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 trying to save you some money. my job is not just to entertain, but to coach you and teach you about the all-time highs in the dow. call me at 800-743-cnbc. if you don't build it, they will come. that's right. we have the exact opposite of a "field of dreams" stock market.

don't build anything new and the profits will come to those who already had the infrastructure in place. that's really the theme behind much of this market's advance. the undercurrent that plays out every day, including this one, with the dow roaring 112 points, yes, all-time high, s&p jumpi jumping .78%, almost an all-time high. let me walk you through my don't build it, profits come thesis, because that is what's behind this levitation. this morning we heard from the keepers of the case-shiller index that housing prices are up in all 20 cities with staggering gains, places like phoenix, las vegas and miami. these increases can happen simply because the homebuilders aren't building houses fast enough to meet the demand. you have a million new homes coming onstream this year, still only two-thirds of what we would have gotten six years' and that's just not enough supply, given our level of household information and how many homes we lose every year to natural

disasters. they aren't building it, so the profits accrue to those few who have the capital to do so. we know from the february new home sales that 411,000 that were sold that we're still way behind where we should be, and that's because of veracious demand. that's how you get quick appreciation for homes. remember, blackstone, our favorite private equity firm, has a huge inventory of homes. now, i heard people fretting all day that blackstone might get hurt when they go to sell them. in fact, the opposite is true. thanks to the new homes being put up and the need for rentals, blackstone's making money with its home collection. it can rent them, sell them. you would think we could get into the home flipping situation with that advance, prices up 15% in vegas, 12% in minneapolis. but unless you are a huge private equity firm with lots of capital, lots of firepower, you do not have access to mortgage money on a second home, and there's no mortgage money for investment property in most

areas, even if you're willing to put down 50%. none. believe me, i know. the same thing's happening in the hotel industry, as you'll hear later from ashford hospitality, a big hotel-owning real estate investment trust that's seen its revenue go up in the high single digits. why? simple. because the industry's not building. they're not putting in new capacity. there's not enough credit, there's too much worry about the last downturn, so you have good pricing all over the place for the existing stock. it's a reason to like win, marriott and starwood, too. the essence of the reality in the airlines, which i think again will be a multiyear move, also comes down to a lack of supply. nobody's building out airports. you can't get any new planes any time soon given the huge global demand for them. so, us airways, united continental, delta, spirit don't have to worry about willy-nilly competition. the first time i could actually recall that being the case. hence, the first time i've ever recommended these stocks. that's why i expect the profits to come in for us airways when

it completes its merger with amr. capacity takeout, just when you'd expect additional planes and routes to come online. i can't wait for "squawk box" tomorrow where the ceo of u.s. air's going to be on. i'll bet you he comes with my thesis that nobody's building, so the profits are coming! don't build more cars, the profits will come. that's the heart of the rental car business. right now there aren't enough autos to go around. the consolidation in the space is immense, the price increases are bountiful. if it weren't for hurricane sandy, pricing may not have been all that tight, but right now getting a rental car is difficult because of the capacity constraints. how can you not want to own hertz in that situation? don't build it, and the profits will come to the refiners! this business has been hellish because the profit margins were so horrendous for so many years and the competition way too vibrant, but there hasn't been a new refining build in this country in nearly 40 years. many have been taken out of service, environmental issues. and we now produce so much oil in north america, many players can refine it here, sell it overseas for terrific prices.

hollyfrontier's in the best shape to profit from this lack of new capacity and arbitrage, between cheap domestic oil and foreign gasoline. don't build it and they will come. isn't that how shinneer energy levitates? these two longtime "mad money" recommendations, i cannot believe how long i've been flogging these have been busting out. it looks like the lobbying effort to stop the export of natural gas is succeeding, meaning cheniere will have a monopoly on natural gas because they were first. the amazing signing up of the contracts by the ceo continues and the profits from the monopoly will be gigantic once the build-out is completed. my hat is off to sharif suki. now, because there is little new construction of anything, we get no real new hiring. construction begets hiring. because we have no real hiring, we aren't getting to grow to get the growth you would normally expect from the economy in this stage in the recovery.

plus, we have an entrenchment in government spending that will curtail growth, and we have a serious worry in how much it will cost people to hire with the new employment obama care laws. we don't have enough small business formation to offset the constant streamlining of every large business i know. ask yourselves which businesses are hiring aggressively. i can't think of any. so, we don't get the bountiful gross domestic product numbers we might expect, we don't get the big production numbers, and we end up simply paying more for companies that can charge higher prices than we thought. at the same time, we pay less for companies that rely on foreign sales, like the drug companies which just hit 11-year highs can show you. oh, and it seems like we will pay anything for staples like colgate and bristol-myers because they, too, make more with less. they build very little and the profits keep coming and coming and coming, and their stocks, buy, buy, buy! this catch-22 situation truly benefits so many different equities. as long as we don't build it, the fed will keep flooding the

zone with money. at a certain point, the commercial real estate and factories will have to be built. at a certain point, the companies that be use our new-found cheap engine, the chemicals, fertilizers and the steals, except new corp's already down there, will build where the gas is cheapest, texas and louisiana, they will go to ohio, they will build up new plants like dow and new corp. it hasn't happened yet. when it does, when the building starts, the profits will actually be diluted and the fed will curtail its monetary policy, it's been so good for the stock market. it's just with the catch-22, no one seems to be willing to take the plunge to start building or get the credit to do so. here's the bottom line -- we've got a zero sum game going between employment and profits, which means the fewer people that are hired, the more money that is made in the stock market! so, we hum along just like this, and the market loves it, as long as we don't build anything and the profits keep bursting through the expectations for the bottom line.

don't build it. the profits come. robert in virginia. robert? >> caller: mr. cramer, a big northern virginia boo-yah! >> loving that kind of boo-yah to start the show. what's happening? >> caller: hey, i'm a 25-year-old new investor, and my question is about hoe vainan homes. with the case-shiller out, what are your thoughts about it now and in the long time? >> i'm a best of breed guy and i'll encourage you to be in a similar state of mind, which means you want to be in towle brothers, which is high end, or linear, which just recorded a spectacular quarter. pulteney at $20, they're better than hovnanian. stephanie in california. stephanie. >> caller: hi, jim. great to talk to you. >> same. >> caller: my question today is about boeing. there's been negative news about the 800 layoffs as well as positive news regarding the dreamliner's successful test flight. taking all this into

consideration, where do you think boeing's stock is heading? >> i think the stock is headed right to par, which is genuine wall street gibberish for 100. here's how i get that. i've been saying, anyone listening knows that i put my faith in boeing to fix this problem. they're going to fix it faster than anybody thought and that's exactly what happened. meantime, you cannot get the planes. the line is that long for the planes and that's why i think boeing is in the middle of a major cycle that will go on for years and years. i wish that my travel trust owns boeing. it doesn't. "field of dreams"? uh-uh, not quite. more like if you don't build it, they will come, meaning the profits. and of course, now, of course, the stock-buyers, companies with existing infrastructures are thriving in this environment because no one's building, and that just makes it so the profits flow right to the bottom lines of the companies you're buying. "mad money" will be right back. coming up, sink or swim? few stocks have been hit harder

than the shippers, but could the tide be about to turn for the most sea-worthy? tonight cramer's wading into the group to find out in a special nautical edition of "off the charts." and later, bill of health? all week, cramer's checking out the cutting-edge science behind some of the biggest players in the biotech industry. tonight, a company forming a pipeline to fight devastating diseases. is it time to get behind their efforts? plus, extended stay? from beverly hills to the sun-soaked florida coast, ashford hospitality trust owns rooms with a view across the country. as travel spending continues to increase, could it provide the perfect accommodations for your cash? cramer talks with the ceo. all coming up on "mad money."

♪ getting hammered, it's looking more and more like the shipping stocks are making a big comeback. i came out a week and a half ago to lay out the fundamental case for the dry bulk shippers, led by best-of-breed diana shipping, but this is really a case where the stocks got hammered so hard that they, frankly, couldn't get any lower. and now that things are starting to get better, they are roaring back with a vengeance, in large part because all of the waekz have been washed out after years of declines and there's an ocean of skeptics who can be converted from bear to bull. in other words, if you want to understand the move in the dry bulk shipping groups, as they transport things like iron ore, coal and grain, then you've got to look at things from the technical perspective.

that's why tonight we're going "off the charts" to see where diana shipping, the best of the dry bulk names, according to our own analysis, is heading with help of dan fitzpatrick, a brilliant technician and my colleague at thestreet.com. fitzpatrick likes diane here, he likes it because he thinks the stock's broken out from a huge, long-term down trend and that it's now very much in bull market mode to the point where any pullback should be used as a buying opportunity, not a reason to freak out and sell the darn thing. believe me, the chart is driving the action, it is, until the fundamentals kick in, as is so often the case when stocks are bottoming. the chart bottoms ahead of the fundies. it happens over and over again. first off, take a grander at diana's weekly chart. you can see that the stock has been locked into a multiyear down trend, going all the way back to 2008. this is a sickening down trend. i mean, compare this to like clorox and kimberly-clark or something. you know, this is where the 40-week or 200-day moving average represented a strong ceiling of resistance that kept

diana shipping down the whole way lower. fitzpatrick points out that the final washout for the bulls happened back in late july of last year. this is when diana bottomed. right there. i mean, this is amaze -- when you take a look at july -- i'm sorry, july of last year. yeah, that's right, that's right. and what happened is that right in this area is where, well, let's just say i'm getting ahead of the story because you'll really like this. the stock made what is known as a dragonfly doji. dragonfly doji. i'm not kidding! that was the last week of july. this is a rare candlestick pattern that happens in a downturn. in a dragonfly doji, as opposed to an imoji, which happens to be my second language, you have a week where prices range very widely, okay? in diana's case, during this week they ranged more than 13%

from the low to the high. one week! the stock opens the week at the top of the range. then the bulls capitulate, sending it much lower simply because they can't take the pain. but then it gets so low that traders realize it's too low and they start buying the stock aggressively, pushing the price back up to where it began the week. with diana, the stock started that week at $6.75. then it pulled back to $5.89, where it played the goddess of pain, and then it bottomed and closed the week once again at $6.75, where she became the goddess of bear hunting. fitzpatrick says that was the point where diana simply couldn't go any lower, right there, could not go any lower, and since then, the stock has been printing higher highs and lower lows. for months, the stock just ground away, okay, trading sideways, light volume. there's the low bay, light volume. see we've got the low volume base going on here, see that? not a lot of volume. and fitzpatrick says that no one really cared about diana.

but while that was happening, 409-week moving average, that key resistance level was moving lower and lower. then, when diana finally broke out above its 40-week moving average -- that's the blue line -- on january 2nd, the stock surged 17% in a single week! holy cow, that's it, buddy. that's what it is. since then, diana's been roaring higher. stock is now testing its last high in mid-february 2012, so go back, you can take a look. fitzpatrick says that's the new ceiling of resistance. a move up on this level will mark the first higher high since early 2009. when it happens, the stock could catapult higher again, but for now, diana's stuck hanging below this $10 range, okay? now, check out -- let's go, let's go to the daily chart, all right? here, here you can see much more clearly that the big, bullish turning point for the stock was back on january 2nd when diana closed above its 200-day or

40-week moving average, broke out above its resistance trend line, and perhaps more important, the shorter-term 50-day -- that's the blue, okay? shorter-term 50-day moving average cost above the 200-day. that's called, yes, a bullish crossover, and it tells you that a stock's short-term trajectory's becoming more positive than its longer-term trajectory, and we live for that. meanwhile, fitz points out that starting back in november -- go back a little -- the 50-day average acting as a floor of support for diana shipping. this is textbook, people. it is textbook of what's going to happen before a gigantic move. and right now, the 50-day marks the low end of the stock's current trading range and fitz thinks any pullback to these levels would be an excellent opportunity and godsend. last week, after trading sideways for about a month and a half, diana roared 20% higher before peaking on thursday. glad we told people to buy it, and it did so, and it did so on, look at this, heavy volume spike. remember, when you're dealing with the charts, volume is like

a polygraph, it's telling you that this move is the truth! however, when you see this kind of massive move and the stock runs up against long-term resistance, which is what happened to dinea, fitzpatrick says that usually leads to some selling once traders start taking profits and that's exactly what we're seeing now. stock was down 5.7% today. i'm sure a lot of people gave up on it, because it's like, dow's up 100, diana's down 5%, get me out. that's perfect! this kind of pullback is exactly what fitzpatrick's looking for. this is the buyable pullback. if the stock sells off down to its 50-day moving average, about $1 below where it is right now, fitz says that would be even better. guys, listen to me, okay? this is the setup. right here is where you pull the trigger! on the other hand, diana could turn on a dime and start rallying even tomorrow. so, fitz doesn't think you should wait to start at the small position. once the stock breaks out above its february 2012 high, fitz believes it could be smooth

sailing to $14. i need you in that move. that's the next ceiling of resistance, coinciding with the late 2010 high of 14 bucks, 20% higher than where it is now. you know it's starting to turn the corner. i wrote about five pieces about it on realmoney.com this weekend, been pushing it here endlessly. the bull index measuring the rates they can charge for the vessels has been climbing since the beginning of the year, just down a little bit last night, but there's a lot taken out of the industry and diana shipping is the strongest player in the group with the best balance shooet and the ability to buy ships right now while they're at their cheapest, while others are struggling to stay afloat. many of the others i'd like to mention are too small. i can't mention them on the show, but they are flying, too. here's the bottom line. after being a complete bow wow, a total dog for years and years, diana shipping is now having its day. the technicals as interpreted by dan fitzpatrick indicate the stock could pull back more from here, so you might want to wait for that, but if it does, you have to buy it, because he thinks diana shipping is a $9 and change name that may be heading to $14, keeping with my

view that this group is back. and for speculators, just speculators, it might be along with the airlines and the mortgage insurers the best place to play this market right now. after the break i'll try to make you more money. coming up, bill of health? all week, cramer's checking out the cutting-edge science behind some of the biggest players in the biotech industry. tonight, a company forming a pipeline to fight devastating diseases. is it time to get behind their efforts?

♪ people don't realize this today, but back in the 1990s, the big pharma names, stocks, they weren't synonymous with safety dividend yields like they are now. they were actually synonymous with growth. ♪ hallelujah at that time, the major drug companies were innovation factories, constantly churning out new and better drugs. and best of all, they traded like growth stocks. these days, merk and pfizer trade 11% earnings respectively and they are dividend factories. back then, big pharma names would trade for 30 or 40 times earnings with meager dividends. i mention all this because even though the days of big pharma

may be over, but the blockbuster drugs of the '90s having gone generic and the stocks trading like fixed-income vehicles, there's a group of stocks right now that remind me of the big pharmaceutical companies 15, 20 years ago. i'm talking about the large-cap biotech companies that are bursting with innovation, companies that have terrific pipelines full of new drugs with enormous potential. i think these fast-growing biotechs have the potential to be the next big pharma stocks, which is why i'm highlighting them all week. last night i told you about cramer fave celg. and tonight i've got another one for you. it's gilead. gilead sciences, gild for all you home gamers. gilead is the number one maker of drugs that treat hiv out there. that's also a developing game-changing, new drug to treat maybe one of the most aggressive and horrible illnesses on the planet, which is hepatitis-c. now, i last recommended gilead back on september 12th, as the company with the best chance of

dominating the hepa-c market, and since then, gilead's roared 51% higher, going up practically in a straight line. the stock has practically taken up semi-permanent residence on the new high list. it's a squatter. yet, even up here, i think gilead is not that expensive. why? because it sells for just 16 times next year's earnings estimates, despite having a 26% long-term growth rate. consider it once again one of these stocks that's so cheap that when it goes up, people are saying, eh, you know what, i can see buying that. for instance, gilead, did you know that is cheaper than bristol-myers, which sells for 18.7 times next year's numbers? i like bristol-myers a lot, own it from my chapa trust, totally dig that 3.5% yield. hey, so do you, but gilead is growing earnings much faster, three times faster than bmy. that's ridiculous. gilead deserves a higher multiple, end of story. if it traded 20 times next year's earnings, the stock would be 23% higher now and it would still be inexpensive on a growth basis.

hey, why am i so confident about this one? let me count the ways. first, there's this company's hepatitis-c virus or hcv franchise. for those of you who don't know, hepa-c is a nasty, chronic liver disease that can cause cirrhosis, liver failure, even liver cancer. in the united states alone, 4 million people suffer from hepa-c. this is not an orphan drug indication, 4 million. another 5 million in europe. in the entire world, the number could be as high as 200 million people. as many as 13,000 people die from hepa-c-related causes every year in the united states. it's also responsible for the majority of liver transplants, so this disease is a serious global problem. and as much as i hate to say it, from a drug company's perspective, it is a huge opportunity. right now, there are treatments for hepatitis-c on the market, but they have horrible side effects and they only work some of the time. if you get this terrible disease, you need to take a combination of interfurn injections with a powerful antiviral for 24 weeks. that's half a year, sometimes even a full year. those drugs can cause severe

side effects, giving you chills, making you feel like you have a fever, but you still have to keep taking them for week after week. at the end, the current standard of care only cures the hepa-c patient about 50% to 60% of the time, so you go through a lot of hassle, a lot of misery for six months and only whether you're cured comes down to a coin toss. however, there's a whole new generation of hepa-c drugs in the works and gilead's become the leading contender. just yesterday, they won the first phase of its patent disputes with idetics, with the patent office determining gilead was the first to file a patent. this is a difficult drug to make. first of all, they had to write off something they made after the drug killed someone. the drug that gilead's developing is light years ahead of the current standard of care for hepa-c. first, the drug can be taken orally instead of injected and you only have to take it 12 weeks, not 24. third and most important, based

on the trial results so far, patients who use gilead's hepa-c drug have a much higher chance of actually being cured. anywhere from 78% to as high as 100% when used in combination with another hepatitis-c treatment that the company's developing. so far, gilead has completed four phase 3 criminal trials for sefasdavere and they're set to file for a new subset next quarter. based on the data i have seen, i have little doubt the fda will not just rush this one and it should hit the market by the middle of next year. gilead has additional phase 3 trials studying this drug in combination with a second hepatitis-c drug gilead is developing that interferes with hepatitis-c's ability to replicate itself. gilead got into the hepa-c gain when it acquired pharmaset in january of 2012. it was a stunning acquisition. many people ridiculed the company. why? because they paid $11 billion, because it was a gigantic 89%

premium to where pharmaset had been trading. people snickered. they thought gilead overpaid. the stock took a 9% hit the day the deal was announced, but now it's looking like gilead's hepa-c franchise could be racking up $7.8 billion in sales by 2018. it's now clear gilead underpaid for pharmaset. they were just visionaries. boy, it makes me like them even more. one more point about the hepatitis-c business. so far, management hasn't spent much time talking up the drug, very nonpromotional. however, in the conference call in february, we were all ears. gilead's vice president for commercial operation said "once we get through the regulatory filings and get into the middle of the year," hey, not quote, guess what's coming soon? back to quote. "and we really start to take up the commercial activities, then i think we'd be able to share some quite interesting information we're starting to gather on the whole dynamics of

hcv," not just in the u.s. we're doing some really good work in europe as well, so we'll start to share that with you as we get into the middle of the year." in other words, not far from now. some time, some time next quarter, gilead's management's going to get a lot more promotional about this wonder drug and that would work as a catalyst for the next wonder drug. it has a core hiv business, it's the leader in hiv drugs and these are really expensive, because really, what's the alternative? thanks to the cocktail medications developed by gilead and others like it, hiv is no longer a death sentence. just last august, the company got fda approval for the quad, which is four of gilead's hiv medicines combined into a single pill, so gilead gets all the profits. by 2017, the quad could do $3.8 billion in sales in the united states and another $1.6 billion in europe. plus, gilead as a healthy pipeline could have many more hiv drugs, cancer treatments, including a leukemia drug that's in phase three development and a

milo fibrosis drug entering phase three studies in the second half. what a stock. here's the bottom line. gilead the company reminds me of the big pharma outfits in the 1990s heyday. you would come to work each day, up at 6:00, then up to 3:00, then closed for the weekend. didn't trade saturday, opened up ten on monday. check out the chart in '87. anyway, gilead's got a robust pipeline and a potentially game-changing hepatitis-c drug, could get fda approval in the near future. yet gilead the stock grows like the slow-growing names we're familiar with in pharma today. actually, it's cheaper even though it's a rapidly growing biotech. this stock may have room to run and i think deserves to go much higher. chris in california. chris? >> caller: hey, jim. i've been watching mankind corporation's stock for a while. they've had some great medical products in the past and they're currently awaiting fda approval for an insulin delivery system that would eliminate injections.

do you have any thoughts here? >> yeah, it's a serve mankind, it's a cookbook. no, i don't want you in mankind. i'm talking about the highest level kind of drugs here. i'm talking about bristol-myers, gilead for growth. we don't need to go down the food chain to mankind. joe in florida. joe company h joe. >> caller: hey, jim, big florida boo-yah to you. >> good to have someone from florida on the show. what's happening? >> caller: i'm asking about individuala pharmacology. >> i'm watching the tape in the morning. see the stocks that are down like $3 and they're like $5 stocks? i'm doing some work on aveo before i opine on it, just in case it's one of those badies. we'll be back. anyway, the biotechs, they're roaring here. all week we're talking about the big biotechs. next week, we'll do the little guys. innovation, growth. first celg, then gild, also

known as gilead sciences, game-changing hepatitis drug. i think it goes higher. don't move. "lightning round's" coming up next. no matter what, people can count on me to get the job done.

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it is time! it is time for the "lightning round"! >> sell, sell, sell! >> my staff prepares. we play this sound, and then the "lightning round" is over. are you ready skee-daddy? so, for the "lightning round," i want to start with danny in missouri. danny, show me! >> caller: boo-yah, jim. >> boo-yah, danny. >> caller: i enjoy your show very much and i'm a longtime viewer. >> thank you. >> caller: i actually have two stocks in question, and i don't know which one is more worrisome. >> all right. >> caller: i guess we'll go with san, banco santander. >> here's the problem with banco santander. after what the europeans just did to the scypriots, these bans have become a free fire zone. you have to let this settle out because spain needs to ask for a bailout. they can't win for losing over

there. i want to go to andy in new york. andy? >> caller: hey, jim, how are you doing there? >> all right. how about you, partner? >> caller: i'm doing okay. i was calling to get your views on ungn, just the uptick in the natural gas industry. >> yeah, i've got to tell you, i don't like it. in the book, i talk about why i don't like that instrument. if you do like natural gas, i can send you to a bunch of natural gas companies that i think are much better. you can do anadarko, do conoco if you want some yield. let's go to paul in florida. paul? >> caller: jimmy. >> yo, yo. >> caller: boo-yah from sunny florida. >> nice. >> caller: i'm a longtime viewer and first-time caller. i get most of your shows. three weeks ago, my stack of new ones, you talked about it and i didn't watch the show. >> i don't like voice recognition. maybe this is a legacy of my friend's work on this group. i don't think the group gets any gross margins and i'm not a buyer.

tom in ohio. tom? >> caller: ba, ba, boo-yah, cramer! tom from cincinnati. >> yo. i'm glad we're getting ready for the reds. what's up? >> caller: how about agnc? american capital? >> i see you agnc and i raise you with anally. they've got it go, and kai mara, cim. i wrote about that on thestreet.com. that i think is also a buy. >> buy, buy, buy! >> that's where you need to be. john in florida. john? >> caller: hey, jim. john k. in does not eden, florida, loyal viewer of your program. and i just want to say congratulations on your eighth anniversary. >> thank you. >> caller: the stock i'm interested in is movado, mov? >> yeah, movado's pretty good. i do like the luxury goods, but i've got to tell you, i just saw a really good number from tiffany and i think if tiffany pulls back, i like that more than movado, because tiffany is getting its groove back and that's what matters. and that, ladies and gentlemen, is the conclusion of the "lightning round"!

>> announcer: the "lightning round" is sponsored by td ameritrade.

♪ after a day where the market roared higher, dow in all-time

high territory, let's not totally forget about the need for capital preservation. you still need something in your portfolio with a yield that has the ability to raise it higher and that's why i want to introduce you to ashford hospitality trust. they've been working so well, in the business of owning hotel properties across the united states. 122 hotels, mostly upscale locations under the marriott, hilton, hyatt, starwood and intercontinental brands names. we know the lodging business has been on fire lately. with the strength of the starwood or marriott, think of ashford as the defensive way to play the trend with a 3.9% yield. for the most part, the value of hotels and the cash flows they generate peak, peaked back in 2007, but ashford's management believes the industry can exceed those numbers as we move further into the recovery, and if that happens, it will be very good news for ashford shareholders. before the financial crisis, ashford paid a quarterly dividend of 21 cents a share and they had to discontinue it in december of 2008, only to reinstate some in 2011. now they pay a 12% quarterly dividend, but the company has a lot of room to raise the payout,

generating 39 cents in funds from operations to the latest quarter. that's the reit equivalent of earnings. the company can raise it back to where it was in 2008, they could have a 6.9% yield at this rate and i think ashford could be headed in that direction, especially since the rate of per available room was up 3.9% for all hotels in continuing operations. plus, the company has a history of making smart acquisitions and offers cheap prices. let's check with monty bennett, the ceo of ashford hospitality trust to find out about where his business is headed. mr. bennett, welcome to "mad money." >> thanks for having me. >> first, throughout all your writings, there's a theme, and the theme is that the private market value and the public market value of hotels is quite different and that the public market is not getting the credit for the value of the hotels. how do you explain that and how do you change that so it isn't like that anymore? >> that's exactly right. over the past couple of years, the private market of hotels has moved up in value, but the

public market value of hotels has not moved, except for the past few months or so. and so, there's this disconnect between private market value and public market value. for example, we traded about 12 times 2013 ebitda. if our hotels were sold off privately, that number would be closer to 13 times. it's just how the private market is trading. as far as what to do about it, it's coming on shows like yours, jim, and getting the word out that this value discrepancy exists, because these discrepancies don't last for long in the public markets. they're pretty efficient and they price them away. >> all right, now, i am sure because you have a lot of pride in your company and i know you have a major insider position and there's been a lot of insider buying, that one day you long to get back to that yield that you had, the dividend that you had before the great recession. is that a reasonable goal for someone thinking about buying ashford to expect, over not this quarter or next quarter, but over time? >> we would love to get that dividend back up to where it was. we own 21% of the stock. we're huge shareholders in it

and, therefore, the dividend's very important to us. we didn't like the fact, though, that we had to cut the dividend back during the downturn, so we're just much more cautious about raising the dividend now. as you stated earlier, we've got the capacity to raise the dividend, but for now, we're going to raise it modestly, is at least our current thinking. >> okay. now, there is a series of -- going over your corporate structure, a little difficult to understand. you've got a couple of preferred. you have preferred "a" that has kind of a high coupon. you have a preferred "d," and these are from 2004-2007. and they're high coupon. why not call them in, lower the cost of debt and immediately boost your earnings power? >> we could do that, but in order to do that, we would have to issue equity. and we think that those equity values, the common, is mispriced compared to the private market. so, we would have to be issuing common at prices we wouldn't be very happy about in order to call in that preferred. so, that's why we're hanging up. >> you can't just go to a bank, you can't go to goldman or citi,

who's your banker, and say listen, we want to call that and refinance? >> we could take on more debt, but that's not in our game plan. we think we've got enough leverage and we're not looking to increase our leverage. in fact, over time, we'd like to take it down. >> you wouldn't be taking on more debt if you called the preferred. it would be one for one. >> i guess that depends upon how people look at debt versus preferred. some people see preferred as debt, some people see it more as equity. we see it as closer to equity than debt because with the provisions that they pay. >> i'm sorry to beat a dead horse, but we've had almost every real estate investment trust on and all they've done is called it preferreds and lower the coupon dramatically and come on our show and say this is why we want to come on your show. so, does someone own the preferred that's in the company? >> no, no. very few of us owners own much of the preferred. we own mostly the common and are very excited about the common's prospects, but the preferred, we think we're going to leave it where it is for now because even though it's more expensive than

the debt we might take on, we're happy with the soft pay nature of it, so we're happy with where that is. >> okay. now, lately, we've had american realty capital came on. their stock was at $11.12 and they've decided to do a hostile takeover of another outfit they think is undervalued. is there a way -- you already did a huge acquisition that paid off big, the highlands deal, $1.28 billion. are there other deals like that out there that could be had, or because the business has turned so much, there's no more easy pickings? >> we love that highland deal. we closed on it about two years ago and we started working on it a year before that, but we got into that deal in a very unique way. what happened was we were a lender in that transaction. then during the downturn, the borrowers had trouble hitting debt service, so we worked into a consensual foreclosure with the owner, and that's how we took over the ownership, but a great price point at great points in the cycle. as far as other deals like that out there, that's going to be tough to say. we are about 40%, 50% of the way

through this up cycle in the industry. we bottomed out in 2009-2010. we're on our way back up. and as values start to move back up, those great deals are harder and harder to get. the good news is, though, that we bought this great platform in high-end hospitality, 28 great hotels, well diversified like the rest of our portfolio, and we're putting capital into these assets and we're increasing the margins and we're building revenues and we're very happy with the direction they're taking. so, we think that we'll do very well with that. as far as other deals like that, we're looking, but they're going to be hard to come by. >> excellent. okay, that's monty bennett, chairman and ceo of ashford hospitality trust. thank you so much, sir, for coming on "mad money." >> thank you, jim. >> okay, these real estate investment trusts have been good. you know i like to get them when they have a yield that's above four. that's where i think this might get interesting, but you understand that there's just not a lot of building going on, so the hotel business remains a very strong place to be. monty bennett, chairman and ceo of ashford. stay with cramer.

♪ the alternative universe is sometimes too hard for this guy to comprehend. i can't figure out which is right, the public market or the private one, because both can't be right at the same time, and that's really what the dell deal is about. the dell deal, with multiple suitors now. it's, well, dell is a company in secular decline. sell, sell, sell!

while it has bought a series of companies meant to make the company more of a consultant with hardware than a pure personal computer play, the strategy has not brought dell the profitable growth it was expecting. margins down, cash flow down, earnings down, revenues down. plus, let's face it, dell doesn't have social, it doesn't have mobile, doesn't have cloud. it's just a 1990s tech company has been trying to fight back for ages using the parts that everyone else has, right? microsoft software, intel processors, whichever drivers are cheapest at the moment. this is despite the attempts to be more of a service company. the most successful thing is government, and that's a terrible thing to be liefer to right now. universities, too. ooh, not so hot. plus, big european exposure. ew, no thanks! >> the house of pain. >> so, when the stock kept going down and down and down before michael dell's original proposal to take the company private it seemed like it was short, except for its balance sheet that could be used to make more acquisitions to try to slowly

reposition the company. we all know michael dell talked about taking his company private before it got too low, and i guess 8 bucks where it bottomed was too low, but the beauty clearly in the eye of the beholder here. and i figure only michael dell would seriously entertain the notion that his company would be beautiful to many, hence why i thought there was no way this thing was going back to the midteens on its own. i figured for a little hubris, he's a billionaire, built a successful company, but does michael dell think he can do more privately to make the company stand out than publicly? he's tried to build value and has not succeeded. will being private make him more likely to succeed? so, now dell makes the bid, okay, and incredibly, two other smart deep-pocketth people went in. to me, this seems, frankly, insane. in my view, it only makes sense if there's a personal angle, if maybe these guys just hate michael dell, determined to make him pay up for his own company. surely, they don't mean to actually buy it, do they? bringing me back to the original

question, how can dell, worth $14 billion in the public market, be worth $6 billion in the private market? how does anyone think they could be valuing the sock so wrongly? do they have a machine that can run on water, solar? do they have a cell phone killer or basically the next new device that can change our lives? i think we'll look back on the bidding war and say the one who doesn't get dell. maybe michael dell himself. he should play steve miller here, no kidding. take the money and run. because to get dell at these prices is to risk losing everything. i've seen this happen a couple times in my career, where obviously everyone involved had just lose their senses. most recently, it's with the tribune corps buyout. i know that theoretically, all three of these smart teams of people shouldn't be wrong, but the company's just not worth what they're willing to pay, unless they can somehow fire everyone and still generate the exact same amount of revenue. that's about what it will take, and that ain't happening. stay with cramer.

do not forget the triple d -- diana, dragonfly, doji. remember that? that's the inflection point where a stock bottoms and then reverses. dsx for those