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tv   Mad Money  CNBC  March 12, 2014 4:00am-5:01am EDT

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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 save you some money. my job is not just to entertain you, but to teach and educate you. so call me at 1-800-743-cnbc. it is not easy to sing the praises of today's market, the dow dropping 67 points, the s&p declining 1.9%, nasdaq tumbling 6.3%. we saw some really hideous
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action all over the place today. in the industrials, in the autos, in the oils, and in the back. but i saw some bizarre silver linings in this market that you might not appreciate. silver linings that i think were necessary to come to the fore, before this market can go higher. so what are they? first, you know that i've been very concerned about what i regard as some of the frothier segments of the market. yesterday, for example, while we were on ensco 99, the gulf of mexico, i would walk by the various offices on the brig and i would peek my head in, see what people were up to, say hello. almost every office had a television on, perhaps they wanted to make us feel at home, almost every set was tuned to cnbc. and i was thrilled to see it. but each time i took a look, i was deeply distressed because of the amazing run in plug power, ballard power, and fuel cell. all three of which are involved in the concept of producing clean energy in one form or another.
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i was distressed, because all these of these companies have been around for ages. all three have at one time or another have been had what were perceived to be huge breakthroughs in clean fuel or fuel cell technology. and most important, all three have been perennial money losers. but there they were, once again, rallying, roaring, each having tripled from just a few weeks ago. now, i don't like to talk about dollar stocks on this show. but suffice it to say that these three names have been flatlining at around a dollar for ages. and suddenly they became so fevered that they captured many a trader's fancy on frankly nothing really new. just the same old triumphs of one sort or another that i've been hearing for years. today, the fuel cell fever burst. and all three stocks were pulverized with plug power falling an astounding 41% in one session. yikes! that's a brutal reminder that
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when you play with fire, you will get burned. i know if you own them, you don't want to hear this. but what happened today to these stocks is exactly what needs to occur if this market ultimately wants to take out ties in any substantiative fashion. you just can't have this kind of fever raging, because if that sort of froth spreads over time to other parts of the market, it is almost guaranteed to create a top with all of its negative consequences. similarly, we had a huge wake-up call today in two other speculative favorites, fannie mae and freddie mac, which have been galloping up and up and up, even though many believe they're worth nothing. the stock of fannie mae, the same fannie mae that was so instrumental in the housing crisis that was supposed to be worthless had soared from $1 to $6 in just six months. today, we have learned there are powerful forces in the senate that want to eliminate fannie altogether and not allow them to profit from one of the great comeback stories of the year. in fact, president obama endorsed a senate proposal that could ultimately wipe out these
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two companies' equity. wipe it out. something that sent the common stock of fannie down more than 30%, knocked freddie down more than 26%, like ballard, club power, and fuel cell. these two stocks have been creating the impression that money was being given away for free on wall street. but i have to tell you, that's never the case. another fever stamped out, or at least well on its way to being cured. finally, there's tesla. the bears have been battling this one forever. constantly bashing the company's way of reporting its earnings, and insisting that rather than being a profitable enterprise, tesla is actually losing a lot of money. they've watched this stock go from 50 bucks nine months ago to $250, based on some excellent consumer reports ratings and a very strong demand for a nice electric car. i've been saying tesla was a cult stock, but i wasn't prepared for that last jump from $200, based on a report of a new way of producing power, that could revolutionize the $3 trillion electric grid, not just the power industry, it was fuel cell on steroids.
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and it ran over just about anyone who doubted it. but today we learned the that a new jersey commission voted to ban direct car sales, which is tantamount to shutting down tesla's car operations in the state. because they've run afoul of new jersey's franchise rules. one of the most exciting parts of the whole tesla experience, i have to tell you, in new jersey, what hooked me on the car, was that fabulous showroom in the short hills mall down the block from my house. that showroom would have to be closed if jersey follows through with its rules, insisting that tesla sells cars to a dealer network that the company just doesn't have. for the first time since this tesla fever began, there was a solid reason to actually sell the stock. and people did. got dinged $4.48. profit with fuel cell companies outlawed stocks and outlawed dealerships, all crushed in one session. it was like the trading gods came down from mt. olympus and smoked the froth wherever it could be found. now, again, many of you may have been attempting to profit from what can only be considered the
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reckless trading in the fuel cell names and government-sponsored enterprises. reckless because you simply can't expect these kind of stocks to go to the sky and you can't really value them anyway. i don't want anyone to lose money. but i do want you to get rich carefully. and owning these specific stocks is the antithesis of what i talk about each night and what i teach you in the book. i can see why you might want to speculate in tesla. it's a cool car run by a charismatic showman. but, again, the way the stock's been trading is reckless. the people in it now are dreaming at this point. and it's all about the hopes of hundreds of thousands of cars being sold some day while they also revamp the whole electrical grid with clean solar-powered batteries from tesla. like i always said, hope should not be part of the equation. we know there are other pockets of froth that have been bubbling under the surface, like the stocks involving the marijuana industry, that have been going nuts pretty much day after day after day. we've seen small profitless biotechs double and even triple with no more than a press release. again, not a good sign. when you see these fevers
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spreading like wildfire, from money-losing segment to money-losing segment, you know that a good bull market cannot coexist with a massive, and yes, let's just call it as we see it, irresponsible speculative behavior. that's why i'm saying that the losses sustained in tesla, fannie mae, freddie mac, ballard power, fuel cell energy, and club power, while terrible for those who own them, and i feel for you, might be the best news this market could possibly get right now. when fever behavior goes away and we return to making money the slow, methodical way, the market is a safer, more rational place. that's what's needed to go higher, ultimately, which is why, despite the downdraft in the averages and the crushing of the speculators, the bottom line is the market is a healthier place after today, even as almost everyone who owns stock lost money by the end of the session. can i go to roland in massachusetts, please? roland? >> caller: hey, jim. boo-yah from boston. >> good to have you on the show, there, sir. what's up? >> caller: trq. i was looking for a spec stock,
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obviously, and i was wondering what you thought about that. and if you don't like it, something else. >> well, all right. i got to just own this, i do not know trq. i just do not know turquoise hill. i've got to do more work on it. i'm not saying i would avoid all the speculative stocks. i am saying it's not my cup of tea and it's not where i go. i don't encourage them, because people lose more money in speculative stocks than they make ultimately. that's just been the history. patrick in new york, patrick? >> caller: a big new york boo-yah to you, cramer. >> sweet, what's up? >> caller: nothing much. i had a question for you about frankfort international. i bought some around 30 and more in the mid-20s. i noticed it had a pretty good pop after earnings a couple of weeks ago and i wanted to see where you thought the stock was going and where i could look for? >> patrick, this is a real company and a good company, and i was shocked that it fell with the alacrity it did. i think it has gone up 15% and
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it has more room to run. again, this is not a speculative stock, it's a good company in the oil patch. and we know the oil patch is booming. you might not appreciate the losses in today's action, and i know you don't, no one likes to lose money, but i have to come back with a bright side analysis. the froth is what could slaughter the bull. and the froth got slaughtered today. "mad money" will be right back. coming up, royal rental? think the bull market's 170% run in the past five years is impressive? how about a stock that's skyrocketed more than 2,700% in the same time? don't miss cramer's exclusive with the ceo behind it, next. and later, market mover? with the rise of whole foods and other organic markets, the grocery is being gobbled up by the natural food trend. but is there still space for a newcomer to take share? tonight, cramer eyes a disruptive player. all coming up on "mad money."
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you want to know why i believe the united states is a terrific place to invest, with an economy that's getting substantially stronger, just take a look at the stock that united rentals, uri for you home-gamers, this is the largest equipment rental company in the world. uir owns roughly 400,000 pieces of equipment and machinery that they rent out, mainly to construction and industrial firms u.s. and canada, they're mainly a equipment outsourcing play. companies rent expensive equipment from these guys rather than having to buy it and have all the things that go with buying it that are not so good. we last spoke with the ceo of united rentals in mid-october. the stock has given you a fabulous gain. some of it is because we're seeing real improvement in nonresidential construction, which is united rental's bread and butter. and at least part of it has to do with the company's acquisition, i think this is brilliant, national pump announced sunday for $780 million, the nation's second largest specialty pump rental firm, and the deal is expected to be added to earnings this year. i think united rentals could have even more room to run, as nonresidential construction keeps getting stronger.
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don't take it from me. let's check in with michael neely, the president and ceo of united rentals, hear more about how his company is doing and where it's headed. welcome back to "mad money". >> thanks, jim. >> have a seat. >> you know, we just came back, because i know you watch the show and we saw your equipment everywhere. but the one thing i thought was just brilliant about this national pump acquisition, this is uniquely levered to the oil and gas industry, which is maybe the greatest growth engine in this country right now. >> you're absolutely right. 51% of their business comes from the upscale, upstream, right now. and we think there's a unique opportunity to expand that to our broad network. so it's taking that business and layering it into our national network and growing it. >> now, we see a lot of bigger companies. would a bigger company need to rent too, or -- >> absolutely. i mean, this is very specialized. it's solution-based, going in, finding out what you want to move, how far you want to move it, and trying to analyze and being a solution base for the customer.
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large and small. >> now, one of the things i just, i think you've got to run through for our viewers, because i don't think people get the disadvantages of owning versus renting. you've got a great chart, just tick them off. it's pretty amazing. >> you think about it, owning a piece of equipment. to really fundamentally think about how you own it, you have to transport it, you have to insure it, you have to maintain it. and on top of that, you have to utilize it. and if you can't utilize it at 60%, you're better off renting than owning. >> and also the government gets involved. you have to permit it. in each state, the permitting is different. so the government is really your best friend. >> oh, absolutely. in certain areas, absolutely. >> now, i want to talk about your view on nonresidential construction, because you've got a better view than all the economists we've talked to. you're all over the country. and you're quite bullish about it. >> we are. you know, right now, i mean, every month, we go out to our customers, our core customers,
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and we find out where are you? what do you think about the future? or for the next 12 months. right now, 98% think that they're -- 98%, the highest ever. they really think that next year is going to be higher or better than last year. and on top of that, the abi index, which had a record last year, all but ten months were above 50. >> now, what do you think is the source of that optimism? if you listen to the news, you tend to think that the country's in a funk and the world's in a funk, and the government is in a funk. so where's the optimism stem from? >> well, we should take a look at residential construction, which is another leading indicator. we've seen that come up. and then we're starting to see new construction coming through. and as you mentioned, you know, you're talking about oil. oil is a great growth engine that's out there today. these are the things that we're seeing out there. >> a lot of companies do poor capital allocation. you've been incredible. you bought your stock right, you reduced the leverage, you've done a lot. how did you know that your stock
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was cheap and how did you figure out your philosophy when someone and their ceos don't understand their own stock price? >> well, i can't speak for other ceos, but what we looked at, our business and said, where are we in this cycle? we're in the very early stages. we've taken a lot of cost out during a downturn and we're poised for growth and returns. >> one of the things that you have is that after you're done with the equipment, you sell it, and it's just another line item that you make a lot of money. >> absolutely. our goal is to buy it as cheap as we possibly can. >> and you have to be the cheapest, because you're the biggest. >> yes, we're very, very strong in how we go about the market and buy our equipment. then we rent it for as long as we possibly can, and at the end, we try to sell it for the highest value, through our retail channels. >> who are your biggest -- you buy from which suppliers? which are the biggest machine, like, when you do your earth movers, i know you use cat, you use everybody. but you're the biggest customer of all these guys, right? >> we typically are. we buy from case, we buy from john deere, we buy from, you
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know, jcb, we buy from glb or oshkosh and also terax. >> a lot of these companies are trading based on whether they're doing business in china. do you think it's time we start thinking about who's doing business in the united states, and the united states is growing fast enough that we can actually stop worrying every minute about china? >> i can't speak for them. all i can tell you, the market in here in the u.s. is strong. and you know, if they have a great representation here, they should do very well. >> okay, give me the breakup. right now it was 50% industrial and 46 -- with the pumping, you're a little more oil, but it's still not more than 5% oil. >> that's correct. >> i don't want your stock to be -- if oil goes down, people shouldn't be selling your stock. >> absolutely not. the beauty of this transaction is the fact that we can go into the commercial and we can go into the municipal, where this is -- this acquisition, that's not where they play. and so we can bring that, through our cross-selling capabilities. >> wow, well, you've done a
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remarkable job. it's been such a huge win. we're going to stand with you. i thought this acquisition was brilliant. we could raise money on an acquisition. not a lot of companies do it, they're not that spatter. that's michael kneeland. we've liked this stock for a long time. this is the equipment play. you don't buy caterpillar or those other companies, you buy the guy who buys their stuff and rents it out. that's a better model. >> coming up, market mover? with the rise of whole foods and other organic markets, the grocery is being gobbled up by the natural food trend, but is there still space for a newcomer to take share? tonight, cramer eyes a disruptive player. [ male announcer ] meet jill.
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♪ you know, i'm a big believer in healthy eating, especially the idea of organic and natural foods. that's a long-term theme that you can make money, year after year, if you play it correctly. that's why i wrote about it in "get rich carefully." but over the winter, it seemed like maybe it wasn't a safe bet on the organic and natural supermarkets anymore. however, it's too soon to write off these organic grocery chains. take sprouts farmer's market. here's a stock that became public at $18 a share, tremendous fan fair last july, we're 123% higher on its first day of trading, only climbing as high as $49 before it came
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falling back to earth. when sprouts reported the first quarter, the numbers were good. not good enough to justify the sky-high evaluation. later that month, the company announced a $20 share secondary offering, put even more pressure on the stock. that's when people started giving up on the organic and natural supermarket segment. i think they gave up too soon. because when sprouts reported again on february 27th, the company blew the numbers away, a one cents earnings beat off a 6 cent basis, 27% year over year. get this, 13.8% same-store sales. much better than the 10.5 the analysts were looking for, and by far the best performer of the group. since then, the stock has been rebounding nicely, although a pullback today. sprouts is a powerful regional and natural growth story. imagine if they can expand 1,200 stores. that's appealing if the organic and natural competition isn't as deadly as it seemed. let's talk more with the ceo of sprouts, mr. greg sanders. how are you, sir? take a seat. no one did 13% comps except for you. i went over -- before you came
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out, i kept trying to find someone. and chipotle had 9, that was our standard. how can you have 13% in an environment where no one is doing double digits m >> >> obviously, the growth in natural and organic. the health and wellness trend is really driving the health and wellness in our sector. but you're seeing the strength of our model. our model is geared based on health and value to attract not just the natural lifestyle customers, but the everyday supermarket customer who's wanting to eat healthier, but doesn't quite know where to start and is under the perception that eating healthier is too expensive. >> it's true. we all except the fact, if you're going to be natural and organic, it's going to cost more than if you buy processed foods. you're promotional, you're flyers, your prices are reasonable. it's not supposed to be able to happen. >> when you look at the sprouts experience, it's all about the in-store experience.
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it's more than just stacking cans on a shelf, you need to understand the product and how have that customer engagement so you can teach them how to eat healthier and understand the benefits of the products they're buying. >> let's take this. this is not something necessarily i would eat, quinoa and flax. >> it's phenomenal salsa, by the way. >> how much does this cost versus a typical salsa we would buy, you know, a name brand, a frito lay kind of salsa? >> surprisingly, it's not significantly more. >> how can that be? >> the consumer is really looking for more out of their food. not just looking for health and value, but looking for attributes like natural and organic and gluten-free and non-gmo. what you're seeing is that today's customer is really not just about the food, but really expecting more from their food, and even more from their food retailer. >> okay, you're very successful in california, 74 stores.
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you're now moving to the southeast. what's been the reception? >> it's been tremendous. obviously, our first store opens in the southeast. and we've done a lot of homework in the southeast. and a lot of the same competitors we competed with for years, some new players, but what we really took away from it, there was real demand for natural foods and healthy foods, at prices the everyday customer could afford. >> you talked about what happened in phoenix. a great test case, it just doesn't seem that you are dented at all by whoever comes in. is that again because of the differentiated model? >> it is. obviously, the strength of our model is the broad appeal of our model. when we go to market with fresh produce at those tremendous prices that are 25 to 30% below the supermarket's, that opens that broad spectrum and allows us to compete not just in the natural foods space, but in the broader supermarket space. >> well, now, i have to presume that all this stuff -- how do you contract with the companies to be able to have it so that you've been able to be competitive? what is your relationship with
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farmers? >> from the produce standpoint, we obviously decentralize our produce buying, because, remember, we source, quality control, and distribute all the produce we sell. so we have really strong relationships with growers from a local, regional, national, and international perspective, that allows us to, you know, source the amount of produce we need to support the volume that we do. >> now, you've been saying that you make the healthy source available, persistent shift in shopping behavior. is that, again, they don't want the can, day don't want the preservatives, they don't want the food chain. that's what it is, it is revolting against the food chain. if i go to your store, is everything natural? >> not everything, probably about 85 to 90%. >> wow, that's incredible. i got to tell you, i saw the numbers. and people in the industry were all head scratched, because it is just remarkable that you did the number with trader joe's, with whole foods, with everybody. and it just hasn't mattered, right, the more players, you're still able to do these numbers.
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>> when you look at markets we compete in today, we compete in some of the most competitive markets in the country with some of the best retailers in the country. we know what it is to compete and we compete every single day. moving into new markets across the country, we've been able to see some of the same competitors and compete with new competitors. but the strength of the model is, as you see the consumer really shifting towards -- away from the processed foods and more towards fresh, natural, and organic, you're seeing that our success not just in highly concentrated markets like california and colorado, but really, in markets you wouldn't necessarily consider healthy. you know, in central parts of the country. >> that's what i think is really incredible. congratulations on amazing numbers. >> thank you very much. >> that's unbelievable. >> doug sanders, president and ceo of sprouts. got to go through the presentations and understand it's a very expensive stock, but it did have the best comparable store sales of any companies i follow in the whole country. stay with cramer.
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it is time, it is time for the "lightning round" on cramer's "mad money." rapid-fire calls, you say the name, i don't know the name of the caller or stock. when my staff plays this sound, then the "lightning round" is over. are you ready, skee-daddy? time for the "lightning round" on cramer's "mad money." let's start with tom in new york. tom? >> caller: hello, mr. cramer. good evening! boo-yah! >> wow. bayou boo-yah back at you. what's going on? >> caller: my question for you is, sun power. where do you see the value of the stock within six months to a year? >> not clear, but i will tell you, at least it's profitable. it's not as speculative as some of the others in this area. it is a good company, i do prefer first solar, which is actually inexpensive for next year's earnings. let's go to john in pennsylvania. john? >> caller: mr. bull market, boo-yah. >> boo-yah and back to you. >> caller: boston scientific, a good time to get in? >> it's one of my favorite stocks. was up very, very big last year. it's moved up another 10% this year. they do have the right product. i like edward life science and st. jude. this is an area i like very much and boston scientific is certainly back among the majors.
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carl in washington. carl?! >> caller: yeah, jim. a long boo-yah from long view, washington. love your program. good reporting from the gulf yesterday. >> thank you! we had a great time there. thank you to everybody in louisiana for helping us. what's going on? >> caller: i got a stock that's been trending down, pgem, is it worth handing on to? >> look, i'm a sherwin-williams, whirpool, fortune home security, and this is not my cup of tea. i don't really want to own the stock. can i go to beth in california, please? beth? >> caller: boo-yah, jim cramer! hi! >> how are you? >> caller: fine. sending you lots of gratitude from silicon valley. >> well, thank you! thank you. i hope i don't let you down. >> caller: so i'm looking for some fun, good spec stock and i wanted to know your thoughts about novagold. >> i've been watching the stock
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come back and it's breathtaking. i didn't own this -- my charitable trust lost money. this was a very speculative gold stock play with very smart people involved in it. and i'm glad to see it come back, but i don't want you to overstay your welcome. because it has just gone up tremendously. i would sell some tomorrow and let the rest run. it was such a checkered experience to be involved with novagold. fred in new jersey? >> caller: yes, boo-yah mr. cramer. >> how are you? >> caller: good. my question is occidental petroleum, oxy. it is a buy, sell, or hold? >> my charitable trust has a big position in it, it's breaking into two pieces, i want you to own occidental. steven in florida, steven? >> caller: boo-yah, mr. cramer. my stock is beth bath and beyond, ticker bbby. >> yeah, i didn't like that in your term number. i'm not going to recommend that stock, because i think it can go down to 64 or 65 before i feel really good about it. there's so many other retailers doing better.
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that said, this is a good outfit, but i didn't like that announcement. let's go to jordan in massachusetts. jordan? >> caller: jim, my man! a big boston baa b-b-b- boo-yah to you. >> second boston today. what's up? >> caller: i'm looking at orexegen. >> this is another company that i think will cool off, and i would rather have it cool off without you in it than rather you be in it. let's go to derek in virginia. >> caller: a big boo-yah from virginia for you. >> i like that. an aircraft carrier boo-yah. >> caller: love your show, love your books. >> thank you! >> caller: yes, sir. my stock today is halozyme pharmaceutical. this has some reputable biotech ownership. >> you're absolutely right.
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it does have a very good pedigree and pedigree matters tremendously. remember, i'm a believer there's a little bit too much froth in that segment and that stock can come in, but better bloodlines than most and i'm in a agreement with you. let's go to james in new york. james? >> caller: boo-yah, jim. >> boo-yah, james. >> caller: my question is about sonne. they're continually moving slowly but surely regionally and nationally. and they're moving into new york now. and with the worm weather just around the corner, i thought this might be a good time to pick up some -- >> how much did i want to stop at sonic yesterday when i was in louisiana. i'm in total agreement. i think it's a terrific situation and i think it can go higher. it is not expensive and it has a big, big build out. i would stay with sonic. and i would -- well, that's the end of the "lightning round." stick with cramer! >> announcer: the "lightning round" is sponsored by td ameritrade. coming up, cracking the vault.
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in a market where people are constantly fretting about things getting too frothy, a market where we've had an epic run and the averages are within striking distances of their highs again, what stocks can you buy, not because they're momentum monsters, you know, we don't like those. but simply for the old-fashioned reason they just represent good value. here's an idea. how about the financials? yes. i think this is a terrific time to own the insurance companies,
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the credit card issuers, and especially the banks. interest rates are once again rising, a strong employment number last friday, and we know that when rates go up, banks make more money off the difference between the piddling amount they charge you for your investments. we've got two huge data points coming out later this month. first, a week and a half on the 20th, we get the results of the dodd/frank stress test, which shows projections of how the banks' balance sheets would fare under various stress scenarios. in other words, how would they hold up if we got another recession or financial crisis. and in two weeks' time on the 26th, the annual comprehensive capital analysis and review. that's called the c-car, where we find out whether the federal reserve has approved or rejected the banks' plan to return capital to shareholder, dividends, buybacks. last year when this happened, we were flooded with news about dividends and buybacks. so i think it make sense to get
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yourself some financial exposure before these two catalysts come out. so tonight we're going off the charts to get a closer look at the banks, especially bank of america, with the help of tim collins, a brilliant technician, who's my colleague at realmoney.com. technical analyst can be a fabulous tool for helping you tie in your buys, timing your sells, and give you more insight into how a stock might be trading. when it comes to bank of america, this is a company i like very much. follow along, actionalerts.com. what about timing here? does it make sense to buy bank of america right here when the stock is already up 11% for the year? take a look at bank of america's daily chart. two months ago, okay, when this stock was trading at $16.50, we highlighted tim collins' chart work on this one, and he predicted it's going to go to $17.75. now, bank of america hasn't quite gotten it there. it peaked at around $17.50 last week, but that's still a 5% gain. that's an impressive move for a megastock. but even up here, bank of america has more room to run. in fact, right now collins sees a pattern that's very similar to one that caused him to be bullish on the stock just two
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months ago. see, bank of america just broke out of what's known as a textbook descending triangle. see that? earlier this month. since then, the stock has been consolidating. there's your consolidation, trading between 17.25 and 17.60, in what's known as a flag pattern. see this? that's the flag. okay? and because it's made up of a period of sideways trading, that kind of looks like a flag. why do these pictures matter? because this flag is the type of continuation pattern. meaning when you see it, it means the stock is catching its breath before resuming its previous move. and in bank of america's case, well, that move is higher. based on the breakout in the flag formation, collins you would see this stock making its way into the 18s in the very near future. one more point. check out the accumulation distribution line at the bottom of the chart.
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this is a momentum indicator that measures whether the big money is trying to move into or out of the stock. with bank of america, this indicator took a dip near the end of february. normally, that would be a negative sign, but in this stock, the accumulation of the distribution line dipped right before the last several big rallies. look at this, i think this is amazing. every time this dips, it then rallies. that suggests that the recent move might not be over. now take a gander at the second version of bank of america's chart. these show it is different fibonacci levels. fibonacci is the medieval italian mathematician that discovered a crucial series of ratios that repeat over and over in nature, quite curiously, also in the stock market as well. at least according to fibonacci's charts. bizarrely enough, these fibonacci ratios are 23.6, and 61.8, can actually be incredibly useful predicting the levels where stocks will peak or bottom. and this was the most textbook
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case i've ever come across. in the case of bank of america, when you go to the stock's initial breakout last fall, when it went from 13.70 to 15.87, that move lined up almost precisely with the 61.8% fibonacci ratio. then, bank of america broke from 15 to 17, it once again lined up 16.8. almost exact. 61.8. it's kind of mesmerizing when you think about it. assuming the stock keeps going to fibonacci levels, collins sees bank of america going to 18.50, which would represent 100% projection of its last move. check out the weekly chart. collins points o tut that bank of america still has a very strong bullish channel, quite simple chart, but that's okay. it's a channel where the stock has a powerful floor, supported 16.50, and assuming resistance at 18.57. that's the same upside target he saw in the daily chart. overall, collins sees bank of america headed higher in the
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near-term, moving up to 18.50 about 7% higher than it is right now. a very short-term move. i very much like the banks here ahead of those stress test results. these are catalysts, people, in a week and a half. and the fed's decision on their capital return plans in two weeks, which i think could be a couple of very positive catalysts, given how strong the bank's balance sheets are. plus, these indicate that bank of america, one of my favorite bank stocks, isn't done going higher. i know today was ugly for the banks. i say stick with bank of america and using this dip that we're getting right now to do some buying. peter in new york, peter? >> caller: jimbo, how are you doing? >> well, it was a tough day, peter. there was a lot of froth that got erased, but a lot of good-quality stocks got hit too. what's up? >> caller: just hang in there. that's what you've got to do. >> absolutely right. >> caller: specifically, i want to talk about financials. i was looking at citigroup or bank of america. i'm a little torn between the two. >> well, you know, citi, you're talking about a company that is an international company. i didn't like that mexican
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fraud, but that's not indicative of anything that the ceo is doing. he's doing a good job. but i don't want exposure to the international, i want exposure to the domestic. bank of america gets me that domestic. bank of america, by the way, is much cheaper than citi, i think, in terms of scrub book. a lot of people think citi is very cheap because it was owned by the government and cleaned it up. i think bank of america has more upside. let's go to mike in new jersey, please. mike? >> caller: hey, jim, boo-yah, what's happening, captain? >> i don't know, checking over this market, seeming some interesting pockets of a lack of enthusiasm. what's going on? >> caller: i'm loving the dips, i'm buying where i can, and i'm enjoying the pullbacks in certain ways 100%. >> okay. >> caller: i have health care trust of america for about two years. i want this. i've been doing my homework left and right, buying on the dips. it looks like they're ready to make a comeback here and i like it. what do you think for the next five years with this reit? >> i like it. i like assisted living, i like the medical trust buildings. i know it's fallen out of favor for a while, i think it's back
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in favor, i like the 5% yield, but i like ventas better. i like yours, but i think ventas is a better company with better management. all right, banking with the banks and a market where investors are worried about froth, well, what's the least frothy group in the market? it's the banks. and what may be the least frothy bank? bank of america. "mad money" is back after the break. here in philadelphia you can access a philly cheesesteak anytime, day or night. just like you can access geico anytime, day or night. there is only one way to celebrate this unique similarity. witness the cheesesteak shuffle.
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♪ >> well, let's just say, my footing now is a little more sure than it was yesterday at this time. before we jumped into no huddle, i just want to call attention to the amazing people we had the chance to meet over the past few days in louisiana. you know that we are always on the hunt for bull markets, but also for good news.
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good stories, ways to celebrate some of the things that make our nation great. hard work, american ingenuity, and optimism. we found all of it in spades at new corp. and ensco 99, meeting with halliburton and governor jindal. we are back here today and we are energized. all of us at "mad money" want to thank the people of louisiana for reminding us why we come out here each day. bayou boo-yah to all of you. all right, now, sometimes you have these quiet moves in stocks that aren't on anyone's radar screens. they aren't battlegrounds, they aren't sources of contention, and they aren't froth! they just methodically generate excellent returns year after year. such is the case with two stocks that we don't talk enough about. cedar fair and six flags, two amusement park operators. speaking of the new book, i'm going to be signing it this coming saturday, march 15th, at the costco in east hanover, new jersey, between noon and 2:00. that's my costco.
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you'll see me there. anyway, enough shameless promotion, back to business. the new frugality is a theme i think you should be paying attention to because of the scars of the great recession. those scars run deep. people now see bargains similar to what our parents or grandparents or even great grandparents saw after the great depression. the idea of these amusement park stocks as big winners may seem a little fanciful. they're not tesla or netflix, major tugs of war with brilliant people on both sides. they don't make fuel cells like ballard power or plug power. you won't find any 3-d printers in the group. no hedge fund managers going to short them and start a lobbying campaign against them to drive them down and profit from the destruction. nope, these companies simply manage properties that are relatively inexpensive destinations, where you can have a real good time, perfect for newly frugal people who don't feel like going in hot over vacation, after the hideous recession win from not that long ago. amusement parks like six flags
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and cedar fair, which you might know as stoney park or king's dominion or wild water kingdom are the ideal frugal family vacations. they're great destinations, and these two operators keep their parks fresh with new rides fairly regularly. these features keep people coming back year over year. while we focus on how disney's theme parks are doing, how much disney is charging and how big the gain is, the move on six flags or cedar fair seems to mean absolutely nothing to most investors out there. i've been a big fan of these stocks ever since the recession, in part because the underlying companies is so committed to helping their shareholders. they spew cash and return as much as prudently possible to the people who own them. i think that's a chief reason why cedar fair has gone from $7 five years ago to $50 now. and even after that remarkable move, it still yields 5.3%. six flags is no slouch. yields 4.4% after a terrific run. these companies raised their dividends pretty much each time they open new rides. that i have little competition,
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because it's so difficult for any new operator to cobble together the real estate and get the insurance that's necessary to even open a new park. they have locations all over the country, so they aren't just hostage to the weather of one particular region, the biggest risk to being a theme park operator. look, i always preach diversification. i never want you in all cloud stocks or all oils or all biotechs. that's just way too risky. unlike those groups, stocks like cedar fair and six flags, they're not roller coasters. best of all, they leave the thrills and excitement to their parks and not your portfolio. stick with cramer. stick with cr.
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so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line, anytime, for $15 a month. low dues, great terms. let's close! new at&t mobile share value plans our best value plans ever for business. hey, what are you doing this weekend? come see many saturday at the costco at east hanover, new jersey, between noon and 2:00 p.m. i'll be signing copies of "get rich carefully." big froth alert. these power stocks, they got overheated, tesla got overheated, fannie and freddie,
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overheated. we want them to die down. we don't want them to take the rest of the market with them. though. i like to say, there's always a bull market somewhere and i promise to try to find it just for you here on "mad money." i'm jim cramer and i will see you tomorrow! hello. you're watching "worldwide exchange." i'm ross westgate. the headlines today from around the globe, concerns grow in china with copper down 5% pushing equity prices lower in asia and europe. futures falling by their daily limits. malaysian authorities hold the latest press conference in the disappearance of flight 370. the world's biggest staffing company, adecco, reports a jump in nu

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