>> of course. look at what macy's just did. i think macy's, look at what kors did. i think it's still a buy right here. >> it's always a pleasure, drur. catch "fast money" again tomorrow. i'll be back on friday, as well. "mad money" with -- 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 a little money. my job, entertain, teach, educate. call me, 1-800-743-cnbc. tweet me, don't be too disputatious @jimcramer. just like that. just like that the market changed its mind about our economy. almost overnight, we've gone from thinking the economy's

accelerating to believing that commerce has peaked and is now going downhill, which is why counterintuitively the dow gained 91 points, the nasdaq pole vaulted 1.02% today. at the same time, a rally in the russian stock market, coupled with ukraine's absence from the headlines and the fact that president obama's not inflaming the situation because he's on vacation have created an aura of diplomatic possibilities that are totally at odds with where we've been since the downing of mh-17. now, before i go over the markets, this new view, i want to explain the way i work. boy, even after nine years on air, continues to elude people. the monologue is about what the market thinks at this moment and why the stocks went from point "a" to point "b." about what did happen not necessarily what should be happening. in reality, my actual world view is at odds with the manic-depressive swings that this market gives you constantly.

i don't like the all or none, black and white thinking -- >> buy, buy, buy! >> of a market suffering from bpd. borderline personality disorder. i don't have a way to judge the russia/ukraine situation, because if the president were back in washington, he could take a couple of pot shots at putin and that would be the end of whatever diplomatic outreach is going on behind the scenes. i respect the market's right as crazy and as stupid as it wants to be on an hour-to-hour basis. and i'm good at discerning the stocks and sectors' moves. i've been around and speak the language of stocks for many years. i'm fluent since '84. so when you're trying to interpret the action, what's the first thing you look at. you look at who's leading the

market. today was the highest turbo charge stocks that took center stage. cheaply the biotech and internet commerce names. a new mobile payment initiative. we also got good research today. about how google and facebook should be bought with price targets of $700 and $95 respectively spurring them on. let's be clear about something. these kind of research calls, they can't work. they fall on deaf ears if the backdrop isn't right. the big institutions don't go buying high growth stocks like facebook and google unless they're convinced that the economy has down shifted. people might be buying yelp off my suggestion that if you get a bid, perhaps, from priceline. that stock wouldn't move up either if it weren't for the new slow growth thesis taking hold.

you only buy the celgene if you're sure the economy's cooling. plus, unlike facebook and google, these biotechs rallied without any kind of push. that's clue number one about what's happening in the market battlefield. clue number two, retail sales numbers came out today and they represented what i regard as an abrupt downshift from what we saw in the late spring. ordinarily, that negative number might be dismissed. but it came at the same time as a very, very disappointing quarter from macy's. now, let's set the second clue. first, macy's didn't report anything that negative. sure it shaded down numbers for the future, no fire sales.

this decline occurred because of something i talked about in last friday's game plan. the analysts have all but become too bullish on macy's, so they set the bar way too high. not one, not two, but three different firms, goldman sachs, morgan stanley and bmo had just squawked that macy's could do a strong number, better than expected. when you have a trio of firms, a trio saying that macy's is going to clobber the estimates, they had better know something. they better know something you don't. because otherwise there's no way the company can clear such a high bar. as it turns out, they knew nothing. still, though, this macy's fiasco which caused the stock to drop $3.29 coupled with that broader retail weakness is the second tell of the new slowdown mindset! the third clue, we have a dramatic decline in inflation of all kinds going on right now. nobody talks about it except for

"mad money." we've got it going in cattle, pork, the soy, the corn, the oil, the cotton. hey, by the way, oil, that's visible. there's got to be some sort of slowdown, right. unless there's a slowdown. so they reach for the high growth stocks which do well in a slowdown. again, i am urging you not to think it through. that's how the big boys roll. i'll have more to say about this collapse of inflation that nobody else is talking about later on in the show. sacrifice suffice it to say stocks that are commodity takers not commodity makers. because their future earnings power in the out years are worth more if inflation is calm. hey, when inflation is low, we put a higher value on future earnings, the ones that are many years down the road. since the lack of inflation means that money, you know, actual paper money will have more purchasing power. then there's the fourth clue. lots of real geniuses and loud-mouth ideologues have told

us over and over again that interest rates must go up, and that the fed's keeping them down. i think the world is keeping them down. the world's bonds are now being priced off german debt. no one else has said that, but i'm going to say it. germany's the most solvent company in the world. meaning the bonds are more risk-free than ours. other bonds in europe are too expensive. meaning they're paying you too little for the risk you're assuming. if you're an international bond buyer of which there are trillions of dollars worth out there, you don't get enough yield from bonds and the other country's bonds aren't worth the risk. so instead by default you buy u.s. treasuries. the stock buyers see interest rates as low. okay, they think they're low, oh, those rates are low. they think, well, inflation must be low or else rates would be high. demand must be low or else rates would be high. and that drives them toward the high-growth names. again, that explains the surge we saw in tech, in biotech, and in the fast-growing health care

and internet plays. stocks that have been going down even though their numbers were picture perfect. these are regarded bizarrely as plays on a russian-inspired slowdown in global demand. so much of the business is related to europe where the real slow down is. with the russian market having rallied for many days and the ruble getting stronger. i do know that's why the stocks are jumping. let's put it together in a big mosaic. we're going to have faster growth with better hiring, more inflation, possible outbreak of war in ukraine. that was the mindset a month ago. the prevailing wisdom has changed, changed dramatically on a dime with the new backdrop being slower growth, lower inflation and potential peace in the old soviet union. here's the bottom line, when the consensus changes, the buyers change accordingly. and the same stocks that just

got sold down -- >> sell, sell, sell! >> buy, buy, buy! my job is not to wonder why, to show you what they buy. elaine in missouri, elaine. >> yes, hi, i heard your view before about harley davidson, but the company polaris has publicly challenged harley and sturgis reintroducing motorcycle and price challenged, as well. my question is two-part. should we be rethinking? but more importantly, what would you recommend concerning polaris? >> well, i'm never going to go against the brand, it's a great american brand. we've had this guy scott wein on the show. he's a vicious competitor. he's the richard sherman of these kinds of vehicles. and i'm never going to mess with richard sherman. i think scott should come back on, polaris is a better stock than harley davidson.

sorry, i had to say it. it just is. kathy in new york? >> boo-yah, jim. thanks for taking my call. >> of course. >> caller: i want to know how you think about kkr. i want to buy it for the dividends. >> i'm blessing that. i've been blessing that for a long time. i am with you. i like that yield, i like the stock, i think you're in good shape. i think he's a smart and a good man. larry in massachusetts, larry? >> jim, just after the last quarter, you took me to task for defending an indefensible dsw conference call. the stock has rebounded by 17% from the low and you recently called it cheap because of what you've heard from the shoe manufacturers. >> right. >> my local storebusy, do you still think the shoes won't match the bags? >> remember, you said empirical knowledge, that's anecdotal.

we do know there's a footwear bull market right now i think could spill over to dsw. i don't mind it. the risk is better than reward. i was blown away by how bad the kate spade call was. it's not a buy to me it bounced so much. it went down so much. that wasn't good, the macy's conference call p wasn't that good. they didn't say things were all that bad in handbags. i don't know, dsw. i think it's three down and ten up, and i think that's worth playing. just like this. just like this. the consensus changed and the buyers follow suit. should it be happening? not necessarily, but it's just the way it is. it's how the big boys roll. on "mad money" tonight, do you know there have been more than 180 ipos this year. if you're buying into an exciting new story, how do you separate the winners from losers? i've got one under the radar offering. a restaurant upstart being called imagine the next chipotle. i've got more than a taste test for this stock. plus, you've heard all the bad news about putin's sanctions against the u.s., maybe i've

found an unintentional positive. why don't you stick with cramer? >> 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. so i can reach ally bank 24/7, but there are no branches?

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why the heck does all news have to be presented so negatively? last week, vladimir putin may have done the single most positive thing you could do for the consumer's wallet, he banned u.s. chicken imports. immediately, the outpourings were negative. the washington post pointed out that the ban is, as i quote, also slated to negatively affect a number of u.s. food industries, end quote, particularly chicken where we sent $300 million worth of poultry to russia every year. the chicken industry, come -- come on! is that the real ramification for something that's eaten by

tens of millions of americans? the pain in the chicken farmer's budget. this putin hurts chicken farmer story is a classic example of how a huge positive gets turned into something dastardly. do you know ever since he put in this ban, the prices have been in a freefall. do you know that hog futures which had been soaring not that long ago have come tumbling down, including a day they fell the maximum! the maximum allowed? and are back to where they were on march 18th. that was before the big move. do you know the stubbornly high price of cattle is now crashing as a newfound putin-inspired chicken glut has made poultry more competitive! hey, weeks ago, we thought cattle could only go up in price. no more. it's -- virtually every commodity i follow save cheese.

grains, hogs, cattle, poultry, they're all getting hammered. the building blocks of the american diet are tumbling down in price, which brings me back to a bigger point. the impact of chicken on fed policy and the ideologues that bash the fed out of anger or desire of profit, let me tell you something, it's wrong. think back to june 18th when janet yellen admitted inflation was on the high side but added the caveat that the inflation we were seeing was a little noisy. oh, boy, the bond market intelligence that has favored higher interest rates even when the economy was dying on the vine, immediately lamb basted her for being naive. i'm willing to admit that inflation got not just troublesome, but on the verge of running away. what's happened since then? how about declines in about everything that goes to the end price at the supermarket? plus, this wholesale retreat, notice the play on words there. wholesale retreat -- is

occurring simultaneously with the most unexpected decline in gasoline despite the summer driving season and the geopolitical turmoil. that's how the big -- that's how big the u.s. created worldwide glut in oil really is. how about the large decline in natural gas that right now is lowering your air-conditioning bill? how about the big slowdown in the rate of home price increases we caught in yesterday's figures. how about the decline in mortgage rates we're getting with this relentless rally and bond prices? was it not supposed to be happening? therefore it's not happening. look, like fed chief yellen nailed it perfectly with the inflation. even though she surely wasn't counting on the help that putin gave her, she gets no credit for -- she's considered soft on inflation and therefore a lightweight. now, i've been building a thesis that this decline in inflation wasn't being taken into account by the stock market. i've been suggesting that as the price of gasoline goes down as it has and purchasing power

rises, means more money for the consumer to spend. now i realized i'm thinking too small. the whole commodity consumer complex, beginning to see a windfall. may not be able to offset the rising dollar, but it's powerful and it's real. putin gave us the last piece of a positive new puzzle. here's the bottom line. numbers will soon be going higher, not lower for commodity consumers at both the corporate and the individual level. but the chicken farmers, sure, they may be hurting, but the rest of us, it's all good! . paul in pennsylvania. paul? >> caller: hello, jim, thanks for taking my call. >> no problem. >> caller: love your show, jim, it's absolutely great. my question is on mcdonald's corporation. >> oh, yeah. >> caller: i've held a stock a long time, it's been good to me over the years, jim, don't get me wrong. i'm concerned about direction of this company right now. >> i think you should be. i think natural organic is the way to go and mcdonald's is

synonymous with the opposite of that. i think mcdonald's is in a secular downturn. they do have a great balance sheet, good dividend, flexibility. but in the end, the dogs won't eat it. let's get to the meat of the issue here. putin pulled out the cleaver, all right, and he went for pain. but it's our gain. these sanctions could be a windfall for american companies and consumers. no bones about it. okay. now there's still more "mad money" ahead. missed the mass move in chipotle, listen up, i caught my eye on a new casual, find out if it's time to go greek. then it's time for no place like home. i'm talking about a home builder that could put you on solid ground. plus, avoid the hype, i've got an under the radar play you need to know about. i say, stick with cramer!

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how do we approach a stock like the rapidly growing fast casual mediterranean food chain that exploded higher in april and has since continued to make money for investors in the aftermarket? before i go any further, let me make one thing very clear. it's a tiny $565 million company, and i'm not recommending it is a buy right here. i'm not telling you to buy

zoey's. it would be downright crazy for you to jump all over it afterhours trading or buy it without a ton of research yourself. the track record of stocks becoming public in the last few years is nothing to write home about to say the least, especially when there's a lot of insider selling as there is with this one right now. it's a very intriguing story. it's tapped into the fresh natural foods i like so much. one of the slogans is, if it wasn't food 100 years ago, it's not food today. and the company seems poised to double the store count over the next four years. so it's -- i think it's worth asking under what circumstances zoey's might make sense as an investment for you. that's why tonight i want to give you a rubrik. specifically we're going to evaluate versus where chipotle was in a similar point in the life cycle. there's no such thing as a next chipotle. i'm using it as a comparison.

since becoming public in january of 2006, they've seen the store count triple, revenues have grown more than five. can you imagine? and if you got in on the actual deal, the stock is giving you a 2,980% gain. no wonder people are trying to find the next chipotle. it's a tough act to follow. if it looks anything like chipotle did shortly after it became public, that could mean the long-term opportunity could be tremendous. but before we get into comparison, let me just quick give you a rundown on what it actually is. this company is a texas-based fast casual chain serving mediterranean food daily. which has grown leaps and bounds over the last few years. they only opened the second store in 1999, by 2011, 50 stores, the company has roughly 115 locations. this is a regional to national story. just like chipotle when it came public, zoe's appeals to consumers by giving fresh food and clean environment. the company's carving out its

own niche, creating a market. a lot of veggies, which means it has inherently less competition than a chain like el pollo loco. let's talk numbers and see how zoe's stacks up to chipotle back in the days when it was a much smaller similar size. average annual sales for restaurants that have been open for at least six months. right now, zoe's has an average unit of $5.5 million. back when they only had 100 or so stores, it was roughly half. how has chipotle done lately? over the last six years, they've more doubled their annual unit volume, now it's an astounding $2.2 million. can zoe's expect similar growth? that's a tough one. a lot of chains like panera bread have to do with the fast casual revolution. with these companies creating a happy medium between limited service fast food joints like

mcdonald's and full service restaurants think darden. zoe's operating in 2014 is experiencing the benefits of that. so while the average -- the company's average unit volumes are very strong, i don't think we can expect truly explosive growth on this front. the model's been solved. how about new store growth? this is key. and it's where zoe's does set itself apart. the company was increasing its store count at a 19% annual clip. in the two years prior to chipotle's ipo, they had new store growth of 27%. the expansion was decelerating by the time it became public. zoe's is putting new stores up like crazy. last year, zoe's increased by 36%. that's an acceleration from 32% to 33% growth in 2011 and 2012. company expects to grow the footprint by 30% this year, 25% in 2015, 20% in 2016.

if they can deliver on those forecasts, it'll be able to double the footprint in roughly three years. and that is incredible and the growth stock guys will love it. what about the total size of the opportunity? all right. zoe's has done extensive research and believe they can get to 1,600 locations which represent a monster increase from the current store count. they're all targeting 2,500 to 4,500 stores eventually. zoe's target is far from a hard ceiling. these are 1,600 very specific locations that management has identified through a strict analysis of trade areas demographics, particularly desires of women, competitor dynamics and real estate availability. if anything, 1600 stores could be a floor for zoe's not a ceiling. then we have to consider the same-store sales, the holy grail, the all-important metric for retailer or restaurant. just today, zoe's released a preliminary second quarter update because they filed a secondary offering that shows there's their same store sales

increased. that's incredible. but doesn't come close to chipotle's quarter. that was amazing, babe ruth like. what about chipotle in 2006 after it became public? back then it was on fire posting a 19.7% increase right out of the gate. i think this is really where we need to draw the line when it comes to comparisons to chipotle. zoe's may have a strong concept with excellent unit growth but not strong enough to come out with chipotle-style sales figures. those are the best way to measure the health of a restaurant chain. i will say this, though. zoe's does have a terrific management team. the executive chairman has run six different restaurant companies over the last 20 years including being the former ceo of baja fresh. that was neck and neck with chipotle in the fast/casual mexican space right up until it was acquired by wendy's and badly mismanaged the concept. the ceo also worked at baja fresh before it was sold to wendy's and has a long career in

the space. in a way, they have a chance to do what they couldn't do with baja fresh. i felt was going to be better than chipotle at one point. at the same time, it's important to point out that they filed a secondary offering. almost all of the 4 million shares being sold by shareholders, no the the company. i wish that weren't the case. even though i expect the right for people to take profits. here's the bottom line, while it's clearly one of the most compelling growth stories around, comparing to chipotle, chipotle of 2006 is a miscarriage of justice. zoe's has the potential of being a very good stock. they would need to execute flawlessly for years to follow in footsteps. is it worth buying on the deal? ultimately, i think we should wait and see a bit longer, get more of a track record, but i understand how people could believe this could be the son of chipotle and speculate on it because of the bloodlines, its niche and its market all to itself. tim in pennsylvania, tim? >> caller: hey, jim, how you doing? >> i'm good, tim, how about you? >> caller: just fine. hey, i wanted to get your

thoughts on walmart. i've selected walmart stocks ever since i started investing about 30 years ago. and i've always reinvested all the dividends and everything else. but of late, they've been disappointing me. i went in the store every day, if i see something i don't like, i let them know. i was in there this saturday. they only had one full service checkout open and the store was full of people. >> yeah. look, walmart has issues. we're going to take a look at the quarter. they're just about to report. but i have great concerns about walmart. it's not one of my favorite stocks by any means. and, remember, i am a little bit sk skittish about retail in general. all right, sure, zoe's kitchen can heat up, but is it the next chipotle? that's a long way away. it could have the right recipe, but don't touch it, do the homework. on the deal, if they priced it on the whole, look, i want more track record. there's still more "mad money" ahead. investing is like buying a home, it's all about location. find out if tripoint is the right place for cash to call.

as mortgage rates hover near historic lows again. then, don't believe the ipo hype, but believe in good companies. i've got an under the radar name. stay with cramer. you're driving along,

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some point you need to ask yourself, what about housing? that's right, housing, one of the ugliest parts of this market should be one of the biggest beneficiaries of lower interest rates. guess what, mortgage rates are coming down, too. meanwhile, pricing on homes come down too far, too fast. so houses are becoming more affordable. you don't see anybody revising up their estimates for the home builders and stocks have been in the dog house. what is going on here? let's take a look, got to take a look at this one. this is called tripoint homes, tph, a smaller home builder operates in seven states out west. company acquired warehouser's home building division and a 2.8 billion deal last month. okay, it was part of a complex process known as a reverse mortgage trust. now, tripoint reported last week. the company actually delivered some excellent numbers.

4 cent earnings beat off a 16-cent basis, higher than expected revenues, 54% increase in the backlog. plus, i thought the guidance, the first forecast was pretty robust. yet this stock is still less than a point above the 52-week low. so let's check in with doug bowers, find out more about where the company's headed. withing to "mad money." good to see you, sir. thank you for coming on the show. >> thank you. >> i saw your stock's down 33%, and i saw the ultimate valuation of the company to me is worth less than the business you bought from warehouser. i just think that this group is in some sort of funk and you couldn't break out of it no matter what. >> well, the whole transaction, the reverse mortgage trust you indicated earlier, it's a very complicated transaction. and when we announced it back in november, you know, our stock initially went up. >> right. >> and during the whole process of a reverse mortgage trust, there's a huge trading game between the shorts.

you had all that going on. and then you had the announcement of a split. there's been 28 reverse mortgage trusts even done since the tax code enacted. so when you take a look at the split when warehouser announced a split, they induced their shareholders to the tune about 10%. you take another drop. so there's been a lot of noise around that stock. >> i was going to use the word technical. because, look, you're doing better than almost every home builder i know. and yet your decline is greater, which is where i think the opportunity is. so why don't you tell people about how well the company's really doing, your position in all the places where everybody's land short, you're land long. your home price is $500,000 price point. that's who has money to spend. just walk people why this story's different from the other home builders. >> the key drivers going forward in the future, our average sales price $443,000.

>> right. but it's also in an area that's doing better. >> now we have a bigger sand box to play in. we've got 31,000 lots, 17,000 of those in california, which is a very land and entitlement constrained market. the fact of the reverse mortgage trust, jim, that's really, i think, the investors don't understand is the minnow swallowed the whale. >> right. well put. >> but the book basis for the whale comes over. so the assets at warehouser real estate company come over the a an attractive basis. these 30,000 lots that i have to play with, especially in california, you know, provides a lot of growth opportunities for the company. the second key thing is the rico companies were part of a -- you've had dan fultonon yo on y show. >> did a fabulous job at warehouser. >> but rico was being run as a cash company, not a growth company for earnings.

>> right. >> and then lastly, they hadn't looked at a lot of the ancillary businesses, title, insurance, mortgage, stuff like that. so those are the three key drivers that we see for tripointe for the future. >> one of the things dan said to us, look, it's kind of undermanaged. if you got it at the right home, you would see how much it's worth. and i think what's happened is everything's being clouded. look, i don't want to pick on any particular home builder, but there is -- i would do a pair trade if i were at a hedge fund. meaning, i would buy you and go short another because yours is dramatically undervalued versus the rest. how could you bring out that value? what has to happen? >> we need to execute. in excess of 25% earnings growth, we gave the street guidance, earnings growth, delivery growth. 25% delivery growth and $1.25 to

$1.40 as far as earnings. we've given a lot of visibility in light of the fact that the market as you said is choppy. >> right. we should talk about that. i mean, how much of it is the housing market got cold again? >> you know, it's gotten choppy. >> right. >> housing's a local business. but when you look at the bigger picture, what i see for the next three to five years is a slow and steady recovery. you've had fiscal constraints and an accommodative monetary policy, but you haven't had capital come into the space and overbuild as it did in 2007 and 2009. so we see a very slow and steady recovery, and we can fuel ourselves right into that market with these -- >> wait a minute, but your houses are not too expensive for your neighborhood, right? some places in the country got too expensive. not in yours? >> no. >> i think if you execute and do that number, it will be revealed that your stock is about six multiple points below everybody else. makes no sense to me. you had a good company. >> thank you. >> that's doug bower, the founder and ceo of tripointe

homes. i love the warehouser home business. this is it. just got a new structure. "mad money's" back after the break. are you sure we should take this billboard down? people find out state farm does car loans as well as they do insurance, our bank is through. good point. grab an edge. look there's two guys on the state farm borrow better banking sign. nope for real there's two dudes on the state farm borrow better banking sign. [ reporter ] breaking news from the state farm borrow better banking sign... we're seeing two men that have climbed the borrow better banking sign gentlemen please get down from the state farm borrow better banking sign. phil get the hose. okay he's getting the hose. alright, let's go. [ male announcer ] talk to a state farm agent about car loans that can save you hundreds.

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it is time -- it is time for the "lightning round" on cramer's "mad money." rapid-fire calls, say the name of the stock, whether to buy or sell. are you ready, ske-daddy? time for the "lightning round" on cramer's "mad money." nelma? >> caller: hi, jim, thank you for taking my call. >> of course. >> caller: i'm calling to get your opinion of arrowhead research. >> i met with one of those this morning and i've got to tell you, this is -- you understand this is the height of speculation. if you have anything more than 10% of this portfolio in arrowhead, you're making a big mistake. let's go to tony in north carolina. tony? >> caller: hey, how you doing, boo-yah, jim. >> boo-yah. >> do you think pot belly will get its act together and go up? >> i don't know, my friend herb greenberg told me not to touch the potbelly, and i still ain't touching it. let's go to michael in pennsylvania, michael?

>> caller: reported positive results for rally on monday. and with that being a $12 billion market and 50 million shares worldwide and a reaction in the market. >> i think the stock has moved up too much in advance of what people thought would be an approval. that said, i like opko, i think it's a good hold here. i saw it jump up and go back. people expected a big move and they didn't get it. bob in new york, bob? >> caller: hey, jim, boo-yah. >> how are you? >> caller: i'm great, thanks. my question is financial resources. >> right now, the oil complex is going down. i did a video about the idea, oil's going down, these are all going down. we'll find a level and then -- but right now, be careful on the exploration production companies. j.p. in illinois? >> caller: yes. >> you're up. >> caller: i have ibm, buy or sell? >> i don't want -- you know what, i'm going to do -- >> don't buy, don't buy -- >> ibm with cisco's challenge,

problems overseas, i want to wait. i don't think it's a great buy, i don't think it's a great sell. al in florida, al. >> yes, jim, captain al here in na naples, florida. tropical paradise down here, captain al. you ever down here, naples city. we'll take care of you, buddy. >> thank you. >> caller: do a little fishing, relax. >> how about the stock, too? >> caller: okay. this is what we're looking at. we own h.a. >> h.a., hawaiian holdings. i like hawaiian holdings. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. ♪ time and sales data. split-second stats.

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in this environment, you have to wonder if it's really safe to invest in any of the companies that have come public in the last 18 months. there's just been so many newly minted stocks that seem promising and then they turn out to be duds. even companies with fantastic products and terrific long-term visions have gotten killed in the aftermarket. think about go pro. came public june 25th, and doubled at $48.84 a week later. and the company reported a seemingly, not really, but seemingly disappointing quarter out of the gate, so the stock dropped from 48 to below 41 in a

single session at the beginning of this month and it's been stuck in the high 30s ever since. and, look, go pro is a real business, it's actually profitable, it sells a popular product and i like the company very much. but its stock rallied too far, too fast and investors were punished when the company's results couldn't justify such a lofty price to earnings multiple and then the real dogs. the e-commerce ipos. they've been making fortunes for the short sellers. back in may, i warned you stocks like rocket fuel, coupons.com, retailmenot, which had all soared on the first day of trading and come down since then. still have a lot more downside ahead. sure enough, they've given up the ghost in the last couple of weeks and seem to make new 52-week lows pretty much every day. but look, the weakness in these stocks does not mean you need to be wary of every single recent ipo. it does mean that you need to be careful when you're actually investing in a newly public company. we used to call these unseasoned companies. many of these freshly minted

ipos make great trades, but they make terrible investments. curiously, the less hype a company generates when it becomes public, the more i'm interested it. it will be the stock that turns out to be a good investment. one of the major reasons i like trinet, a sleepy little company. the company we talked to yesterday, it hardly did a thing the first day. you could have gotten all the stock you wanted. it's been a juggernaut ever since because a solid, well managed company with a good balance sheet. making money. or take cramer fave q. it's known as a contract research organization. it's like charles river labs. basically, it's an arms dealer to all sorts of pharma and

biotech companies conducting outsourced clinical trials that help save on costs so that drug developers can spend their time focusing on what they do best, developing new formulations. unlike charles river, though, which best launches an early stage research, 1-800-lab rats is, indeed the phone number. let me put it this way, all about helping biopharma companies, while quintiles is about running the final gamut of clinical trials so they can gain fda approval and be commercialized. when they became public in may of last year, it was a yawner. the ipo was far from impressive. unlike all of the much hyped initially red hot sizzling offerings that rocketed off into the stratosphere and crashed back to earth, the price at $40 a share then jumped a meager 5% on the first day. i remember i told you to like it.

this stock has slowly but steadily worked its way higher, just like a good investment should. i recommended just a few days after it became public. slow and steady really does win the race and the 18 months since it's given us a terrific gain. it's up nearly 40%. oh, it's up a quick 10% since we last spoke to the ceo roughly ten weeks ago. why has it been a solid performer? and why do i believe that performance can continue to be great? first of all, this company is the largest of the contract research organizations that provide outsourced clinical trial services. and this business is booming. in 2012, cros, contract research organizations control roughly 36% of the market. most drug companies prefer to do the research in-house. but it's expensive. that's why by 2018, i think that 50% of the business will be outsourced to contract research organizations. second, we've seen a proliferation of well-funded small cap biotech companies.

and all the different ipos, right? think about the ipos that flooded the market. well, all these companies will now have money to spend if they want their trials to go smoothly. they can't do it themselves as well as they can outsource them to a company like quintiles. they can't afford all the infrastructure to run a topnotch trial on its own. but they get access to fully scaled information technology systems, skilled therapeutics staff and a global infrastructure that simply wouldn't be economic for a single small biotech to maintain on its own. spending more of your research and development budget on outsourcing is simply a terrific way for drug companies of all stripes to get more bang for their buck. plus, because it is the top dog in this industry, that gives them an enormous manage competing for this business. why? okay. be a small cap businessman here. because if you want the fda to approve your drug, right, you need to seedy verse patient sites, accuracy and speed, all the things they can deliver which the smaller competitors

may not be able to handle. it's got an fda seal of approval. third, they're best known for the work in phase 2 and 3 clinical trials, a sweet spot of where they're allocating their money. although charles river saying it's going back to the basics. they want to invest in the drugs that can more quickly come to market and more quickly hit the bottom line because they're so earnings challenged. sure enough, been able to consistently post a series of excellent results since coming public 18 months ago. these guys have proven they can execute. in the most recent quarter reported at the end of july, the company blew away the numbers reporting a 10% earnings beat. they raised their guidance for sales and earnings, saw a 21.2% increase in net new business. plus the company now has $10.3 billion backlog. the only piece of hair on the quarter was the core product development did get hit by a major cancellation. it was just one cancellation. and despite the damage it did, the company's book to bill ratio

for this division still came in at 1.11. anything above one means they still have more business than they could actually handle. meanwhile, management said they're in the process of negotiating some sole source deals where they would be the only provider of clinical research. now it's been 18 months since they became public. it's had a nice run. i can't blame anyone ringing the register. but this stock is selling for 19 times next year's earnings and it's got a 13% long-term growth rate. that is not super expensive. i wouldn't be surprised at all if the estimates were too low, which means this stock could have more upside like the original quintiles. when you're searching for the companies that have become public in the past couple of years, don't look for the ones with a big splash and attracted a lot of hype. the best investments are often companies like quintiles, became public quietly, to little

acclaim and slowly but surely chugged their way higher. and i think this one is not done yet. stay with cramer.

a master of disguise hatches $100 million scam preying. don't miss american greed tonight. tonight. i promise to trymarket >> narrator: in this episode of "american greed"... he's a consultant to con men. >> the greed, the greed, american greed -- you want to talk about american greed? the american greed was... without boundary. >> narrator: the brains behind one of the largest scams in history. before it's over, he'll lead federal agents on an international chase, changing locations and identities. deal maker shalom weiss doesn't hide in the shadows. >> the guy is such a flamboyant character. he's big and he's bold and he's brazen and he's loud. >> he was attracted to lights, women, music, gambling. >> narrator: are these the fatal attractions that will do him in?