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 in summer. i promise to help you find it. "mad money" starts now. >> i'm cramer. almost to "mad money," mm welco to cramerica. call me at 1-800-743-cnbc or tweet me @jimcramer. some dips are made to be bought. you just have to say to yourself, okay, i don't like what caused the pull back but

i'm going to take advantage of it, because i'm trying to make some money around here. after an amazing week but a ho-hum day where the dow dropped 16 points and the nasdaq gained 0.3%, i want to talk to you about buyable dips, google and ibm. you might think i'm sticking my neck out. what i am saying i'm doing is introducing the notion of long-term opportunity. it's not a copout. first off, we know google and ibm both disappoint ed people last night. we know that because they went down after earnings. that's what happened. it's undeniable. in the trading world, a stock that goes up after reports is a good stock. and a stock that goes down after reports is a bad one. pretty simple. that's because anyone who bought

the stock for the quarter, in other words, people are expecting upside surprise, simply got it wrong. in the world of trading you buy a stock for a catalyst. you sell no matter what, good or bad. that's discipline. having the discipline to recognize that you bought something for a trade and it just didn't pan out. but investing, which is what i'm trying to teach here, is quite different. it has a different set of rules. plus a different mindset. investing is not catalyst driven, it's not about trying to predict the quarter and scalp a few bucks. no. it's about long-term decisionmaking when you were given a chance and even though the chance may seem scary, you have to take it. which brings me to google and ibm. any trader knows that google and ibm failed as trades last night, that is unless you were shorting them because they both got hammered. however, if you're an investor

and trying to catch not just a few points but something big, meaningful, you have to buy, not sell these two stocks, counterintuitive? no. listen. let's start with google. what did cause it to go down? what was google's crime? simple. it missed wall street's estimates. a company that misses estimates is a company that immediately gets put in the penalty box, immediately as in that minute. but understand something. unlike most companies, google doesn't actually help the analysts make their estimates. most companies do. most companies provide guidance on their conference calls. right before management takes questions, they outline how the company's earnings and revenues will likely be for the next quarter and the next year. google, however, is a rare bird. it doesn't give guidance. the only other major company i follow that doesn't give guidance is berkshire hathaway.

warren buffett wants to win long term, same with google. which is unlike the vast majority of companies you hear about, when google misses the numbers, it's far less important than pretty much if any other company did the same thing. that's because frankly, the analysts are clueless about what google can really earn when they try to get the numbers. it's not like they missed their own forecast. they don't make forecasts. the number that disappointed was only disappointing in the eyes of the analysts. now, you might wonder who else matters in the process other than analysts. big deal, jim. all that matters was the analysts. that's where i can help you. the portfolio managers themselves matter. they look at google. in a couple of days they won't be looking at it in the vacuum of the internet sector. no, money managers will look at google versus all the other stocks in the s&p, all the other stocks they own. they'll see they're missing an

opportunity to own a company that's growing, remember these numbers, they're going to be important, at a 19% clip yet it sells for 17 times next year's earnings estimates. remember how money managers value stocks. you always have to go back to this lesson. make it an apples to apples comparison. to do that, they look at the price they're paying up for the company's future earnings, also known as the price-to-earnings multiple. they pick google's growth rate against the companies that they currently own. let's make it easy. suppose a portfolio manager owns coca-co coca-cola. coke is growing at 6%. what's the price to earnings multiple? 20 times earnings. go back to google. we've stipulated that it sells at 17 times earnings. let's see. from the portfolio manager perspective, he's paying 20 times earnings for 6% grower like coke. when he can get a company that grows three times as fast for 17

times earnings, a discount. many portfolio manager will be unable to resist google and will easily sell coca-cola to pay for it. not today. it's too ugly. take panera bread, a 13% growth rate, sells for 24 times earnings. why own panera? google, these are just two growers. why own panera when you can get faster growth from google. kellogg grows at 5% but trades at almost the same multiple as google. these portfolio managers will wait until the smoke clears, the stock settles and they're likely to sell a kellogg for a google. the fact is on a growth basis, google is cheaper than any almost anything in the s&p 500. believe me, in a week, most portfolio managers will forget google missed the analyst numbers and instead be saying that's too cheap to ignore. that's how this terrible trade, terrible, turns into a terrific investment.

but you might say what happens if google keeps deteriorating? as missing the analyst number applies? it's not deteriorating at all. they're spending a lot of money to promote future growth, something you want the company to do. you want your company to invest in future. not all should be buying back stock and giving big dividends. wasn't that was wrong at microsoft, hewlett-packard, dell? i think so. yes but aren't they being crimped by the desktop-to-mobile revolution? i think google has the best mobile product out there. i trust management when they say they have a game plan to make more money from mobile than desktop. you have to have patience here. do you? if so, i think google is a fantastic investment, at a great price. how about this ibm, wasn't that a miserable quarter? no revenue growth. revenue declined, right?

suspect cash flow. miserable earnings that seem to be made by the skin of the company's teeth. >> the house of pain. >> doesn't ibm has to be -- >> sell, sell, sell. >> yes. if you bought it for a trade. absolutely not if you're looking for a value stock based on next year's earnings like warren buffett who is a big owner. next year's earnings will -- by this time next year ibm should be hitting the mark because of the change at the company. if you wait until next year, the stock will be too high. it didn't turn around this quarter but i think it will. you have to get in on the weakness, even though you might hate ibm's current configuration. buy it now when it's on sale. google and ibm, two trades that went bust. two investments that can now be started at excellent discounted

prices. the bottom line, one man's trash can be another man's treasure. provided that the first is a trader who only cares about the here and now and the second is an investor who cares about the future. nick in new york, nick. >> caller: hey, jimmy, how are you? >> how about you, partner? >> caller: thanks for your insight and sticking up for us little guys. thank you. >> caller: the voice of reason, all this crazy volatility, my question relates to b & g foods. it's featured on your show. i bought it at 12. what is your advice now based on their recent quarterly result which is are shy on earnings? >> right. thank you for taking action. that's my companion product that i do with my charitable trust.

b & g foods i felt was an attractive idea. it yields 4.3. was it a perfect quarter? absolutely not. is david doing a good job? yes. take out the invested capital, let the rest run. i think we helped you a great deal for b&g foods. thank you for what you are saying about the little guy. dubravka in massachusetts. >> caller: i am here. i have question about zebra. you recommended it a couple days ago. it dropped like a rock 10%. i like to know, do you still believe it's good or not? >> oh, yeah, it's real good. sometimes the stocks don't do what they're supposed to do. it went up 8, reversed 8. i think buying that simple technology business is a terrific business and you'll hear much more about zebra from me within the next two weeks. let's go to madelina in new

york. >> caller: hi, jim, how are you? >> i'm real good. how about you? ? >> good. >> caller: thank you for taking my call. i enjoyed reading your book. i have a question for you considering cldx, celldex therapeutics. >> we rated that -- our great previous analyst ted graham pointed that stock out in the midteens and we caught a double and left it and we have not looked back. i have not looked at it because it was a trade, a specler stock. it was done and i'm not looking back. i'm sorry. one man's trash is indeed another man's treasure. case in point, google and ibm, trashed by the traders, made treasure for the investors. don't go anywhere. i have an exclusive with the bank that has had the best performance of any bank we follow. fresh off earnings.

plus, there are concerns about the company that keeps the lights on in new york. i'm checking if the future is still bright for con ed and the white hot utilities. to get a read on the economy, sometimes you need elbow greece, snaple and tools, coming up next. don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet, #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.

forget about all the problems we have with the stock market. when you look at the actual companies, especially the ones that benefit from the improving economy, they are doing pretty darn well. take snap-on tools, sna, maker of tools they mainly sell to auto repair shops. through 3,500 vans in the united states.

they sell to agriculture, construction, mining, power generation clients, have a bountiful european business, some asian. snap-on is a nonstop innovator creating new tools and diagnostic systems to make work easier for professionals doing critical tasks. the company just reported this morning and they earned 1.62 a share, an 8 cents over year. in particular the commercial industrial sales rose 9.1% driven by a fabulous surge in the european segment. stocks has given us a 23% return since we spoke to the ceo last july. it has more room to run even if today's $3.38 rally. let's take a closer look with nick pinchuk, chairman, ceo and chairman of snap-on to learn more about the quarter and the prospects of the company. welcome back. >> great to see you, jim. >> there were only 28 stocks on the s&p that hit an all-time high. yours was one of them. >> right. >> i think it's because you innovate even with such things

as wrenches. >> correct. that's the thing. snap-on is a type of company that's actually a technology company. it innovates based on a practical understanding of the workplace and is associated with technology. take this, for example. we can talk about a wrench. this is a tech wrench. it has to do with measuring torque inside an engine or inside an aircraft, an aircraft frame. it is the state of the art in terms of measuring torque and getting the right tightening for the critical task that take place in those places. >> you had this for automotive and it also goes into aerospace. >> sure. one thing about snap-on is it's been an automotive repair company. we with realized that snap-on means a lot to any professional as long as they are performing critical tasks, the need more repeatability and reliability is important. they have to perform with certainty. that's aerospace, oil & gas and aviation. we apply technology to that.

for example, not shown here is one of these things where we have a smart toolbox. one of the big things on an aerospace line is don't lose a tool in the engine. sounds like crazy stuff, right? a screwdriver. >> no! don't leave the forceps in surgery. >> exactly. we make a box that uses imaging technology that tells you, boy, jim cramer took out screwdriver "a" from door "a" and he's working in bay 6 on engine two. before they button up, it checks the box to see if he returned it. >> that's great. >> that's driven growth. cni was up 10% in revenue. >> double digits. >> it's driven by the extension of critical industries. people value snap-on. we have technology and insight to bring them. >> a lot of people felt you shouldn't be moving into europe or maybe try to minimize europe because europe was bad. obviously they were wrong. >> right. we have established a business in europe.

i mean, i have welts on my back for europe. last time i was here france gave me a headache. i didn't want to hear the word france. >> you said it. >> france is up now. germany, spain is up now. the thing about this now, we spent a lot of time not taking down productive capacity. >> right. everyone told you to do it, though. >> we had faith it was coming back. we knew the customers were still there. we improved the efficiency and productivity. before the revenues started coming back profitability was getting better. now the revenue is coming back so we're getting a double dip, both profitability, efficiency and leverage. >> what did you learn in terms of what you're going to do in asia? >> well, the thing about asia, if you think of china, united states they both buy big cars. >> yes. >> a lot of new cars. >> a lot of people in china. >> a lot of new cars, a lot of people in china. the u.s. market a lot of cars on the road already and they are old. >> yes. >> china, 11 1/2 years old and 300 million on the road. despite the fact they are selling new cars in china there aren't many on the road and they are all new.

the repair wave is just starting. i lived in asia for 11 years. one of the things i learned is that you have to have the physical capability to take advantage of this. what we've been doing is building those physicals. when i arrived in china nine years ago, shanghai, the only people who worked for snap-on in a city of 50 million people came with me on the plane. >> how many years ago? >> that was eight or nine years ago. came with me on the plane. 1,500 people, 31 offices, a design center. 700 distributors. we are building physicals because the wave is coming. >> let's go back to oil and gas. >> sure. >> we have been visiting the sites. we were on an oil rig off the coast. we were in utica shale, north dakota. you guys are there now? >> yes. we're starting to grow this. part of the snap-on base is technology. but also an understanding of the business. we understand automotive repair very well. we have guys that can tell you why a mechanic takes his rag out of his pocket with his right

hand instead of his left. >> really? is it an algorithm or something? >> no. they understand the work. >> the customer. >> when we visit oil and gas sites we see people welding things together that nobody makes a tool for. we are making them and starting to build business there. >> i love the people at stanley, black & decker. they are terrific. they're not doing that. >> i love them, too. it's a different business. >> different. >> different business. >> retail based business. they are professionals. >> different business. we are based on criticality. the need for reliability. nothing can fail like in aerospace and mining. we're based in technology. take this thing here. this is a diagnostic unit. you plug it into a car and it give you what the car is saying in terms of the fault codes.

it shows you the car's heartbeat, allows you to make the car run through tricks, sit up and do dog tricks. this one allows you to go to the internet to get special database. we have a database which we use our field information and we can tell you exactly if a honda is at 56,000 miles and it has these symptoms, here's probably what's wrong with it. you will get it through this device. high technology in an area which is increasingly dependent on high technology. people don't think of it that way. >> it's interesting. you are the only industrial and technology stock that hit an all-time high today in the s&p. now people know why. nick pinchuk, chairman and ceo of snap-on. i'm sure you understand why i think this is a great company. stay with us.

in market that's gotten far too exciting for comfort today's ho-hum session notwithstanding maybe you need boring stocks like utilities which performed well in the past month. one of my favorites is consolidated edison, con ed, as you know it. you own the utility because it is low risk. con ed is about as low risk as

it comes. the company owns the largest under ground electric system on earth dae signed to supply the most densely populated city in north america but here's the thing, they don't own any power generation facilities. this is a wires company which means they are immunized against epa action. they are protected from rising commodity costs like the rally today. they have to face infrastructure issues and that's daunting for a utility. con ed got slammed today. falling 1.09, almost 2%. -year-old is 4.5% dividend declared today. they have been treating the stock as a fixed income alternative. when bond yields striked that made them look less attractive by comparison. the company has a lot going for it. since we first had ceo kevin burke on the show in april 2009, con said has given you a 7% return after invested dividends. not bad. far less than gains in the s&p 500 but that's good when you sacrifice upside and go for comfort you might fall behind the market. doesn't mean you didn't get the dividends and live comfortably off them.

let's dig deeper with john mcavoy, the new president and ceo of con edison. he took over in january. welcome to "mad money." >> nice to see you. >> have a seat. thank you for coming on. >> pleasure to be here. >> you have challenges and technology working for you. i wanted to show people -- my electric bill spiked, i've got to tell you. i'm convinced that if i had been sensitive to what my appliances were doing i would have saved money. you have a new device that's a cool stealth only the play with honeywell. how does it work? >> i'm one of the few ceos that will tell you how we try to help our customer use less of our product. that's what we are doing with our energy efficiency programs. these are two of the devices we roll out to our customers. this is a wi-fi thermostat, used for a central air conditioning system. there are 400,000 of those in our territory. we partner with honeywell. there are others available in the market. many have that. the device here is the one that's unique. in our service territory we have over 6 million window air

conditioners and you can't use a central air thermostat with that. we partnered with a company called think eco to develop this device called the smart a/c modlet. you plug in the air conditioner here, plug this into the wall. it connects to your wi-fi system and you can use this, when you're in the home, to control the tell temperature. it connectses to your smart device. your android, ipad, iphone so you can set the program for the air conditioner and change the temperature in the room from wherever you are. >> let's start with the presumption you just said. wait a second. why would someone want to sell less energy? isn't that how they make their money? >> we are a wires and pipes company. our revenues are decoupled from the amount of sales we have for our electric and gas systems. it allows us, puts us in a position to help customers become more efficient, use less product, save money and also

help the environment. >> david cramer was here, nrg, he's aggressive and buying companies that allow us to put solar on our rooptops. you can do that. should i call you if i want solar on my roof in this area? >> we are not installing rooftop solar but we can help you integrate it into the system. >> conversion into system. >> that's right. we think that's an important role. we try to make it easy for the customers as possible. we want to facilitate that so the customer can make any energy choice they want. >> is there incentive to do it? >> there are incentives from others. we don't provide an incentiveful there are state and federal tax incentives as well as rebates that are offered. we are a big player on the unregulated wholesale solar market. >> you are the fifth largest player in the country. >> right. we have about 400 mega watts of solar production. some in the southwest, some in the northeast. it allowed us to take the power experience. we don't own the plants anymore.

apply it in a new way and do it in a way that's renewable and environmentally friendly. >> let me ask you. you've got new technology, solar. you are also saddled with an older infrastructure. we have tragedy, unrelated to money here. we have the east harlem, terrible incident that occurred. i presume you have a big maintenance. you have an infrastructure from a long time ago. what do you do? how much money can you really generate to make the infrastructure current? >> we have a very aggressive infrastructure renewal program. we put $2.5 billion into the electric, gas and steam systems each year. >> each year? >> each year, $2.5 billion added into our systems. >> wow. >> we've developed some pretty advanced place to put the money based on equipment performance, historical trends, ambient conditions and usage to get maximum benefit for every dollar we invest. >> is it possible to cut down on

the terrible incident we had? >> jech so. part of our infrastructure investment strategy includes significantly risk reduction as input. the incident in harlem is a terrible tragedy. we are working closely with the ntsb, national transportation safety board to identify the cause. we looked at the cast iron piping and the new plastic piping as well as water mains in the area. i'm confident we'll get to a place where we understand the cause. in the meantime we have been working to support the community and people affected by the tragedy. and working to encourage customers that if you smell gas, act fast, leave the area. when you're in a safe location, call us, call 911, call 800-75-con ed and let the experts respond. >> last time mr. burke was here in may 2012 he said we have 7,000 buildings that are using oil. oil is $105. how have we done at that?

how has con ed done in terms of reducing the number of buildings using that inefficient fuel? >> we are changing out 800 to a 1,000 buildings each year. driven by the price comparison we are getting buildings to switch from number two oil. those are large buildings. the one to four family buildings, 1,500 of them convert every year. it's a triple win. it's better for the environment. it saves our customers money. it improves the operation of their equipment. >> excellent. i think if you want a safe dividend, you've got the best record of any of the utilities. and consistency. i think you've got it if you own con ed. thank you so much. john mcavoi from con edison, new ceo and president. sometimes it's good to have

something. stay with cramer. ♪ [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.

market commentator for the street.com. now also for cnbc. jim cramer. >> hey, mark. how are you doing. >> we have to put up with you twice a month. >> i wish it were more. you know that. >> come on.

i wear this on my sleeve. quit kissing. >> that's kernan. >> have i professed my love of "squawk"? >> that was mark. miss mark every day. >> cnbc turns 25 today. i think this is a terrific moment to reflect on how business has changed over that period. how we have changed wit. first of all, when the network was born i counted myself among skeptics. the financial news network when i first started managing other people's money out of my dorm room at harvard law. i thought it was useful. until then you had to call brokers to get information about how stocks were trading. i did watch it for the tape. that ticker thing in the lower third of the screen. much more than for the information. i wanted to get a feel for the action the way the day was going. nothing tells the tale like the tape. i went to goldman sachs after graduating from law school. i thought i would have been fired if i suggested watching

fnn. i had the machine that brought me the information i was supposed to need and the dow jones news tape which gave you the corporate news but it didn't start until 7:00 and it ended early. if you were a stock junkie when you got home you watched the nightly business report on public television. by the way, that's still worth watching because it's produced by cnbc. you could watch the national news see where the dow closed. that was it until the wall street journal came out the next morning. when i left goldman to start my hedge fund in 1987, i brought along the same tools i had at the brokerage. a couple years later i heard people talk about the network. they were breaking news, talking about stocks in a creative way. talking to ceos. back then the requested of having a television in your office seemed like the height of absurdity. you're supposed to be working not watching tv. i would dismiss anyone watching tv at work. how could i put one in? two years went by after our network's birth and i realized i had no choice.

cnbc was a realtime newspaper, a living, breathing organism. i was tired of hearing about stories secondhand. i had to beg the landlord to wire the place for cable. one of the reasons i ultimately moved my office is because he wouldn't let me have my cnbc. not long after i was mesmerized by particularly the anchor work done by the late great mark haines. i talked to the screen driving everyone crazy yelling he should be doing this or saying that. next thing you know i'm screaming at him in all caps saying how he's getting this wrong or should emphasize that news right up until he finally answered my e-mails and said it was time for me to shut up or put up and be a guest host on "squawk box." he put me on the air. life has never been the same. all my years spent as a guest host on "squawk" and kudlow & cramer. followed by nine years here at "mad money." i know for sure this has made an impact. we are indispensable not just because we are on pretty much everywhere but you ignore cnbc

at your own peril. business news is too important for tomorrow's paper. when the paper arrives it's been overrun by events, events this network covers in realtime. we all do our part. breaking news, making judgments, teaching all to help you make money without fear or favor. i'm proud of what we do at the network and what we have carved out on "mad money" to celebrate business and hold people accountable for what they do. it's been a terrific run. i'm thrilled to be a part of it. thanks for taking us into your office, your hotel or your home. unlike when i got started in the industry, these days, i think it's fair to say, if you're in the money business you don't get fired if you don't watch cnbc. it takes a lot of great people to keep a network thriving for a quarter century including a voice you hear every day on the show. but never get to see. we're changing that tonight. ladies and gentlemen, jim bursall. >> thanks, jim. thank you, cnbc. stay tuned, cramerica.

we'll be right back with the lightning round. boo-yah!

good evening. i'm jim cramer. welcome to my world. we call my world "mad money." i want to help make you rich. really rich. what is "mad money"? it's that little bit of extra money. no, scratch that. it's a lot of extra money. you can make it by making the right investments. >> no, that wasn't a puffy shirt. it was a puffy guy. anyway. can you believe i haven't aged at all? maybe i look a little bit younger, frankly. not really, but anyway this is in honor of cnbc's 25th birthday. we want to remind you how handsome i was when "mad money" premiered nine years ago. back to business. now it is time for the lightning round on cramer's "mad money." we play this sound and the lightning round is over. are you ready? time for the lightning round. i will start with sean in iowa.

sean. >> caller: hi, jim. this is sean from iowa. >> nice. >> caller: black rock reported today. >> it shouldn't have reversed. that stock was up, going up. i want to buy it. they're doing a real good job. tyler in my home state of new jersey. tyler. >> caller: from the garden state, jim. good to be on your show. hologic. >> me no like hologic. they haven't delivered the goods for many years. ge's health care number wasn't that good. it was a nice cop to hologic. from california, jalal. >> caller: hello. cramer, thank you for taking my call. >> of course. >> caller: my question is about sunedison. i want to know your opinion. >> i'm negative on sunedison. this could be the right way to

go. i like first solar but sunedison has game. i like it. i'm going to dominick, also my home state of new jersey. dominick? >> caller: jim, how 's it going? >> going okay. how about you? >> caller: going okay. so my question is on mankind. it's had a good committee meeting with the fda. they still need approval but i want to get your thoughts. >> i think mankind is a cold stock. if i say something negative i can't go to twitter for days. all will be in the feed is what a jerk i am. i think the new device, i wish them luck. i don't know how big the device will be. that's all i'm going to say. because i'm critical and skeptical. now to fred in ohio. fred. >> caller: hi, jim. five-year listener. love all that you have done for us. >> thank you. >> caller: my question is

paccar. >> there is a bull market. we know a lot of companies are talking from alcoa to many of the companies that reported today. i think you're in great shape with paccar. pull the trigger. christine in pennsylvania. >> caller: this is chris, but my grandsons call me boo. i have a boo, hoo, hoo boo-yah for you. i bought whole foods at a lower cost basis than you guys at action alerts. i want you to tell me it's going to turn around and go up. otherwise whole foods will lose a customer. because i will have a heart attack. >> i am shocked in this decline with this stock. action owners has a small position. wanted to buy more. stephanie and i know there is competition. walmart is coming in. these guys are good and the stock has been straight down. we are taking a pause, trying to find the right level to buy more. we are obviously not there yet. i feel your pain. and you feel my pain. this is a tough one and i don't have an answer about why it should be this far down. not yet. i feed to go to james in texas. james.

>> caller: howdy, cramer. or boo-yahs as you say in cramerland. >> that's right we do. >> caller: action alerts subscriber. started listening to you in bulgaria. >> bulgaria. they have a king there. >> caller: yeah. mark haines recommended i listen to cramer. i've been following you ever since. >> thank you. >> caller: do you have a view on isis? up to the mid 40s, sold it. i was wondering the if it's time to get back in? >> look, the biotech stocks haven't found their footing. the btk is one of the biggest danger zone areas in the market. that said, this stock has been cut in half. i think there is real value to the situation. remember, we have not reached a bottom yet. they keep pumping out new biotech stocks. that's the problem.

too many ipos. too much insider selling. its day will come. i'm not calling the bottom here. that's the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade.

for the last couple of weeks the banks had become real dogs.

since the financials are the second largest component in the s&p 500, when they do poorly it's difficult for the broader stock market to act well. then earnings season starts and most of the banks are reporting pretty darn good quarters. today we heard from the regional banks like keycorp. one with i have liked for a long time. what did key, a big regional player based in cleveland with over 1,000 branches have to say? this morning key reported a 2 cent earnings beat with inline revenues and 4% loan growth year over year including a 9% increase in financial and agricultural. key is still cutting costs left and right. if we get a sustained up tick they will make a killing. that's how banks make money. they pay you next to nothing for your deposits and then lend that money out at a higher rate. while we wait for an uptick, keycorp is returning capitol to shareholders. they used $564 buy back authorization gr a new $542 million buy back authorization for 2014.

add them up, that's equal to 9% of the company's market cap. and it is expected to boost key's dividend annually next month. part of the fed approved capital return plan which would give the stock a 1.9% yield at these levels. the stock has given us a 16% gain since we talked to the ceo in october. i think it has more room to run. let's check in with beth mooney from keycorp to find out more about the quarter and where her company is headed. welcome back to "mad money." >> thank you, jim. glad to be back. >> you had a tremendous 9% commercial industrial growth in loans. where are the loans concentrated? >> who's taking them? >> it was one of the strengths of the quarter. we are with leading our peers in that regard. commercial lending is up 9% year over year. 4.5% length. generally it's across the board. our business model is winning with clients. if i were going to look at sectors that are doing particularly well, i would say energy, health care, technology

but geographically it's well dispersed and it's been a strong quarter for us in lending. >> it turns out geographically key actually has a lot of overlap with what turned out to be the new oil and gas portion of the country. >> it does indeed. the energy sector that the natural gas and shale play as we call it is in our backyard. >> okay. let's go over. i think people want to hear wait a second, they hear if interest rates went higher, you can make mr money. what rate is the optimal rate for shareholders to make the most money owning key corp. >> i will tell you, any lift in the short end of the curve will be very, very good for banks but particularly good for a bank like key. with the large commercial lending book, 70% of those are variable rate loans tied to one-month libor or prime rate. as we get lift in the short end

of the curve you will see momentum in our earnings and revenue. >> you mentioned the commercial doing great. you have an impeccable home equity book. 60% of the mix is first liens. what is it that you guys do right that the other guys aren't doing? >> good old-fashioned back-to-basics lending. the home equity book is branch originated. they are customers of the bank. we make sure they have strong credit. it's also for a strong need. as you pointed out, 58% of them are first liens. many of them act like a mortgage for our clients. we keep strong fico scores and very low loan-to-value. at the end of the day it was a high performing book through the crisis. for us it's been one of the most profitable consumer lending products. >> let's look back for a second. in the 2006-2007 period, key high dividend, very small. 400 million shares. is it reasonable to think one day given the fact that the country might be growing we could go back to the smaller share count and higher dividend?

>> as you know through the downturn we issued equity as part of the recapitalization plans in the financial downturn of 2008 and 2009. in 2010 as we repaid our t.a.r.p. obligations. we have a larger shareholder base. what i think is important is where you started, we are successful to returning capital to our shareholders. our second consecutive year that key has been able to return pure leading levels of capital in the form of dividends and share repurpose. our investors find that very attractive. it's a reason many of them hold key. >> that's why we tell people to do it. m & a comes up as being a bright spot. people don't think there is a lot of m & a going on in the country. who are these companies? who are they acquiring and merging with? >> it's interesting. when we look again at what use is for the commercial lending it's not a lot of historical plant and equipment lending or building of inventories.

we find companies are finding ways to grow more inorganically. they're looking at buying products or capabilities or competitors as a way to grow. yes, there is actually a fair amount of m & a dialogue as well as m & a activity going on. it's on a smaller scale. part of oh corporate are america learning how to grow their business in a slow economic environment. >> i want to congratulate you on the best performance of any of the bank stocks we follow. great job. that's beth mooney of keycorp. good to see you. >> thank you. thank you for your support of key. >> of course. this has been a big winner. it will stay a big win wither. i would stay with key corps. stay with cramer.

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where businesses pay no taxes for ten years. you'll get a warm welcome in the new new york. see if your business qualifies at startupny.com all right. google and ibm. did they stink up the joint? absolutely. do people hate them? yes. why would you own them? actually one is going to turn in 2015. that's ibm.

you can't wait for 2015. google wasn't even bad and the money managers are going to flock to google because it's got growth at a very reasonable price. happy 25th cnbc. there is always more. i promise to try to find it just for you. "mad money." i'm jim cramer. i will see you next time. "fast money" starts right now. live from the nasdaq market sight in new york city's bright lights of times square with cnbc's melissa lee. the traders tonight are tim, the ambassador seymour. risk reversal's own dan nathan. brian b.k. kelly.