling and right about now we're starting to gain sales in that product line. >> you can, given that crop expect it to help the bottom line. >> exactly. where it has been a drag on us last year, it will be a positive the rest of the year. >> given the fact you have tremendous stable business, why did you have to cut the common stock dividend. >> we were at a point last year, we had two soft quarters, people

looked at the cash flow, the question was, are you even going to pay a dividend? we were trying to demonstrate to people through head count cuts, economy and other areas and by a 20% cut in the dividend, we were committed to paying this dividend albeit at a somewhat reduced rate. we wanted to establish that confiden confidence. we felt it was important people have that stock and confidence there will be a dividend. >> we were recommending the hybrid security that performed better. we read the change -- i know it's a night time show and educate and entertain, you changed the language in your indenture so you might get rid of the hybrid. if i tell people to buy the hybrid, will it exist come the end of october. >> we changed the language in the indenture so we could buy the subordinated debt and perhaps the hybrid would split.

we have to call the bonds to get rid of that bgf security. the jury is out whether we will do that or not. >> am i to recommend it? i think it's a great way to play your company. am i right to recommend it here. >> my ira is chock-full of that stuf stuff. >> it's exactly what -- i like mass limited partnerships and this security for ira, it compounds and regular income otherwise and dings people. >> a better number, if you bought that in 2004 when we went out on it at $15, it's gone up to almost 16 now. we've paid you over $9 in interest and dividend in those five years. >> this is a period where the market's done nothing, which is why i wanted -- i'm sure people say, wait a second, this little pickle company, what's the point? it's not a little pickle company, has a lot of brands. i was at the okchiropractor tod,

you wear these long enough, your back hurts. what do you have for my ira? you have to find these higher yielding securities, i never give away who i'm seeing on my show. b & g is precisely what you should buy for the hybrid security. you own it. i wish i could buy it. i'm not allowed to have individual stock. >> the bond has a life in any event. >> all bonds are fine, absolutely. >> as you say, you will get a call premium, should we call that bond. >> you put together a great group of products. we're thrilled we've been recommending something through this very bad period has done quite well. david wenner, president and ceo of b & g foods. thank you for being on the show. more and more active trads are turning to fidelity

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got a nice rebuttal to the bears. i think things are fine, not great, not bad. stop selling the hewlett packard. i promise there's a bull market somewhere. i'm jim chaimer. not so bad out. i'll see you tomorrow. i'm bill griffith. coming up on the kudlow report. is the public option back on the table or not? if it's not, what exactly would health care reform look like. >> and what just won't go away, the stimulus package in the next hour.

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tonight on the kudlow report, the new bull market rally gets back on its feet. stocks rally across the board with financials and retailers leading that charge. is the hot button public option back on the table or not. the white house that says controversial plain remains. and there are our experts tonight. and giving us their ob investment strategies an what to expect from this new bull market recovery. was the nearly $800 billion stimulus a big help or a big

dud? do we need a second stimulus package? yes, we will debate that again tonight. we'll talk exclusively with the ceo of rentech, that just signed a biodiesel contract with eight big airlines. fasten your seatbelt. the kudlow report starts right now. good evening, everybody. i'm bill griffith fort pitt. welcome back to the kudlow report. larry has the evening off again this evening. the health care sparked this debate cia wide and they don't seem to have a solid stance on it. how do americans feel about the public option when it comes to health care reform. let's go to hear the answer for