>> i'm jim cramer and welcome to my world. >> you need to get in the game. >> firms are going to go out of business and he's nuts. they're nuts. they know nothing. >> i always like to say there's a bull market somewhere. >> "mad money" you can't afford to miss it. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to help you save a little money. my job is not just to entertain you but to teach you. so call me at 1-800-743-cnbc. too far, too fast. heard it all day today. as in the market simply gone up too much. now it's got to come down because it happened with such alacrity. with the averages struggling, the nasdaq down .16%, i get the worries. i get the woes. i hear you people.

i think i hear you people because it's a continuous loop of caution. you hear it with the pundits ç saying apple has gone parabolic. you hear it when the critics chirp at a certain point it has to succumb. you hear it when the negativists chat about earnings worries. those stocks related to yes, china, sell, sell, sell. you hear it when the skeptics harp about the under-performing banks. they start out and now heading lower. and you hear it when the cat-callers grouse about the retailers. don't they have to stumble at $4 gasoline? don't they? and you're overwhelmed by the fretting about the autos and housing energy industries that falter when the transports go down. oh, doctor, have they ever been going down. i'm going to beg to differ. somewhat. not entirely, but somewhat.

those are not imagined negatives. let me address each one, not to refute them. i can't. but i want to take them as a whole because the statements as a whole, while tending to be true without context certainly make you feel like you should be panicking outside of this market. and i'm saying that's a mistake. first, a little bit of physiology here. markets don't get speeding tickets. this is not the new jersey turnpike. there are not staties around the bend with radar guns. speed has nothing to do with earnings. as much as we would like stocks related to the velocity, we actually trade and invest on earnings. right now, as a whole, stocks are cheap relative to where they have traded at other times on earnings. now, every time we divorce valuations from earnns and think about something else, whether it be companies like yelp or pandora that don't have earnings or green mountain coffee and alcoa, you've got to be careful. but when we measure stocks

versus their growth rates, we keep coming up with stocks that are frankly too cheap to ignore. they're very high. or earnings versus growth rates. so let's challenge it -- well, let's just take the elephant in the room. let's just address it right now because it's all anybody wants to talk about. so i'm going to give you the skinny. let's talk about apple. yes. apple has a trajectory. yes, it seems like the stock just won't quit. but we've got to do two exercises with apple right here, right now, i'll make this so you understand what's happening. first, we are going to do some arithmetic here. i want you to take apple stock and i want you to divide it by 10. how has apple been doing this year? let me think. okay. it's gone from $40 to $55. hmm, is that that huge of a move? does that scare you? 40 to 55? i think we'll be much less put

off if we thought of apple as a $55 stock. there's a way to think about it. divide it by ten. if apple were to split 10 for 1, you'd be much less fearful about owning the stock. apple is supposed to earn $42 a share. this is -- no, no. for the sake of this argument, you've got a $55 share company. let's continue this. but it's going to earn $4.20. so you have $4.20 and it's a $55 stock.ç what's the price to earnings multiple? 13. 13. what's the price to earnings multiple of the s&p 500? 14. do you think that apple has average growth? less than average growth? do you think apple should sell less than the average s&p stock? me neither. now let's match that $550 apple stock against three stocks that you know that have similar earnings growth. here's three household names.

chipotle, under armour and isg. do you know that each is growing roughly at the same pace as apple? so they have the same similar growth. what are they selling at? what's their price to earnings multiple? 40. now, get this. if apple were to sell at that same multiple as those three stocks that all grow the same as apple, it would be priced at $1600 a share. that's right. you heard me. if you were to compare apple to its growth cohort, it is selling at a small fraction of these other companies. and, remember, earnings is how we measure stocks. not speed. think about it. put yourself in the shoes of the average growth manager who probably owns under armor, chipotle and intuitive surgical. apple shouldn't be in the 500s if the other stocks are right. you say wait a second, jim. all those other stocks are misvalued. all right. i'll concede that. let's say they sold at half their multiples. on that basis, apple is worth $840. these buyers, they simply can't

get enough apple because it's too cheap versus all the other stocks in their portfolios.ç let's deal with the china slowdown. it's importing much more than it's exporting. how about china is not selling enough because of europe? how about if the chinese government made a decision to grow internally? that means china is still going to need plenty of goods. many industrials are trading off given the chinese slowdown. i'm not going to fight that trend. but at a certain moment, the selling will be overdone. but not yet. i think it soon will be. how about these retailers? i think that as much as gasoline is a negative, employment growth is a positive. when you combine employment growth with low interest rates, you get a buoyant consumer that's not going to be deterred, even by $4 gasoline. which brings us to the transports. this is when i throw my hands up. this is the toughest one.

i am a transport fanatic. i don't ever like to go against what the transports are saying. they're very negative. you get the transports faltering, you get a market that could falter with it. i have no real answer. i could give you a rationale. you have a once in a gazillon pox on the industry. a competitor for the natural gas utilities get hammered. so i rationalize that we can't put less emphasis on transports. not no emphasis, just less. but, look, it's a yellow light. it's not a red light. it's a yellow light. still, the transports make me much more cautious than i would be otherwise. they put me in the beer can. that's the one part of this exercise that makes me a little more bearish. the banks should be acting better if employment is strong. the techs keep faltering, except for apple. a lot of that apple is creating destruction. re doing quite well. some techs are doing phenomenally well. ipm, sap, accenture.

let's call it a mixed bag. here's the bottom line. i think that if you look at all of it too fast and too furious arguments, they tend to fly in the face of the only thing that really matters. earnings. stocks just aren't expensive enough yet. even after this run and despite the decline in the transports, stocks can slip. they can slide. but last week's resilience in the face of chinese and european woes remind me that when you get too negative, you do miss the next move. i hear the bears. i listen to the arguments. they are cogent. but they're not cogent enough to make me want to do anything other than continue to trim the marginal positions and stay long the rest. let's go to dan in massachusetts, please, dan? >> caller: hey, jim. first time, long time. thanks for taking my call. >> thank you for calling. what's going on? >> caller: i was just wondering with the new anti-trust litigation that's coming out for ebook publishers, do you think it's going to affect amazon

stock price? and if so, do you see amazon going below the $170 level for the first time in 12 months? >> i worry about amazon, but for a different reason. i think the company is trying to spend enough to wipe out everybody else. i'm not worried about the anti-trust case. i think they're going to do well in the anti-trust case. my worries with amazon has to do with the spending side of the equation, not the pricing on the product side. let's go to bill in massachusetts. >> caller: big beantown booyah to ya, jim, what's going on? >> i saw the celtics play the sixers the other day. that was a rough one. but they were hot.-go ahead. >> caller: yoku, what's going on with their acquisition? >> i want to sell both of these. i just really feel that they're going to come up with some reason to own these stocks. they're not mine. i am not going there with china. i want to take profits. brian in wisconsin, brian? >> caller: hey, jim, thanks for taking my call. >> my pleasure. >> caller: my question is with pepsi, p-e-p.

pepsi is restructuring and down with a 3% yield. what do you think? >> i think you're being paid to wait for something good to happen at pepsi and i don't think that's a mistake. i think you buy that stock here and you just hold onto it and i think you'll do just fine. it's a very inexpensive stock. what goes up must come down, isn't that what we're hearing? with apologies to my friend isaac newton, i disagree. it is not too fast or too furious. remember, it's about earnings. and stocks are still too cheap. i have plenty of reservations. i feel a lot of the bearish pressure, but not enough to tell you to abandon ship. just enough to tell you to stay the course. "mad money" will be right back. >> announcer: coming up, cash cloud? this year's ipo market has seen some studs. >> facebook has just changed its own status in a big way. >> announcer: and duds. but cramer has found one company that demands attention. this soon-to-list stock just may have you on cloud nine. and, later, cleaning up.

fracking has unlocked incredible potential and profits for energy in the u.s. but at what cost? cramer is drilling down with the company that's cleaning up the mess. coming up, the ceo of clean harbors. can they m@[e your portfolio sparkle? plus, total recall. with home prices becoming more attractive, cramer evicted the real estate rental stocks. but one landlord is appealing. jim welcomes the ceo of associated estates realty to hear its rebuttal. all coming up on "mad money."

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never confuse a trade with an investment. that's one of my rules of the road here at "mad money." it's ever more important when

we're trying to profit from ipos. a lot of people have been forgetting this distinction and it's cost them a lot of money. we had a parade of ultra-hot internet ipos like groupon and yelp. these deals were classic trades. >> buy, buy, buy. >> sell, sell, sell. >> meaning they were only worth buying if you get in and you had to sell the moment the stock started trading in the after market. that's the essence of a trade. you're in and you're out. anybody approached these deals as a trader made out like a bandit. unfortunately, too many people acted like they were investments. they couldn't get shares in the ipo so they bought them up in the aftermarket. even to that initial pop, the ultimate investing no-no. anybody who bought those in the aftermarket has since lost money and in some cases, lost serious money. that's really unfortunate. there's still plenty of fantastic web-based companies coming public.

you just need to be able to tell the difference between the winners, which you can hang onto, and the overhyped losers. the only smart money is to -- the only smart move is to take the money and run. for example, there's a company called demandware. and that's coming public later this week. demandware. and i need you to try to get ç some demandware because i think this one is going to be terrific. demandware makes software that helps companies design and maintain their own e-commerce web sites. this is a cloud-based software and it's serviced as a software play. i'm sorry, software as a service play. look, this is the same business model as cramer fave salesforce.com. they can use the company's software over the web which lets them save big money on server costs. it's in the cloud. so why am i such a big fan of this demandware deal? we've seen two kinds of internet ipos. there's been the massively hyped products like yelp and groupon

which were great trades but horrible investments if you bought in the aftermarket. then we had a series of relatively under-the-radar ipos of software as service companies that are very similar to demandware. and these deals have been total home runs. yet, you've been able to get in them because they're not red hot. they've made you money even if you bought shares in the aftermarket because they're not red hot, at least to start. what's been like this, jive software, guidewire and most recently, bright cove. i think demandware will follow in the footsteps of those highly investble ipos. if you want to try to make money, all you've got to do is take your cue from the bright cove play book. they're a service provider, but instead of e-commerce, they're all about distributing video, high-quality video over the web. i love their product. i've used it many times. it wasn't overhyped. it was possible for regular investors to actually get$to the ipo. stock came public less than a month ago.

priced at $11. 31% pop on the first day of trading, but it was available. what might surprise you is that bright cove kept going higher. it's now up 49% from the ipo price. and even if you bought the stock in the aftermarket on that first-day of trading, you got a gain of 13.5%, that's the opposite of what happened with yelp and groupon. and it's not just bright cove. the same thing with jive software and guide wire. two more software as a service names that came public in the last three months. jive came public on december 13th. the stock is now more than doubled. you could buy it in the aftermarket. it's up 61% if you bought it in the aftermarket on the first day of trading. guide wire gave you a 32% pop and now it's up 74%. up 35% from where it started trading. to me, these deals are exactly what you want from an ipo. you get in them, you get a hefty first day pop. you can't get any yelp and groupon.

that's why we want the next jive. internet companies with a genuine path to profitability because they have to advertise to make their money. as far as i'm concerned, demandware fits the bill. let me give you the quick rundown. demandware had a slight loss last quarter, sales growing like crazy. total adjustable market, gargantuan. when you think about e-commerce, that was a $316 billion market in 2010. $653 billion, we think, in 2015. that's worldwide. so it's growing at 17.3% compound annual clip. but a global gold rush going on right now. demandware makes the picks and ç shovels that companies need in order to capitalize. the software needs to manage and make high quality web sites. the total market for cloud enabled e-commerce platform services, 21.3% annual growth rate. from a $4.3 billion business in 2010 to what we think is going

to be $11.3 billion in 2013. it's servicing a market that is growing like crazy. but does demandware have anything special? something proprietary? some really big customers from proctor and gamble, panasonic, they could get anybody. it means that they can answer their customers' needs quickly and at a lower cost than competition. speaking of competition, demandware mostly competes by potential customers or non-cloud e-commerce like ibm oracle and e-bay. but as we've seen, cloud-based players like salesforce.com can run circles around more traditional software providers. bloodlines? the company's management has a deep bench. a lot of experience in the software game. ceo used to run a company called profit logic which he eventually sold to oracle in 2005.

lead underwriters goldman sachs and deutsche bank, that's about as strong as it gets. how much should you be willing to pay for demand? what do you tell your broker? company plans to sell 5.5 million shares. the midpoint of that range, demand will be selling for five times sales. when you look at the other recent software as service ipos, the service ipos, they're trading 3.57 sales. seven times sales wouldn't be unreasonable.ç that means you can go at 16.5. not every ipo is a trade. some are being priced correctly and they're worth investing in. and i think we'll see that again with demandware, which i believe you can get shares of, unlike those others. it's why i want you in the deal on wednesday night, particularly if it prices below $15 a share. even if the company is as terrific as we think it is. on "mad money," price matters. we like bargains. we can't pay up front. remember, our idol warren buffet says there's no such thing as

called strikes. if the price is too high, you can keep your bat on your shoulder. fred in new york, fred? >> caller: hello, jim. >> yo, fred. >> caller: i called you several months ago about an apparel company in transition. divesting itself of its low-margin, private label business? oxford industriesk, oxm? it's now completed the divestiture and it's expanding its lifestyle aspirational brands. they recently announced expansion for their crown jewel, tommy bahama. a restaurant and store which they call the compound in tokyo. that's in 2013. stores at the venetian resort in macao. a store in singapore slated to open in 2012. a flagship store and restaurant in manhattan and a store on michigan avenue in chicago. >> fred, i've got to tell you. this sounds good.

this sounds good and i'm also going to tell you i didn't knowç what you just told me. you've obviously done a huge amount of work. i learn from our viewers constantly. we're going to do -- you know what we're going to do, we're going to see if we agree with you. because, boy, does that sound like a compelling story. all right, this is demandware. to me, it's a dream weaver. this one demands your attention. i like the bud lines. i like the growth. i like the prospects. but most importantly, i like the fact that you'll be able to get in the deal and it's going to trade nicely, slowly. not like yelp. not like groupon. that's the way to make money. after the break, i'll try to make even more money. >> announcer: coming up, cleaning up. fracking has unlocked incredible potential and profits for energy in the u.s. but at what cost? cramer is drilling down with the company that's cleaning up the mess. coming up, the ceo of clean harbors. can they make your portfolio sparkle? hey, did you ever finish last month's invoices?

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carfirmation. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. i've said it before. i'll say it again. unlike most of last year where the vast amount of stocks traded in quarter averages, this year stocks trade on their own

merits. now, i love this. it means you can find high quality companies with terrific growth stories and execution. and the odds are pretty darn good you're going to make some money. take clean harbor, clh, the largest hazardous waste disposal firm in north america. 69% of the incinerator market. it's a company that's become serial way back in june of 2010. but that was a play on the macondo. since then, they've proven themselves to be so much more than just the emergency responsiveness. they're second to none when it comes to cleaning up disasters. consistent day-to-day business. and this is a wonderful area to be in, now that more and more companies are outsourcing their environmental and maintenance programs. clean harbors cleans up after some of the nastiest sectors out there. refineries, chemical plants, paper mills, manufacturing, power generation facilities. and most importantly of all, oil and gas fields. in a world where we spent $145 billion in drilling in the country just last year, up massively from just $13 billionç

in the year 2000, we need clean harbors more than ever. so it's no wonder when they reported back on february 22nd, that he they knocked it out of the park with much higher than expected revenues. better still, clean harbors raised guidance for 2012. now the stock is giving us a solid double since i first got behind it in 2010. up 22% since the last time i spoke with the ceo with a terrific track record. that's why i'm thrilled that al mckin here with us tonight to talk about his company and where it's headed. >> hey, jim, great to see you. >> i feel like that i have to be remiss. we saw you in the bakken. but this economy looks like it's coming back. i'm talking about the regular manufacturing company. is it time for me to start asking you about the regular day-to-day industrial business you have because it's got to be much stronger than it was a year ago? >> it is, for sure. and certainly, natural gas is having a positive impact on that, although it's having

certainly a negative impact on the drilling side. manufacturing has seen lower costs and we think manufacturing is going to continue to grow, particularly the chemical industry. >> all right. well give me -- because we have not gone over this, you know, you take a big chemical plant. what are you doing at that chemical plant. >> well, you know, as they manufacture chemicals they're generating by-products. many times those byproducts are toxic, need to be incinerated. you need to clean out those chemical facilities, do turnaround work, handling catalysts, for example. so we'll install catalysts where we move catalysts, recycle that catalyst form. so as the chemical industry continues to grow and expand, ç we're going to be there to handle both the disposal side and the industrial service side of their business. >> is there anybody else who even has that kind of scale of incineration? >> there isn't, no. we operate 69% of all of the capacity in north america. we're going to expand, hopefully, over the next 3-4

years to grow one more kiln because there are about 75 incinerators that our customers operate. and we anticipate some of those plants to close and outsourcing. and we'll need to have more capacity. >> i want to talk about the trade off between oil and natural gas. oil is through the roof, we know. the first down day in four. and, obviously, people are drilling like mad for oil. but natural gas, we've got numbers today that showed a dramatic decline in drilling. is there a level where the decline in drilling for nat gas is going to hurt you? >> yeah, certainly the lower natural gas in the conventional area in western canada has been in place now for about three years. and now we're seeing a slowdown, certainly, in the states. about one hundred million of our two plus billion in revenue is associated with natural gas. but i would tell you there's still a lot of gas drilling going on that we're supporting. we're also seeing a lot of shifting to those liquid-rich plays, more focus on the oil side. and certainly i don't want to

forget about talking about the growth in the oil sands in canada. that's really where the opportunity is on the oil side. >> now, there were a bunch of articles i read about ohio and earthquakes. and they said it was all entirely involving disposal. now, when you read those articles, doesn't it mean you can call some of these clients up and say listen, we'll get it out of ohio.ç no more earthquakes. we've got a place to put it. >> well, we certainly do. and i think treating that material on site, recycling frack water on site is certainly what we want to do. we're waiting for regulations to be drawn up and sort of have some consistent regulations across the market. that is really the place to be treating that material right at the source of the drilling. >> now, when i read about the arguments about keystone, a lot of people say it's about spills. some people say it's about really dirty oil. but you obviously make more money off of spills than not. do you think keystone is safe? >> i absolutely do. when you think about right now in the bakken, how much trucking

is going on, movement of rail, oil by rail, pipeline is by far the safest means of moving that oil out of the bakken. and that's what we need right now to keep that business growing out there. >> now, is a really tough epa good or bad for you? and the reason i put that is that a really tough epa, for a lot of businesses, you know what, we've got to go make stuff in another country. but at the same time, a tough epa means you have to have clean harbors to be able to not have government regulation coming down on you. >> well, i think regulation is certainly what our business is all about. back in the early '80s when the first government regulations first government regulations towards superfund came about that spurred an industry. regulations would be important on the oil and gas side. but you know what, it's a two-edged sword. certainly we are governed by these regulations, but we also help to support our customers when they have these new regulations come upon them. so we're certainly a regulatory driven business ourselves. >> i know you guys have put through some price increases in

2012. are they all sticking? >> you know, i think you're ç always going to have pushback from customers on price increases. i think we've been able to justify because of our cost structure, because of the investment we're making, particularly the capital investment we're making again this year, that customers realize that if they're going to want a player with the breadth and capability that we provide, we're going to have a fair return on those investments. >> how is that lodging business doing that we see? it's kind of an exciting business. we saw the man camps. this is something all over the country. whereever there's oil, there's no infrastructure. how is that business -- what are the year over years for that?

it is time. it's time for the lightning round. are you ready skee-daddy? time for the lightning round. we're going the start with jason in massachusetts. jason? >> caller: jim? >> yo. >> caller: disappointments out of cypress and texas instruments recently. klac offer protection? >> you're absolutely right to be worried. i'd counter it by saying let me just double check the yield, you've got 2.8% yield.

why not wait until it goes to 48, 49 and then pull the trigger.ç you'll be great shape. let's go to tony in big mo, missouri. >> go, tigers. hey, jimmy, booyah to you. i've got abbot laboratory stock. >> all right, this stock is just on a tear. action owners, my charitable trust, loads of stock, on tv. so she and i both think this stock has got 60 all over it. i think you hold on. how about susan in florida. >> caller: booyah, jim. it's susan from boca raton. should i sell or hold transocean? >> i want you to sell it. i think that this stock has a very big run to the bottom. let's go to jim in vermont. >> hey, jimmy, how are you doing? >> oh, man, i'm so jealous. how have you been? >> beautiful day today. >> yes. nice weather. >> caller: yes, it was. i was wondering, jim, what do you think about microsoft 20 years from now?

buy, sell or hold? >> well, 20 years from now, holy cow, that's after the phillies have just won their 6th world series. i can only say 20 months from now. i think the stock is cheap. 20 years from now, that's too hard a call for me. that's like john carter territory. let's go to walter in massachusetts. >> caller: a big booyah, cramer, from wilford, massachusetts. >> nice, i've been there, what's up? >> caller: thanks for all the good work you do. kinder morgan. kmi. >> all right. i thought i'd never say this. but i took profits and rang the register last week. my charitable trust decided that we were pressing our luck and we decided to rotate into etp, that's right. energy transfer partners. let's go to isaac in virginia. isaac? >> it's a pleasure to talk to >> back right at you. >> hey, i keep a piece of my portfolio set aside for speculation. >> i like that. >> caller: mapp pharmaceuticals has an orally inhaled migraine treatment up for fda approval this month. what do you think? >> wow, i didn't know that. i've got to tell you, i was

recommending alergan off the botox. what a stock. it's 450. david has told us about a migraine drug. apparently, selling like hot cakes. let's go to anthony in oregon. anthony? >> caller: hey, booyah, booyah. where should i be sprinting to with sprint? >> there's some blogs for sprint that are doing very well. i'd rather see you in the blogs. sprint has to raise money. let's go to gregory in maryland. gregory? >> caller: how are you doing, jim? >> long time, first time. love those. >> i've got a question long term on spectra energy. >> what a great company. i love these companies that are toll road companies. it transports and -- you know, it stores natural gas. that's a win. 52 week high. but i still like it. it's got tremendous management and great growth potential.

that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.

>> last thursday, we put the apartment real estate investment trusts in the sell block. saying that many of them are so high that they didn't represent great value anymore. lower yields because their stock appreciation seemed vulnerable given that housing affordability is at record highs. plus, while housing is going down in price, rents are through the roof. up 9% in chicago, 4% in l.a. those hefty increases amid comparisons to monthly mortgage payments on a new house seem quite compelling. the higher rents have stimulted construction which could ultimately hold down rents in the future. that wa[ nur worry. now, after our segment, jeffrey friedman, the president and c.e.o. of associated estates, a terrific mid-sized real estate investment trust company reached out to us to politely disagree.

sports a nifty four-plus yield and has 53 properties in eight states. as soon as mr. friedman contacted us, i asked him to come on the show with the alternative view. that's something we pride ourselves on as we know that good investors always challenge their own thesis. so without further ado, i'm pleased to welcome mr. friedman to the show. welcome to "mad money." >> hello, mr. cramer. please call me jeff. >> okay, jeff, you sent an e-mail that says i'd be delighted to talk to you about what's going on in the apartment business. fundamentals have never been stronger. take it from there, sir. >> well, that's right, jim, household formation is the number one driver of apartment demand. according to the u.s. census bureau, approximately 1.2 million new households are being created each year. approximately 65% of those new households actually buy a home and the inverse, 35% are renters.

so we have over 400,000 new renting households entering the market each year. we have new construction permits at historical lows. and as apartment owners, when i heard you correlate what's happening with single family house prices to what's going on in the apartment business, i couldn't help but object. >> well, i think you have every right.ç that's why we're so thrilled. i got your e-mail, i said we've got to get this guy on. one of the things i'm looking at is a very big macro call which is gee, houses are cheap. so people are going to buy houses. but a lot of people, from listening to your analysis and reading, a lot of people can't really afford to buy a home or can't get credit. but they can move into a rental, right? >> jim, that's right. housing affordability is a sub market story. and just like the 12 publicly traded apartment companies, each of us have a little bit

different exposure to various markets. some of us have exposure to coastal properties and, like associated estates, we are the only publicly traded apartment company with a significant presence in the midwest. so you might think, well, isn't that counter cyclical? but, in fact, in the older suburbs of the midwest, there's even been less new construction over the last 10 years. therefore, our properties are some of the best locations and best addresses. when you look even deeper at the single family home prices in those sub markets, you'll see that the cost to own is two or even three times what the cost to rent is. and that's really, jim, how we look at it. what is the difference between the cost to rent and the cost to own? when you look at the macro numbers, those numbers take a much larger picture of the smsa, as opposed to dialing in on the individual suburbs.

so, as you always say, it's really a company-specific story. and, more importantly, in our business, it's a sub market story.ç >> yeah, i saw -- for instance, i was looking at the numbers. you have a lot of properties in florida and georgia. housing is still going down there to the point where it might be a sucker's play to buy a house yet versus renting from you. >> you know, it's really interesting, jim. we monitor how many people move out of our properties to purchase a home. and what's interesting is if you look at our southeast portfolio, for us, that's atlanta south to orlando, palm beach, south miami, ft. lauderdale, if you look in those markets, the lowest percentages of all of our properties are in those markets. said another way, fewer people in the southeast are moving out to buy a home. now, in the midwest, where the bottom -- we've been bumping along the bottom in single family home prices for some time.

we see a larger number of people moving out. overall portfolio-wide, jim, at associated estates, 17% of our residents move out and purchase a home. that was a high of 27% in 2005. >> one last question. given what you just said about the price of homes and how there's not been a lot of new construction, it does sound like you have the runway if you can -- you know, it sounds like you have the runway to be able to raise rents for some time. >> we look at that as a percentage of households' income, jim. and today, we're hovering right around 20%. we think the 25% on a historical basis has been a point at which we start to bump into more ç resistance, and as high as 30% in some sub markets, residents can afford to pay. so, based on that, we have lots of runway. and that's not just specific to associated estates. but i would say all 12 publicly

traded apartment reits have lots of runway ahead. >> and that translates ultimately into being able to raise your distribution over time, too. >> well, we look at it on a total return basis. so some of us with a higher dividend, you might expect a lower beta, lower return in terms of growth. some of the companies with a lower dividend, you would expect higher growth. and that's why i think you may have seen the slide that we sent you showing the associated estates over the last five years through the end of 2011 had a 58% total shareholder return. the largest of all 12 apartment reits. >> absolutely. a that's why i say you've got the apartment return. and you're so right. i throw it right back at me. these are individual stocks. they're not a group and yours seems to have much more appreciation ahead of itself. thank you so much for coming on "mad money." >> thank you, jim, very much. >> guys, good yield.

good growth. best return. associated estates realty. under the radar, it shouldn't be. it sounds like a buy to me. stay with cramer.

>> whither hewlett packard? this weekend, i looked at ibm

and sap all which are doing so well. they're simply carving up. then there's hewlett $10 billion acquisition. offering search software. having seen s.a.p. search software in action, i have no idea how autonomy can be beat. s.a.p. is gunning for the best of them. we all know that hewlett packard came to tablets last year in an incredible about face. we also know that they tried to develop phone infrastructure with the purchase of palm. something then c.e.o. mark something then c.e.o. mark hurtz that seems like a common theme in that culture. finally, there's personal computers. last year, apple surpassed hp personal computer sales. it had always been hewlett packard versus dell. now it's apple eat dog as in apple eats the dog world with the new ipad.ç it seems like a suitable component to the personal computer. ipad one and two.

it seemed less than an ideal as a substitute to say what hewlett's got going. i can't think what the laptop has over the ipad. maybe some software companies and data companies don't support the apple world. otherwise, someone please tell me why if you were enterprise buyer you would stick with hpq because of entrenchment and good service. you can have an apple desktop, you can have an apple ipad. what else do you need? the most important point about hpq is that the information technology world is gravitating toward the company that is have mobile, social and cloud. while autonomy was supposed to be helping in the cloud, the company is no mobile strategy. hey, what does apple have? no social strategy. google has that. the new ceo said last week. the only thing i see dominant is the printer business. but, believe me, given the way hpq forces people into different models and has so many different cartridge types, any client would be glad to be free from the hewlett packard printer arrogance business model. none of this would matter if they were a small company. but it's just the opposite.

has $130 billion worth of revenue that can be taken by others. i think that's what's going to happen. especially when they can be cherry picking clients who want to migrate to oracle software and sun micro solution, not to mention emc solutions and dell products to go along with the competition. hpq is still profitable. sells a lot of bundled solutions. to me, the questions are how fast will those revenues go down? how could it possibly recover from the lapses in spending andç research while others forge ahead? i think hpq is going to be a source of funds as a stock and a source of clients for competitors for years and years to come. it will be the gift that keeps on giving to the rest of the i.t. industry and to short sellers everywhere. stick with cramer. choose control.

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