i'm jim cramer, and welcome to my world. you need to get in the game! firms are going out of business and he's nuts! they're nuts! they know nothing! >> 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 just want fewer days like today because my job is not just to entertain but to educate and to coach you. call me at 1-800-743-cnbc. in this corner, we have the former heavyweight champion weighing in at two tons, caterpillar!

and in the opposite corner, we've got the reigning king, conagra, coming in at, well, let's see, how much exactly does a slim jim weigh? depends on the jim! okay. this is a battle royale for the soul of the market. got the king right here. now, this market got punched in the face today. with the dow taking a 112-point hit. s&p plunging 1.05%, nasdaq tumbling 1.11%. and you can thank these boys, caterpillar and its cohort, for this hideous decline. let's give an assist to north korea, which seems hellbent on mayhem. we are not foreign policy experts at "mad money." we do know clear and present danger when we see it, and north korea needs to be defused for this market to stop being confused. it's an insane regime prone to insane acts that cannot be

gamed. and i don't want to be glib about this threat, but within the friendlier confines of this market, we have to deal with this tug of war. this is a thrilla in manila folder that is cat versus cag. they represent polar opposites. caterpillar relies on worldwide economic growth and its share price. conagra doesn't need any growth at all, it actually does better when the economy is stagnant, something the adp employment snapshot this morning indicates might be the case. second, this morning goldman sachs downgraded caterpillar taking it from a buy to a hold. why? because demand for materials is plunging, particularly iron ore. you need cat's big machines like this to get materials out of the ground. stock lost 76 cents on this downgrade, even as cat was down 5% for the year, and off gigantically from its high a year ago finishing at 84 bucks. third, conagra reported its

earnings this morning, and by most accounts they were, indeed, disappointing. people expected more from this incredibly well-managed company, which is better managed than caterpillar. what happened to this stock on this disappointing quarter, on a quarter that raised questions about the food company's long-term growth rate? down 69 cents. big deal. despite the fact it's been up 17% for the year as one of the best performers in the whole stock market. let's make it tough. caterpillar selling only nine times next year's earnings, conagra, 14 times earnings, more than twice its growth rate. you know that's danger zone. plus in a yield-starved world, its stock has been on a horrendous decline. while conagra always thought to have a bountiful yield now only yields at 2.9%. why? because of a stupendous price appreciation. which one's best here? before we answer that, understand i'm not a poet and i

know it, cat and cag are just metaphors for the market as a whole, which why on today's data points i picked them to solve the market at this particular moment. if you like these guys, if you like caterpillar, if you think this is going to work, which it doesn't, then you believe that there will be a turn in what has become a raging bear market in materials, materials like coal, copper, and most importantly iron, which you need to make steel. you're thinking these can go up in price. but these materials right now are in free first of all largely because of worldwide weakness but particularly weakness in china. if you buy caterpillar, you think china is going to turn. and it's a complicated melange of housing, coal use and european demand. europe is stunningly bad. that's a terrible trilogy to bet on. however, if you want to bet against china and with the commodity collapse, meaning you think commodities, including the oils and the grain complex, you know what i mean, right? if you -- yes, even flour,

everything, if you think those are rolling over, right, if you think corn is rolling over, guess what? you sell cat and you buy conagra. here's a company that's a pure beneficiary of the decline in raw cost foodstuffs, the stuff inside this, as well as the packaging, by the way, which is expensive. this is a play on a thrifty consumer because it bought a gigantic label company that attracts the stuff in the supermarket. it's a play on obesity. as healthy choice is a huge earnings driver for the company and it's doing a lot of great technological improvements here, it's a play on staples, not the store, the stuff you can't do without. conagra has no problem paying its dividend because its sales are so steady, something caterpillar can't possibly claim. of course conagra stands for all the other great performers in this market, including all the liquids i dumped through last night's punch trash can -- colgate, proctor, kellogg,

pfizer, generous mills, the defensive play against stuff like north korea. the fisticuffs, you may need a good slim jim just to be able to deal with them. second battle of pork chop hill. now, at first blush, it seems like an easy call. conagra's stock has been a huge winner. this year it seems to be exactly what the market wants right now. all the attributes cag has. on the other hand, owning caterpillar is like eating a whole box of slim jims and then following it up with a little hebrew national dessert. you could fuel a liquefied natural gas powered eighteen wheeler with the effluvium from that meal. effluvium. okay. this is not the way portfolio managers with a long-term horizon think. sure, conagra has momentum and earnings projections are going

in the right direction. the owners for caterpillar probably have to come down a lot. that's right. the estimates are too high for these guys given the weakness. and just as i expect many analysts to reiterate their buys of this guy tomorrow, i expect more downgrades and number crunches to come for caterpillar. so why would anyone possibly choose this stock over this one? simple. because of the size of the opportunity that's out there. do you know the last time cat got downgraded endlessly was back in 2011? when everyone was worried sick about the debt ceiling and possible government shutdown. the stock plunged from 115 to 69. 115 to 69. it was a horrendous no-parachute decline and you missed it! but caterpillar almost immediately recovered, 69 to 117. what a move. sure you had to take some pain if you tried the cold bottom.

it went down far more than anyone thought it could. and you had ample earnings risk, like you do now. but what a game you could have had. almost 70% in less than six months. do you honestly believe you have a chance to get anything even remotely like that gain from conagra? hey, i think it's reasonable to expect you might get a 7% return from conagra during that period, including dividends. at these exalted levels, not much more. so why not just -- why not say, listen, sell cag, buy cat? first, we're just beginning the downgrade estimate cuts for caterpillar. other analysts tomorrow will be slicing and dicing. you have to expect that cat is going to get a real slap chop in the next few days. you know what i mean? maybe right into earnings period. second, the fear trade is still driving money into conagra. and there's enough hope coming from this raw corp private-label acquisition that the stock would be bought if it were to decline even a couple percent from here where it yields 3%. never forget that the money coming into conagra is money looking for a stable return with yield. think of it like this. let's say you are a rich fat cat

and you live in europe and you're worried that your money's going to earn next to nothing in a bank that may not even be guaranteed anyway post cyprus. isn't the first bank of conagra the better place to put your cash? caterpillar, however, isn't going to provide that safety net. net. in fact, i expect the cat could sink to the high 70s. that would be before it settles down. given that traded down and more dicey time with not nearly as strong a market as you have in the u.s. now, china was a lot stronger. so here's how you come out. you own conagra, you can sleep at night, which is a heck of a lot more than i can do as anyone who's watched @jimcramer on twitter. you can sell to lock in a gain but it's still doing just fine. cat, oh, man, join me in the insomnia brigade. you will have trouble sleeping. but you know what, when you do fall asleep, you may find yourself up 25%, 30%, 50% or more after the stock settles down. that's a ride i want to be on. here's the bottom line.

it's all about risk and reward in this game, and right now this market is not giving you the reward you want with conagra, but it's giving you too much risk with caterpillar. you get this baby a little lower, though, to me the choice is clear. you can abandon expensive conagra and buy the cheaper cat. the champ will be defeated and the challenger revered. soon! just not now. dennis in illinois. dennis. >> caller: hey, jim. i know you prefer vale, but what about rio tinto? >> no, no. vale's got the restructuring to end all restructurings. it has been a house of pain. >> a house of pain. >> but you know what? if iron ore comes back, vale is going to go up more than rio or bhp. it doesn't have that much room to drop. maybe 5%. let's go to geno in new jersey.

geno. >> caller: boo-yah, jim. thanks for everything you've done for me over the years. in light of today's upgrade of six flags, what is your current opinion of fun cedar fair? >> cedar fair. these are both great stocks. that upgrade was seven. we had the ceo from six on and as my late mother would say, he was a dignitary, but i think that's because he was, like, british. but i do believe six can go much higher because it yields four and change. cedar, got to let it come in. one of the hottest stocks we ever recommended. sure there's opportunity in cat. i say float like a butterfly, sting like a slim jim! "mad money" will be right back. coming up -- reenergized? magnum hunter resources announced a deal that shed some of its domestic energy assets,

which sent the shares higher. is now the time to refuel on the driller? cramer's talking with the ceo. and later -- in the genes? all this week, cramer's checking up on the strongest trends in medical science. tonight, next-generation companies on the forefront of big changes in dna research. could they help keep your portfolio healthy? plus -- recovery real? the markets are up big this year, but are people spending? cramer's checking in with the ceo of shopping center reit kimco realty to take the pulse of the consumer just ahead. all coming up on "mad money." >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc.

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as magnum hunter, the highly speculative oil producer is down 39% since i recommended it in february last year. finally found its way out of the house of pain. magnum hunter has terrific assets. marcellus shales, growing production like crazy, up 137% in the last quarter. but the stock has been held back. magnum owners tried to get a bunch of natural gas wells last year, curtailed production because there wasn't enough processing capacity nearby. last may they did a big secondary, oh, man, that got crushed. if you were on that one, you got annihilated. then they missed numbers reporting in november. most recently two weeks ago we noticed the company's latest 10-k filing would be delayed beyond the s.e.c.'s extended due date. today, good news. they found a buyer for their shale properties which they've been trying to sell for a while. selling in virginia for $401 million and can use the proceeds

to clean up the balance sheet. in response to the news, come on, end of a lousy day, only up 11 cents or 2.9%, so maybe that's the beginning of a turn, maybe an opportunity. gary evans is the chairman and ceo of magnum hunter to learn more about the deal and what comes next. welcome back. >> thanks, jim. good to be here today. >> you got the money, $401 million. is this when you clean up the balance sheet and remove what a lot of people feel is a speculative feel about magnum hunter or put it all back in immediately? >> it's definitely designed to pay down debt. to build the positions in the bakken, marcellus, the utica, the eagle ford. we had to take on debt. we took on senior notes. now we've got those positions built. we've taken our very first asset, which was the eagle ford. we've only owned it three years, generated over an 80% internal rate of return in three years and we've sold it. why? it's the smallest of the three

plays that we're involved in when we own 19,000 acres that we've sold. so we sold it to a company adjacent to us that, you know, build mass and build scale. with that $401 million we're paying off our senior bank debt, we'll redeem some of our perpetual preferred and the liquidity question will be off the table. >> when will it be off the table until? i know you have some expirations but a lot of other debt outstanding. i don't want to minimize your full balance sheet issues. >> obviously, we have other debt. we also have close to 15,000 barrels a day of current production from those other plays. we expect to still exit the year north of 20,000 barrels a day even after the sale of the eagle ford. so we're still in a very fast growth path, and that -- those dollars that were being expended in the eagle ford for drilling

will now go into the bakken, utica and the marcellus. remember, this was a january 1 effective date, so all the money we've spent since january 1 in the eagle ford comes back to us once we close. >> gary, would you tell me after -- that's about 17% of your reserves. you were going toward more oil, less gas. does this put it so you're a little more gassy after this sale? >> well, obviously, the bakken is all oil and the utica is 50% oil liquids, 50% gas. yes, we'll be a little more gassy but gas has gone from $2 to $4, so that's not a bad thing. we can make an unbelievable rate of return with the marcellus and the utica. we're very bullish on where we think natural gas will go in the long term. we're very happy with $4 price as you mentioned at the beginning of the show. we were delayed when a processing plant came live december 17th. so now we can process all those wet liquids that come out of that gas stream in the marcellus

and utica that we couldn't do in 2012. >> i know you're bullish on it, but at the same time, you said in 2013 you have 8,000 barrels of oil hedged at nymex 9250 and you've sold 35 million cubic feet at $4.02. how much are you hedged? is there still upside or is the hedging so good we don't need more upside? >> well, we're pretty well hedged for 2013. we haven't hedged much in '14 or '15. you know, i think all of us have been a bit surprised at how well oil has held up in a mid to upper 90s. so we hedged almost everything we could on the oil front. now, today, just up in the bakken, we're already running 5,500 to 6,000 barrels a day of production just on new wells we've drilled, so we're really excited about 2013 homing in on these areas. and i can't emphasize enough how excited we are in the utica. we think the utica play will prove to be one of the best and the highest economic plays in the united states. it's simple math.

in the eagle ford, we would spend $8.5 million to find a 500,000 barrel eur well. in the utica we'll spend $8.5 million finding a 1.5 million to 2 million barrel well. that's almost three to four times the economics of the eagle ford. that's why we want to be drilling in the utica. our first well spuds next wednesday. >> next wednesday. your first -- >> next wednesday. we have a 16-well pad. it's taken us two months to build because of the terrible weather up there. but we are spudding our first well. so this year will be the year of the utica for us in our acreage position in eastern ohio. >> okay. one last question. you know we've been to utica, we did our show there. but you are further west where there's a lot more oil, right? you are not in the gassy part. >> no. we're actually -- we're all the way to the ohio river, which is west virginia so, that's about as far east as you can go in the state of ohio. and then we go a little bit west. so we would be in the -- both

the dry gas window and the wet condensate window. we are not in the oil window. that's further west. >> that's great. people want oil more than gas. nat gas has gone up. gary evans, chairman and ceo of magnum hunter, thanks for coming on the show. >> thanks, jim. appreciate it. >> all right, guys, look, i was wrong. i was wrong when i thought it was a good spec at the six level. i think what they just did was conservative, get that $400 million in, i thought that was very important, a bad day for oil and gas, but at four bucks? okay. i say average. stay with cramer. coming up -- in the genes? all this week, cramer's checking up on the strongest trends in medical science. tonight, next-generation companies on the forefront of big changes in dna research. could they help keep your portfolio healthy?

on a day where the market really got crushed, courtesy of lousy employment data from adp, plus the frightening situation in north korea, and i'm not minimizing that, it's noting there are plenty of companies that don't need a strong economy in order to thrive, here or overseas. that's one of the reasons why i've been running this series all week last week and this week on the future of pharma, because we know this is what you want to invest in. drug stocks can rally in any

environment so as long as the underlying companies are innovating, creating new medications that can make it through the fda approval process and make big money once they hit the market, we've got to stay focused on these companies. now, last week i highlighted large biotech outfits i believe will inherit the earth. i think they have what it takes to get even larger and become the big pharma companies of the future, celgene, gilead, biogen, regeneron. they're not dividend players. they're growers. and this week we've gone smaller. we're going more specialty. we're looking at less-known biotechs where the risk is greater but so is the reward. tonight you want to tell you about the game changers and rule breakers. these are little biotech companies with revolutionary technologies that could change the of the pharmaceutical industry, not to mention saving some lives while they're at it. specifically i'm talking about isis pharmaceuticals, alnylam

pharma and sangamo bio sciences. speculative, speculative, speculative. got it on the table. right? speculative. these three companies are at the edge of becoming orphan drug-producing machines that treat ultrarare diseases, and you know those are stocks that have been big on "mad money." how exactly are these companies game changers? what makes them different from other small cap biotech stocks? if you want to understand the scale of the opportunity here, i wish we didn't have to do this, but i got to give you a small biology lesson. stick with me for a second. i recommended isis after the ceo came on back on october 23rd and the stock has rallied 78%. that's a pretty massive gain in less than six months. alnylam has gained 24%. maybe it's worth hearing a little science to see what these game changers really are and what sets them apart. for over a century pretty much every pharmaceutical company out there has created drugs that

work by binding it to individual proteins within the body, binding them. your body is full of all kinds of proteins that do all sorts of things, basically the building blocks of human life. but our game changers do thins differently. rather than just targeting proteins, companies like these have developed technology that lets them change the way those proteins are created. stick with me. they're bypassing the building blocks and going straight for the blueprints. how do they do it? they develop drugs that work by binding to rna, which is the substance that affects the expression of genes, basically rna is like a messenger that takes the blueprints from your dna, turns it into various proteins, the building blocks. if like isis you can stop the rna or alter it, you can potentially treat a whole host of diseases by changing what the body is doing at a much more fundamental level than what we see from traditional drugs which might be too late in the process. if you know a particular gene is doing something harmful, this technology can effectively shut that gene down. in other words, these

dna/rna-based medicines are completely transforming the way drugs work so it's no surprise this space is incredibly hot. just two weeks ago astrazeneca shelled out $240 million for just a licensing deal with a tiny cambridge, massachusetts-based start-up because they got this kind of technology, one of the largest initial payments ever for a deal that doesn't even involve a single drug that's in clinical trials? so let's take a closer look at these game changers now that you know what we're talking about. isis pharma has been spearheading rna-based medicine for years with a fabulous technology, a host of partnerships, and a deep pipeline. at the beginning of february, isis got fda approval for a controversial drug. we backed it. it's an orphan drug that helps lower ldl cholesterol in patients who suffer from an ultrarare genetic disorder that causes them to have insanely high cholesterol levels. now, the people who suffer from this disease, they tend to have heart attacks in their teens,

their average life expectancy is only 33 years. this drug could ultimately do $440 million in peak sales. but this is a trail blazer drug. the fact the fda approved it means they're more likely to approve other rna-based therapies down the road. that's what caught our eye. good news for isis because they have more than 20 drug candidates in development, including for cancer, neurological disorders, wow, big panoply. isis plans to launch five novel drugs by the end of 2017, fda willing. they have a drug for severely high triglycerides in phase, early phases that could do a billion dollars in peak sales, and early stage spinal muscular atrophy drug in phase one, which is very early. and an oncology drug that's in phase three studies for prostate cancer and phase two for breast cancer further along. isis has run up. so, look, just pull back. i'm just saying, pull back. like the one that started today with the stock down 48 cents or 2.8%.

i don't think it's done. as i said at the top of the show, the market's battling for its soul right now. how about alnylam? here's another company that uses rna-based medicines to treat rare diseases. it's down to $22 and change. they have a strong pipeline, expect to have five products in late-stage development by 2015, around the corner, and i think stock can ultimately return to its $35 peak if they execute on its pipeline. not easy. difficult. difficult drugs to make. they have strong partnerships with larger players like novartis, decatur pharma, biogen, roche, glaxosmithkline, even monsanto. nice quarter today. it's revolutionary technology. again, ahead of the building blocks. the blueprints, the biggest drug candidates for a condition known as attr, a chronic, progressive, and often fatal form of amyloidosis.

this drug is in phase two trials, could be worth $1.5 billion according to research we saw in peak sales to alnylam in the united states. if the company gets fda approval for this one, much higher. remember, playing fda roulette can be a dangerous game. they also have early stage drugs that might have a lot of potential like a severe hypercholesterolemia drug that's in phase one. could do $2 billion in peak sales, far away, though, and a hemophilia drug in phase one could do well. however, it will be years before the fda considers these two. finally, there is sangamo biosciences. a super speculative stock. market cap of just $500 million. small for us on the show. sangamo is a super high risk, high reward play.

they have a proprietary technology platform that could cure genetic diseases by physically changing your dna. if all goes well, the bulls that cover the stock at j&p, they think sangamo could do about $500 million in revenues by 2018. they have two phase-two clinical trials going, trying to develop a dna-based therapy that could make a person's immune cells impervious to hiv. in other words, i'm calling it a functional cure. who knows if these trials will pan out, if the drug will be approved? if it does, obviously it would be huge. the hiv franchise alone could be worth $13 and this is a $9 stock. the company is going after a bunch of other diseases, too, but everything else is working on very early stage development. i like the stock. don't get too excited, not particularly in this market. sangamo, i'm saying again, highly, highly speculative and unlike isis or alnylam, we don't know if their technology drugs will work. the fda could reject them all. you could come in and say why is down five?

if you're looking for biotech game changers i like isis and alnylam, and if you're a real risk taker, consider speculating on sangamo, remember that's a down five, up five situation. phil in new york. phil! >> caller: hey, jim. first and foremost, i'd like to send your way a big, big apple boo-yah! >> stuttering boo-yah big apple is what it's all about on this show. how can i help? >> i'm calling about the company merrimack pharmaceuticals. ticker symbol mack. >> mm-hmm. >> i know you had the ceo on your show several months ago and you gave company a strong buy, you recommended it. i was wondering how you foresee the company in the near future and what your outlook is for the long term. >> i like it. i remember it was super speculative and i said that it would be. this is another one. i described this as three down, three up. and, again, you come in in the morning, see those wild fox, down three, say what the heck is

that? that's when merrimack doesn't deliver if it doesn't deliver. let's go to matt also in new york. matt. >> caller: what's up, cramer? i'm matt from tucker, new york. i was wondering what you thought of arna, arena pharmaceuticals. they have velvet launching in a couple days. >> it is a very -- let's just understand this. very controversial stock. i'm not as crazy about the obesity sector. why? because there are so many drug companies in it. i'm going to take a pass. i don't think that arena is right for most of our viewers. it's a two-week series of medical plays on "mad money." today we're celebrating the real game changers. holy cow. this stuff is just radical. rna at work here. celebrating isis on a pullback. alnylam right here, and sangamo, that's the spec of all specs. don't move. "lightning round" is next.

hey, wildcats, thursday, april 25th, let's rumble. "mad money" back-to-school tour

is hitting my home state of pennsylvania. we're going to nova! go to madmoney.cnbc.com for tickets. you will not want to miss this. now it is time for "the lightning round." >> buy, buy, buy! sell, sell, sell! play to this sound and then the lightning round is over at this are you ready? i'm going to start with nathaniel in new york. nathaniel. >> caller: boo-yah, jim. ticker symbol s. i'm wondering if with the recent dip i should continue to keep as part of my long-term portfolio. >> i think that ford is okay. i think america is smoking. i think europe is terrible, which means it's a push, which means don't buy, but don't sell either. joe in new york. joe! >> caller: hey, boo-yah. long island boo-yah. western union. >> i got a nice yield, not a lot of growth, going back after it had a real hard time.

i don't need to be there. i'm going to say ixnay on that one. let's go to grant in california. grant. >> caller: grant in ventura. last october my dad passed away at the age of 92. he had a great life. and he loved -- he traded right up to the day he died. >> that's great. >> caller: he and i -- it was great. he passed along a pretty good portion of acas, american capital, to me. it's almost kind of a keepsake. what's your thought on it? >> i'm sorry for your loss and it's great that your dad traded right until the end. that's an okay company. no real growth and i don't like the banking business right now. i'm going to have to -- other than small regionals. i think you can hold it but nothing great happening there. pat in pennsylvania. pat. >> caller: hey, jim. boo-yah. >> boo-yah. >> caller: harrisburg, pennsylvania. >> nice. >> caller: a question about a radian group.

>> it's pulled back. i was at their headquarters saturday and tweeted @jimcramer right in center city, philadelphia. i think it's real good. lots of housing plays are coming down. i reiterate buy, buy, buy! rdn. freddy in new jersey. freddy! >> caller: boo-yah, jim cramer! >> holy cow, what's going on? >> caller: freddy from toms river, from new jersey. and i'm calling you because you're better than calling 991 for somebody to watch my back. i'm looking for cbr energies. >> fertilizer play. ag play. grain complex coming down. even monsanto should have been up by three or four. they could not manage it. why? because that group right now is not doing well. i'm going to walk away until it yields four. and that, ladies and gentlemen, is the conclusion of "the lightning round"! the "mad money"

back-to-school tour is in session, and this time we're headed to the city of brotherly love. if you are a student at villanova university and want free tickets to see cramer do the show live on campus thursday, april 25th, visit madmoney.cnbc.com. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪

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remember the beginning of the year when everybody was fretting about how the end of the payroll tax holiday was going to crush the consumer? then we were told the layoffs from the sequester would do the same thing. i point this out because real estate investment trusts have been on fire and lately, even in the last couple years. maybe instead of worrying about payroll taxes the professionals should have been more concerned about missing this move. take kimco realty, the real estate investment trust that owns the largest portfolio of neighborhood and community shopping centers in america with 896 properties. kimco has been roaring since the beginning of the year. but even up here the stock still

gives you a 3.74% yield. in its latest quarter it had a high ratio and the company has had 11 straight quarters of increases in same property net operating income. they're raising the rents. it's giving you a 16% return since last we spoke with the ceo in november. can the stock keep on rolling? let's check in with dave henry, president and ceo of kimco realty, find out more about where his company is headed. mr. henry, welcome back to "mad money." good to see you, sir. happy to see you. what a change from when we first heard about your stock and i was concerned about amazon. it looks like if anything amazon should be concerned about some of your tenants. >> not sure about that, but we're having a good year. >> 57% on a supermarket? that will never be challenged by anything online. >> the key is if you have good real estate at low rents even in a thin margin business like

grocery stores, you can find new grocery stores to replace old grocery stores. >> i see you continuing to shuffle the portfolio. you're selling out of some things you said are hard to rent and you're still getting these properties that are 100% filled. where are we in the timeline of getting rid of the portfolio you don't like, or is that just going to be a continuum? >> well, it is going to be a continuum in terms of always looking to sell your bottom real estate. >> that's just your process. >> when you have 900 properties, there's always going to be some you want to cycle out, but we are in the process of upgrading more than usually. >> now, you have in your handout, you've got a connecticut property, i've been to it, the wilton one, but you also have a california property. it always makes me feel that california is very strong now as part of the overall mosaic of the country. >> well, california has those super barriers to entry. it's very difficult to build in california. it's a five-year entitlement process in some of those markets. so once you have a shopping center you're good to go in terms of occupancy and you can increase rents, and some of those markets are very strong. >> there was a time when people were concerned that some of your

tenants might file for bankruptcy. when i look at the rents you're charging now, you've got very clear graphics in your portfolio. it wouldn't be so bad if some of these guys were to depart. >> that's right. we have 1,000 leases that are more than 20 years old so you can imagine the low rents we have in some of those leases. so if we lose a tenant, many times we can get higher rents. >> you've also done something that's a little i think -- i don't want to say controversial, just different, which is this investment in super value. why would we want a pure reit to have something like that investment in a food chain? >> kimco is a 50-year-old company that's always been around retailers, and we always have this small bucket of opportunistic investments that rely on our relationships with some of these retailers. so we can identify opportunities to make some money. this is short term, generally trading profits that we reinvest in long-term returns. >> that part is a hedge fund for real estate. >> well, we prefer not to be a hedge fund but -- >> a mutual fund.

an aggressive mutual fund trader. >> a small part of our business. >> all right. how is this -- you've got chile, peru, brazil, mexico, i like mexico, it's really booming, but you think are these part of the trade so, to speak? >> we have two series. south america we only have about 20 properties down there. we've always been just too small to make a difference. and now is a good time to sell. south america is on fire, cap rates are low, property values are up. mexico, also, in the past six months, the capital markets have just -- >> the peso is on fire, too. >> and there's been a lot of new public companies that have come to market. it's a very thin market in terms of quality real estate, so we're able to sell some of our properties to these public companies at very attractive prices. >> okay. now, one of the things i know the federal reserve chairman wants to do with these rates is he's praying there will be some commercial reconstruction. the big banks and little banks we talk to, they're hoping for commercial construction. when i read through your notes, i don't see any new construction. >> that's what's nice about our sector.

there is virtually no new supply. a couple issues. first, rents haven't recovered from the prerecession level. secondly, it takes a long time to build a big shopping center. the old days of buying 100 acres of land and taking it through a long zoning process and getting retailers patient enough to wait for the several years' process to build that thing. they'd much rather pay a little bit higher rent for something that's already there. >> you have some real expansion possible. you've got trader joe's. they seem to want to be everywhere. are they saying we want some leases, we need more space? they seem to want to put them up constantly. >> at a very high level, we have a five-year high in terms of planned new store openings. more than 80,000 new stores will open up over the next 24 months. >> that is great detail. >> four dollar stores a day are opening up in the united states. >> wow. >> one example. >> in california they don't have enough dollar stores. incredible.

you're a great story. hard asset story, which is what people are looking for in this country right now. this has been a winner, kimco. i see no reason, as long as there are no new shopping malls or shopping centers, this is a great place to be. david henry, president and ceo, kimco realty, one of our best recommendations. "mad money" is back after the break. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%...

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can we speak hypothetically, you and me for a moment? can we just show a little imagination? i've been talking a lot about how apple should shell out 13

billion and just buy netflix. given that netflix doubled in the first quarter, not exactly the most opportune time to launch a bid, i'll give them that. but if it keeps getting hammered like it did today, it looks better. time to face facts. apple derided itself as arrogant in an apology letter to the chinese the other day. haven't apologized to the japanese yet. who knows if that will happen? i don't want to use the term arrogant with regard to apple. i was thinking more like proud. but they did the dirty work for me. so now apple is too arrogant to buy netflix because they don't need to do anything, including apologizing to its shareholders for their hideous decline. why? they've been a terrific performer over time. buy it at 600, 700, 500, what's the point of defending yourself when you've done nothing wrong? what's the point of buying netflix if that shows desperation? if anyone's desperate, it's the new suitor i have in mind hypothetically, microsoft. mr. softy.

here's a company that suffers from not being social enough, not being mobile enough, and certainly under ceo steve ballmer, classmate of mine and a friend, not being cool enough, microsoft in one fell swoop would change all that by spending $13 billion to buy netflix. not only that, they'd be able to integrate netflix instantly, refinancing a bloated balance sheet at parking lot levels. they could play hardball. the reason? while microsoft might be desperately seeking cool, it can still outlast the studios without worrying. the studios need netflix more than ever. i'm calling it the "walking dead" factor. television stations have been making fortunes with serial stories. you need to start with episode one. netflix is the way you crack into a new series. everyone in hollywood knows it. prospective viewers binge watch on netflix and then get right into the new episodes.

without netflix, these networks wouldn't have the numbers they're getting. that could take you to a home page that would load with microsoft games and skype. sit and skype while others are watching "walking dead." sticking with that gruesome metaphor, 27 million homes and growing use netflix, dovetailing nicely with the millions of households that play xbox. netflix is growing with original programming and costs a lot of money. wouldn't cost a lot for microsoft. i don't know if you could see the production costs for a hit like house of cards in microsoft's bottom line. let's not forget, you buy netflix, it's a two for one, buy one, get one. you get visionary ceo reed hastings, too. he might be worth billions of dollars in vision alone, if you can lock him up. of course this is all hypothetical. nobody's expressed one iota of interest in buying netflix. but if microsoft wants its groove back, if it ever had one, make the bid happen for netflix instantly. stick with cramer.

all right. i'm not talking enough about north korea, and one of the reasons is because that regimes is nuts and it's very hard to gauge. but i am actually focused on it every minute. why? because when they're that crazy, you ju