investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. 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. 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 just want to help you make money. my job is to educate you. call me, 1-800-743-cnbc. on a day when the dow surged, s&p gained .33%. nasdaq climbed. this market can't seem to get its story straight. one minute tech is bad.

the next minute it's good. oil's bad. >> sell, sell, sell. >> wait. oil's good. >> buy, buy, buy. >> housing is horrendous. >> the house of pain. >> wait a second. housing is fabulous. transports are awful. or maybe they're terrific. ♪ hallelujah perhaps we should dispense with these sector-based labels and start talking about individual managements, individual companies, and execution. this earnings season we've seen a remarkable divergence in individual sectors, more than we've seen in 25 years. we believe stocks in the sectors should trade in unison, we're missing important opportunities to earn the stocks of companies that are deliberate. rather than etfs meant to capture broad-based moves. those aren't working. we've become so conditioned to playing certain trends with certain stocks that we forget sometimes the facts about the actual companies can get in the way of the stories. you know why that is?

it's because the performance of management varies tremendously from company to company. some guys get it while other guys don't. take the most glaring example, caterpillar. construction is coming back in the country, residential and nonresidential. we know from data out of china that the people's republic, despite an aberrant number here or there is doing much better than we thought. ♪ hallelujah how about caterpillar? the gigantic construction equipment concern. what a great way to play both of these themes, right? there's just one niggling problem. caterpillar reported a hideous shortfall yesterday and cut guidance gigantically. and that's how a stock goes from 89 to 83 in one session. cat is certainly no way to anything other than the erratic performance of the management team running the great american company. sure, it's all in the right markets and it even does an excellent job of telling you how

these markets are doing. unfortunately, cat is executing so questionable that it cannot be owned. it doesn't even seem to listen to its own advice about what's happening in the world. how about approaching things methodically and rigorously by doing homework rather than slotting in the most obvious company that makes products? you want best of breed construction in the united states. go buy united rentals which is a huge equipment rental company. that's become the de facto way for builders to get their construction equipment. cheaper, more discreet, well managed. business is terrific. you want china? buy an engine company, the one that's working. buy cummins, a fabulous truck engine company. you're just betting on the wrong horse with cat. cummins. how about tech. earlier this week, altera a miserable quarter. the market took the entire semiconductor cohort down as well as anything pc related. then tonight microsoft, hammered all week over worries about tech sales, blows the doors off the quarter, top and bottom line. stocks screaming in after hours. say you think oil is going to

rebound after a week's worth of weakness. you want to own an oil service company to trade the move. aren't they all the same? one big commodity oih thing. ask the people who bought cameron or diamond offshore. they executed so poorly it took their breath away. how about ensco, a company nobody likes? many thought it was going to miss the quarter and guide down big. ensco beat the numbers and affirmed the guidance. the stocks were trading totally incorrectly going into the quarter. totally. prices made no sense because of execution. you want case by case? check out the rails. i'm a huge fan of union pacific. buying it for my charitable trust. company had been signaling things were robust. things got weak suddenly. next thing you know the company preannounces a terrible quarter. i thought it was terrible, frankly, citing coal among other things. it wasn't what i was looking for. immediately you saw the stock get hammered. right after that, what happens? norfolk southern.

everyone is coming in, buying puts, shorting the stock. they have more coal exposure than union pacific. what happens when they report? the stock goes from 80, 87, to straight line. we saw delta deliver an amazing quarter. delta, the airline. i'm talking the airline. tuesday. the stock is still running higher. united continental missed. hence why delta is up 120% for the year. today, dow delivered underwhelming numbers. they got hurt. after the close, dupont announced it's going to spin off its performance chemical segment. hey, how much have we been pushing for that? that's a brilliant way to bring up value, give shareholders an extra little juice. in the tio2 spin. off the commodities business. stock is soaring in after-hours trading. we'll hear more about it when we talk to dupont's fabulous ceo later in the show. weak housing numbers. that disappointment was too sweeping, as we saw from pulte,

making a huge amount of money per home because it's concentrating on margins, not put up houses willy-nilly. they give us 35 cents. pulte took up housing stocks. that makes some sense given the interest rates have gone down. the issue isn't whether housing is any good for not, but who is capitalizing on the strong demand, and pulte is the one that's making the money. there are so many reasons we shouldn't be homogenizing and pasteurizing stocks as if the companies' representatives are all .500 teams, .500 that can win or lose on any given sunday. this isn't a game theory version of the nfl, people. some companies are doing a better job than others and they win more because they have better coaches and execution. apple is being besieged with kindness from carl icahn, who is tweeting about how the company better start doing something with the bountiful cash, or else. i ask or else what?

i want apple to reinvest money in places given some growth. some companies execute so well that there isn't any price portfolio managers won't pay for their stocks. amazon, tonight, after the company reported phenomenal revenue growth. there are still some things so powerful you have to take advantage of any dip. earlier this week, honeywell momentarily and kind of stupidly dipped. then snapped right back and raised revenue more than people expected. boeing, which uses honeywell's technology in its planes, blew away the most bullish earnings estimates. it is case-by-case for the earnings period, with the determinant being management skill, not the power of the underlying sector, itself. bottom line, stop playing themes and invest in best-of-breed stocks. that's how the real money is being made. i know it's a bit of a bummer because you have to do homework on each company rather than guying an etf and hoping for the best. sometimes this market is like school. you don't do the homework, might

as well flunk out and stay at home. ernie in florida. >> caller: hey, thank you so much for taking the call. good evening, jim. >> good evening, ernie. how are you? >> caller: good. i hope you're doing well also. >> i'm doing okay, man. busy week. what's shaking with you? >> caller: the stock is steinmart, department store, symbol smrt, and with t.j.maxx coming in pretty positive, i'm wondering if we're going to see the same come on down to steinmart. >> well, there is an element of steinmart -- steinmart is up a lot more than t.j. i like t.j. because, frankly, i think this european business is great and we just had a big analyst meeting. first time in two years. it made me confident that the next 18 months to two years will be terrific. i have less worry about t.j. than i do about steinmart. jeff, in my home state of pennsylvania. jeff? >> caller: how are you, jim? how are you tonight? >> i'm real good. how about you? >> caller: great. great. i see aem has made a significant

move, up 18% while gold is down 20% in the last 12 months. do you like gold right here? >> i do like gold. as i said this morning on "squawk on the street," i've been tough on the ceo of agnico eagle because they missed on their long-term goals. this was a fabulous quarter for them. hope it's the beginning of the first of many. they leapfrogged rand gold in my eyes of being the best managed gold company like they used to for so long. marilyn in texas. please, marilyn. >> caller: hello there, cramer. >> hi, marilyn. >> caller: are you having a great day? >> couldn't be better. how about you? >> caller: looks beautiful in texas. >> it was here, too. there was a fire drill. went outside. did a lot of work. didn't let anybody bother me. it was fabulous. what's up? >> caller: i want to know about cheesecake factory. i invested in them a long time ago at your, not recommendation, but an assessment you had, and

they were doing really good there for a while. and then they dropped and then all of a sudden, boom, they're shooting up, and i sold a few stocks of, or a few shares, of cheesecake factory, but i held on to some. >> our friend, bob olstein, friend of herb greenberg, said this company was about to bust out, it was very inexpensive. this was a really remarkable quarter they reported. it's not done going higher. that stock could go to 50. the best of the best, top of the line, cream of the crop is what you should be looking at. best of breed is the way to be able to navigate an earnings season that is, let's say, erratic at best. "mad money" will be right back. coming up, chemical catalyst. dupont broke news after the close today, announcing it would spin off its performance chemicals business. the stock's headed skyward, but what does this mean for the company going forward? cramer is speaking exclusively with the ceo.

and later, paper trade. if it's packaged, shipped or printed, chances are it's from international paper. the cardboard conglomerate just beat the street's earnings expectations, but what does their broad outlook say about the economy? don't miss cramer's exclusive. plus, short circuit? avnet is a technology supermarket for corporate clients worldwide. so is today's earnings miss evidence of a coming catastrophe in the tech sector? cramer talks to the ceo to hear if today's decline is a bad omen or an excellent opportunity. 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.

i always like to say while it's not easy for companies to change their stripes, it does happen. take the chemical companies. this morning, dow chemical reported a not so hot quarter. tuesday morning, cramer fave dupont delivered a great quarter. they announced they're spinning off a high quality but cyclical performance chemicals business, including the tio2 product line, going to shareholders in what will be a tax-free transaction 18 months from now. that news is driving the stock it new highs. secret to dupont's success? the company moved away from the old commodity chemical mainstays to high growth engineering and science solutions for global customers. the genetically engineered seeds and crop solutions help feed the world, design materials to protect people and the environment and corrected novel materials that make cars more lightweight to improve fuel economy. it's no wonder when dupont

reported two days ago, the company delivered a four cent earnings beat off a 41 cent basis, with revenues coming in slightly ahead of expectations and management reaffirming guidance for 2013. the stock has given us a quick 15% return since i booked the ceo four months ago. they have a lot more room to run. let's check if with ellen kullman, chair and ceo of dupont. miss kullman, welcome back to "mad money." >> it's great to be here. thank you. >> you're basically transforming the company to higher growth, higher value added and at the same time giving shareholders a piece of what could turn out to be a very strong chemical company. >> you know, you're exactly right. over the last few years, since 2009, we've been working on the future of dupont, our transformation. today we're announcing an advancement in that area. creation of dupont, integrated and differentiated science company, really focused on areas like feeding the world, protecting people and the environment. and creating new and novel science for alternate fuels in

that area. it's just a tremendous opportunity for us. on the other hand, a very strong, industry-leading, industrial chemicals business standing on its own. it might be low growth and volatile but it's very solid. >> so you waited. the people who get this over the next 18 months are going to recognize, this company is actually doing much stronger than it was even a year ago. >> yes. obviously ti2 hit a bottom earlier this year, and it's starting to recover. and i think as the 18 months it will take us to fully separate it, it will create an increased strength in that area as well. >> okay. there are two different really terrific business solutions that you're offering that i think our viewers are going to love. maybe you can expound upon them. you have a fabulous photovoltaic business that seems like it's on

fire. second is this crop protection business. again, renaxapure, which seems it's doing something proprietary that nobody else has going right now around the world. >> you know, in pv, what we've seen, materials matter. our focus on using a broad array of sciences to create metallized paste and weatherization films to create not only higher efficiency but longer life modules makes a difference. as that marketplace has recovered, we've seen those materials and you saw it in our third-quarter announcement earlier this week where our electronics and communications segment had a very, very strong showing. you know, science, the integration of it, creates some great opportunities for us. you mentioned renaxepure. understanding the biology of the bugs, understanding how unique chemistries can create a novel, human friendly, low toxicity, very efficient insecticide that has gone from zero sales to over $900 million in sales this year in just a five-year period of time.

it really shows you the power of science when focused on key areas where the world really does need differentiation and how powerful that can be. >> you also had some extraordinary numbers in safety and protection. you've got to be the only company i know that actually had good government orders with the ballistic military protection. i think that's what the kevlar you showed us the last time you were on? >> yeah. so in safety and protection, we did see an uptick in ballistic protection in kevlar. these are tenders that we won over a year ago where the military now is in need of replacing those vests and those helmets and we're seeing that volume on our business this year. it's a business that we actually stay very close to because it is -- it is actually, you know, it comes and goes depending on what the military requirements are. but we've seen a good trend there. >> we've been without agriculture reports, because the government shutdown. you gave us a little bit of insight in your segment, commentary. you say we are excited about what our customers are seeing

during the harvest, which is occurring later this year. could there be -- could the fourth quarter be a little surprise in terms of the fact that the crop business may be stronger than people expect because we don't have any reports from the ag department? >> yeah. certainly the usda not producing a report in october kind of puts us at a loss until they do in january around what the acres are. we've seen, and being out in iowa, i was out in iowa last week, and we've seen very good progression in our products, both corn and soy this year, in north america. i think one of the keys for us in the fourth quarter is going to be the freeze season. we're coming off a summer season in latin america where we've seen more soybeans being planted, which should mean more corn in the seprenia season. where the commodity prices are in latin america right now, we're watching that very closely. the one thing we're seeing in latin america is heavy pest pressure. we're seeing fungicides and

insecticides really take a strong hold in latin america. >> if you didn't have renaxepure, how much of the crop will fail? >> it will be over $900 million in revenue. >> how much would fail? how much of the food chain would actually be eaten by bugs if it weren't for this? i'm trying to get a sense of how important this is for our food chain in the world. >> certainly insects and pests create huge havoc for farmers, especially in latin america where there is appreciable insect infestation that occurs during these seasons. and so i don't have the numbers with me in terms of what the yields would be impacted without it, but i think it is substantial. >> okay. we had a terrific conference, delivering alpha. nelson peltz is a supporter and a shareholder of yours, was hoping you'll do this kind of reconfiguration. was this always in the works? are you saying, listen, i've heard the shareholders, they make a lot of sense, maybe it's

time to part with tio2? >> you know, it's interesting because we've been working on our portfolio since 2009, and you've seen that through the acquisition of danisco and the sale of performance coatings. you know, this is the next advancement in our transformation. i think it's the right thing to do for our company. it's going to create two strong companies. you know, i'm out with investors all the time, and they have a lot of ideas about what we do well and where we could improve, and i'm sure there are several of them over the next few weeks will say that this was their idea. >> fair enough. well put. you've got a lot of cash building. one of the best dividends in the dow, but is the way to be able to buy, you've been good at buying back stock, is it going to be the same mixture? what is all that cash going to do? >> well, you know, we bought back shares this year. we've also increased our dividend this year. when we think about our cash allocation, we think about not only the shareholder from a buyback or dividend standpoint. we also think we want to maintain our credit rating. our credit rating is very

important to us and our ability to maintain and move our cash through the seasonality of agriculture. and we also look at what opportunities we have. you know, m&a. we look at research and development. all those things are at the table when we focus on how we should most optimally optimize our cash allocation. >> at the same time, you had some good things to say about asia. 14% growth versus last year. is that continuing this, from what you see for next year? >> you know, asia is one of those things that has been very, you know, the up and down over the last year has been tremendous. we see some of the fundamentals coming back, obviously strong in automotive, strong in electronics and in industrial. but as always, this is a marketplace, a macroeconomic environment, that we think still has great uncertainty in it. and it's something we stay very close to and watch because you have to understand where that demand forecast is going in order to be able to really be there, beat the competition, and

return the growth to our shareholders. >> okay. one last question. you're down in delaware. you're close enough to washington. where's america right now? i mean, where -- we are so worried about how we look globally, how our government looks globally. where do you see us as a country? >> you know, i think this uncertainty, we created it starting in the middle of '11, right, with the first debt ceiling. i think we have to deal with those issues. i think we're losing credibility globally. i think we really need to, if we want to establish a continued strong economy for the u.s., we have to resolve these issues, and it starts with us. i mean, you know, we are in control of our destiny in this country and i think we need to get after it. >> all right. excellent. congratulations for everything you've done, congratulations on the new high and the spinoff. i'm sure the shareholders will be rejoicing. ellen kullman, ceo and chair of the board of dupont. thank you so much for coming on "mad money." >> great. thank you, jim. >> ellen kullman, ceo and chair of dupont. again, stay with cramer.

coming up, paper trade. if it's packaged, shipped or printed, chances are it's from international paper. the cardboard conglomerate just beat the street's earnings expectations, but what does their broad outlook say about the economy? don't miss cramer's exclusive. ♪

♪ ♪

here's why you don't dump all your cyclical stocks in the middle of one of these rotations to the soft good names. like we were seeing yesterday. it's happening in the middle of earnings season. two words, international paper or i.p. for home gamers. business of making paper and cardboard is as cyclical as it comes. remember, international paper is the largest and most globally oriented north american paper company. does a huge amount of business in the faster growing emerging countries. they're number one in corrugated packaging, number one in coated paper board, number one in distribution. no question international paper is the top dog. that's especially good. the company has taken out excess capacity left and right, given i.p. more control over pricing. two years ago, they took out a major competitor. now that deal is starting to pay off. international paper just

reported a one cent earnings beat off a 93-cent basis. what really catches my attention here is the pro-shareholder stuff the company is doing. not only have they recently boosted dividend by 17%, get the yield back, though stock is up. board authorized $1.5 billion buyback over the next two, three capitalization. i.p. is a total innovator, a paper technology company, a good one at that. last time we spoke with the ceo one year ago, stock giving an excellent 30% return since then. trading ten times earnings. it has much more to go. let's talk to john faraci, the chairman and ceo of international paper. welcome back to "mad money." we got to take advantage of it immediately. i'm not going to bury the lede. i'm looking at real fish and a box and this is a type of technology i'm starting to expect from i.p. >> this is a new product that's recyclable and replaces foam. you can ship fish in corrugated with ice and paper without using any other insulation.

>> i will get my omaha steaks in a big foam thing, goes into a landfill, takes up a lot of space, decomposes 300,000 years from now. this, right back? >> all our customers are looking for ways to simplify their packaging. if we innovate with our customers, this is a great example of innovation, we'll win new business. >> this is the big business, right? >> tyson is the big customer. >> this, the largest in north america? >> they're a big, important customer for international paper. >> i would have thought it would be amazon. reported a great quarter tonight. all my amazon packages come in your stuff. >> right, right. well, we measure the package volume by weight and by square footage. amazon's a big user of boxes. they're a big customer of ours as well. tyson in terms of volume would be the biggest. >> okay. one of the things that i've always found to be difficult is that people still want to view your company the old way. hey, there's a plant coming on stream somewhere, that means there's going to be a lot more supply which means you're going to have to cut prices.

are we looking -- is the industry, the analyst looking at your company wrong that way? >> well, i think, first of all, international paper is a cash flow story. at the end of the day in these big, mature markets that show some growth, like corrugated packaging is growing at maybe a point less than gdp. half a percent. your managing capacity is an important part of managing a successful business in mature but large market. >> you were able to put through price increases. not like the price increases are rolling back. >> sure, sure. >> that's a good story. it's not one that any minute now i'm going to read that you cut price. >> if you look at our margins, earnings have moved steadily up. at the same time, we've been able to integrate businesses. a lot of that margin expansion has come from the merger benefits of putting first the

weyerhaeuser acquisition together with international paper then temple. >> there was a line in the conference call i think american people, or worried justifiably about unemployment, how tough it is. your cfo said, we had to make a decision to shut one. we have more business than we have capacity. a lot of people would say, wait a second, why are they firing people if they also have more business? it has to do with the mix, right? >> well, i think what we were saying there is we have a certain amount of capacity. the paper market in north america is declining at 3% to 4% a year. so we've got to resize our manufacturing footprint so that it matches up with demand. that's what cortland is all about. a very tough decision, affected a lot of long-term i.p. employees. it was a great thing to do for the company and we managed it very well. >> the same time you had the secular decline, clearly secular, you have a secular demand wave, i believe, because of the environmentalists, not just for this but, you know, we switched at cnbc, there's no foam cups anywhere. we all use paper. i used to say i don't like paper so much.

but for the environment we do. this is obviously something sweeping the country. >> it is. mcdonald's announced in 14,000 stores they're going from foam to paper. you forget about how many cups we use. we make over a billion cups, just international paper, every month. we've got maybe 40% of the quick serve restaurant market. that's a trend increasingly coming, not only a sustainability story, but it makes for an upgraded product. it just looks better. >> now, i think -- i don't want to be -- there was a time i would view your company and know it was international paper, it was really national paper. you have some growth markets that are growing much faster than our gdp. that's where all your margins are coming, your growth is coming from. >> that's where the revenue growth is coming. we're generating strong cash in north america. we're actually interested in profitable growth, not just revenue growth. we're not chasing revenues. in places like russia, we have a very good business. china is 70% of the world's incremental pulp consumption is in china and we've got the closest, lowest cost pulp mill in china in the world.

the only expansion going on in the world. >> i was surprised to see the weather still matters. southeast, and that meant you had a higher -- that could come right back down. >> could you believe it? no hurricanes this year. we wake up and have the wettest southeast that we've had in over 100 years. and with wood being 30%-plus of our cost, that's a big deal. >> but i felt that the dividend boost showed me that this -- i should view that as just being a vicissitude of weather. you wouldn't be boosting like that if you didn't have such a great view of the next couple years. >> the wood cost blip, that's what it is, is a seasonal thing. it's going to come back. so, yeah, the dividend increase was an expression of confidence in the company. you know, we think we're going to generate more cash. we think we're going to afford the dividend we. >> are there other companies you're able to buy? that was a brilliant acquisition. >> international paper is focused on taking the businesses we have and showing investors what we can do with those businesses.

but if a good strategic acquisition opportunity arose, that was a good use of capital, we thought it was going to create share owner value, just like temple, we'd do that. that might not be a north america given the business we have. >> right. i would think, presume, because of -- were it not that -- if you could get something in latin america, could get something -- >> we just acquired a corrugated packaging company in brazil earlier in the year. the number three corrugated packaging company. that market is growing at 4% a year. we like that business. >> okay. one last question. you have, like, a technology lab somewhere that we could visit? >> we have an innovation lab. >> okay. >> and our technology people are really engineers out in the field working on improving our facilities. they're either in airplanes or in mills. >> all right. i just think this is the way of the future. we're not going to be using -- >> come to our packaging innovations center in memphis. >> i'd like to. we're not going to put these in foam anywhere. thank you so much. chairman and ceo of international paper.

really big boost in dividend. lot of innovation, big cash flow. perfect for a retirement account or just your discretionary account. "mad money" is back after this.

yeah, i'm married. does it matter? you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm. what are you wearing, jake from state farm? [ jake ] uh... khakis. she sounds hideous. well she's a guy, so... [ male announcer ] another reason more people stay with state farm. get to a better state. ♪ ido more with less with buless energy. hp is helping ups do just that. soon, the world's most intelligent servers,

designed by hp, will give ups over twice the performance, using forty percent less energy. multiply that across over a thousand locations, and they'll provide the same benefit to the environment as over 60,000 trees. that's a trend we can all get behind.

>> announcer: lightning round is sponsored by td ameritrade. >> it is time. it is time for the lightning round on cramer's "mad money." rapid fire calls. buy, buy, buy. sell, sell, sell. play this sound and then the lightning round is over. are you ready, skee-daddy? time for the lightning round on cramer's "mad money." i want to start with ajit in california. >> caller: good afternoon, jim. big silicon valley boo-yah to you. >> i like that geographic

boo-yah. what's up? >> caller: the question is green mountain coffee. it's had a good run this year. i bought it when it started trading low, below the average. through the shutdown. >> i'm questioning it. i'm questioning it because my friend herb greenberg has been raising red flags. why? i think he feels, wait a second, dunkin' donuts didn't do that well with it. there's a slowdown going on. i say sell, sell, sell. william in louisiana. >> caller: hello, jim. >> what's up? >> caller: i'm from new orleans. >> i was there a couple weeks ago. >> caller: clrr. >> that yield impresses me. sell, sell, sell. i've been disliking that stock of late. i'll continue to do so. rod in louisiana. >> caller: hey, i want to know about the cheniere, lng. >> you're from there. that's one of the biggest construction projects in the world. liquified natural gas transport. the stock is a great one.

i do prefer the master limited partnership. let's go to matt in florida. >> caller: jim, a big new york knicks boo-boo-boo-yah. thank you for everything you do for us home gamers. >> thank you. >> caller: i hold nbl. noble energy. should i hold it? >> it's one of the best ones. stephanie link from actionalertsplus.com, we were impressed. by the way, the field was the natural gas field, may be the biggest in the world. joe in kentucky. joe? >> caller: royal bank of scotland. >> oh, these analysts keep hating it. they knock it down, every time they do i want to -- >> buy, buy, buy. >> buy the irish bank, it's worth so much. sell the american division. i like them more than banco santander. can i go to -- oh, oh. stewart in colorado. stewart? >> caller: hey, jim. how you doing? >> i'm all right. how about you? >> caller: denver, colorado. i'm all right. hey, i had a question about halcon resources. i was wondering why nobody is talking about it.

and they have access to utica, the bakken. >> well, you know, everyone keeps thinking this is just too much of a spec. you know what, i'm still behind the ceo. >> buy, buy, buy. >> he has made people a lot of money. i'm not deserting halcon. we had the ceo on. i'll invite him back again. i think this company is for real. it's floyd wilson. he's made a lot of money for people. let's go to mike in illinois. >> caller: boo-yah, jim. what do you think of triquint? >> that's too hard of a stock to own. you know what, that stock is too hard for me to recommend. and that, ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.

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. right now we're in what is seasonally the strongest part of the year for tech, at least historically. the semiconductor companies have been struggling of late. real hit-or-miss. we got to figure out what's going wrong. we may have gotten our answer with avnet when the largest supermarket of tech reported. i've viewed this as a terrific

tell for the rest of tech. they're the number one director of electronic components including semiconductors and the company has a tech solutions business, much higher value added, among the largest distributors of i.t. hardware, software and services. over hundreds of thousands of clients. this company has the finger on pulse of tech. when avnet reported, revenues that came in a tiny bit shy of estimates, up 8.1% for year over year. basically mixed guidance. tells you something is awry, okay? i think avnet actually did pretty well in a tough environment. wall street doesn't seem to agree with me. the stock shed a couple points today. it's been a red hot stock. let's dig deeper with the ceo of avnet, rick hamada, to find out how his company is doing. welcome back to "mad money." >> hi, jim. always a pleasure. >> you've got the dividend, so i know the future is bright. you said you'd only do that if you felt there was great long-term growth. this notion of mixed guidance doesn't really maybe tell, yeah, as accurate a picture as the fact you put the dividend in. >> yeah, jim, we felt it was an appropriate time to incorporate a more systematic return of capital to shareholders. we've been busy with our buyback. remember, we've talked about that on previous quarters and

then we thought it was a good time now to find a way to manage the overall cash for looking for future growth wherever we can. we're still in the m&a business. we're still in the buyback business. but a part of that cash flow, we felt it was an appropriate time to go ahead and make that commitment. >> now, at the same time, i know when i parse your call this afternoon and all the great stuff you put out, it's clear that you guys, yourselves, are really trying to wrestle with why tech is so uneven. is it because tech isn't tech anymore? that things have changed in the secular basis that we can't look at tech as one entity? >> you know, jim, there are multiple dimensions of change. you and i have talked about them in the past. in the i.t. world, there's big data, there's the cloud and analytics. there's lots of individual changes taking place there, even in semiconductors. what's going on with the latest telecom build-out, the latest new consumer devices. that's technology. that's the way it's been for 30 years. we've talked about moore's law

in the past and all the change that brings. today is really no different, other than i tell you the pace of change i believe has accelerated. it's putting even more pressure on all of us to try to keep pace with what's going on. when external change exceeds the rate of internal change, that's when you have problems. >> we had palo alto networks on last night. really terrific company. they, themselves, are having difficulty predicting six months from now. >> i wish i could add some more clarity to the crystal ball, jim. we feel the same way. we've got to pay attention to our dashboards, keep talking to customers and suppliers, keep factoring in what they're seeing in the marketplace and put them in the best position to capitalize on accelerating their growth. >> you are a no excuses guy. at the end of the conference call, it's clear you could have said the government shutdown did hurt people, right? >> we could have, but i can't draw a straight line to it. i'm not going to tell you what i don't see. >> all right. now, europe is starting to come back. you know, we had ford today saying europe is coming back.

dupont saying europe is coming back. you're still seeing tepid growth in europe. >> yeah, so it's interesting. remember, two worlds of avnet. computers and components. in the high single digits this quarter for year on year. our computer business has been lagging. it's been down 11% year on year. in the i.t. spin, we've got a particular challenge i think in one of our key markets there. we've got part of its execution. it's not an all market phenomena. components are doing well. the computer products business less well. some of it self-inflicted, and we're on it. >> do we have to worry about a slight inventory build, or is that just going to be dissipated by the time the year is over? >> yeah, some of it was to build up for some scheduled fulfillment orders that are coming in this quarter as well. if you look at our overall velocity metrics, they actually improve slightly on a sequential basis.

to us, it's never about raw inventory dollars. we want to make sure we have the right profile and the proper velocity to be able to continue to support the needs of our customers. >> rick, your company's probably got more of a global reach than anybody we've been talking with in a long time, so you're talking to a lot of different people. do people mention the united states as being a country that was at one point a great country that now seems to be, perhaps, run by a government that's totally dysfunctional? do they bring it up? >> you know, jim, i would tell you it's a popular topic. people when i travel to asia or europe, they do want to talk the american political situation and ask my opinions as well. but we're still a great country. we've still got the number one gdp and economy in the world, and it's all interconnected. we're not isolated by any means. again, being a global company, we see that firsthand every day in our business. and actually it's a great opportunity for us to be able to leverage that global scale and scope into competitive advantage where we can. >> terrific, rick. once again i think stock overreaction. it's been such a good stock in a very difficult industry. thank you so much for coming on "mad money." >> thank you, jim. always a pleasure, like i said.

>> that was the ceo of avnet, rick hamada. told you he was going to give you a dividend. boom. you got the dividend. business is strong and i think it's going to stay strong in 2014. 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.

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what does a retailer have to do to please investors these days? home depot reporting amazing numbers. costco put up 5% same-store sales. so much better than everybody else. goes down and ends up back to where it started although a

little bit lower. target and nordstrom two good operators, up 8% and 10% for the year. macy's probably the best of a struggling lot managed to gain 60%. can't any retailer please this market? you bet they can. and two of them, whoa. they just reported in the last 24 hours and they're doing a heck of a lot of pleasing. i'm talking about lumber liquidators, ll, and tractor supply. they have exactly what the retail growth investor wants. rising same-store sales up 17% for ll and 7% for tractor supply. rising from 2.9% last year. lots of new stores being put up. steadily improving gross margins. proprietary products. a clear runway of expansion. oh, may i also mention they can not be amazon? the products for the most part don't lend themselves to mail order. it's not like once amazon sees the opportunity it's going to seize it. that's never going to happen with flooring or tractors or grain or feed. i joke with my buddy and pal,

these two are the keys to this market. he used to marvel i would make such a bold statement. until he realized, listen, i'm using them as metaphors for stocks growth investors are feasting off of because they delivered the metrics that please the most portfolio managers. think about it. here's home depot adding one store this year in north dakota. home depot. lumber liquidators has 307 stores up from 284 a year ago. that's 8% growth. there's so much room across the country. talk about runway. they only have 17 stores in california, 18 in texas. tractor is a little more broad. should be. it has $9 billion market cap, $3 billion for lumber liquidators and 12 million stores. it's a lot of places. it's still accelerating new store openings for years. these stores are niche. lumber liquidators is a less expensive place to buy flooring. the company has low sourcing cost and has gotten a lot of tension from clever advertising.

did business after hurricane sandy, but pretty much assured us it can maintain the momentum. october has been gangbusters. ll didn't skip a beat when federal authorities requested information about lumber sourcing. the company dismissed it and it never even came up in the question. these stores may not seem high quality. lumber liquidators has drawn the attention of my buddy, herb greenberg. my tractor supply seems hick. all right, so it's hick, but farmers aren't looking for the abercrombie & fitch of agricultural equipment, animal feed and pet supplies. when it comes to growth investors, these are tailor made companies. tractor supply sells at 30 times earnings and lumber liquidators sports a 40 multiple. that's why in the end they are the key to this market. they're the biotech of retail, junior oils of chain stores. both aren't done with their growth.

lumber liquidators, third as many stores as tractor supply, their stocks aren't done going higher either. stick with cramer.

what a night. after the bell, microsoft, better top and bottom line.

dupont, the huge spinoff is going to be gigantic. amazon, much better than expected revenues. and old friend, deckers, ugg, for real. big, big gain. tomorrow could be, we set it up as a little bit better. i like to say there's always a bull market somewhere. i promise to find it for you right here on "mad money." i'm jim cramer, and i will see you tomorrow. aubrey lee price wins the hearts, minds, and retirement savings of more than 100 investors. >> he appeared to have been a knight in shining armor. >> narrator: but is chivalry dead? the feds say price squanders investors' money in day-trading disasters. >> it was a downward spiral, and it kept getting worse and worse and worse. >> narrator: when $40 million go down the drain, price says he can't live with the guilt, but did he really meet his end in a watery grave, as his suicide letter suggests? >> we feel the evidence strongly leads us to the conclusion that he had plans to continue on after that ferry ride. >> narrator: and later... >> sam saw the world as, "screw