tv Mad Money CNBC July 17, 2012 11:00pm-12:00am EDT
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the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪ > i'm jim cramer and welcome to my world. you need to get in the game. those 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 save you a little money. my job is not just to entertain you. but i'm also trying to educate and to teach. call me at 1-800-743-cnbc. look, i feel it. felt it all day. i know it's tempting to throw up your hands and say who cares about stocks? they're corrupt. they're controlled by greedy rich people. today's action, a little break.
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decent. dow rises, s&p gaining. but rallies have become a few and far between exercise. we were down 6 of the last 7 days coming in. the last seven straight mondays. who the heck needs any of this? turn it off. one big waste of time. that is the prevailing wisdom out there for everyone i talk to and man do i ever talk to a lot of people. i don't know, though. i got some trouble with the totally corrupt thesis that says it's rigged, it's not worth it. the big guys have too many advantages versus you the home gamer. i'm stuck with some pretty glaring facts about how much the stock market is hurting you. maybe you're stung by the gain in apple. it's hurting you, right? no. you're probably feeling it from that 53% increase in gap stores.
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the 20% profit in target is probably hurting you, right? telephone companies. verizon is only up 14%. at&t has given a paltry 18% return. only nine times what the bonds do. i suggest you should be drowning your sorrows in a budweiser, up 27%, or jim beam. why not knock back a jack daniels, made by brown foreman. at least you can brush your teeth with the stuff. it's up 20%. go with johnny walker black. zoomed 20%. chase it with a corona, just guzzled a 21% gain. they all leave you cold, you don't want that kind of money. that money is not worth it. maybe go to wells fargo because it's making you that miserable 24% this year. i don't know. to me, those are convincing and highly visible gains, gains that do make me want to stop
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apologizing for this market. the market does not need an apology. yet the disgust is so palpable i can barely read twitter. somehow i, yours truly have become a symbol for stocks. stocks are despised. i've become nothing more than a stock symbol represented by a man. so tonight, i want to turn the tables. i'm going to define your anger and define your anger's worthlessness. as much as it has merit, it ain't making you any money. i know how much you loathe stocks right now because tomorrow in our delivering alpha conference, i'm interviewing berarra, the attorney for the southern district of new york.
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given that the stock market is a southern new york city affair, he's become the de facto sheriff of wall street. and in preparation for the interview, i've read his speeches and reviewed all the high-profile cases he's brought, especially raj rajaratnam. he won these cases, but you can't help feel that the cheating and the lying and stealing is incredibly widespread, endemic even, and that it can't be possibly stopped because of the total lack of conscience of even the richest people on wall street. and other than berrara, by the way, i don't see prosecutors bringing any cases. no one ever went to jail. they didn't go to jail for robo signing. the banksta gangstas made all that money and unless berrara looked into them, they got away scot-free. does crime pay? interesting question. when you read about the libor
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scandal, a bunch of rich traders sat around and rigged the most important benchmark of interest rates on earth and did it with a level of impunity that would make the mafia jealous. didn't tony have a good sense to go see uncle june at the doctor to get his fixes in. just yesterday we got a huge story that helped get a heads up of what's being downgraded and upgraded. is there anything that isn't known ahead of time by anybody who is rich? you know how corrupt things have become? there's a huge new multibillion dollar investigation into money laundering at hsbc. it didn't even register until guy adami asked me about it. when i think about doing the laundry, i used to think gtl, gym, tan, laundry. now when i think of laundry, i should think of hsbc.
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you wonder why people put their money in treasuries? jpmorgan lost $5 billion. $7 billion? i don't know, something. because some guy, people called the whale, fooled ceo jamie dimon. the whale. okay, great. who the heck wants to be worried about the bank you keep your money in? it's not just the chicanery, it's the helpless feeling that comes from having to pay attention to every single politician on earth and every single central banker in other words to figure out what to do. the market swooned when ben bernanke made it sound like he wasn't going to do anything. the market was getting hammered. but then it soared when he said he might do something. that's what we do? that's what we trade? that's when we're not trading off the fiscal cliff. watch this european fiasco unfold is like betting on a game and you don't even know the
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rules. yet so many always seem to know the outcome ahead of you. and the stocks people can't get enough, they aren't the ones i talked about. everyone seems to own research in motion down 53%, zynga, minus 51%, or facebook, already down 21% from where they were a month ago. no wonder everybody is so angry, right? people seem to buy when it's up, sell when it's down. every so often i find myself under attack for being mr. stock market. i try to find the bull market no one seems to care about. i come out here to talk about how this business works to help you. what else is my m.o. here? frankly, the at&ts, the gaps and
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the walmarts, i do tire of depending the asset class. yet i admit at times i don't like talking about stocks anymore. because these days it's only done in the context of the politics without hope and crime without punishment. and vitriolic, unbridled, ad hominem attacks against me. but the bottom line, as long as there's money to be made, i am not going to stop telling you how and where to find the winners. the anger, the ennui, they make me redouble my efforts. they make me work harder to get you to see the opportunities because they are there. and the bad guys, there just aren't enough of them and they're not powerful enough to stop us. let's go to don in oregon. don? >> caller: hey, jim. greetings from partly sunny portland, oregon. >> what's shaking, partner? >> caller: i was considering hasbro, ticker has. it's well off its 52-week highs
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and has a big revenue catalyst coming up with the "gi joe retaliation" movie. it has a sustainable dividend yield north of 4% which has increased by 20% the last three years. great free cash flow and return on equity. what do you think about hasbro? >> i like hasbro, but you're attracted to the fact that mattel had a great quarter. i would rather watch mattel come down and pick up mattel. that was a great quarter and hasbro has let us down in previous quarters. rich from my home state of new jersey. rich? >> caller: boo-yah, jim. mosaic was up 5% today. fertilizers have run a long way in the past three or four weeks. what do you think of a small corn fertilizer named rentech nitrogen partners?
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>> you got to go with the potash here. by the way, this corn crop is going away in this country. and people don't talk about it enough, what is happening. and the farmers can't go buy farm equipment, but fertilizer is going to be king. and as much as i don't like to recommend red hot stocks, potash is going higher. anger? i feel it, i sense it, it ain't making any money. throw barbs at me, okay? throw them at the market. as long as there's money to be made, check the anger to do some buying. "mad money" will be right back. coming up, fun times ahead? it might be a roller coaster market, but shares of amusement park operator cedar fair have risen almost 50% this year. cramer is buckling in and taking a ride with its ceo just ahead.
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and later, reading between the lines. a big headline you probably read. cramer is put on his "mad money" corrective lenses to show you how to get the 20/20 investing vision that could lead to profits. plus, satisfy your craving? burgers, pizza and donuts might be bad for your waistline, but could these tasty stocks bump up your portfolio? cramer is putting this menu to the test when he goes off the charts. all coming up on "mad money." [ male announcer ] this is rudy.
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every so often you get a stock that is still a great value. take cedar fair. symbol, fun. a glorious 5% yield. it announced that year to date revenues were up 5% from a year before. since then, the stock hasn't looked back, rising 2.3% just today. cedar fair has already given you a spectacular 99% return. hoping for a little bit more so we could say 100 today. that's including reinvested dividends. there could still be a lot more upside here. not only are they giving us the domestic security here as well as growth and a monster dividend. it's also growing the payout at an incredibly rapid pace. cedar fair would yield nearly 6.2% at these levels next year. i'm thinking $2 might be actually pretty darn conservative. we'll find out. this is exactly the kind of
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stealth winner that i want you to know more about. why i like this stock market so much. which is why i'm thrilled to have the president and ceo of cedar fair here tonight in studio to talk about what's ahead for his company. welcome back to "mad money." great to see you. here's my thesis. the market is not a perfect place. the reason i say that is you have been most vocal about what you can pay out and no one believed you. why is there such a disconnect between what you were saying and what happened? >> i think we're just early in the story, right? we put our plan out in january and we said we'll target $2 or more next year. and the reality is $2 is simple math. we did really well last year. as you saw in our may or july announcement, we're doing well this year. and our debt service cost is $50 million less, which in and of itself is another $1.
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we feel real good about the north of $2. >> you know, i believed you immediately and booked you on. but there was so much skepticism. why, given that it's arithmetic? >> again i think it's back to understanding who we are. 11 amusement parks across the country and just a basic model where mom and dad brings their kids and has a great day at cedar point or dorney park. >> now, you also got some things you're changing. e commerce, a line system where people can do better than other people. what do these mean for business? >> i think it means upside, right? we talk about segmenting our consumers. there's a benefit-oriented consumer who wants to buy up, right? they buy the front ticket at the concert, first class on the airplane and they want to wait a little less in line at our parks and it's been very successful, of course. >> your level of confidence on a $2 number in a business where
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i'll be candid, there was another fellow, i won't mention names, but told me not to worry about six flags. i have been to six flags a number of times. then the weather got bad and then things went wrong and there was a closure at the park. your levelf certainty is off the charts versus six flags. is it because you've got more confidence that even with weather problems you're still going to make the number? >> look, there are extreme weather situations every year. and on average, they balance themselves out. we believe provide the best day of the year experience for the consumer. great value to the consumer in a difficult economy and we'll do fine. >> a lot of your parks are what i call a good hour, hour and a half drive. we used to have to drive 40 minutes. i was lucky. how important is the decline of gasoline for you guys? >> it helps in in-park spending. if it costs a little less to fill up the gas, dad is more likely to spring for the game or merchandise. >> there are always theme parks for sale.
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are you always on the lookout? >> we're always on the lookout, right, but it has to be a great park where we think we can make a difference. there are fewer and fewer of those, but our eyes are always open. >> how much does it cost to build a theme park, versus the market cap it's a little out of whack, isn't it? >> it is out of whack, but you haven't seen a new successful amusement park built in this country in the last three decades. >> why is that? >> too much land, too much cost. the market is absorbed by existing parks. >> what did you learn from disney that you apply to your job? >> attention to detail and people make a difference. it's all about having quality people work for you that want to take care of guests and wake up in the morning and do it all over again. >> you have prebookings. i can't give away stuff you're not allowed to talk about, but if you had to look at prebookings for the rest of the
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summer, coming along? >> the best example is season pass sales. what i can tell you is every single park we have is offering season passes over the last year. and most of the parks are at rlevels of season passes so far. >> do you think part of that is people doing stay-cations? >> it's simpler. right? we like to say having fun should be fun. and if you can avoid the airline trip and the luggage and all these other issues, driving to your local amusement park, i think staycation is here to stay. >> disney had tremendous success expanding to cruise ships. your brand is getting a reputation as a fun brand. not just a stock symbol. are there other things that are in the realm of what you could do, brand extensions that i'm not thinking of that you might be thinking for 2015, 2016? >> we're focused on making the
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existing parks great, but getting a reputation for great fun is something you can do over time. >> what are the rides that are most extreme? what are the ones that the family go together? your place i regard as a family place. i have never been threatened. you know there are other parks where you feel a little bit outnumbered by teenagers. >> we talk about a social mix in our parks. it's great to have teenagers and also mom and dad with young kids. one of the things we do well, i think, is having coasters that are the beginning coasters, if you will. you rode this last year, you're a little taller, and now you can ride this one this year. then they work their way up to the top thrill at cedar point. >> there are parks you feel like you take your life in your own hands on every single coaster. >> i think everybody in the industry is doing a pretty darn good job.
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>> you're doing a grat job. what a great yield. you've been terrific, a man of of your word and then some. fantastic job. that's matt ouimet, one of our best recommendations ever. and it ain't done. stay with cramer. coming up, reading between the lines. a big headline you've probably read. cramer is putting on his "mad money" corrective lenses to show you how to get the 20/20 investing vision that could lead to profits. and later -- satisfy your craving? burgers, pizza and doughnuts. they might be bad for your waistline, but could these tasty stocks bump up your portfolio? cramer is putting this menu to the test when he goes "off the charts" all coming up on "mad money." [ female announcer ] the best things in life are the real things.
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ideas that are hidden in plain sight and easy to spot as long as you know how to connect the dots. take this story. this is ripped from the front page of today's "new york times." rise in pill abuse forces new look at u.s. drug fight. this article is all about how the war on drugs has become almost irrelevant thanks to the rise of prescription drug abuse. apparently most drug use these days, the bad kind, isn't from cocaine addicts or heroin junkies. it's prescription drugs, especially painkillers. more than 54% of overdose deaths since 2008 have involved a prescription drug. that's more than every other illicit drug combined. this article is good. it does a good job of making you think maybe rather than spending millions of dollars of blowing
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up villages in honduras or el salvador, or fighting cartels, we should treat this as a medical problem and get prescription drug addicts the help they need to recover. get them out of the jails. it's all well and good. what does that have to do with making money? simple. the "times" piece gets you 90% of the way there. you need me to fill in the blanks, connect the dots. near the end of the piece, the authors cite the director of the national institute of drug abuse basically saying this is a problem that urgently needs to be solved. what they don't tell you is, it has been. there's a solution. it's a drug called vivitrol, made by a small biopharma company, alkermes. if i had written this story the headline would be buy alkermes.
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after an opioid addict gets clean, you can give them a vivitrol shot once a month. it will prevent them relapsing. it blocks the receptors in your brain. in other words, it makes it effectively impossible to get high off of opioids. that's a huge step up from the old standard of care where patients have to take the drug daily and what they're taking is just a different opioid that's less dangerous. how big is this vivitrol opportunity? about 1.6 million people in this country are addicted to opioid-based drugs. three quarters of them will seek treatment.
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it could actually be a huge money saver for state governments. chris christie is saying how bad this is. they're spending fortunes treating these opioid addicts in prisons. not everybody is clueless. the state of maryland just cited a study that found that vivitrol was more effective and didn't cost any more money. this thing is a miracle. the best weapon we have in the modern day war on drugs. based on the "times" article, i think alkermes isn't getting enough credit for vivitrol. they submitted a new application to the fda for a new drug. you could probably say alkermes gets you coming and going. i love it.
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they figured out a diabetes drug that only needs to be taken once a week which the company developed in a partnership. how valuable is this technology? bristol myers agreed to buy it after a major bidding war. this is a big deal for them. you better believe that they will get a major boost from bristol myers. which means more royalties flowing back to alkermes. they also produce an anti-psychotic drug. the company is working on a long-acting version of abilify,
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another popular anti-psychotic in phase three clinical trials. again, these people forget to take their drugs or they don't think they need them because they don't know their minds. this one sells for 17 times earnings. alkermes is down fifty cents since before we knew their drug would be bought by bristol myers. investors aren't connecting all the dots on this crime wave. or maybe they're just playing sudoku with their paper or something. we, on the other hand, see the whole picture and know that alkermes is the answer. every now and there will be a fabulous idea hidden in plain sight, like this story that pretty much screams buy alkermes. except i think we were the only ones who heard it. scott in texas, scott. >> caller: jim, boo-yah, home of
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the houston texans, the football team of texas. >> future home of jeremy lin because new york doesn't want to pay up. what's up? >> caller: bmy. >> bristol myers. >> caller: they're trying to acquire amlet. do you feel this will have a favorable or unfavorable effect on the bmy shares if they are, in fact, successful in their effort to make the acquisition? >> i think it's huge. i was in mexico talking about how brilliant this acquisition would be. it will help deal with the patent cliff involving plavix. bristol myers is one of the greatest companies in the world. i want to go to chris in new york right now.
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>> caller: how are you, jim? boo-yah. i would like to know about orex therapeutics. >> these are all battlegrounds. and one of the things that i said about vivus that was very clear was if you owned it, i would sell half of it. this group is very volatile. yours is one more volative play. if you want to speculate, i'm going to bless it, but just don't be greedy. eureka! reading between the lines to find investing ideas is one of the greatest things we can teach you on "mad money." alkermes stands to benefit here. if only the paper knew how to do that. stay with cramer. coming up -- satisfy your
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it is time. it is time for the lightning round. you give me a stock i'll tell you buy, buy, buy, sell, sell, sell. you'll hear this sound and the lightning round is over. vinny in new york. >> bronx booyah. >> i'm going on there in a few. what's going on? >> caller: you've been a cash cow for me with some of your picks. what happened about ew? >> this is the solution for people who don't want to have open heart surgery after age 50. that's why i'm not giving up on it yet. everyone on wall street gave up on it except for us. chris from my home state of pennsylvania. >> caller: thanks for having me on.
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boo-yah from media, pennsylvania. everybody's hometown. >> you bet, you bet. >> caller: i want to talk about mark west, mwe. >> another one of my favorites, 52-week highs for enterprise today. let's go to drew in michigan. >> caller: this is drew from east lansing, michigan. >> that rocks. >> caller: my question is about brunex holdings. >> i wasn't a believer. they do have some intellectual property. they keep winning these lawsuits. i am not against it. >> buy, buy, buy. >> tom in pennsylvania. >> i have a boo-yah for you in scranton, pennsylvania. >> i hope the economy is doing better there. i have a lot of relatives there. what's up? >> caller: your thoughts on
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excela. >> it's one of our preferred bio tech spec plays. as long as you know it's a spec, it's fine with me. michael in north carolina. >> caller: hey, jim. east carolina pirate booyah. alaska airlines. alk. >> i used to like one. i used to say if you have to buy one, that's oaky. but now it's u.s. air. nathan in wisconsin. >> caller: big arkansas razorback boo-yah from wisconsin. >> i don't know what kind of animal that produces. what's up? >> caller: i just wanted to know if i should sell and take the losses or stick with kinross
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gold. >> i like gld. evan in tennessee. >> caller: a big boo-yah from memphis, tennessee. >> what's up? >> caller: i need to liquidate to pay for tuition at chapel hill. >> i would ring the register. the tech group is not so great here. it's scattered, and i think this stock could go to 21, 22 and you can buy it back. but i would ring the register. >> caller: john in florida. >> the stock i would like your take on is polycom. >> the video conferencing business is hard as all getout. even cisco has had a tough time. i say ixnay. drew in north carolina. drew? >> caller: a university boo-yah to you. >> what's up? >> facebook, fb. >> all i'm hearing is bad. all i'm hearing is the mobile
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ad scene is bad. the click through rate is negative. right now, it is yelp, it is groupon, it is zynga. i know those are making money. and those aren't making money and this one is, but i do worry about it. i'm just scared of it right now. okay? let's go to john in the illini. john? >> my stock is conoco phillips and the juicy dividend. >> stephanie link and i are going head to head on this. i think we should pull the trigger and buy cop. i like the yield, i like the upside. to me, conoco phillips is a -- >> buy, buy, buy. >> and that is the conclusion of the "lightning round." >> the lightning round is sponsored by td ameritrade. ♪
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important to remember it's mixed. we're very much in this tale of two cities mode, it was the best of markets, it was the worst of markets. this dickensian landscape still gives you plenty of opportunity to profit. even though we've been stuck in a range, called a rut, there are entire sectors thriving here. many of the restaurant stocks, for example, are absolutely on fire. which is why tonight we're going off the charts to find the next restaurant winners. a very smart technician, ponce points out that within the past week, we've seen a series of major breakouts in the restaurant group. papa johns, close to an all time high. jack in the box. and cracker barrel did the same thing. ponce likes all four of these stocks. he thinks they're worth buying
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on a pullback. but what if we want something that hasn't run quite so much. something that isn't already at or within striking distance of new highs? well, ponce has not one, not two, but three not particularly healthy ideas that he believes could give you some tasty profits. mcdonald's, dunkin' brands and dominos. it's what he calls the homer simpson portfolio. yep, burgers, doughnuts and pizza. you can see the performance. we made a chart. take a look. see the breakout? this is the 52-week right here. well, let's just say that's ridiculous. but that could help you make some dough, though. these may not be the key ingredients of a well balanced diet, but you could benefit from a delicious restaurant bull market. we're perfectly happy with pro obesity stocks, as long as they look like they can make us money.
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that's exactly why ponce favors these names in the homer simpson portfolio. let's start with the burger part of the equation. take a look at the daily chart of cramer fave mcdonald's. remember, goldman downgraded it at $85. anyway, this stock has been very much out of favor the last three months. in part because it outperformed the market, but also worries about currencies and commodities going the wrong direction. ponce thinks it's pulled back to a level that's buyable. what's changed? why does he think it's ready to reverse its downward trajectory even though its new ceo is relatively untested? it's made an inverted head and shoulders pattern. not because it looks like an upside down bottle of shampoo, but because it looks like an upside down person with a head sandwiched between two shoulders.
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chartists fear a regular head and shoulders formation because it's an indicator a stock is about to take a turn for a worse. but an inverse is just the opposite. it's a powerful technical indicator that a stock has bottomed and could be ready to run. however, this formation doesn't necessarily mean anything until the pattern is complete. so when mcdonald's broke out above what's known as the pattern's neckline, just last week, confirming that it's for real, ponce considered that an extremely bullish development right there. ponce thinks the momentum should take mcdonald's substantially higher. how high? he sees it going to $97, $98 in the not so distant future. next item in the homer simpson portfolio, doughnuts. why does ponce favor dunkin?
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jp morgan downgraded today. those guys got up on the wrong side of the keurig. last week they pulled back. blue, 50-day moving, then it rocketed higher. we have seen this happen a number of times since dunkin came public. every time the stock trades back to that 50-day moving average, it rebounds like crazy. and that makes ponce think this key moving average is a powerful floor of support. he estimates the stock will be a screaming buy the next time it pulls back to these levels. right now, the average is at $33.50, about a buck below where it's currently trading. if it comes down $1 from here, ponce says you should buy it hand over fist. last but not least, domino's.
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took a real bruising falling from its march highs. it's been clawing its way back up over the last few weeks and the stock is now at two-month highs. ponce thinks it could be on the verge of a major breakout right here. the reason -- domino's has formed cup and handle pattern. it looks exactly how it sounds. in june, domino's bottomed, making a pattern that looked a lot like a cup. and then it traded sideways. that looks like a handle. it's one of the most reliable technical signs that a stock would be about to rally and rally hard given that domino's picked up steam last thursday and friday and tacked on another 94 cents or 3% today. ponce believes we could be witnessing a significant move higher. the restaurant stocks are smoking right here. and this could be a terrific time to stock up on the stuff
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that's really bad for you health-wise. ponce thinks mcdonald's and domino's pizza are worth buying right here and he says you should double down on dunkin' if it pulls back from these levels. these three excellent companies, stocks that are very much worth owning, especially mcdonald's, which the charitable trust has been buying aggressively under $90. stick with cramer.
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>> will marissa meyer be the savior of yahoo? this is a tough one. i thought levinson would be terrific because he understood the need to be disciplined. something that yahoo hasn't been known for since it was yahoo. the web experience seems to have gone down. perhaps it's a function of the need to compromise to generate revenue, as the web isn't necessarily the easiest place to make money. the ad guys have just taken over. sometimes i long for the simplicity of the old google. a white screen with a blank space where i type in a question and i get an answer that i trust. it was only after marissa meyer won the job that i discovered
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that she was the inspiration. i was talking to siri. turns out that i again had stumbled on the work of marissa meyer. there had to be a ton of people involved in the process. yahoo, partners with cnbc, has a ton of catching up to do. it like aol suffers from an incredible lack of cool. you think you're clicking on something that you never would have read at the news stand or trusted at the library. it's known as a tough place to work. maybe she can change that, too. beyond that, they have a ton of assets. unlike aol, i still use yahoo constantly. it hasn't lost loyalty and man, its speed is still breathtaking.
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that said, yahoo has no social, no mobile and no cloud strategy, so meyer is going to have to develop all three immediately. i hope she'll unite the company and make technological changes that yahoo desperately needs. yahoo most of all needs someone to stay as ceo. anyone. at least for a couple of years. the steady factor must come to the fore. if she can simply pull that off, i call it a job well done, no matter what else she does. stick with cramer. sitting on the sidelines because of all the uncertainty in the market? >> thanks for turning my portfolio from mean to green. >> that's what i want to hear. >> with over 25 years of experience in bull and bear markets, let coach cramer show you how to play to win. >> "mad money" weeknights on cnbc. [ female announcer ] the best things in life are the real things.
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