my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm just trying to make you a little money. my job is not just to entertain you but to teach and educate you. so call me at 1-800-743-cnbc. does the business media overemphasize the negatives and underestimate the positives? hey, i've heard this criticism many a time.

and at least for the last three years, i think the answer is, yes, a resounding yes. we do. and on a day where the market meanders, the dow closing down, and the nasdaq inching up .13%. i want to show you what i mean about the press' bias toward pessimism and how it hurts you. something happened today that put this thought in my head. really crystallized my thoughts on the issue. if you heard about it, it didn't register. didn't register with you because it got such short drift. did you know today standard & poors upgraded their outlook for the united states? ♪ yes, they took up our debt from negative to stable saying that the downside risk to the aa plus ratings on the u.s. and i quote, have receded to the point that the likelihood we will lower the rating in the near term is less than 1 in 3. s&p goes on to say, quote, we do not see material risks to our favorable view of the u.s. monetary policy, end quote.

there. i think i just spent maybe triple the amount of time anyone else devoted to that s&p upgrade. and that's wrong. very wrong. because two years ago, when standard & poors downgraded u.s. debt from aaa to aa plus, the stock market, it got crushed, it got eviscerated. >> the house of pain. >> sell, sell, sell. >> losing 15% going into the chatter about the downgrade and then dropping a couple percent more as people continue to sell, sell, sell on fears that another downgrade would be lurking right around the corner. it mean that's what the chatter was. something we know isn't going to happen because of today's pronouncement. i remember how dire that period was. i happen to be at the training camp for the philadelphia eagles on the day of the downgrade. and the fear of what could happen next rippled through the stands and went right on to the practice field where some of the players after an obligatory boo-yah wanted to know if this

was the beginning of the great unraveling of the united states. with multiple downgrades to follow. isn't that what happens, jim? my conclusion was the players were wrong about the downgrade as wrong as they were about the miserable season. but anyway, more important, this downgrade caused so much angst and generated so much concern. hey, am i going to get my social security check? that kind of thing? you would have thought america was going the way of zimbabwe. of course, since then, while the president and congress were allegedly just kicking the can down the road, there was an substantive compromise in washington to raise taxes to avoid the fiscal cliff followed by a genuine move to cut government spending. hey, it is a cut. it's a knuckle head cut, but it's a cut. the sequester. in other words, we did raise taxes and cut spending and that's real positive. i think standard & poors wanted to get its news out ahead of wednesday when we next hear about the federal deficit which i think will be headed the, and i quote, quickly shrinking federal deficit and maybe 9 out of 10 papers i read. think about how asymmetrical

good news and bad news are. a sense that the u.s. had truly lost something that's prized above all, the aaa rating because of our nation's profligate and polarizing ways. we cared when it was going down. of course, this upgrade from negative to stable isn't the same as returning the u.s. to aaa status. but if you go back in time, presuming that was the first in a long line of downgrades and we began joining the strata of italy, portugal and spain. when i read through the upgrade, i think the u.s. will be soon returning to aaa status, given the bigger tax receipts and the reduced spending. they may hate each other so much they could agree on something ultra important, the possibility of avoiding automatic cuts. in other words, dysfunction can cut both ways! ♪ hallelujah >> let's put it in a way that can really be swallowed here.

we either made too big of a deal of the downgrade initially in 2011, or not enough of the deal of the upgrade from today and, sorry, i think that we didn't make a big enough deal of the upgrade. it's the latter. today's debt upgrade from s&p is just the most glaring example of how good news doesn't get its due from the media. for example, you might think the entire advance shouldn't be happening because we never got the certain pre-conditions that the press set out and demanded to see before a rally is allowed to ensue. for example, we weren't supposed to be able to get higher prices because while companies had good earnings, they didn't have revenue growth. how many times did you hear? turns out the earnings mattered. if you waited for the press to green light stocks because of good revenues -- >> buy, buy, buy! >> you would have bought nothing for the last 5,000 dow points. >> boo! >> we're not supposed to believe

that anything positive out of europe. isn't that the rap, right? we've got numbers from a host of countries last week. did you hear about them? they were terrific. i'm not kidding. spanish unemployment which has been up relentlessly for years actually didn't go up when we got the news last week. that's right, employment in spain of all places is picking up. someone's hiring. what did i hear when i pointed this out? i heard, oh, come on, jim, it's not like a hiring boom. of course it isn't a hiring boom. but wait a second, does a car go from 50 miles in reverse to 50 miles an hour in drive? no, that's insane. car first has to slow down, then has to stop before it can be slammed into drive. that's what's happening in spain. another one this morning, we saw french industrial production numbers on the rise. 2.2% gain which followed a minus .6% figure the month before. how can that be overlooked? i can tell this improvement is happening just by looking at the fxe. the etf that tracks the euro

versus the dollar. lately the euro's been on a tare against the dollar. but when i say that, you know what i hear back? no, jim, no. you don't understand currency. these are trade currencies for living. you don't understand currencies. it isn't that the euro's strong, it's all about the dollar rally against the yen but being weaker against the euro. come on, that is demonstrably false. you can't have it both ways. when you see the euro get weak and say it's being hammered because european economies are grinding to a halt, you can't then say when the euro gets strong, it has nothing to do with europe. it has nothing to do with the european economies. that's asymmetry in the worst. sorry. or how about almost every single number that comes out of the uk these days. all stronger than expected. every single one last week. no wonder the royal bank of scotland or rbs is starting to really romp. remember that along with raidon

and u.s. airways, my favorite specks for 2013. hey, but you mentioned a positive. you know what you're doing, smashing the orthodoxy. and you're forbidden to take on the orthodoxy. then there's a tapering, no tapering issue. it's supposed to be bad for stocks, i plead guilty, i plead guilty saying that on the show on "squawk on the street" and on realmoney.com where i blog. but it's soared here, really rocketed. and friday's rally pretty much wiped out a ton of the losses we got when rates ramped gigantically. maybe i'm being too negative about the impact of higher rates of these lower levels. me. right now the stock market is saying i am way too negative, at least about this rally, 70 basis points. sure there's some real bad stuff out there. china seems to get worse by the hour. we don't have any real lending growth and inflation to speak of precisely because we don't have lending growth. i think the lack of lending might be something that people can easily be too pessimistic about. it's too easy to lapse in negativity and forget what we were worried about when that worry is replaced by good news.

what were we worried about? what was that? i know i have to vow to be less jaundiced and you do too. quite simply, it isn't making you any money and it is costing you fabulous opportunities. i want to go to val in illinois, please. val? >> caller: hey, jim. >> val. >> caller: i've got some money and some cash on the sidelines that i'd like to put to work. my question is in light of today's report that an employee leaked classified information, do you think it's a good time for the individual investor to buy, sell or expand their position in that stock? >> no, no. look, i don't court controversy. you're actually courting controversy going in there and buying that one. i made a joke this morning with brian sullivan that booz allen hamilton, here's the way to look at booz allen, you go into a bar and say, give me an allen hamilton.

how about alfred in missouri. alfred in missouri, please. alfred? >> caller: yes, cramer. monsanto chemical, last week had a negative in the united states and a negative in europe. today, it had upgrade and the stock went up. what shall i do? buy, sell or hold? >> monsanto should've never sold off as it did. i went over that quarter this sunday and thinking, hey, maybe someone saying don't buy this genetic modified offering kind of thing. but the upgrade was right. the shorts really pressed monsanto down. it is a great american company. a great one. don't be fooled by what's out there. it's too easy to forget what you should be cautious about and then what looks good after the caution is appeased by the facts. "mad money" will be right back. coming up -- smell of success? from scents to servers, two

stocks expected to debut this week. when it comes to your money, do big-name fragrances or big data have a better shot at cashing in? cramer sniffs over the stories in "know your ipo." and later, hoop dreams. tonight, they are home for the nba's top teams. we're leaving the basketball behind. san antonio's valero is squaring off against burger king. to find out which company takes home our trophy coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question, tweet cramer, send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.

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even though the average has been all over the map lately, there's one area of this market that is completely en fuego.

the ipo market. did you know may was the best month for initial public offering since 2007? do you there was a total of 30 deals that month? that works out to about 1 1/2 deals a session. but it's not just that the volume of ipos has increased dramatically. more importantly, the performance of these stocks has been stellar. on average the fresh-faced ipos up year-to-date, that is good, everybody. plus these deals often spike enormously in the first day of trading where it feels like wall street's simply giving the free money away. the idea that the investment bankers who run these deals would ever give regular investors like you such a sweet deal sounds ludicrous. but the truth is, they like to use underpriced ipos as a way to coax ordinary people back in the market. they're happy to give you a quick and easy win with these ipos. and tempted back into the casino that is wall street. there's no reason not to take the win. tonight i want to tell you about two ipos. a tale of two ipos i see coming

this week. coty, that's the big fragrance and the cosmetic company that tried to buy avon last year and gigamon. a small but rapidly growing enterprise tech play. i mentioned these two last friday. tonight i want to go more in-depth so you know exactly how to play them. coty and gigamon are two different players. i expect them to behavior quite differently. when it comes to gigamon which will trade under gimo, i think you should call your broker right now and say you've got to try to get me shares of this deal. it's accelerating revenue growth, arg, and for money managers that's the holy grail of growth investing. ♪ hallelujah . >> it's going to have a small initial public offering. before i explain what it does, let me give you some background so you understand why i'm so excited about this. and the stocks of those ten tech

ipos are up an astounding 33%. that's according to renaissance capital, a firm that provides ipo info to institutional investors. however, every cent of those gains came from the initial spike of the first day of trading. that means that the best way to make money on this one is by getting in on the deal itself so you can take advantage of that delicious first day pop. what is gigamon and why do i think it's going to spike so hard? this company is a little hard to explain. gigamon is a tech play with the best of breed technology. traffic visibility networking products that help large and medium sized businesses do a better job of managing and monitoring their own networks. we have a host of trends in tech that require computer networks to become more complicated. that's mobile, cloud computing, big data. gigamon's products filter.

keeping unnecessary or redundant data from being sent across the network. that saves money, that allows customers to get more performance out of less network infrastructure and end up really, you know, their testimonials here are amazing. because these customers do not have to spend as much money on costly switches. they think the opportunity could be in the billions of dollars, i'm not disagreeing with them. they have over 1,000 customers, they've experienced a ton of repeat buying, a majority of sales come from existing customers making additional purchases. again, fabulous growth margins when you get customers to keep adding on more business. you've got their wallet, keep taking money from it. numbers here, downright fabulous. gigamon's revenues have grown 40% over the last two years, recently accelerated. company posted 55% revenue growth in the most recent quarter.

you know wall street absolutely adores that accelerating revenue growth. and unlike many tech ipos, gigamon has been profitable for the last five years. >> house of pleasure. >> that was easy. >> gigamon plans to raise $128 by offering 6.8 million shares. good luck if it comes at that price. the midpoint give the company a market cap of $600 million. how much should you be willing to pay for gigamon, the other networking games, river bed, same deal. but palo alto networks they trade at four to five times next year's estimates. every one of these guys come out hot out of the shoot and then they stumble. if we assume it keeps growing at the same pace as the last two years and if anything that could be a conservative assumption because the growth here has just accelerated, then gigamon should sell at 3.2 times next year's sales. i think to at least 25. it's going to spike 25%. and it would still be at the low end at where the peers are

trading. if it were to trade up to five times next year's sales estimates, $29. but remember, with every tech ipo, virtually all the gains come from the first-day spike. that's why i think you need to handle gigamon with care. as long as the price is below 25, that's my limit. i bet you'll do well. however, if you can't get in the deal, please say i didn't get in on the deal, i've got to pass and don't buy gigamon the aftermarket. that's been a sucker's play in the tech space. what about the second ipo, though. coty, this cosmetics pipe, very different. the coty deal's going to be big. they plan to sell more than 57 million shares, holy cow. in order to raise $1 billion. and when an ipo is that big, you're less likely to see a huge initial pop that can't control the flow. it's the furthest from a turbo charge growth story. over the nine months, their revenue growth was flat.

in part because of weakness in europe which makes up the substantial portion of the business. instead coty is a better balance sheet story. after the ipo, expects to have $1.8 billion in net debt. the plan is to use the cash to pay down the debt and also pay out a modest dividend. also a chance that coty could be doing a transformational acquisition acquisition. they tried to buy avon last year. the cosmetic industry is going strong lately, up 37% on average, pretty good cohort. the beauty space traded about 22 times this year's earnings. we've got to figure this out. at the high end, estee lauder and loreal, at the midpoint the stock trading at 20.5 times earnings, a discount. there's room for the stock go higher, it would have to spike 7% to catch up with the broader beauty sector and would need to rally more than 20% to have the same valuation as best of breed estee lauder or loreal. as long as they don't price above 19, i think it's worth it to get shares in the ipo, 19 limit. but this is one where you watch and wait to see how much the company can prove after it

becomes public. don't need to flip it. here's the bottom line, with the red hot tech ipo with gigamon, it'll come from the first-day rally. try to get your best right now. your best, tomorrow morning, to get a couple of shares, okay. 25 shares. i think coty could have a solid first day. but if it prices more than 50 cents above the expected range, i say take a pass and wait to see if the company can get its act together where it deserves to play in the sail league as estee lauder which is a tall order because it's best of breed and coty just shouldn't trade above the industry gold standard. after the break, i'll try to make you more money. coming up, hoop dreams, tonight, they are home for the nba's top teams. we're leaving the basketball behind. san antonio's valero is squaring off against miami's burger king. to find out which company takes home our trophy. and later, stock spotlight, mobile marketing has taken

center stage after exact targets takeover helped many of these stocks soar. tonight, cramer has the exclusive with a newcomer to the space to see if its cloud offerings could bring sky high returns or just hot air all coming up on "mad money." ♪ we will we will rock you

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>> the nba finals, they're here. miami heat facing off against san antonio spurs. i've got to tell you, i think it's the best series i've seen in ages. and after watching miami pummel san antonio last night, san antonio won the first game. we decided it's time to give you our own "mad money" series running parallel with the basketball championship that's happening right now. of course, this is a show about stocks, not sports. so i'll let espn give you the player match-ups like lebron james versus tim duncan, dwyane wade versus tony parker. ginobili, he's cool. i'm the ginobili of sports business. anyway, while the heat battles the spurs, instead of comparing players, we're going to match up miami companies versus san antonio companies. right, that's our thing. now this may sound like a bizarre conceit, especially if you're not a basketball fan. maybe you're from overseas and don't know that the spurs aren't really raised in texas or perhaps you only care about soccer or rugby or cricket. i'm a man on a mission and that's about coaching yo uh to

become a better investor. i'll use every tool at my disposal to grab your attention. and this series is a great way for you to learn how to compare to pick stocks. since tonight is the first match-up, we're going to get the ball rolling with a faceoff between the best known companies in each city. in san antonio, that means valero, the number one independent oil refinery in north america and representing miami, we have a company both founded and headquartered in the home of the heat, burger king. bkw, the second largest quick service hamburger chain on earth. you might think that valero versus burger king is comparing apples to oranges and maybe like oil and burgers don't mix. you'd be right. because an oil refinery is different than a fast food joint. when you're managing your own stock portfolio, you have to choose between different sectors. which one you should have more exposure to, which ones should have less. sectors worth about 50% of the stock. so it may not be apples to

apples. but wait a second, let's get started. as an oil refinery that mostly operates along the gulf coast, it's a patience stock. as cheap domestic crude flows from all the newfound oil discoveries down to the gulf, operating more efficiently, and companies should experience hefty margin expansion, should. the latter's important because refining is a margin game. it's all about the difference between what you pay for crude and get for selling refined products like gasoline. like i said, though, you have to be patient because it takes time to build out all the infrastructure that's needed to transport the oil and quantity form. say the gigantic bakken formation down to the refineries along the gulf coast and texas and louisiana. at the very bottom of the country where oil is very inconvenient. that said, over the last 12 months, valero has been on a huge winning streak with the stock doubling over that period. however, at the beginning of march, the levitation stopped. stock's trading sideways for the

last couple of months. how about miami's burger king? here's a company that's in a total turn around mode and believe it or not the turn is working. burger king has improved the operations from top to bottom and the stock has been rewarded for the success. it's rallied 36% since burger king relisted on the new york stock exchange last june. the turn around plan here is very smart. burger king is focused on improving the brand image domestically and around the world. putting them in the hands of the best franchisees because they're going to be the best operators. two years ago, burger king was 89% franchised and now it's 99%. they're incredibly lucrative. the company has revamped the menu. they got rid of that really creepy -- remember that? ew, what was that guy about? and the remodelling the stores. something that we know drives traffic in this business. right now 19% of burger king's locations reimage. the goal is to reach 40%, we had numbers that show when you

re-image -- remember amce? that's a re-imaging story. last year they added twice as many locations as the year before. wow. and the company's accelerating the new store rollouts in brazil, russia and china. they love the king in those countries. i think burger king gets it. and the don't forget, mcdonald's just reported substantially better than expected may same-store sales number. i think some of the strength in mcdonald's bodes well for burger king, not a zero sum game. burger king has gotten its act together. lately, more important, it's growing twice as fast as mcdonald's because it's in the early innings of expanding overseas and mcdonald's is a more mature growth stock. you want a juicy yield, mcdonald's the way to go. but if you want growth, i would go with burger king. stay away from wendy's, even though i like biggie fries. bkw trades over 22 times estimates, that's not cheap. it's far from cheap, actually. burger king's got an impressive

16.8% long-term growth rate, though. which of these is the better stock to own right now? valero? or burger king? you know what, this is a tough call, i like them both. but i'm going to have to say tonight san antonio wins because i see more future upside ahead for valero. the stock sells at 6.9 times next year's earnings estimates. that is really cheap compared to the 9% long-term growth rate. valero is doing things that are amazing. 16 refineries worldwide, key spots in the u.s. and canada. half of the refining capacity along the gulf coast. that's fantastic. remember, it's become one of the largest exporters of refined products in the united states and we are exporting a huge amount of gasoline in this country. remember, accounting for roughly 1/4 of our total exports is valero. now is a major competitive advantage versus refiners in other countries because they have access to the cheap

domestic oil and gas. that access is only increasing as we build out that infrastructure. hey, listen, once the pipelines are all built from the big bottleneck oil hub in oklahoma down to the gulf coast, that is going to be fabulous for valero. meanwhile, focused on using the refineries to make what are known as distolets. all of which have higher margins than gasoline. demand for these is growing much faster and there's far less spare capacity. in order to make these particular products, valero spent 1.5 billion to build two hydrocrackers, units that come on this year. that's the stuff that honeywell also sells those refining chemicals into. and each one should be able to generate $500 million in earnings before interest, taxes, depreciation and amortization. that is huge. plus with the capital spending behind them, the free cash flow is going to explode higher. this should generate $2.87 in

free cash flow. 2015, going to be $4.16. and they can boost the dividend or buy back stock. last but not least, valero is an extremely shareholder friendly company. i'm going to talk about the 2% yield. last month, spun off an 80% interest in nearly 2,000 of the gas stations as cst brands. this is a company that understands the value of breaking up in order to create value. plus on the last conference call, talking about spinning off some of the midstream assets, pipelines, terminals, rail facilities as a master limited partnership in order to unlock more value, these guys are doing everything right. here's the bottom line, when it comes to the best known public company in miami, burger king versus the largest one in san antonio, valero, unlike last night's basketball game, valero wins. i like burger king too, but if i had to pick one stock here, i'd go with valero, no questions asked. let's go to joe in missouri, please.

joe? >> hi, jim, first-time caller. >> excellent. >> caller: my wife is from colombia so we bought some in the mid-50s. i believe it's the largest company in colombia and pays a high annual dividend. it's down from the mid-60s to the mid-40s and i guess i want to know, do i buy some more at this point? >> no, that's a dicey one. always reminds me of southern oil company, which is the oil company in wages of fear. i think it's in a very tough area. and i don't necessarily want that risk when i own an oil company. i would prefer total which i think is operating better. walter in texas, please, walter? >> caller: yeah, jim. boo-yahs from cowboy country. several months back, you gave a good presentation on national oil well, where are you at now? >> oh, i love them. i think this is a leading technology company, it is

absolutely best of breed. they almost have a hammer lock on this business. if general electric wanted to really get in the space, general electric should pay $40 billion and by n.o.v., probably won't happe nov doesn't need it. san antonio's valero energy is the winner. stay with cramer. ♪ 'cause you make me feel so right ♪

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it is time. it's time for the "lightning round" on cramer's "mad money." rapid-fire calls. you say the name of the stock, i tell you whether to buy or sell. my staff prepares the graphics. play until this sound and then the "lightning round" is over. are you ready? time for the "lightning round" on cramer's "mad money." elizabeth in florida. elizabeth. >> caller: hey, cramer. i've got a real question for you. >> fire away. >> caller: costco versus price mart. >> easy, costco would be the one. pull the trigger just today. cost.

let's go to al in georgia. al? >> caller: boo-yah, jim. >> boo-yah, al. go ahead, al. >> caller: w.w.w. >> we have liked it ever since we did it, recommended it at the wolverine big show at the university of michigan. now ken in texas. ken? >> caller: thank you for taking my call. my stock is suburban propane partners, sph. >> i think the earnings profile is bad, but you know what, propane has turned the corner. getting a good yield. it's a trigger puller! theresa in north carolina, theresa? >> caller: hi. i'm a first-time caller, i love your show. >> thank you. >> caller: and i recently purchased some amvi and wanted to know your take on it. >> i think you've got horse sense. i like that company and also the other part that was abbott labs. oh, that stock is a good stock. let's go to joe in florida, please. joe?

>> caller: b-b-boo-yah from the sunshine state. >> i like the stuttering boo-yah from the sunshine state. what's up? >> caller: with the recent ipo and the investments, what do you think of seaworld? >> i like f.u.n. and don't forget six flags pretty good too. no, we're not done because aisle going to van the man in washington. van? >> caller: boo-yah, jim. thank you for taking my call. >> excellent, van. >> caller: what should we do with spnp. >> we need to sell it because we don't like network security. >> sell, sell, sell. >> it's too hard. those companies, they don't get it. it's impossible. i feel bad for anyone in that company. let's go to olga in ohio. olga? >> caller: hello, boo-yah from cincinnati. >> i like that. reds look good, what can i tell you? >> caller: we love your show. >> thank you. >> caller: we try not to ever

miss it. it's very educational and you're so funny. >> thank you. >> caller: what do you think hain celestial? >> i think it's a good, old-fashioned stock. and it's doing a good job. the bears want to knock that thing down. and let me tell you something, i think ultimately the bears will be wrong. and that's it. it's the end of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. coming up -- stock spotlight, mobile marketing has taken center stage after exact targets takeover, many of these stocks soar. tonight, cramer with a newcomer to the space see if the cloud offerings could bring sky high returns or just hot air. take a look at mkto. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission.

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take a look at mkto. cloud-based marketing software

play that helps companies streamline the marketing decisions while boosting revenue growth and building long-term relationships with their customers, also lead generation with new customers. this is a red hot space for acquisitions. we saw salesforce.com get more exposuring to marketing software. and marketo became public on may 16th, $13. 77.7% higher to $23 in the first day of trading. marketo started pulling back yesterday, closed below $20, today, though, it did shoot up another $2. 10%. no news. man, this is a wild one. i can tell you why -- i can't tell you why it rallied so hard, but i have a supposition. see, tomorrow is the day when wall street analysts are expected to roll out research coverage on marketo, and when that happens, you normally catch big pops the stock ran up in anticipation. this marketing software space has become very sexy. but given how much of a roller coaster this has been, we've got to do some homework.

let's check in with phil hernandez in order to learn more about his company and its prospects. mr. fernandez, welcome to "mad money." >> hello, jim, thank you very much. >> well, look, it's great to have you, sir. you are in a very competitive space and i want people to understand from the get go you're not just an e-mail company, you're a solutions company for lots of companies that need to be able to reach customers. so why don't you walk through the food chain for us of where marketo plays a role in getting these customers, nurturing them and building somebody's business. >> you bet. well, we work with customers of all sizes, large and small, including some of the world's global brands, and we help them really build more profitable relationships with their customers. you know, our customers use web, e-mail, facebook, direct mail, phone, text messages and they coordinate all of those ways to really build relationships with their customers over time and ultimately sell more to them. the marketer is really in charge of the customer relationship these days and we help the customer, our customers do that more effectively to sell more,

frankly. >> now, i think a lot of companies are trying to do this. offering webinars, e-mail solutions. they're looking at social media. how do you distinguish yourself from the other guys? >> well, we're really a platform. we put all of those different channels together. we talk about channels of communication to the customer, e-mail, web, social, et cetera, et cetera, there's dozens of them today. we hope the marketer makes sense of all of that and create relationships with customers across all of those channels. we don't have any one-channel race. we don't make money from e-mail, although we do e-mail and we tell customers not to send more e-mails to their customers. so we actually use analytics to drive the best relationship with every customer at the time that

our buyers are interacting with their customers. >> what is the data you're looking through? what are you doing to make a smart decision? >> well, some of our largest customers, we might have 30 or 40 billion individual pieces of information about what their customers are doing. every web visit, e-mail click, tweet, facebook post, et cetera. so we build this big data set, permission-based, customers give the end user gives our customers the ability to record that data. and then we use analytics to figure out who is hot, who's not, who's buying, what the right message at the right time for each customer and make a personal and individual communication with each customer when they're ready to buy or when they're ready to do something meaningful in the buying relationship. >> mr. hernandez, you're a competitor to exact target. last week, salesforce.com bought exact target. what is to keep salesforce.com to say stop using marketo. we've got a new guy exact target, that should be your partner. >> well, they might do that. it's been a super competitive market since we founded the company six years ago. and we've been the fastest growing and we continue to be, i think, the innovator and the leader. so we'd expect probably some kind of move from sales force with this new acquisition, but

we've competed with exact target for some time like the way we compete and expect to continue to compete really favorably with them going forward. >> now, you have not been making money, but you've been growing the revenues. at what point do you say, look, we've got to start making money even if it means revenue growth, no longer can be as aggressive as it's been? >> i got asked that about 70 times two weeks ago, i thought i was done with that. >> i'm sorry. >> you know, i think the signals are as long as customer retention is good, acquisition costs are good and growth rates are the kind we've seen. the signals from the market and they want to see us continue to grow at maximum possible rates. as we look forward, with certainly see the ability to get those lines to cross. we take the foot off the gas on trying to grow revenue and the sheer mass of the installed customer base and the cash flow from a subscription based, cloud-based business, i think, lets us outlook that profitability down the road. >> i think that's true myself. now, you mention the social media. my friend upgraded facebook

today and i think people are trying to figure out, does facebook really work? you mentioned facebook. do your customers like to be able to find clients and sales through facebook? does it work? >> yeah, it absolutely works. we don't do paid advertising on facebook. we help our customers build really interesting interactive social media campaigns in facebook that incent people on facebook to share with their friends and to spread the word and to spread advocacy and loyalty and brand messages and it works. we have some customers that would describe they've been able to add hundreds of thousands of new customers for free by building great facebook marketing campaigns run through marketo. >> terrific. well, sir, it's great to have you on, congratulations on your ipo, i hope the research tomorrow will be interesting. phil hernandez, thank you for coming on the show. >> you bet. great to talk to you, jim. >> guys, competitive space, really high-growth company. you know these growth companies

like salesforce, they are about showing revenue growth first and then profitability after. i had to ask the question about profitability. i know you guys are worried about it. but take a look at this, very dog eat dog world but these guys do help get new clients. "mad money's" back after the break. to prove to you that aleve is the better choice for him, he's agreed to give it up. that's today? [ male announcer ] we'll be with him all day as he goes back to taking tylenol. i was okay, but after lunch my knee started to hurt again. and now i've got to take more pills. ♪ yup. another pill stop. can i get my aleve back yet?

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here's a query you never thought you'd hear, mcdonald's is outinnovating apple. the contrast between what's coming out of the apple's developers conference right now and what's coming out of

mcdonald's earnings is pretty stark. this morning, mcdonald's reported much better than expected same-store sales numbers. 2.6% growth versus 1.9% growth than the analysts were expecting. the u.s. in particular increased 2.4%. analysts looking for 2.1%. what's significant about these comparisons? first, i've got to tell you, i'm tied into mcdonald's and no one thought they would surprise the upside. had them leaning toward disappointment. second, the surprise was driven by new menu items. the terrific ceo who took over less than a year ago including chicken mcwraps and mcmuffins, my favorite. i'm not kidding, it's really good that egg white. and they're working on it. and stock finished $99.53. apple is talking about change, it's interesting, but i don't think they'll create a mad dash to the apple store. also iradio, defensive against the success of other players

including the popular pandora, public company and spodify which everyone tells me is so fabulous. the news on what should be apple's day is that google's attempting to purchase an israeli mapping system that's more advanced than google's current best in show map offering. despite all the hype and down for the day falling $2.42 because the multiple announcements had been -- and there was a lot of pizazz coming out of there. anyway, sorry. now, i know that many people think i'm being facetious when i talk about apple being outengineered by mcdonald's. but it is true that they do represent fantastic innovation, it's just innovation i'm saying has gotten long in the tooth. mcdonald's hasn't moved the needle with much lately and giving people new reasons to visit their stores. it created those new reasons in the fabulous food lab. maybe apple should shift some of the development there.

why does all this matter? because i've been asked over and over again what to do with apple stock, which means a small position in my charitable trust after taking a big profit in the name. i say that as much as apple's a special company, remember, the stocks of special companies trade on earnings per share growth. and i'm not seeing anything that makes me feel confident that apple's too low. none of these seems to provide the omg factor that's necessary to propel those efforts and therefore the stock higher. mcdonald's on the other hand has now bested same store sales number so heartily with the additions and the possibility of a whole new day part, maybe i should say night part, the after midnight lunch menu, you could argue that estimates are too low and need to be raised which i think will happen tomorrow and that will propel the stock even higher. no one has thought of a burger joint as a hot house of innovation. but we all expect the innovations. here's the thing, it's what we expect that matters. and if innovation creates better than expected earnings, well, that's innovation that i care about. until we see that at apple, it's dead money. we're seeing it at mcdonald's

right now. i think the directions of both are set for the time being until apple invents something that puts it back and the technology lead and boosts its earnings or mcdonald's runs out of new menu items to keep the estimates going ever higher. stay with cramer.

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