up 0.08%. any explanation for the underlying strength is pure supposition. we should be going down hard right now. right here. as we did right about now, for every single federal level imbroglio since we've had so far. in other words this was the day they started versus the event. the october 1st date for when a government shutdown is supposed to be begin, it looms so large. there isn't a single sign that there will be a deal. none. we could be in for a prolonged period of rancor and indecision, both of which are bad for business. so how can we think this time will be different? why aren't we down, 4%, 5%, 6%,

instead of a measly couple of down days? let me give it a try. first, maybe the market is saying, there won't be a showdown. maybe there are forces at work that we don't know about which will make the whole episode more benign than skeptics including me realize. hard to believe anything's happened behind the scenes. but we never know with washington. put that in. i don't know, 20% chance. second, even if there isn't a deal immediately, well, people are expecting there will be one down the road. as much as we hate our political system, we do end up paying the bills. that's been the lesson from the other times when they were done, we caught a big rally. perhaps the market going to the troubled moment portfolio managers are using whatever weakness they can get including intraday including the last three days to put money to work. maybe that's what's going on. third the fed has managed to keep rates down. see them today really, really low. so maybe we shouldn't worry if we get a government shutdown because low waits buttress the valuations of so many stocks.

particularly the bond market equivalent stocks we talk about all the time on the show. 3% plus yielders we've got a positive one-two punch from the fed no larry summers. rightly or wrongly to be anti-accommodating as well as the surprise nontaper. interest rates have been going down ever since then. the market gave up these instant gains since the sell-off. everything we got that wednesday is now gone. but today's reversal seems to me signal kind of a, i don't know, pretty benign close. i mean ugly but it did say to me that you're not, that you can pick. you should never, ever fight the fed even when you think it's out of bullets. fourth reason our stocks aren't getting annihilated, the market sees lower interest rates reinvigorating the housing business. one element of the earnings released was a clear miss more on that later but you know obviously people looking through the valley. the market's willingness to overlook this key orders number for lennar and have the stock go up anyway shows you that perhaps we don't have nearly as much to fear from the weakness in

housing as we might have thought. when housing goes higher, it takes a large swath of related stocks, furniture, clients, names, retailers associated with home building. fifth the foreign markets are not taking their cue from washington. no, they are incredibly robust. the baltic drive freight index which i always say to keep your eye on is getting stronger and stronger almost doubled. from the low it has doubled signaling that china's starting to order raw materials again. part and parcel of that is turnaround in europe. spain just declared end to its hideous recession yesterday. greece tells us now budget surplus. remember when we were worried about italian bonds? should have bought them. meanwhile the european central bankers are saying they'll remain accommodative because the market is so fragile. sixth reason, merger acquisition and breakup pressures continue. it makes it an environment for short sellers. you never know when lightning could strike.

greenway medical technologies fairly recent ipo launches a $9 billion takeover for cross-border rival tokyo electron. a 5% stake in bob evans farms wants to break the company in two and another value move. this stuff happens every day. it acts like a trampoline under the market. we're up these activist related moves later. oil is coming down given that iran is acting nice with the united nations. i don't trust iran. you don't trust iran. i'm sure you don't but regardless of trust, any suspension of tensions, prices lower. gasoline of course. retail possible weakness in the economy, going to the holidays could get a boost from lower gas prices. remember we're just trying to come up with some suppositions why this market isn't down five, eight, ten percent, eight possible reason, autos. car max, gigantic used car retailer, reported outstanding sales and earnings today. auto market has been a huge engine in the economy. car max, fantastic news. i don't know.

i kind of hoping for a chrysler ipo. ninth explanation, president obama was forced well this is a political statement but he was forced to make a foreign policy speech today. the market likes resolve and dislikes indecision. there was nothing indecisive about obama at the n. u.n. tenth reason, growth stocks are thriving in a lower growth environment and that is incredibly bullish. facebook is leading the parade going to an all-time high on one more upgrade. the high growth rally across the board. we've got a cluster note from jpmorgan about starbucks. stock rallied up $1.19. that's strength. chipotle's been a strength. netflix back on track, amazon yelp, tesla, lincoln roared. $6.24. for the long only momentum managers nothing gets the juices flowing like these kinds of rallies. they always change the tone of the tape and make short selling downright dangerous. eleventh explanation for why we

haven't been hammered, hedge funds are negative. so many funds are betting a shutdown will be terrible that they keep shorting the market endlessly. you can feel their brooding ommy presence. the short washington play has been terrific during the manufacturing crises i have to believe many hedge funds are reading from the same playbook that worked when we were going to the debt ceiling debacle, the fiscal cliff debacle and the sequester. each time short sellers got good opportunity to cover positions. perhaps the short side has become too crowded. short sellers tend not to make money when everyone is expecting the same bad circumstances. we're only a few days away from a good quarter. the hedge funds have to show they weren't totally out of it. the longs might be bidding up stocks to boost their performance underneath. dow has now components, a little more wild. finally, remarkable run in the transports which has been the lovey blanket of the market. they finished up today. you can't have them advance without believing that commerce is picking up. if you have commerce picking up and rates going down we should be in good shape.

when the transports rally, it lists boeing and all suppliers and airbus things are looking better than ever they got a 20 year plan, too. i'm sticking with the gal that brought us here. here's the bottom line we can't be sure why the market's holding its own against pending washington meltdown of epic proportions. maybe the market's dead wrong and it's just a matter of time before the stocks collapse. maybe the last 20 minutes of trading were not so hot. but given that the cataclysmic washington event is only five sessions away, you've got to believe some of these positives are playing out making sailing a lot smoother than you'd expect. except for the short sellers. mike in illinois. mike. >> caller: booyah from chicago. home of the 3-0 chicago bears the monsters of the midway. >> rub it in. you think we're all from chicago here or something? is that what you think? >> caller: yes, i do. >> all right. >> caller: my, my, my company is gse capital corporation, symbol

gsec it was up 6.25% today and hit a 52-week high is this the best way to play the upcoming twitter ipo? >> when i saw that, i said geez this is the way. i'm going to tell you that i don't know everything else that it owns. but i think the twitter ipo is going to be gigantic. i hear numbers and they're way too low. i've been sticking by my prediction that you're going to get $18 to $20 billion in value, which should send up gsc capital to a higher level. i've always been a bears fan. we don't play them that often. we being the eagles. kurt in colorado with peyton manning, with the winning winning orange -- kurt. >> caller: booyah, jim, how are you? >> all right. glad to go to denver next week. >> caller: good, good, just calling in regards to wendy's and how do you see long-term growth and also how do you see it competing against the larger fortune 500 food companies like mcdonald's, chipotle and burger king? >> we talk about moving the needle. believe it or not this bacon pretzel roll cheeseburger is

actually working. although my friend last week didn't like it. now here's what you need to know. wendy's is on a major roll. management is terrific. that stock can go to 10 without hurting mcdonald's, without hurting burger king. i like the fries at burger king but it's not enough to move the needle. jimmy in california. >> caller: booyah, cramer, how are you? >> real good. how about you, jimmy? >>. >> caller: good thanks. i want to talk to you about a company that you've been behind for for a good reason for the last six months. it just hit a 52-week high, 14 days ago before reported earnings. since then, it's gone through 78 down to 61. today the stock went from 61 back up to 64.5, and i want to know what's you're position on restoration hardware holdings. >> okay. i went through this quarter with a fine tooth comb but it happened to come when interest rates are going higher. now, interest rates are coming back down. the stock is recovering. reminds me the way coors

recovered. even fossil reported. this is not in that league. it is better than those. i'm sticking with restoration hardware. i think it's a buy. against all odds the market is hanging tough. yes we had an ugly close. the fact is there was no cataclysmic selling yet. your survival guide which says i have your back is telling me maybe we won't have that monster sell-off before the shutdown. coming up, stable foundation? this morning's headlines show home prices are continuing to rise across the country. but steadily rising interest rates have made wall street worried about the future of the mortgage market. cramer gets an inside look in his earnings exclusive when home builder lennar. and later cash connection? when verizon's $130 billion buy to sprint's acquisition of clearwire. wireless deals are aplenty. is it time to make a connection of your own? cramer speaks with ceo dan hesse for the first time since the deal to find out what it means for the future.

plus, berry good? pack it, wrap it, contain it and cap it. there's one company that does it all. berry plastics is the household name you've never heard of. but you might not want to forget it. is it time to fill up your cup? 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. miss something? head to madmoney.cnbc.com. are you sure we should take this billboard down?

people find out state farm does car loans as well as they do insurance, our bank is through. good point. grab an edge. look there's two guys on the state farm borrow better banking sign. nope for real there's two dudes on the state farm borrow better banking sign. [ reporter ] breaking news from the state farm borrow better banking sign... we're seeing two men that have climbed the borrow better banking sign gentlemen please get down from the state farm borrow better banking sign. phil get the hose. okay he's getting the hose. alright, let's go. [ male announcer ] talk to a state farm agent about car loans that can save you hundreds. that's borrowing better.

ever since interest rates sky rocketed over the summer everybody's been wondering what kind of damage it would do to the home building business. we know home build being stocks were hurting but was it warranted based on what's happening to the underlying companies. today we heard from two home builders who said it is more like hitting a speed bump than crashing full force into a retaining wall. kb homes.

jumped 4.9%. and lennar had a terrific quarter and nine cent earnings beat off of 45 cent basis with higher than expected revenues that rose 45.7% year over year. this wasn't a perfect quarter. lennar's new orders were up expectations. and ever since the fed announced it wasn't going to taper the bond buying program interest rates have been crawling back down. something that could make the next quarter even better than this one. no wonder the stock was up today. housing is a very important for economies. let's take a closer look with the ceo of lennar. welcome to "mad money." >> good afternoon, jim. happy to be here. >> stewart, congratulations, first of all. this was one of the best quarters i've ever seen lennar have. while everyone's worried about the granularity august was actually the strongest month. whatever anybody was thinking it

didn't play a role with you. >> well, listen, i think that we're particularly well positioned, but as we noted on our call today, june was a pretty strong month. july tapered way back. and then august was a strong month again. so we saw some strength out in the field. we saw some strength both in our customers and in traffic. so it was a -- it's been an interesting ride. >> and maybe you sent some great charts over that some of this what people are missing, is the limited amount of inventory, because of the actual incredible, almost depression-like lack of building of homes during the last part of the cycle. >> that's exactly right. and i think the dominant theme for housing over the next few years is filling the hole of production that has not been filled over the past years. if you look at the average during the downturn, we were delivering about 7,000 homes -- 700,000 homes. per year. both multifamily and single family. the need in the country just by population and household

formation alone is a million two to a million five. that underproduction is going to -- is going to define where we go over the next few years. there will be speed bumps, as you noted before. that derive from interest rates, public policy, international events. but the trajectory in our view over the next three to five years is generally positive. >> one of the things i don't like about your group is because of the power of the real -- of the actual etfs, the good and the bad are amalgamated and homogenized. you were doing a huge number of things away from just home building including rialto, including apartment -- literally renting that perhaps you're not getting enough credit. what can you do and you hint upon it in your conference call to bring up that value because you're not just another home builder. >> well, happy that you're noting that.

look, we think that the primary driver of our short-term earnings quarterly performance is going to be driver be in the near term by our housing and financial services businesses, which are our core. and we think we're extremely well positioned in those two areas. our ancillary businesses of rialto, our multifamily communities division, and our five-point large-scale communities division are longer-term shareholder value creation machines that are going to realize their maturity over the next few years. we keep the investor focused on our core business, but we keep them apprised of what we're doing to create long-term shareholder value, and i think we've got a great balance. >> i follow the apartment real estate investment trust. none of them has the growth of your apartment unit. why not give that to the public so that i can push it really hard because it's got growth and would have great yield? >> over time. right now we are maturing a -- a

brand-new business. as you've noted, our pipeline has been growing steadily. we have built a national franchise, and we've left ourselves by segmenting this business, giving it complete visibility to the street, as we grow it, we've left ourselves maximum flexibility, and over time, we think that the optionality embedded in that business is going to give us a lot of opportunity to create value, depending on where the market is at a given moment in time. the ability to build, produce, and stabilize brand new apartment units in this environment where we have a shortage of inventory, both on the apartment side and the for sale side we think gives us a great position. >> fed last week takes basically literally takes rates people think they're going to ten year going to three, maybe three and a quarter right down, right down in the face of the short takes them to what now is 2.6. is that meaningful for september traffic to your homes?

>> well, listen, interest rates are fluctuating and i'm not even sure that we can tell what's driving the fed decisions. is it really derived from a question as to what's going to happen relative to the debt ceiling discussions? or are there some other factors involved that relate to the macro economy? i think that as things stand right now, lower interest rates are bringing customers and traffic back to the field. we'll see how this plays out over the short term. but, again, our focus is not so much on what's happening with short-term fluctuations. over the long-term, we think that we're in for a steady rebound in housing, over years. and that's going to define where we go. >> one last question, gross margins. can they stay as high as they are, given the labor cost that you mention on the conference call? >> yes, we've noted that we think that gross margins in the industry, and particularly in our company, can exceed prior highs.

even at the peak. and we think in part it derives from pricing power in the product, due to the shortage of inventory, and what we've seen to date and are likely to see as we go forward is that pricing power and revenue increases have outstripped the increases in cost. we noted this morning that our cost year over year were up about 8.4%. but you saw that our revenues were up some 13%, and our revenues in the sales that we've made in the past quarter were up 16% year over year. this gives us the ability to maintain and even grow margins. >> well, thank you so much, stuart miller. make your dad proud. this was just a terrific quarter. fantastic job for shareholders. good to talk to you. >> thank you, jim. nice to be you. >> that's stuart miller ceo of lennar corp. you haven't missed anything. yet longer-term this is the winner. they've got the land, the housing, the gross margins, and they've got the magic. stay with cramer. coming up, cash connection? from verizon's $130 billion buy to sprint's acquisition of clearwire, wireless deals are

aplenty. is it time to make a connection of your own? cramer speaks with ceo dan hesse since the first time since the deal to find out what it means for the future. huh...fifteen minutes

could save you fifteen percent or more on car insurance. mmmhmmm...everybody knows that.

well, did you know that old macdonald was a really bad speller? your word is...cow. cow. cow. c...o...w... ...e...i...e...i...o. [buzzer] dangnabbit. geico. fifteen minutes could save you...well, you know. seasonal... doesn't begin to describe it. running a bike shop has it's ups and downs. my cashflow can literally change with the weather. anything that gives me some breathing room makes a big difference. the plum card from american express gives your business flexibility. get 1.5% discount for paying early, or up to 60 days to pay without interest, or both each month. i'm nelson gutierrez and i'm a member of the smarter money. this is what membership is. this is what membership does.

just days after the launch of the latest iphone iterations. it is time to talk about one of my favorite wireless stocks, sprint. sprint consummated a deal selling the company for $21.6 billion in cash. sprint got to keep $5 billion. the rest going to you, shareholders. sprint turned around and bought clear wire for $7 billion. giving the company control over tremendous, high-quality, electromagnetic spectrum to provide, better, faster service. the deep pockets needed to finish building out its ultrafast 4g network. the sprint of today is very different from the company of three months ago. for a long time, i liked the stock, a speculative turn around. shutting down the nextel

network. to cut costs. sprint is no longer the third wheel of the wireless world. does sprint have that staying power? will too many customers dessert in the interim. let's talk to dan hesse. welcome back to "mad money." when i saw you, the biggest worry i had was that you might be leaving now that you had new owners. but you are sticking around. >> i am. they signed me up to a new five-year deal. >> in that situation, they own 78%. is it they or your new owners got a 300 year perspective? last i looked, 300, 207 years from now, you may not be still at the helm. >> we have eight board members.

they have two. we have five independent members and there is me. we see the board as being ten plus me. it is run as an independent company. very good governs. we make the decisions at sprint management. we get together at least once and share best practices. we've learned lots from them and them from us. >> a lot of people who watch this show bought sprint. they are confused. they think they are down on the position if they bought if in the last six months. that structural not correct. >> we are up 28% year to date and up 11% since the transaction with soft bank. a lot of people get confused because the stocks changed with the transaction. we closed at 567 on a pro forma basis but the close yesterday was about 726. we are up 11% since the

transaction, about 28%. >> you have already been very honest about the near term and the longer term. september 20th, iphone launch, the 5 s5 c. >> how is the demand from this strong? >> very sfrontrong. we are beginning to run out of inventory, specially the 5-s. >> the inventory is stuck at the telecommunications level. that's not true if you tell me you are short inventory 1234. >> we are short inventory, specially t specially the "s." >> we have some ss but they are multiple colors and multiple memory sizes. >> that's a great fact. thank you for sharing that with us. when i look at what you're trying to do, you gave an interview, you've talked to some analysts, you are saying, be careful. this is a difficult transition.

you are talking about cutting back some advertising. >> 2013 is kind of a transitional year for us. a lot of people know we shut down the nextel network at the beginning of this quarter. it is also a complete rip and replace of the entire 3 g network which really has never been done. it's the most massive network change any company's ever, you know, ever gone through. so it's not only expensive but if you take a city like chicago, would be a great example, it was good. and then we had to rip out all the 3g networks we got, not so good. now we're largely done, it's great. so what we want to do is keep our powder dry, until the networks are great. so we're bringing on a lot of new lte around the end of the third quarter and in the fourth quarter. we'll have about 200 million pots covered by the end of this. that's when we're going to put a little more pedal to the medal in terms of offers in marketing when the network transition is mainly behind us. >> verizon and sprint -- verizon and at&t aren't slowing down

their spending. how can you stay up in that arms race? >> from a capital perspective, we're staying up. as far as the network is concerned, we're spending $8 billion on cap-ex this year and we told analysts to expect a similar amount of spending, just to put it in perspective in 2008 and 2009, we were spending $2 billion a year on capital. so we're spending a lot of money on capital to make sure our network is great. our goal is to build the best network of any carrier in the world. and we think we have that when we're done. >> how is clearwire? >> hugely important. >> it was. it was and turns out you got in there and everything's what you thought. >> yeah. i mean of course we were a 50% owner for a long time. so we had our eyes wide open. but tremendous spectrum position which allows us to offer -- it wasn't coincidental that we announced unlimited for life right after that acquisition closed. and it will also give us the opportunity to really provide unheard of speeds on the network. because you have 120 megahertz

of contiguous spectrum. it's a huge slice of spectrum. so when people talk about lte they talk about 10 megahertz channels, i'm trying not to be too technical. ten. so think of that as one highway. we have 120. think of that as 12 highways. tremendous amount of capacity. >> that's a good stat. you always told us you couldn't necessarily convert all the nextel people and i have to believe that at a certain place where you're not where you don't have where you have the spotty network you're not gaining what are you doing in terms of gaining from verizon and at&t net? >> well, you -- that will -- that we hope will happen in '14. you know, 2013 -- >> not happening now though, right? >> because of a couple of things. number one, when we put in this new network, i talked about chicago, we call it pardon our dust, the transitional issues. the network performance went down in markets as we were building out and putting the new gear in. the good news, it's all brand-new. it's the best. the 3g and 4g will be the best. the other thing is with respect to our business accounts.

most of our business accounts had what we call mixed accounts. they had sprint subscribers and nextel subscribers, so we put so much focus on winning back the nextel subs, that was important and they had to leave by the end of the second quarter. the sprint customers, if we lost that business account, they tend to come off in the second half so we're still going to lose a lot of cdma or sprint brand customers in q3 and q4 because of the accounts we lost because we shut off the network. for those 60% of the business accounts that we didn't retain, we won 40% which is a lot more than anybody expected us to win. >> much better. >> much better. but if you will the nextel customers came off in the first half. the sprint customers come off in the second half. so that so those customers leaving this is not going to be a great subscriber year. >> right. >> but you got to take the long-term view. >> take the long-term view. do you most fear facebook? do you fear google? do you fear microsoft's skype? do you fear your own owners who have such a long-term perspective that they may not

want the shareholders to win right now? >> all the companies you named we look at as partners. >> partners? >> partners and people that we can work with. the other thing about softbank is they own a piece of over 1,000 internet-based companies. the kinds of companies that you've described. that's their world. and i think there's more opportunity for us embracing over the top players applications companies, software companies, social networking companies than there are threats. >> dan hesse you've been talking straight the whole way. you made people a huge amount of money particularly when we were talking best $2 and you told people not to give up the ship. ceo of sprint corporation. look, what can i say? its been a great win. maybe it stays that way. stay with cramer. ♪

[ male announcer ] staying warm and dry has never been our priority. our priority is, was and always will be serving you, the american people. so we improved priority mail flat rate to give you a more reliable way to ship. now with tracking up to eleven scans, specified delivery dates, and free insurance up to $50 all for the same low rate. [ woman ] we are the united states postal service. [ man ] we are the united states postal service. [ male announcer ] and our priority is you. go to usps.com® and try it today.

nascar is about excitement. and our priority is you. but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans.

you may not know it yet but "mad money" is better than ever. i'm talking about zee box. what is it? think of it as a tv side kick that makes watching your favorite shows even better. you can download the free app or

go to zeebox.com/madmoney. you get exclusive content and chat with crammericans across the country. plus you'll see me in there, so download the free app today or head to zeebox.com/madmoney. now it's time for the lightning round. what is that about? and then the lightning round is over. are you ready skee-daddy? time for the lightning round. going to start with bill in maryland. bill. >> caller: bill, maryland. motorola solutions and lionsgate. >> you know, one at a time here. motorola solutions, i don't know. i mean it's another -- it's got government services, no. no. you know what? i like cisco. cisco is down and out but shouldn't be. let's go to chris in south carolina. >> caller: love you show, jim. my question is pacific coastal oil trust, royt.

>> yeah, you know, these have been such declining asset stocks. this is a california-based stock i'm not going to go with it. i don't like these anymore because they're depleted assets. when i can recommend a stock like eog. eog. now i want to go to dave in florida. >> caller: big booyah to you from sunny tampa, florida. >> go bucs i think. i don't know. >> caller: i was happy with the result of the patriots game to be honest with you. >> what's up? >> caller: go go. i took my first position -- >> this was a mistake that i didn't recommend this thing when it came public. it's a good situation. it's got real momentum. buy buy buy. now morgan in california. >> caller: doctor cramer big booyah from walnut creek, california. >> how are you? >> caller: i'm doing great. i've been doing my homework with all these record truck sales in

august every 45 seconds, i've been thinking everyone wants to tow a boat with that truck and i've been getting bullish on a boat manufacturer ticker bc. >> brunswick is the best. i personally have a boston whaler, it's a 17 footer. but brunswick is the boat company. now be careful. the stock has had a monster run. if i recommend it up here i'm violating all my discipline because i do think while it's good i think it can come down a bit. let's go to gary in illinois. >> caller: mr. cramer, i want to tell you that you and your staff are excellent. keep up the good work. >> i got a great staff. they make me look good every single day, particularly regina my executive producer. >> my stock today is home depot supply, hds. >> home depot supply. no! you can't come out and disappoint from day one, and have me on the team. i am not on the team hd supply. as far as i'm concerned three nfl teams. vince in pennsylvania. >> caller: jim this is vince from philadelphia booyah!

>> i'm giving you a sean mccoy comes to play booyah. >> caller: my question is regarding unxl, unipixel, i'm playing as a short play seems like 44% of the stock is being shorted. >> well, it is short but did you see the touchscreen day today? i'm going to agree i don't want to be there but i don't want it to be short. i don't recommend shorts for the show. abdul in texas. >> caller: yes, cramer. thank you for taking my call. last quarter for amd. >> last quarter was nasty. but you know they do have some gaming revenues coming in. i think under $4 you want to buy the stock. i can tell you that was such a miserable quarter that a lot of people lost heart. but i haven't. i think it's a buy right here. and that ladies and gentlemen is closing out the lightning round. >> the lightning round is sponsored by td ameritrade.

coming up, berry good? pack it, wrap it, contain it and cap it. there's one company that does it all berry plastics is the household name you've never heard of. but you might not want to forget it. is it time to fill up your cup? ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. [ engine revs, tires squeal ]

[ male announcer ] since we began, mercedes-benz has pioneered many breakthroughs. ♪ breakthroughs in design... breakthroughs in safety... in engineering... and technology. and now our latest creation breaks one more barrier. introducing the cla. starting at $29,900. ♪ where would you go? woman: 'greece.' woman 2: 'i want to go to bora bora.' man: 'i'd always like to go to china.' anncr: download the expedia app and your next trip could be on us. expedia, find yours.  help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts

watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. 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%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.

you all know that sometimes the stock market overreacts. take berry plastics, bery, maker of value added consumer packaging and engineering materials came public a little less than a year ago. very much a tech company as it is a plastics play. they use proprietary technology to create innovative products. just yesterday they announced 100% recyclable material to make to-go cups to maintain hot and cold beverages. this is the only recyclable company that can be used for hot and cold applications. according to management, 4% of the american market could bring in more than $500 million in sales but here's the rub. a little over a week ago, berry gave an analyst presentation where management lowered the boom. the company came from predicting a mild increase to a 10% decline. not good news.

in response, the stock got poleaxed from 25 to 20 in a matter of days. to me feels like an overreaction. especially selling 16.5 times next year's earnings estimates. stock is giving 19% gains since i recommended it in january. i think we can go higher from here. don't take it from me. let's talk to jonathan rich, chairman and ceo of berry plastics. find out what companies next for his company. welcome to "mad money." >> thanks, jim. >> have a seat. >> great to be here. >> look you had a huge analyst meeting with lots of great slides. lots of great information. there was one line you just said this one line which, you know, september quarter will be lower by approximately 10% versus the prior year. that's all anybody heard, wasn't it? >> yeah, jim. we got impacted by two things in the quarter. first of all demand remains muted. and that's because the consumer is still cautious. you know, berry plastics we sell to more than 13,000 customers in consumer staples, nondurable goods, products like food, health care and so forth and we've seen the consumer be soft

all year long. we do sell some products in to durables like duct tapes that go into automobiles and housing, those have been better. the second thing that happened to us in the quarter, frankly, is that our raw material costs went up significantly. our plastics resins costs are linked to oil prices. and in the third quarter we saw oil prices go up significantly, due to the geopolitical events in the middle east. >> but that could be short-term in your conference call you say today the discoveries of shale are being led by united states will change the global landscape, including yours. is it short-term to think of you as a play on the price of oil? >> short-term, it is, jim. but long-term, we are incredibly excited about the discoveries here with north american shale gas. it's going to change the manufacturing landscape here in north america. it's going to be an incredible boon to berry plastics. >> how quickly can you make that transformation? any way you can lock those prices in? >> i think those investments are coming online now in the next

three to five years and they're going to be incredibly significant for us. >> okay. now, we often talk about moving the needle. for instance we've been talking about the apple. new phones. and i said on this show that they would move the needle. they're important. you've got a new invention. it's an invention. can it really move the needle because you said how many products you have? you have to deal with a sluggish consumer. can it really accelerate earnings? >> well, this is a completely new greenfield space for us. berry plastics today does not participate in the insulated packaging segments, which go in to things that have to be kept hot or cold. we have a breakthrough technology here with our new versalight product which includes new inventions in materials, manufacturing processes, and product design. you know today, jim, there's over 130 billion disposable cups used by americans every year. and the paper coffee cup has

been around since almost 1900, and, frankly, it doesn't satisfy consumer needs for keeping the coffee hot, keeping your hand cool, and preventing the 80 billion cups that go into landfills today from continuing to do that. >> there's a lot of people who say listen plastic that's the last thing we want. but this isn't really plastic, right? >> no, this is from a recyclability and sustainability standpoint, this is going to be the most readily recyclable disposable cup in the market. because it's made 100% of number 5 polypropolene. today we're working with municipalities, waste handlers, recyclers like preserve and their gimme 5 polypropolene recycling program from a sustainability standpoint, lower energy use, lower carbon footprint. so, this really is a breakthrough in product design for thermal management. >> if we're looking for what to be able to model for next year and say that people overreacted do we care about the sluggish

consumer and whether consumer packaged goods go up? do we watch the price of oil? do we look at the innovation? what can put you back on that growth path that you had until you mentioned it in this quarter? >> well, obviously, the economy, and the cost of oil are some things that are out of our control. but we try to focus on the things every day that are in our control. relentlessly deliver on productivity and efficiency. continue to generate substantial amounts of positive free cash where we're generating more than 200 million a year and deliver exciting and innovative new products like versalite and you already talked about the fact that it could be 500 million in new revenues or more. >> you're not deserting it obviously the stock took a big hit from where it was, still up nicely from where we said to buy. jon rich chairman ceo of berry plastics. innovation. consumer package good component. oil is coming down that doesn't hurt either. stay with cramer. mad about "mad money"? immerse yourself in the cramer's

world while you watch the show with zeebox. on your phone, tablet or on the web, get sneak peeks, go behind the scenes. and join the conversation. download the free app today for the ultimate cramerican adventure.

the status quo, it just won't cut it. management and share holders

both won't take it. they won't accept underperformance. they are taking action. look at today. they are not happy with their stock price. makes a huge bid for tokyo electron. japan. a $1 billion deal that would give the combined company tremendous buying company. this would give this semiconductor company with intel and samsung to put them at a tremendous disadvantage over pricing. this could raise the price of all sorts of consumer electronics made by these customers. doubt it gets approved by the regulators. we don't think it will go through. it is incredible that the company would make the attempt. still one more deal where they acquired stock. up 9% because the merger would be so good for the combined entity. how about greenwood, health care records company. then, it lost its way. preannouncing a hideous miss with a transition to a

cloud-based system. they say, what the heck, we'll sell ourselves to a company called matera. the stock soars. management took action. how about tom san dell he took a 5.1 stake in bobe, bob evans forms. hoping that management will unlock the food business and a restaurant chain. this one amazes me. the stock is up 43% for the year. what more could you ask of a company. 21 times earnings, total winner at least this year. there's some years that it lied. but i could see bob evans farms trading up to 20 points from the current $57 level if it does split up because i think hillshire brands, remember sara lee, could easily make a bid for bob evans' terrific pork sausage business. manage if they buy back the rest of the stock. when i bought this stock 34 years ago, i expected this breakup to happen. bring back a ton of value.

better late than never i guess. what else. you got to be impressed national oil is not standing still. it's buried within larger oil rig manufacturing enterprise. it shows you just how friendly ceo pete miller is to shareholders. he's one of our favorites come on pete and explain this deal. finally, sotheby's simple bid just today the stock got recommended by citigroup and i bet sotheby's is going higher because dan loeb would like management to bring out more value. i think it makes sense. lobe is doing the right thing. i know 2018 has been a bust for m&a. talk about that with anybody, david faber on squawk on the street. they started strong but petered out rather dramatic. however this kind of relentless drum beat of companies spinning off properties and activists bushing to unlock value has swept wall street by storm i think it is still in its infancy. consider this a huge behind-the-scenes pop to the stock market and given all the money being raised by activists as well as cheap money available for acquirers we're going to see many more of these kinds of deals. what's really amazing? the companies in question were all doing pretty well on their own. but pretty well just doesn't seem to cut it anymore. stay with cramer.

tomorrow, kick off the trading day with "squawk on the street" live from post nine at the nyse. >> and i watch it on my device. we all watch it on a device. >> it all starts at 9:00 a.m. eastern. ♪

nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."

building animatronics is all about getting things to work together. the timing, the actions, the reactions. everything has to synch up. my expenses are no different. receiptmatch on the business gold rewards card synchronizes your business expenses. just shoot your business card receipts and they're automatically matched up with the charges on your online statement. i'm john kaplan, and i'm a member of a synchronized world. this is what membership is. this is what membership does.

i think sprint is a cautionary buy. i'm jim cramer. i'll see you tomorrow! detectives... jacques plante's prototype goalie mask-- a true piece of sporting history. if this item's real, it could be worth $50,000 or more. >> it looks like something out of one of those horror movies. >> it's got, written, plante's name. >> this could have been written on there last week. >> if his nose was broken, the silicone is gonna copy that. >> not an easy one. and... a 40-foot mural that could be worth a fortune. has anyone seen anything like it before? >> not seen anything like this at all. >> what do you see now? >> yeah, yeah, i can see it. yes! >> even we, the team, were shocked.