>> the stock held 92.5 a number of times. i think it goes higher. >> see you back here tomorrow at 5:00. "mad money" with jim cramer starts right now. 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. some people want to make friends, but my job is to help you make money. call me at 1-800-743-cnbc or tweet me at jim cramer. merger monday is back, skb baan with avengeance. we've taken a little break, with

economy misquarters and weaker sales and potential ebola outbreak. sales are back. it is mixed, with the dow sinking and the nasdaq gaining, they help consolidate the gains from last week's rally. now, the two deals we had today were typical of what we're seeing before at least the pause in october. lab clinical testing company that tests new drugs is a logical extension company for one that's tapped out for growth. it rivals letter q, my favorite, and par xl which has a terrible quarter. this deal rekindles the things going on in the health care space. the companies can't keep to help but merge. you know what? i would take the 25% gain and run. sell, sell, sell. it's the other deal.

the french advertisie ining fir buying sabian. we have to drill it down here. when i read about this, i was a bit mystified. i knew sapient as a smaller scale sape. the division called sapient nitro. while the publicist was nicked, i can see the synergies and recognize how it can make publicists relevant in the digital world. i think this deal explains why this market likes social media and marketing plays and why the stocks of google, facebook and twitter remain undervalued, despite various missteps and execution issues. [ buzzer ] >> that have kept them from rallying of late.

let kevin spacey tell you. when i was rooting around the website, i came across a speech he gave about the relevance of content, most specifically, story telling. the notion of the speech was brilliant, as is spacey. i guess that was something i should have figured. he talked about how all people want to do is hear and see great stories. they don't care how or when or where they hear them. they want to be engaged and be inspired. if you don't give it to them the way imax theaters rebelled against netflix, you get past the freedom of watching what you want to watch and when you want to now. spacey said there is an explosion of story telling right now. it's happening faster than anyone can believe. he picked two examples that hit home as we try to figure out how to value stocks. rather than being data consumers, people are generators. each facebook user produces an average of 90 pieces of content each month. original content.

that adds up to 30 billion pieces of new content shared across all platforms. that's an outstanding number of stories. spacey talked about how there are 2,900 days of worth of video uploaded every 24 hours on youtube. more content in one month's time than you find in all three major networks over 60 years. it's what he called a torrent of content. what does this have to do with sapient? they know how and where to show the second story. how about this. whole foods reports wednesday it's trying hard to distinguish itself from the other guys that have inundated the market. they hired sapient. according to ad week, they created a digital screen on a wall that shows produce growing in the fields of six local farms that supply the store in the

south for whole foods. it's a non-cliche way to explain how whole foods is a local experiment. it's working. coca-cola hire sapient the tell stories, and video games use them to show their video game enhances. this doesn't amount to a hill of beans if it can't translate to sales. that's cynical. the whole process of advertising may be too cynical for the average user these days. people trust stories that are presented in novel ways that break through the clutter created by the networks but, most importantly, by facebook, twitter and other websites. i think the acquisition is a defensive move for publicists. the companies i follow are all desperately trying to stay relevant with young eer people, and younger people don't care where the stories are. they want good content. the advertisers are figuring out

what the rate of return is when spending with facebook or google, and the advertising firms don't have the expertise to create the stories that can be viewed on screens. an ad firm like publicist has to hire or buy sapient and then figure out what to do with the rest of it. this brings me back to what i care about, facebook, google and twitter. all three have difficult reporting periods. google disappointed with the desire to hire like bad to make the best bets in the future. didn't matter the sales when you back out the cash. this prefers cheap layoffs over expensive hiring. then came facebook, which deemed 2015 an investment year. wall street was hoping for a harvesting year. sell, sell, buy, buy. when zuckerberg started talking

about the long-term need to have franchises, he might as well say he intended to start a bonfire and throw dollars into it and see how many catch fire. finally, there's twitter. twitter is like publicist before sapient. it knows something is out there and content is being created by individuals, which costs twitter nothing. management can only stare in wonderful that every tv personality promotes twitter. twitter is known for two things, staff turnover and am bbiguity. the staff turnover subtracts billions. publicist seies the writing on the ball that it better find out how to tell stories in the new world. we should own the stocks of the new networks with the billions

of stories and videos created, not by the advertisers but regular people. i wish google, facebook and t t twiter knew how to tell its own stories. maybe they can't define who they are right now, and that's why the stocks are stumbling. particularly twitter. maybe they need a sapient to tell their story. perhaps one or all three of the companies should hire kevin spacey. now, there's a guy who can tell a story, which is what all three need to get their stocks going again. in a world that favors traditional old fashion tech where people avoid the companies with bigger grand schemes that may or may not make money some day. james in california, james? >> caller: how is it going? boo-yah, cramer. >> boo-ya, back.

>> i know they acquired a solar panel company this year. i was wondering if that's a good idea, to keep them long term. >> long term is better than short term. the stock is volatile short term. they want to put a panel on everybody's roof. with energy costs coming down, someone might say, you don't want to be in solarcity right now. that's what you're fighting. zach in new york. >> caller: boo-yah. >> westchester ymca. what's going on? >> caller: want your take on how valspar is stacked up against the big players? >> why bother? it's up a lot, and i like ppg. i like all the paint companies, but they have the mexican acquisition that will be helpful. let's go to ohio. stephen? >> caller: quick question for you. >> sure. >> caller: i'm calling with

capital funds from a university where a large cap opportunity to manage the school is dominant. i want to talk about cerner. it has an extensive backlog. is this mispricing? >> it's a top quality company. when i was doing it the other day in cardinal, i was thinking of including it. it's too it oriented. i would never -- i think it could be a great portfolio holding for someone who wants a health care stock. google, facebook and twitter are actually undervalued. maybe with these american internet dominated, they need to tell their own stories. maybe their stocks could get going. it's a dirty business, but is it time you do dumpster diving? i'll talk to the coe of waste

mack. and allibaba hit new highs. should you be gaga at these levels? plus, the fight against infectious diseases continues. a brand new company on the front lines of stopping the spread. stick with cramer. for over 60,000 california foster children,

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if you want to own a nice consistent company with a strong did i ha dividend and management team, look at waste management, wm. this sleepy stock which i've liked forever is the largest in america. a nice recycling business. it yields 3.1%. higher than the return you get from the treasury at the moment. waste management reported last wednesday the company had strong results. beat off 68 cent bases on a higher than anticipated base that fell. the management expects to get the highest level. the company saw robust pricing. what gets me excited about the story is the value of creation element. three months ago, waste management would be selling the business where they burn garbage

for $1.49 billion. the same time, the business announced a buy back, most of which has been spent. if they can't find takeover targets, they'll buy more stock. waste management has given us a 7% return since we spoke to the ceo at the end of july. this is the kind of stock that rallies slowly and steady. let's take a closer look with the president and ceo of waste management to find out his company's prospects. welcome. >> hi, jim. pleasure to be here. >> this quarter seemed to be all about discipline and execution. discipline and execution can produce nice things, right? >> no doubt about that. we've done a lot of work in the last ten years to get the right team in place to drive that kind of execution. you know, jim, these things don't happen overnight. i'll tell you, i wish i'd done it faster but we have the right team right now doing the right

things. >> one of the right things is to pass up on business, isn't it? >> you know, look, we think we should get our fair share of volumes but we're always going to be a more price dominated company than volume. we always like to say that if you lower the price of trash, people don't create more trash. this is not like a consumer product. if you lower the price of tvs, people buy more. they don't create more garbage, which means you'll be better off making sure you can cover your inflation with price and get your fair share of volumes. that's what we plan to do. >> when i saw the gdp number and knew you were going to be on the show, i am still amazed we're not back to where we were in terms of trash creation in 2007. what are the elements that would make it so we could return? >> you know, jim, it's really interesting. the last downturn, we really saw what drives waste management's business, and that is housing stocks. when you think about it, every

time you business a house, you put a can out front to build it. when you build 100 houses, you have to build a grocery store and commercial businesses to support the houses. then with new houses, obviously, you have new residential customers. we get a three-for-one pop every time they build a new house. what you've seen in the recovery is it hasn't been a housing-led recovery. i've always said if we can get three successful years of one million plus housing starts, that's when you'll see the volumes come back for us. this will be the third year in 2015, and we expect to see the commercial business, small businesses like dry cleaners and restaura restaurants, that's when we see those pick back up. we're thinking in 2015, we'll start to see our volumes improve. >> one of the things you've taught us is that the urban areas want you to use natural gas. you've had a fabulous natural gas business. you've been a pioneer. the lower gasoline prices are

going to stop outfits other than yours from switching to natural gas, don't you think? >> yeah. i don't think there is any doubt about that. the differential, even with lower oil prices, you still see the differential favoring natural gas. our customers want that, and we'll continue down that road. >> how about recycling, which i felt was a mixed picture from the quarter? >> recycling has been a mixed picture now for about 18 months. you know, it really is, i think, the untold story of what's going on in our industry. that is that at the peak, we were investing anywhere from $100 million to $400 million a year in recycling assets. what you've seen is the first sustained low prices in commodities since i've been ceo, which means we're not investing in recycling. we need to work with our customers and governments to find out, how do we incentive

folks to recycle? it's something we need to take a look at, from a governmental point of view and customer point of view. >> recycling not so great. are you turning waste management into a smaller, smarter to be smaller, but you can argue that is what's going on. >> you know, jim, i have to tell you, we're not here to create an empire. we're here to create shareholder value. if we can do that by doing a smaller company, that's exactly what we'll do. i think we can take the proceeds and reinvest them into more stable businesses that will create additional value. we can create more than that by using the proceeds of the sale, because we have a high tax basis. no tax leakage there. i think we can replace the

calendar year 2015 and $3.67 in 2016. wow, shoot the lights out. we know managers are willing to pay up to two times the growth rate, which implies alibaba

could get a price earnings multiple of 80. before y if we're talking about what's potentially the fastest growing large-cap company on earth, don't you have to give it the highest price to earnings multiple? i can see super growth oriented managers paying up to as high as $222 for alibaba, based on next year's earnings, almost double. not me, but they could make a case for the stock going to $296 when the 2016 numbers come, and that's before factoring any upside earnings revisions. with alibaba at a meager 102, there's very little fear of paying the huge prices because the growth oriented hedge fund managers believe they will be able to blow away the estimates and the stock deserves to go higher. $222 or $298 price target, way too much for most of you to swallow.

it seems absurd. even as the uber growth money managers would have no problem holding on to alibaba until it reaches the numbers. let's say it gets the same multiple as facebook, that seems reasonable. that still takes the stock up $20 on next year's numbers, to $160 on 2016 estimates. that's reasonable, considering that facebook has slower growth and is less profitable. facebook's valuation gives managers a huge umbrella to figure out how much they pay for alibaba. there's always a chance alibaba could disappoint, though the firth quarter, that rarely yields a miss. right now, the stars are aligned for a higher price. no wonder major alibaba shareholder yahoo is there. and i'm a strong supporter of yahoo. the most important point here is there is some price that must be paid for alibaba, and in the end, considering the comparisons, it deserves to have among the highest price to

earnings multiples in the market. money managers bid the stock up in advance of tomorrow's report. even without knowing what it'll be. wow. why don't we start with tom in texas. tom? >> caller: jim. i'm going to give you a double boo-yah. >> i'll accept it. >> caller: thank you, sir. i want to ask you about dealer track. get your opinion on that. >> it's a good company. it does well in this environment. i will support it. it's funny you mention this. i've been looking at a lot of these companies. not a lot of competition and good business. claire in new jersey. >> caller: hi, jim. thank you for taking my call. >> of course. >> caller: i'm excited. i'm your neighbor from livingston. >> good deli there. what's up? >> caller: i don't get around too much. getting too old. >> you and me both. >> caller: i watch you every single night. >> thank you.

>> caller: you've made me such an addict. >> i love it. thank you so much. >> caller: i have a question about mobileye nv. i don't own it anymore. it went up to the 60s. >> right. it got a little too high. now, that will report not until december. i think the stock could have another run up. why? its technology is used in every single expensive company car i follow. i think it is okay at these levels. thank you for all those kind words about continuing to watch me through thick and thin. the sky is the limit, and the stars are aligning. alibaba deserves to have among the highest price to earnings market. that's why there's no fear among the managers to pay the big bucks for the stock. much more ahead. including the new face of wall

street that is the center of the battle of the spread of ebola. one of nba's biggest stars ticked over pepsi and coke for the latest deal. find out what kevin durant sees in the upstart company. let's get this week started with a bang, answering your questions in a lightning round. stay with cramer. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers;

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roughly a year ago, a company i love, consumer products giant, announced it could spin out the health care division as a separate company. this weekend, kimberly-clark spun that out, which trades under hyh. viewers know i am a fan of breaking up for value of shareholders. this health spinoff makes a ton of sense to me. medical supply companies doesn't belong under the same roof as kimberly-cla kimberly-clark. this reminds me when cardinal care spun off the business in 2009. $20 a share. a month ago, we found out it was acquired for $58 a share.

it makes surgical and infectious prevention products for the operating room, along with other medical supplies. the company has a medical device business, accounting for 30% of the sales. overall, the products are number one or two in a bunch of categories, including sterilization wraps, masks, pain pumps, feeding tubes. i think the spinoff was perfectly timed. they are exactly what hospitals need to prevent health care workers from getting infectious diseases. we'll talk about halyard. >> thanks for having me here. we're excited. >> i congratulate you, sir. when a company spun off like you, what's the difference? what can you accomplish?

even though we love kimber kimberly-cla kimberly-clark. >> absolutely. i mean, a couple things we can do that we couldn't do as kimberly-clark. we can increase the investment in research because innovation drives all of our product strategies going forward. the second thing we can do is better utilize the cash. in 2013, we generated $175 million of free cash, and kimberly-clark was using that to grow the consumer brands. now we can use it to make the health care business take off. >> are you in the market immediately for acquisitions now that you have a currency? >> no. for the first year, we'll complete the separation from kimberly-clark. we'll have separation agreements. it's important to separate the it systems, human resources, all the things that have been given to us as part of kimberly-clark. kimberly-clark continues to assist us in the first year. in year two, we do. we want to use the cash to look at is thstrategic acquisitions expand the markets.

>> i remember when kimberly-clark made the acquisitions. it seemed like a good idea. they were a health care company, franchise. we think of the kleenex. let me ask you, when did it become such that it was a burden on kim berly aberly and not gre you? >> this has been a strong business for kimberly-clark. it became a strategic use of the cash. they said, we need to use the consumer brands in places like china, russia and brazil, and the cash health care was generated was used for that. if you back up to 1997 to 2000, we were doing strategic acquisitions, great acquisitions. it expanded our portfolio, grew the business rapidly and was really a great addition to the health care business. >> i don't want to be too opportunistic because we're talking about real life and death here, but protective apparent, infectious disease

outbreak preparedness, that sounds like what our country is going through right now with ebola and what africa is going through. are you in those markets, and is it a big year for halward? hallyard? >> yes, we're in there. the face masks, respiratory, surgical drapes and gowns. it's part of the cdc protocol for stopping the advancement of the disease. we're in that business. so far, we've gotten more inquiries about the products. we're growing a little bit, but it's hard to tell at this point whether they're based on ebola or the normal build up of business because of cold and flu season coming on. >> the reason i thought it would be -- i mean, there's a lot of hospitals that i think might be unprepared that would be calling halyard and saying, help us.

>> they're calling and asking for advise because we're one of the most respected in terms of infection prevention. what are the right gowns to use? they're calling for advice. in addition, they're calling to say, if we had to ramp up quickly, if we had to increase inventories, can you assist us to do that? we're making sure we have the right equipment and production schedules in place, so if we need to ramp up rapidly, we'll be able to do so. >> i was trying to figure out how that fits with the acute pain solutions. does that belong under halyard's roof, too? >> yes. we have the prevention products, which is a strong cash generator. then the entire strategy of the new company is to dramatically shift the portfolio, shift to the high margin, faster growing medical device products you mentioned earlier. the surgical pain products, the

chronic pain products, respiratory and digestive health. those are products that eliminate pain, non-narcotic solutions, but also speed recovery. get people out of the hospital faster and make sure they don't return to the hospital. it's a matter of not just preventing infections but also making sure we can speed recovery and eliminate pain. >> i'll tell you, your company, i couldn't wait for it to be spun off. i like them both. you've got a great thing going. thank you so the ceo of halyard health. >> thank you, jim. the way the spin ofs work is people don't know what they have and people sell it, not sure. let it settle in. this may be a company like a company that has so much going for it. "mad money" is back after the break.

it is time for the lightning round. lightning round is then over. are you ready? time for the lightning round. we'll start with mike in new jersey. >> caller: boo-yah! boo-yah to you, jim. >> that's talent. america's got you, which is talent. what's up? >> caller: i appreciate that very much. fyy is the ticker. i like the conference bowl, i didn't love it but yeah. >> i want that deal closed, and it didn't. i'm lousing a little heart, and that's syy. it's not coming together.

the 3% yield doesn't protect you. not crazy about it anymore. that's a new position for me. wally in washington. >> caller: yeah, boo-yah from the land of overpriced coffee. >> i like that. >> caller: i want to take advantage of the boomer of the health care. maybe health care might be a good way to go. >> i like ben tas more than omega. yours is good, but i like mine. let's go to larry in nevada. >> caller: hey, jim. here with a big boo-yah from henderson, nevada. >> what's up? >> caller: i need your help on two things. improving my golf game and telling me if i have a good stock or not. the company is fei company, fei symbol. >> i can't help you with the golf, but this is the kind of company, remember, this is a

speculative company. particle about the sabeam ion, f tea. if you want to do a speck, i will condone it. jim in delaware. >> caller: quick question. when you look at aramark, the stock is low. what do you think? >> i'm surprised the stock didn't go above 30. i mean, i just really like it. i think it's a good company. let's go to stan in florida. >> caller: jimbo, how you doing? >> real good. how about you? >> caller: good. jim, listen, i had a disposition in linn energy. >> you have to go for maximum safety with the mlps. the maximum safety is kmi. people are worried there is an overbuilt of natural gas, pipe and this has commodity risk. i don't want that now. frankie in pennsylvania. >> caller: hey, how you doing?

>> good. >> caller: listen, i'm asking about 8 by 8. >> internet protocol, i say, go to sysco. 3% yield, that's what you want. it's too risky for me. anthony in new york. >> caller: boo-yah from brooklyn. i caught celg at 68 a share. >> you sell a quarter, and play with the rest. it's a monster. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.

you may not know it, but the aisles of your local supermarket have become a battlefield. gigantic food and beverage company fight for shelf space. how does a tiny company beat the big boys? consider talking rain. the privately held company behind sparkling ice. it's made from spring water and fruit juice and vitamins, grown from being a popular beverage in the northwest to a company endorsed by kevin durant. we had a chance to talk to the president and ceo of talking rain.

take a look. >> when i go to a convenient store and see your stuff, i figure it must be owned by coca-cola. you wouldn't be in there. where did you come from? >> well, it happened in 2010. we decided to relaunch the brand. we created the brand identity, and we had some good retail relationships. amazingly, just putting the product in the store once we revamped it, it took off on the shelves. >> i saw you in kroger. kroger is where it started, which is a great retailer. there's a million sodas. >> we think what's working here is everything is intuitive n neurologically. it delivers on all aspects, the smell and flavor and color. >> you have one of the most electric athletes endorsing you. a man who nike is paying $300 million for. kevin durant, how could you afford him and how did you

connect with him? >> they connected with us. rock nation sports came to us and called and were coming up seattle because robinson kanell was having opening night with the mariners. kevin durant, this is what all he drinks and he wants to do a deal. >> wait a second, this is one where the guy actually likes it? >> yes, and that's important to us. we said we weren't going to do brand ambassadors unless they were authentic. when you're approached by that, you think, is this real? >> they met us and we started going through the process where we tried to find out whether this was something that was authentic. we got the opportunity to meet kevin and talk to him on the phone. come to discover he's been drinking the product and tweeting about it. we went down to visit him at the western conference finals and found out he sold it in his restaurants. he loved it so much, he was giving it to friends and sells it in his restaurant. we said, hey, this is what we've been looking for in terms of

authenticity. we didn't want somebody who says, i like this and sets it on a car or something. >> i know you're a private company, but you're doing like $350 million, up from 2010. >> it's been a rapid rise. the retailers have been supportive. it helps the product is selling itself. it was organically grown. back in 2011, we made the decision to go after the top 40 retailers and landed 39 in one selling season. it boomed pretty fast. >> it's not all done in fair weather. this was not your first one, because people say, this guy just got lucky. it didn't start like that. >> no. in fact, the brand has been around since 1992. it started out in a beautiful bottle. high fructose corn syrup, a lot of things that wouldn't work today. through the years, the company made a decision to go more

toward zero and local r-- low calories. i can't say i'm the brains of sparkling ice because different people provided elements. in 2010, we became a brand and beverage companies and created the experience. even though sparkling ice had been there, the key was, we said, we need to define what this is. >> this happens to be my drink. i didn't know it was you. i bought it all summer. sometimes, there are additives that i put in, you don't, that make it tastier. but this is more than one category. i sit there and listen to pep - pepsi-co. this category is not supposed to be a growth category. >> it's about flavor and refreshment. >> other guys say that, too. >> actually, from a flavor standpoint, we think the

consumer is tired of colas. it's a flavor profile they've seen for a long time. if they need energy, coffee and the energy beverages work for them. for pure refreshment, and if you look at the food industry, what's happening there, hard liquor and beer, it's all about flavor. we're providing flavor at a sweetness level that hits with consumers. >> i've been listening to coca-cola for a long time. they took a stake in green mountain and monster. let's say coca-cola watches the show. i know you have because i said you haven't been doing well, and say, i want this guy, and we're going to buy 20% of his company. you game for that? >> as the ceo, i owe it to the investors. they're successful businessmen because they've been smart throughout the years. i'd bring any offer that comes to them. they're having fun. there's not a rush for us. we're capacitate e excited abou doing. >> you love being private, don't you?

>> it makes things easier. we're starting to push international. those get global and takes relationships, even the strategics in the country have international relationships because of whatever goes on in the countries. >> could be international, that could be next? >> we are actually -- we will make an announcement here shortly on some of the international business. we are getting ready to go. we're having fun. >> congratulations. this is a huge hit. you have done a remarkable job. i really mean it. that's kevin clock, the president and ceo of talking rain beverage company. i've been drinking it and didn't even know about it. stick with cramer. a cure. today, we believe every life deserves world-class care. as one of the top four hospitals in the nation, over 100,000 people from around the world come to cleveland clinic for care each year. and we're ready for you with a second opinion or a same-day appointment today today today and everyday. call today, for an appointment today.

for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more.

i know that facebook, twitter and google have come out of favor stocks. i know they peaked when the alibaba deal occurred. what i am saying is that if you go to the sapient website, you will see why i think there are multiple years ahead of growth of companies that have content created by you. i love that model. they don't have to do anything other than harvest the money. so you might want to give up on them. i understand alibaba could be really cheap after we've seen the numbers, but i am saying those three companies are the future. they're just challenged right now. always more. i'm jim cramer. see you tomorrow!

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