> 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 are 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. my job is not to educate you but to teach so call me at 1-800-743-cnbc. it's the expectations, stupid. on a day where the averages continue to scorch. almost at the four-year highs. dow surging 85 points. s&p climbing. nasdaq falling 1.04%. we're witnessing a remarkable

trend. the positive reaction to negative earnings. >> house of pleasure. >> and the negative reaction to positive ones. >> the house of pain. >> you watch "mad money" to learn about the mysterious ways of wall street and there are few things more baffling than the stock going up on what appears to be really bad news, except when the stock plummets on a job well done. you see this kind of thing. it's hard not to feel like the stock market is just downright impossible to understand, and there's no rhyme or reason to any of it. but believe it or not, in the world of hedge funds from whence i came, these kinds of moves not only make sense but they are gospel. right as rain. one plus one equals two. considering the moves we've had in the last 24 hours. the most visible, two dow stocks, walmart and cisco that glaringly call for analysis. if you saw the action in walmart today, down $2.30. you might have thought that it just blew up and missed the numbers by a mile and gave a

miserable outlook. no, not at all. walmart beat the estimates nicely, guided higher. exactly what you would expect from the biggest retailer in the world, and that's what went wrong in a nutshell. walmart did precisely what it was supposed to do. didn't blow away the numbers. didn't issue a monster guide up that knocked your socks off. given that walmart rallied 20% for the year and has been the hottest major stock in retail, it had to do a heck of a lot more than exactly what it was supposed to do. in other words, the, quote, better than expected numbers were precisely what everyone was expecting. in that sense it was extremely disappointing to the walmart bulls. hence the extremely disappointing performance of its stock. cisco, on the other hand, which i'll have more to say about later in the show, delivered pretty much the same kind of positive results and commentary that walmart did, yet it

vaulted $1.67 or 9.6%. how can that be? pretty easy. >> that was easy. >> we're used to cisco merely doing the number and then giving us disappointing guidance. often really disappointing. this unexpectedly downbeat attitude and outlook have become the expected! so when cisco's ceo john chambers didn't guide down but was actually quite rosy, it was a shocker. >> all aboard! >> not to mention the gigantic 75% dividend boost that told you the future is brighter than the past. all of a sudden a company that's growing low single digits seemed downright exciting, sizzling even. hence how you got this massive rally that otherwise would make no sense at all. hey, you know what's really outrageous though? the street's reaction to the results from sears holdings. sears holdings, for heaven's sake. remember them? once again sears reporting negative same-store sales. once again the economy hurt the business which is something

competitor home depot actually said helped their business, but sears had one item on its gross margin line that incredibly expanded, that galvanized people. what's this? something good happening at sears? so the stock screamed $3.69 higher. flabbergasting one more sales number could produce an upside explosion but think of sears as a company in a coma that suddenly opened its eyes, moved its arms and legs. it's remarkable. not unlike that dazzling scene in "hard to kill" where cramer fave stephen seagal awakes from a seven-year coma. storm then took on and crushed the competition. i don't expect sears to do that. i think it's only going to be a one-day wonder. how about the rally in net app, network appliance, a company that's been a serial disappointment. this one zoomed $1.20 higher on

lowered expectations. they lowered even lower than people expected. the market still lapped it up. as bizarre as these moves may seem, considering the amazingly curious case of abercrombie & fitch, an outfit that -- that endlessly pursues me as a male model for their hollister division, and i have to keep saying no because i wear brione. 15 days ago -- 15 days ago a and f issued horrendous downside guidance of 18 cents versus what the street was expecting. this week abercrombie reports 19

cents, a penny higher than the cut number that i gave you a fortnight ago. wait, not as nutty as j.c. penney where my mom got her venetian blinds. sales down 19%, forecasts way too high. the stock zoomed up, not down. penney and abercrombie had something in common despite the crummy results. they were both heavily shorted or bet against by hedge funds which were counting on the disastrously performing companies to keep, well, performing disastrously, but these were mirror images of walmart. if a company does exactly as badly as it was supposed to do and not worse, that doesn't bring out new sellers. in fact, in the case of a & f it brought in buyers including the company itself which announced a boosted buyback. that meant those who bet against these companies didn't get the expected supply of shares from new sellers that would have depressed the stock, so the shorts were forced to cover by buying back the shares at a higher level. a spoiled short often yields a very terrific move up. some areas where the market makes sense to the layman. home depot, macy corp and housing bottom and spending, stunned the market.

stock up for several days. as it's dawned on people that the long national housing nightmare is truly over and the stock broke out of its range. pet smart blew away numbers and jumped $3.09 to close at an all-time high, in part because so many analysts are neutral in the name and don't get there's a huge secular growth path in higher end food and service for pets. pet smart is no regular pet store. consider it the whole foods and four seasons for cats and dogs. you'll get that move up when the street is dragged kicked kicking and screaming, think "s," sprint and what about an inline number as perrigo did today. including bed bath & beyond, still very far. here's the bottom line. no, the market's not nuts. although you may need a nut to make sense of it. when companies awake from comas with smiles on their faces we take notice.

when healthy companies report healthy numbers we yawn and perhaps do some selling. unless there's some sort of major change in the fundamentals like cisco, don't fret, the old paths of glory or disdain will soon be right on track. let's go to matt in my old home state of pennsylvania. matt. >> caller: hey, jim, thanks for having me and boo-yah and thanks for replies on twitter. i love the medium. i think it's the future. >> i don't mind giving people a beat-down when they get on my nerves but i praise them when they are good. >> caller: a philly guy, it's the year for the birds, so always got that going. >> bet you do. as a philly guy, on twitter i'm such a philly -- got the heros and villains and guys to praise and trash. what's up? >> caller: love it, love it. calling about facebook. stock down 50% from the ipo price. looks like there's capitulation, first lockup expiration date. what do you think? can the stock keep going down? >> the stock was so heavily

shorted and bet against that when the stock lockup happened we'd see real buyers coming in. no. facebook is still struggling with the mobile trade. facebook reminds me very much of the phillies. every time you think they are about to rally they break your heart. not the phillies of old or the facebook of old and, let's just say, they are both going in the wrong direction. let's go to logan in texas. >> caller: boo-yah, jim. thanks for taking my call. >> my pleasure. >> caller: a little while ago ben bernanke made a statement saying there should be a lot of safety in dividend-paying stocks and i was wondering with the fiscal cliff coming up, how credible is that statement, and what are your thoughts? >> as you know, maria had a great guest, you know, i think it was maria, brian and mandy, had a great guest talking about how if the dividends are getting boosted, you're fine. if the dividends are flat-lining and not coming up much you're not fine.

so you want to look at the delta of the boost, it was maria, she mentioned cisco, cisco boosted 75%, ben bernanke or not, you want to get on that bus. let's go to john in florida. please, john. >> caller: hi, john. john in dunedin, florida. jim, i'm thinking about purchasing velti corp, velt. i'd like to know what your opinion is on it. >> velti corp, it's in dublin. i don't even know it. too busy getting the guinness degree in pouring. i don't know velti. i know velshi, another network. good guy. great expectations. the markets reacts to expectations, mrs. haversham. when comatose wakes up the market loves it. the healthy ones are just healthy, eh. don't worry.

it's confusing. i'm here to help. "mad money" is right back. coming up, spring chicken? the company behind popeyes had investor mouths watering when it reported, and then after a quick rally it cooled down, but with favorites like panera and domino's delivering savory returns, could this be the next darling of the quick service sector? cramer sits down with the ceo to find out. and later, thirsty? there's been a spirited rally under way as shares of the top booze brands have shot up. tonight, cramer's distilling the facts to find out which of these names deserve a place on the top shelf. all coming up on "mad money." have a question? tweet cramer, #madtweets or send jim an e-mail or give us a call at 1-800-743-cnbc.

miss something? head to madmoney.cnbc.com.

remember the moment the old

popeye the sailor cartoons would guzzle down the spinach and suddenly be able to beat the stuffing out of bluto? that's how i feel about the other popeye, think chicken, not spinach. this one is a real puzzler because despite the results the stock is actually down today. afce is the company behind popeye's chicken and biscuits, popeye's louisiana kitchen, the latter being the -- they are rolling it out as part of a brand new imaging strategy that's been successful. 200 restaurants, 400 international. a terrific model in the time of skyrocketing food prices. revenues are up so much that profits are good and even though popeye's is the world's second largest quick-serve chicken chain the company has plenty of room to expand in the u.s. and abroad. as 70% of the domestic locations concentrated in the united

states, korea, canada, turkey. afc on fire in turkey. popeye's may be the best way to play domestic weakness of kfc. what's the buzz? last day a blowout quarter, company beats the street estimates by a penny. the revenues come in higher than expected rising 12.2%. same-store sales, stellar. management talked about how a strategic plan to improve the popeye brand could pay off. stock opens up huge. afc takes a turn for the worse. middle of the day, given up most of its gains and this on a day when the averages roared. what happened? this morning very thinly traded. some analysts downgraded due to valuation worries. that shouldn't have been enough to cancel out this wonderful quarter but when you throw in the fact afce has had a terrific

run, can you see how they shook out the weaker hands. these same players would have started selling as soon as they saw afce giving up its gains. don't take it from me. let's talk to the president and ceo of afc enterprises to learn more about the quarter and her company's prospects. welcome to "mad money." >> great to see you. >> is that perfect? have a seat, have a seat. i have been a huge user. >> yes. >> and i love your product, and i was so thrilled when we got together to be able to talk because this is to me the next -- it's the next, because it's small and it's got a niche that is going national, but i just now started seeing the national advertising. just now that you're rolling it out throughout the country. >> absolutely. one of the big parts of our success has been telling the customer about our fabulous louisiana foods that you know comes from a great place called new orleans. it has great seafood, great chicken.

>> i'll be there next saturday. >> awesome. we've got the story out and when we go to open a new restaurant in a market there is an absolute pent-up demand to get in our restaurants and try the food. >> the quick serve business in disarray, mcdonald's didn't report good quick-store sales, chipotle's coming down. why is yours different? >> we're one of the few people with a better second quarter than the first. we're getting the tailwinds of people coming back to qsr. >> quick serve. >> our goal when we went into the recision we wanted to come out strong, we came with new products and came with louisiana kitchen and now the customers are rewarding us with a disproportionate share of business. >> now another thing that's happening is a lot of the big chains have experienced special fatigue. meaning you'll see some big national brand advertisement and it doesn't bring in new customers, but your specials

include ones for crawfish have been red hot. >> there's no fatigue in our kitchen. we're launching great new products. won a menu masters award for dipping chicken, butterfly shrimp, no fatigue in our kitchen. >> your commodities were not compressed this morning? >> we had our best profit and margin quarter recorded, profitability for restaurants, 21.8% margins. >> really good. >> which is outstanding in our business, and we think that will continue. >> i know you as regular popeye's. louisiana kitchen is a new rebranding, doing new imaging. when you reimage a store how much better does it do? >> we've not reported out how much better they do. we've done about 14% of our system, about a third by the end of this year, and then we'll in a better position to talk about those gains.

>> obviously you wouldn't continue it if it weren't doing better? >> okay. >> it's a good investment, a $100,000 re-image when it usually costs $300,000. >> are there states wide open fields for you? >> yes, they are. we have 11 cities that we're chasing where there's an opportunity to build 20 or more restaurants in that town. indianapolis would be an example. >> how does it do near college towns? >> we do great near college towns. do great in the city, and we now do great in the suburbs. our new restaurants are opening at 1.5 million, up 50% over five years ago. >> what do you think is behind the fact that you've had -- look, this has been kind of a not great brand, to be honest. great food all the time but not a great stock. something changed here, and i know you came in, you can say that, but there is a -- there is momentum here that others are not having, and what are the secrets behind the momentum? >> well, you talk a lot about fundamentals. >> right. >> this is a fundamental story. we came in and we got this distinctive brand back on its feet with innovation and media and a great message, and then we went into the restaurants and

improved our speed of service so you can truly call us a quick service restaurant. most important thing is we started making money for the owners so they could be once again excited about the 40-year-old brand and its future and today 40% of our new units are built by current franchisees because the unit economics are there for a great business opportunity. >> who is building them in turkey? >> we're the hottest concept in turkey. >> crawfish? >> turkey is all about a great growing middle class economy. >> yes, yes. >> and they love spicy food and seafood and they love rice. i mean, our food is like designed for a mediterranean country. they are also expanding in malls where the whole country is just learning what a mall is and getting out and shopping every weekend and that's been the basis for our growth. >> are there other countries that it could be -- >> there are many. >> that you're not in, right? >> that we're not in yet. >> the person who downgraded it

today seemed to be thinking afc highly franchised restaurant risk, we prefer highly franchised, not negative by any means but they are saying the operating environment will remain difficult in 2012 and higher pressure commodity prices and uncertainty regarding consumer spending will put a cap on it. i didn't see any of that in the quarter. >> no. you know, we talked about our margins being best in class and that we're handling the commodities increase very, very well. i think what was underestimated in that report is the growth potential. we have growth to improve the average unit volumes in the u.s., the number of units and then do international. that's where our valuation has to go. >> okay. your first, i know i've got to wrap it, i'm going to eat this tonight, believe me. your first three words were good morning, welcome and then you called it to popeye's. i always call it popeyes, but the company is called afce, you're calling it popeye's.

shouldn't we call it popeye's? shouldn't you change the symbol and change the name and get people behind this as a branding effort? >> i love that idea and one day we may do that. right now afc stands for america's favorite chicken and that's what we're working on making that happen. >> thanks. i don't think this is done. i think the analyst is wrong. i think the stock is on the right trajectory, president and ceo, and i've got to tell you, just a terrific money-maker. stay with cramer. coming up, thirsty? there's been a spirited rally under way as shares of the top booze brands have shot up. tonight, cramer's distilling the facts to find out which of these names deserves a place on the top shelf.

tonight here on "mad money" we're having the ultimate drinking contest. no, it's not because i've been feeling a little down lately and want to drink myself under the table on national television. look, if i want to get plastered, i'll do it in the privacy of my own home, preferably, on my dirty linoleum floor. the reason we're embracing alcohol is simple, and it has nothing to do with getting inebriated. the liquor stocks, they are en

fuego, which is really saying something, because if you've ever lit up the stuff, made a cocktail, you know it burns hotter than kingsford. fyi, if someone offers you a molotov cocktail, whatever you do, don't drink it though i never minded an irish car bomb now and then, preferably now. stocks are up huge, you know i've been pushing them endlessly. brown forman, best known as jack, jack daniels up 34% year over year. beam, the aptly named company behind jim beam, is up 37% in the same period and diageo, the global spirits colossus, has rallied more than 39% over the last year. these three stocks have had enormous runs. diageo is only a couple points away and beam and brown forman are each three or four points away. you know what? could take a pause, but this move is far from over. the same forces that have propelled this rally should keep

driving these stocks higher. the alcohol industry is in the midst of a transformation. tastes are changing. consumers in the united states drinking less beer. more hard stuff. and within the liquor biz there's a trade-up dynamic in play. all three of these companies have different tiers of brands with everything from cheap bottom-shelf rot gut to top shelf drinks that sell for top dollar and lately people have been willing to pay a higher price for quality. think of johnny walker, walker's red is cheap. some compare it to turpentine. i like it more. just say it's rough. johnny walker black is smooth and blue is divine. green and gold, take a lot of shelf space up in my local tavern and the liquor companies have gotten smarter about brand imaging. fortune brands isn't selling jack daniels to older white guys.

they are having success selling jack in china. never practiced that before, never broke. and in europe and they come with brand extensions like ready to drink jack and coke. cramer fave, brush your teeth with it. i want to show my age for a second. i still brush with colgate. beam's hottest brand is something you probably never expect. skinny girl margaritas. these companies have diversified, expanding around the globe, they know how to attract all demographics. which of these liquor stocks is the best buy? to be perfectly honest all three have run so much i wouldn't pull the trigger on any of these at these levels. however, these are exactly the kind of stocks you should think about picking up the next time we get a decent sizable pullback. how do we judge the winner in this liquor shootout? seems like we have a bit of a mexican standoff. diageo versus brown forman versus beam. ideally we do a taste test but these companies have so many brands that by the time i got halfway through i wouldn't be able to form a coherent

sentence. all three companies have terrific brands and terrific distribution networks so i think we have to default to the numbers. it's difficult because i've got to tell you in that case, well, let's just say even though the numbers look -- look a lot like when you really dig down into them, not even close. diageo is the winner. consider it the man with no name. diageo is much larger and that's not why i like it the most. a lot of marketing clout, famous brands, johnny walker, smirnoff, jose quervo tequila, captain morgan's rum and irish bailey's cream and the company that also makes guinness. brown forman, southern comfort, woodford reserve bourbon and tequila and el jiminor, my nickname in summit, new jersey, beam, in addition to jim beam

also has makers mark, sauza tequila, canadian club whiskey and every shelf covered. these are all houses of top-notch brands, and beam also has the added advantage of being a great breakup play, but i like diageo best because it's more secure with a bigger dividend and gives you a decent 2.5% yield, let's say after today, better than ten-year treasuries and brown forman yields 1.5% and beam 1.4% and it sells 16.6 times earnings. the other two get higher multiples even though they are only growing slightly faster than diageo's long term growth rate. what makes diageo more secure? for one thing even though amazingly it's headquartered in london, this company has less european exposure than the two u.s.-based names. diageo gets 22% from europe and 22% for beam and 27% for brown forman. emerging markets, they account for 40% of sales, including

china where diageo is well ahead of the curve. back in 2006 they bought a 43% stake in a major chinese distillery and now they are one of the leading players in the chinese white spirits market, one of the fastest growing alcohol categories out there. johnny walker not a johnny come lately and then there's the gross margin, what these companies keep on every dollar of sales. beam and brown forman each have 58% gross margins, not bad at all. diageo, 60%. six times the size of brown forman and gives diageo the vast distribution network needed to leverage its brands. got to take them. can't kick them out and means the company can generate a ton of cash. now, look, listen to me right now, if you put a gun to my head, and told me i had to buy a liquor stock right now right here i'd probably wet my pants, but after that i'd pick diageo,

and give me a choice, the best of breed, the smartest course of action is wait for a pullback and then do some buying. the bottom line, liquor stocks, they have been on fire, and while i like this cohort a lot, the results of our shootout suggest beam and brown forman may have gotten ahead of themselves. the best buy is diageo, highest yet, largest global footprint, least european exposure and cheapest stock. i want to go to duane in kansas. hey, duane. >> caller: thanks for taking my call. >> my pleasure. >> caller: i did buy consolation bronze at 19 and change and sold half of it at 28. i wonder should i sell or should i hold it? i'm not going to buy any more. >> they did that transformational exchange with beer. had a remarkable run. let's not play mr. market. let's just take the money and run. that's playing steve miller.

alex in north carolina. please, alex. >> caller: hey, jim. first i want to say i absolutely love your show. >> absolute to you. >> caller: question is of the three top beverage industry leaders, pepsi, coca-cola, dr. pepper, which do you see is forecasted to perform better than the other? i know warren buffett is a huge coca-cola fan, but it's yielding the smallest dividend right now. should i be concerned? >> i think pepsico -- coca-cola is a remarkable quarter, but pepsico's got a lot of initiatives that i like, so this is -- someone @jimcramer on twitter was asking me which do i like more, coke or pepsi. it's a draw between coca-cola and pepsi. and even though i had a diet dr. pepper today for lunch i don't have the same level of conviction for dr. pepper as i do for the the others. dominic in my home state of new jersey. dominic. >> caller: how is it going? >> couldn't be better. how about you? >> caller: my question, soda stream, blowing it out the door,

blowing away their earnings calls yet i don't see any love on soda stream. what are your thoughts? >> i think soda stream has a hard time predicting what they are going to do. they guide down, blow away, guide up and don't do so well. it's too hard for this guy and i shelved my soda stream, shelved it. too much of my counter space. what what can i say? the spirits are high among spirit companies, but which is the spirit in the sky and which is the top shelf? it's diageo. wait for a pullback. all can i say is belly up and cheers. stay with cramer. >> coming up, send cramer an e-mail to madmoney@cnbc.com or tweet him @jimcramer #madtweets and he might just answer you on air on an all new edition of "mad mail."

it is time -- it is time for the "lightning round."

are you ready, skee daddy? starting with oz in massachusetts. oz? >> caller: cramer, i want to send you a beantown boo-yah. >> i like a beantown boo-yah. i'll be up there in a couple of weeks. what's going on? wells fargo, wfc. warren buffett of fidelity increased their position. stock is up 23% for the year. is it too late to get into wells fargo? >> no, no, no! my charitable trust pulled the trigger. going back and forth. on the unbelievable scott wapner show. we all agreed it's time for more wells fargo. adrian in florida. adrian. >> caller: hey, cramer, this is adrian jr. calling from sanibel, florida. i wanted to ask you about magnum hunter. you talked about it before.

>> look, it's a great spec on oil. oil's got to go to 110 before this thing kicks in but a great spec. i'm going to ozzie in maryland. ozzie. >> caller: hey, jim. how you doing? >> not bad there, ozzie, how about getting ready for the ravens? what's going on? >> caller: i bought an energy company called first solar, fflr. >> what would ray lewis and ed reed do to that stock? come on, man. the first good quarter that you could sell off of. i don't want to own it. i want to be a seller. i'm a buyer of the ravens. let's go to barbara in texas. barbara. >> caller: yes. roundies, rndy. >> very disappointing, very disappointing. not happy with my homework. going to go back and revisit that later on when we do a show designed just for flagellation. i was looking for my whip, but i can't find my whip. i could hit myself in the head with a baseball bat but then i'd

be out of the rest of the lightning round. colt in ohio. >> caller: hey, jim, how about a buckeye boo-yah. >> we don't get enough buckeye boo-yahs on this show. it's our loss. what's up? >> caller: senior at ohio state majoring in finance and would like to liquidate for student loans. what's your thoughts on the mortgage industry with the name of american capital agency? >> i wish it's a winner. wish you didn't have to liquidate it. i would tell you that that yield is good, and i think you should -- look, you don't need income. about to burst out and earn a lot of money. i like them. it's done a good job. i'll go to barbara in texas. >> caller: hi, jim. this is barbara. welcome from texas. i'm calling about liquidity services, lqdt, technically beaten down, but does it have what it takes fundamentally to get back up? >> when it fell i looked at this

and said i like the surplus model. i would dip my toe into it right here. jim in my home state of new jersey. jim? >> caller: hey, jim, how you doing? >> real good. how about you? >> caller: my stock is oracle. owned it since 2000. should i hold it? take some profit? >> five times faster than ibm. larry ellison is the feistiest guy on earth. i'm not going against oracle. >> buy, buy, buy. >> i think it's a buy. >> let's go to drew in texas. drew. >> caller: hey, drew. a bears boo-yah to you. >> what's going on. >> caller: company is ellington financial, symbol efc, they have a dividend yield of 12% with a dividend yield at the end of the month. what do you think? >> a residential mortgage reit play. i have to tell you there is a trade going where people are selling the higher yielders so you could be sensitive to that. dan in california. dan?

>> caller: boo-yah, jim, from beautiful burbank, california. >> it is beautiful. i've been there. what's up? >> caller: thanks for having me on the show and for all you do for investors. >> thank you. >> caller: i want to discuss one you've mentioned in the past, west star energy. >> misunderstood, remember, safety people don't like right now. i think safety never takes a vacation. and that, ladies and gentlemen, is the conclusion of "the lightning round." >> the "lightning round" is sponsored by td ameritrade. [ male announcer ] let's level the playing field.

take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.

before we answer some tweets and maybe some mail, we have some homework to take care of. last night josh from new york called in with a question about jazz pharmaceuticals. i want to do some work. wow. best biopharmaceutical company, 22 products currently marketed in the u.s. focusing largelyn the central nervous system and women's health. their lead drug deals with excessive daytime sleepiness in patients with narcolepsy. last week they posted a stellar quarter. raised earnings per share and revenue guidance above wall street expectations. this idea has multiple legs. stock can continue to grow its lead product and integrate its pharmaceuticals acquisition. i like this one. let me give it fair warning. stock trade is really choppy. buy it in increments. don't take it in one or two trades. on monday doreen from arizona wanted another one that i didn't

know, gaylord entertain, symbol get, the company is a niche player in the lodging industry with a focus on the convention center of the hotel market. at the end of may the company agreed to sell gaylord brands and its rights to manage the hotels to marriott and at the end of the year gaylord will convert to a reit, real estate investment trust. this company's transformation provides upside. this could be a nice income generator. i'm going to follow this. jim from north carolina asked about nxp semiconductors. the company provides mixed signal and product standard solutions in a wide range of automotive, lighting industrial and mobile applications. a pretty interesting company. given the company's visibility through a number of product lines, lower gross margins and the company's latest quarter was strong. upside remains. $28 is reasonable based on ten times forward earnings. this could have a nice fall

spike, an interesting buy here. risks remain particularly on the margin side. all right. our viewers are so smart. three i didn't know, three ideas that i would take -- i'd take an interest in frankly. all right. now let's start with some tweets, okay. first, the prince @wcm3. he says should i buy into kodiak oil and gas corporation? no, this one has been the best performer so we can't come in at kog. wait for a downturn. this has been a red hot stock. too hot for me. another tweet from @riddlejosha. how long did it take for you to get adjusted to waking up so early? always thought i was one of the few 4 a.m.ers. a complicated question because i used to go to bed at 2:45

because i used to drink a lot of uband at around 6:00 p.m. and then i then switched and starting to go to bed at 11:30 and now i get up at 2:45. if i could sleep to 3:30 it would be a godsend. it has to do with the inability to stay asleep, not an alarm clock. it's a nightmare. you don't want it. take another tweet. this one @ianmikutel. thoughts on hershey, hsy? multi-year move in hershey but right now the safety trade is off. i want you to take half of the hershey off and play with the house's money. then you don't have to worry. what a great company. here's another tweet. this one is from upstate angler. i used to be an upstate angler. hey, jim, what do you think about dr horton, dhi, especially with the news on housing? dhi is terrific, i think you'll make money. spain or italy, spain up 4%, did anyone talk about that, spain up 4% last night. come on, man. that's bullish. but i do like dhi.

let's take one more tweet while we're @jimcramer tweeting. predrag_pes says hunger games and expendables 2 come out tonight at midnight. lgf catalyst? i want to pray for rain so i can see "hunger games," but lgf, needs catalyst beyond those. in other words, got to be something on the horizon that nobody is thinking of or it won't budge from this 14 or 15 level. well, i guess that wraps up homework. "mad money" is back after the break. [ engine idling ]

[ engine revs, tires squeal ] [ male announcer ] more power. more style. more technology. less doors. the 2012 c-coupe.

join mercedes-benz usa on facebook for the best summer sweepstakes.

nobody's been a bigger critic of cisco and ceo john chambers in recent years than i have. the networking giant seemed bloated and blowing with the breeze with back row events. felt like every quarter we had to hear endless alibis for why the company wasn't living up to expectations created by the company itself on the previous conference call. when you read the release and it was actually positive you had to bang out of cisco immediately because you knew that on subsequent conference calls chambers would somehow talk people into selling the stock by saying he had a muted outlook or that customers weren't buying or that the prospects weren't as strong as he thought because of global economic woes. meanwhile the company would have wasted loads of money buying a ton of stock at very high prices

and you would think what the heck is going on here. and that's what made cisco's quarterly report and conference call terrific. europe is a big part of cisco's business, almost 20%, didn't hurt them nearly as much as other tech companies, no complaints or alibis. asia was fabulous. other companies cite the japan earthquake slowdown, cisco performed like a champ in both markets. telco spending in this country which everyone says is way down, doesn't seem down for cisco, neither does cable where cisco earned the bragging rights to brag about its seamless integration of the olympics with a staggering number of viewers and telco and cable companies turning on the juice, that could be a multi-year trend here and that's why cisco made a decision to boost its dividend by 75% immediately, taking the yield to nearly 3%. fantastic news for long-suffering shareholders and new ones being drawn to the stock for the yield now. a dividend boost of this

magnitude tells you cisco is confident about its future and a dividend can't be suspended or cut back. sure the naysayers are saying cisco gave you a dividend no longer a growth stock. others groused about the low single digit growth, cisco of old, company taking names, ready to roar back because you can't master big data without cisco, it's ironic. i joked the paltry dividend could give you a good yield all right because the stock was headed much lower. next stop 2%. next stop is 2% again except this time it's done because i believe the stock is going to climb higher, so let me say welcome back cisco, congratulations, john chambers. terrific work in the toughest

environment imaginable.

listen up, the two stocks you must put on the screen to find the direction of the market. banco santander. could the u.s. be next? they own a giant bank in the