Skip to main content

tv   Mad Money  CNBC  November 17, 2014 6:00pm-7:01pm EST

6:00 pm
general electrics not for the reason we said but the stock is cheap. >> thank you so much for watching. see you back here tomorrow. meantime mad money with jim cramer starts right now. i'm here too to level the playing field for all investors. "mad money" starts now. hey, i'm cramer. welcome to "mad money" welcome to cramerica. people want to make friend, i'm trying to make you money. i'm trying to educate and teach you, call me of tweet me at jim cramer. we keep confusing things. we keep thinking what is bad for them is bad for us. today was no different as our
6:01 pm
stock market got clocked at the opening because of weakness in japan. it's always somewhere there. we got a second straight drop in growth for a quarter and that's enough to trigger an official designation of a country in recession. that's right, even after the japanese government pulled out all the stops, hasn't seemed to matter. growth too hard to come by. by mid morning a wave of buying came in to take advantage of the decline. the dow closed up 13 points, the s&p advanced .07% but the nasdaq declin declined. i get the weakness. the ripple effects from japan or china, wherever else it's come from where felt throughout europe where growth seems non-existence and can only get worse. that weakness infected the overnight markets as the case for years and years and everything was drenched in red ink. the early morning selling is plain stupid because after the
6:02 pm
selling wave hits the scores, the positive situation that is unique to america and america alone in this world. first, unlike, say, japan our capital doesn't standstill. oil is coming down, plummeting so what do you do for you're an oil service company? run? no, take advantage of the short-term thinkers and strike and that's what halliburton is doing with the $35 billion take over of baker hues. quite a premium to the $50 and change stock. a lot of people said jim, did halliburton over pay? i don't think so. not bad, huh? i know many think the justice department would stop this deal. heck, i did friday when i first heard it because they compete in so many areas. but halliburton stunned me.
6:03 pm
they publicly said they are willing to give up about a quarter of the revenue to get the deal done and agreed to pay baker hugehs a breakup fee that shows the confidence in the deal getting done. i, frankly, it's amazing. you have to understand it's amazing. this deal for baker hughes and halliburton, it got slammed by 10% has real issues. because you want to figure out whether you want to stick with the whole group given the fact oil is coming down but i have to tell you at these levels i don't care. i prefer halliburton. it's overly punished for real wisdom and cheap if oil goes to 70. the important thing here, halliburton must believe the decline in oil is temporary or i don't think it would do this deal. it create as power house that can go toe to toe against s schlumberger, they are just terrific company schlumberger
6:04 pm
being the best. put halliburton and baker hughes together, i may change may mind. $219 a share, 110 points up from where the stock was urged to be bought on "mad money" last year. an example of immunity. meaning the immunity that activists sees. i know lots of people think allergin, people's desire to use botox and devastating for these guys because that's elective surgery. in reality, botox has so many therapeutic uses it's only begun to tap them. hence why this rally instead of being hammered, again, free from the poll of world of events and i'll have more. free from world events stocks rally. the allergin bid, regenron is working on something to decrease heart attacks. we got evidence from mirk this
6:05 pm
weekend that the drug has a positive effect and that sent mirk up. not long after we read about them, i was struck by the wave of negative e-mail i got about both of them. people hit me with negative e-mails. i thought it was iconic because we saw justice the biggest over pay of the year to speak, the tyson foods purchase of hill shire seems to be working out spectacular. that was one of the biggest percentage gainers of the day after a monster surprise. talk about an american deal producing american results. yeah, we got plenty themes at play today. cold weather here pushes up and plays and nothing to do with japan and europe and brands. that's the maker of ugg boots. the domestic housing place continues on their merry way and home depot and lows to report. the home builders continue the rally that started last month. when mortgage origination spiked
6:06 pm
because farm markets put downward press sure on the interest rates which brings me back to my original thesis. what is bad for them might be good for us. ever since they tried to jump stop i stop, rates should be at 3% instead of 10. it didn't happen. they have to deal with the historical fact it didn't happen. the brilliant hedge fund will be run but they aren't and many macro genouses missed the bull. their weakness overseas is our strength. we have so many companies that don't have much economic exposure at all including this health care takeover and no overseas business making the natural safe havens. emerging market, latin america,
6:07 pm
brazil, doesn't seem to matter. their weakness is our strength. lower oil prices only serve to ignite our economy if they translate into gains at the pump. the declines we've seen here aren't as magnified in non-dollar da nominated countries, those debasing currency to stimulate trade so we're actually getting the real benefit of the declining price. not only that, but our domestic oil companies continue to pump like mad so there is no sign short-term prices will resign. we'll at a point where it pays to drill. if you think there is a pipeline coming soon, which matters since all the forms of transport are expensive if crude oil goes, say, $10 lower. they keep flying high unlike overseas, more traffic, more seats filled, more calm labor situations. that's how they keep rallying. their weakness is our strength. i think one of the biggest mistakes being made by money managers this year is the failure of parallel thinking. the managers are quite adaptive
6:08 pm
to sell the s&p 500 over events as 15% of our companies respond to international trading data but they don't seem to understand that there are people with gigantic pools of money overseas in these same challenge a areas and they are anxious to get into a stable growth market with a good currency. in other words, they are anxious to invest here and they had the firepower to take advantage of it. there will be political events that slow us down. i still don't trust the ukraine russia situation. we have to understand that the fundamentals in japan isn't sitting there and saying wow is me, our country is an awful place to invest. i guess we're stuck with it. he's saying go transfer $10 million worth of yen into green
6:09 pm
backs and buy me anything that moves with any sort of yield at all because we got to get out of here if it's the last thing we ever do. their weakness is our strength. and here is the bottom line. they will keep buying up until things get better, which could take a very long time and a very big amount of investment that comes here out of there. todd in north carolina, todd? >> caller: boo-yah mr. cramer, how are you? >> good, how are you. >> caller: good. i want to say thank you. this has been my best year by far away in the market thanks a lot to you. i'm playing with some house money and my speck play is go go. would you advice me not go go and invest into something like starbucks? >> no, gogo is risky. i like starbucks. when you say gogo i was hoping you would say go pro because
6:10 pm
go pro, the $400 model, i think you play it into the holiday season. so that's a better one. let's go to will in california. will? >> caller: hey, jim, how is it going? >> all right, will, how about you? >> caller: pretty good. i'm here in sunny southern california and i want your take on an ipo coming out on habt. my wife and i eat there a lot. the place is always busy. they got 99 locations and opened one here. the only problem i see is they don't have enough restaurants by i heard they want to take it to 2,000 stores. >> this is how good this show is. i did not know this deal was coming. i try to look at all the deals. i've been looking at the halliburton situation and global situation so i have not looked but i'm going to. that sounds darn good. sounds like you know of where
6:11 pm
you speak and i do like the restaurant business. i like jack but maybe i don't know jack about habbit. their weakness is my strength. we have to stop doing whatever happens overseas as a tragedy. when will refinally get it right? "mad money tonight" the price at the pump isn't the only price. there could be more news. why the next big investment could be found during your next fill up if you know what to look for and can lululemon make a come back? on friday we highlighted one of wall street's most controversial stories we've seen. now the ceo is here to respond to his critics. don't miss my interview with global star. stick with cramer. ♪ ♪
6:12 pm
6:13 pm
6:14 pm
first impressions are important. you've got to make every second count. banking designed for the way you live your life. so you can welcome your family home... for the first time. chase. so you can.
6:15 pm
between the news that halliburton is snapping up baker hughes and the allergin deal, tonight i'm in a mood to put on my investment banker hat and play matchmaker, catch you a catch, find you a find. i want to propose a shotgun wedding between cst brands, the gas station convenience stores spun off by vrksz alero and mar petroleum, maybe my favorite in the country. it would make sense for marathon to acquire cst. we never ever speculate on takeovers unless the underlying fundamentals are sound and when it comes to cst brands whose ceo
6:16 pm
you may have seen, i think the fundamentals are more than -- i think they are excellent and the stock deserves to go higher. even without a deal. i want you to go check that interview on ccnbc.com if you want to know more. this company has around 3,000 gas stations in the united states and canada. so under the corner store brand maybe you pumped gas there, i'm sure some of you are wondering, hey, cramer why are you recommending a gas station stock at a time when the price of gasoline is falling through the floor? well, it's counter intuitive but the fact is an independent gas station chain like cst makes more money when the price at the pump is full. more money. a decline in the price of fuel is good news for cst's margins because when they buy the gas and sale it to consumers at a markup. meanwhile, volumes tend to go up and most important, when
6:17 pm
consumers spend less money on fuel, they tend to spend more money in the convenience store part of cst's operation. what a win. in fact, the convenience stores are some of the biggest beneficiaries around which is why the stock made a brand-new high. i'm not highlighting cst because the consumer has change in her pockets. this is a very welcome pan knee with a lot to like about it. they own roughly 30% of the real estate. that's a terrific asset. second, there is major transformation since it was spun off by valero. under vrksz aalero they were distributing the gasoline refined and cst is able to focus on of tim miezing fuel margins, opening stores and making existing ones more profitable. for example, cst is rolling out stores with a new formouth that to selling food. when the company reported last week management said they are
6:18 pm
accelerating the pace to between 45 and 55 locations a year. meanwhile, cst has been developing it's private label brands, something we can't get enough of. we love store brand private label merchandise because it carries higher merchandise and cst has a strong balance sheet and the opportunity to consolidate a highly fragmented place. speaking of acquisitions, back in august we learned cst is buying the general partner in a whole sale fuel distributor and supplies fuel to 1,100 gas stations and it's a tax friendly way to raise capitol. this combination creates a leading fuel distribution and retail platform and the move i think will boost cst's growth to come. i like cst brands as a stand alone company but why do i i
6:19 pm
think it would make sense for a refiner to. >> buy, buy, buy -- >> cst. speedway, business speedway acquired hes retail for $2.87 billion. this was a big positive. they told us so. they increased the footprint by 1200 locations and moving the business toward more of a merchandised based model and no real over lap here as speedway stores are in the midwest and retail locations are along the east coast. meanwhile from the refineriry side, the placement capacity was increased bringing the company's sales up to 75% of the produxz. plus, the refining business is inherently volatile where the gas station slash convenience store space generates crash flows.
6:20 pm
overall, the retail acquisition could create operating general and administrative expense of $75 million for marathon and integrated light product supply savings and another 70 million from enhanced sales in merchandise. based on marathon purchase of hes retail, they bited the chance to take over cst. there wouldn't be a lot of over lap and most locations are in the southwest, 60% of the stores in texas. at the same time, cst would be able to soak up more of marathon petroleum's gas liegs pproducti. you know what? the cst might be the perfect way to go. at the end of 2012 marathon pete spun off the pipeline as a successful master limited partnership. mostly the company is dropping down the mid stream assets into this mlp because they get a better evaluation. however, on its latest conference call, marathon management saw an opportunity to
6:21 pm
drop down the retail assets into mlpx where they would get a higher price, if marathon goes in that direction, it would make sense to buy up more retail holdings and get more value out of the asset drop downs. that argues in favor of purchasing cst and if marathon is not interested, someone else would. energy transfer partners, the big pipeline that owns sonoco's gas line, they bought susser for $1.8 billion, one of the favorite recommendations. again, i bet cst stores would fit in nicely in the energy transfer family. etp up nicely today. so how much can cst brands be worth in a take over situation? i'm not being wild high. based on what marathon pete paid, i think an acquire would be willing to pay 4.8 billion for cst the enterprise value but translates into $53.40 share price or 26% and remember, if i
6:22 pm
didn't think it could get there on its own. it would make a ton of sense for man on this pete to buy gas stations slash convenience stores like cst brands and if cst doesn't catch a bid, fundamentals are so strong it's worth buying. eva in maryland? >> caller: thanks for having me. >> welcome. >> caller: i would like to get your opinion on valero? >> i like holly frontier, too. i won't say they are perfect stocks. i like the gas station business more than the pure refining business. i think the gas station business is the winner with lower gas prices. call it an energy super boost. it makes sense for marathon to buy but if it doesn't catch a bid, it's a strong story there is much more "mad money" ahead including a look at lululemon.
6:23 pm
but has this downward dog become a wall street warrior? don't miss my take and another development in the fierce battle between a hedge fund and satellite player global star. the ceo joins me to address claims the stock is worthless. i'll show you what the allegin deal means for investors.
6:24 pm
6:25 pm
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.
6:26 pm
how do you go bargain hunting in a market that's constantly within striking distance of the all-time highs? simple, look for laggers and beaten down stocks. in short, you look for turnaround stories and tonight i got a terrific come back. a darling written off, let for dead. i'm talking about lululemon, the yoga inspired athletic apparel chain. it was an unstoppable force, a jugger knot that kept rallying like crazy. two or three years ago if you look up momentum, you see a picture of lululemon's logo and in short, it was on fire. but momentum stocks, wow, when they lose their mojo they come
6:27 pm
tumbling back to earth. lieu li lieu l lululemon and the ceo decided to move to greener past tours and they had product quality issues and to add insult to injury, the founder and former chairman made a series of bizarre insensitive comments about everything from women's bodies to child labor. meanwhile, competition is heading up from gap athletic, sweaty betty, victoria secret and others. pretty quickly, lululemon fell into the habit of missing numbers and the stock got crushed. while nike stock doubled, 176% and poor lululemon has been slammed down 36% over the same
6:28 pm
period. why bother? why bothers with up and comers. downgrade the under performed last week. simple. because lululemon has slowly begun to turn itself around and while this may have become a broken stock, it is absolutely not a broken company, no way, no how. the bears believe lulu won't fix problems and regain the loyalty of customer base but i disagree. one look you hang around in the stores and agree with me. in my view, lululemon stock has come down to cheap levels now trading 22 times next earning easiest mitts and it's worth buying with my charitable trust. sure lul us a lagger but rolling out new products fixing the supply chain and best of all, they have a strong growth story and expands rapidly here and
6:29 pm
abroad. i think you'll like this one or else maybe another company takes a sign to it. i think there is room for lulu when it co-exists and thrives. that will be worth $178 billion by 2019 with the cost of gasoline coming down, put more spending money in people's pockets although this stuff does take more than spending money. look at this way, sales of women's active wear had reached $11.5 billion last year, 9% growth. three times faster and the industry is poised to keep growing in the high single digits for years to come. what is we hind the strength in the women's active wear category. in part of the availability of better products. along with improving fashion trends, greater brand awareness and the fact that people are exercising more than they used to. consider yoga practitioners spend $10.3 billion a year on classes alone. imagine what they spend on yoga
6:30 pm
outfits? that's just oyoga. now we have cross fit and more. we got yoga panels are no longer being used for just owe go anymore. i wore these all day down on the floor and nobody knew. it's not just that i like the category. i wouldn't recommend lulu if i didn't believe they were turning their self around. up 13%, online direct consumer business up 29%. that's a terrific acceleration of the 22% increase. the figure was that lulu lemon's 20% growth in total square footage bringing locations to 270. no other retailer is expanding so rapidly and the company keeps growing north america and begins to take share overseas. here is the negative. lulu's sales declined 5% but i
6:31 pm
think the company can turn numbers around because they saw a rise in traffic. granted the average consumer spent less money but lulu didn't have enough seasonal products, something the management team leadly the ceo who took over at the beginning of the year, lauren is working to fix this by changing the course assortment more frequently and make it fun to go there and management believes the same sales will take a turn for the better with the company guiding for an increase, i think that would be huge when it prints. we know that lulu had a solid month in september and though october was soft courtesy of warm weather, november seems to pick back up. there was one more piece in lulu's operating margin. lulu's operating margin declined to 17.4% but this had to do with a weak product mix which is being fixed and increase store in the e commerce sale and
6:32 pm
higher investments in the business as the company finishes with these investments, adjusts assortment and improves the supply chain, i expect them to bounce back by 300 basis points. lululemon is courting no customers with casual collections, new lines for men and children, both of which can be big opportunities and i think it's worth pointing out a private equity firm initially part of lululemon's ipo took a new 13% steak in this company this past august at 4 2 a share. that represents a nice way for the stock and a buy back over the summers of $450 million worth of buying back, equals 7% and suggests lulu will focus on aggressively expanding its business overseas given the strong results seen from the stores in europe and asia pacific. here is the bottom line.
6:33 pm
i believe that lululemon is turning itself around. the company reported the first good quarter in september. i bet this will be the first of many, yet the stock is 27 points off the high. i think lul us ready to play catch up and i think you should catch up with them. let's go to tom in virginia, tom? >> caller: thanks for taking the call, boo-yah. >> boo-yah, tom. >> caller: my question is about way fair, disappointing earnings and revenues and gone down about 20%. i'm wondering whether to dump it. >> i want to see what william sanoma reports. i thought a good quarter so let's do some more work before we draw any real conclusion yet because the stocks come down a lot. from downward dog to upward trend, lululemon is turning itself around and you should catch up. there is much more coming, including the story of botox and allergan, find out how to spot
6:34 pm
your next injection of proof fits and coming down with a case of winter blues? i'll help you with the lightning round but first, battle round and global star. the $2 stock up 50% this year. i told you where i stand friday and now the ceo wants to show you his side of the story. that's next, stick with cramer. ♪ there's confidence... then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind. it's no wonder last year we sold over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪
6:35 pm
6:36 pm
6:37 pm
>> here on "mad money" we want to hear both sides of the story. i told you about the battle ground stock gsta and satellite phone company lobbying the commission for permission to use the spectrum which is currently for satellite communications to create their own wi-fi service down here on earth. the stock has been on fire until a hedge fund announced it was shorting g set and released some hugely negative research in the company where they claim stocks is worth zero. on friday night i wanted to give you both sides, how there would be no demand for the wi-fi service because it's a non-solution and wi-fi congestion is a real problem and
6:38 pm
the balance sheet that makes it too much of a battle ground with too much we don't know and i'm the first at battle grounds personally but i always welcome ceos to come on the show and lay it out which is why i'm thrilled to have joe monroe who z hhas b a massive buyer. a sure sign of conviction of the face of short selling hedge funds. so let's have mr. munro come on. welcome to "mad money." good to see you. >> thanks for the time. >> i have to tell you, i'm a lightning rod but i didn't know, really stumbled into like a hornet's nest here. why do you think that, first of all, this stock is so polarized? >> well, it's polarizing because of carisdale. the spectrum was needed truth the country. all experts that are serious technical experts understand that it's important and it's a
6:39 pm
spectrum crunch that people are dealing with in a lot of different ways and have been dealing with over the last five or ten years. so to me, anyway, when people understood that and they understa understood how it would be used, it was smooth sailing. when they introduced a lot of negative chatter to the discussion, taking positions that were technically unsound but nonetheless loud, we ended up in the situation we're in so it's polarizing. >> i don't want to take the side, i know they made certain charges and have their own experts to be fair. they have their experts that say your situation is really not as important as you make it sound, let's put it that way. i want to know if you want to build a nationwide network of access points for low power wi-fi, how do you pay for it? >> it's almost free.
6:40 pm
it's almost viral. whichever partner we have is going to have access to your house already or have access to the street already, and as a result, they will build the network out. if they called you -- >> do you think there are people, like verizon, sprint or like a google and amazon? >> the -- >> those big name partners? >> yes, the spectrum is wide. you have cable company, cell carriers and tech companies, each of own have a business model. when they build it out, they are selling you something in the first instance. instead of building a tower and having to have that tower pay costs for back call and for power and for sighting and everything, they are calling you up in your house and saying wouldn't you like to have access to a better wi-fi channel that's private? and if you say yes to that, they will ship you an access point. might cost them $50 or might cost you $50. >> i'm paying nothing for wi-fi and it works perfectly.
6:41 pm
>> does it? >> yeah. >> always? >> yeah. >> okay. then you're probably not a good customer for us. >> no. >> but there will be a lot of good customers for us. people buy quality, jim, period, full stop. the reason someone buys an armani tie versus walmart, they are making a quality decision. if you have a product that is better than something off the rack. >> right. >> some people will pay for it. >> okay. now you've been buying a lot of stock in the open market but you've been issuing a lot of stock. i'm looking at the share count go up from 388 million to 1.189 billion, a huge amount. why is that? >> that delusion happened as a result of the first constillation replenishment. as themo, we got a lot of experience in difficult situations and long dated
6:42 pm
situations. >> will that keep going higher? >> no, there hasn't been substantial delusion since the converts were struck again a year and a half ago. the only additional delusion. >> it won't be like 1.5 billion when we see each other next. you tend to regard the cures of the problem to be non-material. i thought if you issue a lot of equity, that would be considered material. >> let's look at the math for a second. what we have in the structure of the loan agreement is the ability to cure default for one to occur for $10 million. that's money into the company and would be in exchange for you can -- equity. that has a roughly 1/3 of 1%. we have those cures built into the loan agreement. >> any sense of when you expect to hear from the fcc?
6:43 pm
obviously a partner wouldn't want to move unless the fcc agrees with you, right? >> whole heartily agree. recognize the fcc process is one where they put out an npr and that's their stated position on what they want to have occur from a final order. we hope that that order will come out in the next little while. >> there is a lot on the line, how about that? >> you bet there is. >> fair enough. >> that's the executive chairman and ceo of global star. do you own work and look at the presentations, there is many of them. make up your mind. it's a battle ground. that's tough for me, okay? "mad money" is back after the break.
6:44 pm
6:45 pm
6:46 pm
it is time, time for the lightning round. that's buy, buy, buy, sell, sell, sell. play the sound and then, wow, the lightening round is over. are you ready? time for the lightening round. christina in maryland, christina? >> caller: boo-yah jim. >> boo-yah. >> caller: i'm a steelers fan calling from the heart of ravins country here in maryland.
6:47 pm
i wanted to know i love a good under dog story. what do you think about j.c. penney? >> this is more of a kind of a raleigh cooper. we do not recommend j.c. penney. we do not think it's going to be a great stock. we feel it's just going to muddle through. that's not what i want out of a retailer. i actually think walmart will do better. let's go to lawrence in pennsylvania, lawrence? >> caller: hello, mr. cramer. i'm in mobile eye -- >> i do think that mobile eye can have a good quarter, but you know what? this is a stock that had a remarkable run and profit taking everywhere. i think the quarter will be fine. let's go to helen in virginia, helen? >> hi, jim, this is helen in virginia fairfax. my son is a fan and so we both send a big double boo-yah to ya. >> they had the buy this
6:48 pm
weekend. they spent the weekend in green bay. what's the stock? >> caller: the stock is dianna shipping dsx. i've had it for a little over a year -- >> too dangerous for me. just so you know, i'll go back to mobile eye. i don't want to hear jim said buy mobile eye. i said it's fine. i don't know if it's going to be good or not. they will report. all right? let's go to mike in massachusetts, mike? >> caller: boo-yah, cramer. >> boo-yah. >> caller: hey, listen, i love your book. best christmas present i ever got. >> thank you. >> caller: i have a question about merrimack pharmaceutical. >> we like that company. cole in new york, cole? cole? >> caller: hey, boo-yah, jim. >> boo-yah. >> caller: my stock is bio again -- >> everyone turned on bio again and decide there had is nothing
6:49 pm
to franchise. i think this is a mistake. i actually want to be a buyer deep in the money calls. let's go to ray in texas, ray? >> caller: hi, jim, thank you for much. i read all your books and watched your shows. >> thank you. >> caller: i'm very much interested in a company alny -- >> no, we like this thing. this is a whole different way, personalized medicine target. we like that stock. i need to go to peter in pennsylvania, peter? >> caller: boo-yah. >> boo-yah. >> caller: i want to know, jim, buy hold or sell ge? >> i think ge is a buy. i mean, i know that i flipped it out in my travel trust, it just seemed like it just doesn't have the momentum i like, but, you know what? i think the stock holds up well despite the money spent in the oil patch and i think things are getting better there. the last quarter was good. i got to give them that. let's go to john in massachusetts, john? >> caller: jim, long time first
6:50 pm
time. rough and rowdy patriots boo-yah to you. >> could you give the ball to the green and not just the other guy, go ahead. >> caller: my stock is achn. i have a position in it. i was wondering if you think they will be brought out. >> i have to do more work because the world is in such flex and there are roumors they will get a bid. it's been up and down that stock, it's a hard call. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.
6:51 pm
6:52 pm
6:53 pm
money gets made by terrific ceos who insist on bringing out value. sometimes that value is brought out by hard work and ingenuity or technology and sometimes done by all of the above and hard-nosed bargains by an executive officer who will not stop in the quest just rele relentless to bring out every single dollar possible for you, the shareholder. with this $219 bid from the ceo of allergan has accomplished all of those things for shareholders. he's done a remarkable job of creating wealth out of franchise, one growing with some blockbusters in the pipeline. he spent endless amounts to create new uses for his wonder drug botox, one well beyond
6:54 pm
removing wrinkles including a remarkable migraine drug that cuts the amount of time people suffer from migraine drugs. he's been able to come up with these new uses because allergan spends more money on research and development as a percentage of the sales than any other major pharmaceutical company, which should be a reminder, by the way, that spending rnd is a sure fire way to develop new drugs rather than coming up with line extensions designed to keep a drug from going off patent which is sadly the tired mo. not only did he do much to help shareholders and smart spending but he's been an incredible advocate for those who own the stock and those thinking about owning the stock. when allergan fell to the mid 80s last year, one of the most frequent guests came on this show and said point blank that the analyst that downgraded the stock would be proven wrong and that a key drug widely thought
6:55 pm
to go off patent wouldn't be doing so. more important, how earnings could be much better than expected. it seemed for a moment that the only people listening were valant and bill ackman and stripping the budgets to bare bone levels and a hedge fund manager known for the rough and t tumble tactics. he opened his hand and showed you how allergan had as much as $16 in earning power and the various bids came redeemed way too low including the $191 bid. that earnings power attracted the much more respected frankly activist at least by wall street respected because it's known to acquire and bring out value for execution. activists shelled out money and spent $5 billion and alzheimer's
6:56 pm
but activist ceo saunders came on this show early they are month and told us he was ready to do a deal and could be happy to combine forces with allergan and wanted him to. they are using $1.8 billion and the eye care and expanded bow tax use. in the end, david was able to reach a price that no other company including valiauiant co reach. it's been a fabulous run and what he's done for shareholders during his amazing tenure including the run from $28 six years ago to the end point of $219 today. congratulations, david, and all of the shareholders who stuck with him through this remarkably lucrative journey. stick with cramer. (vo) rush hour around here
6:57 pm
starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.
6:58 pm
6:59 pm
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. some pretty interesting things, baker hughes, allergan, it's a terrific, terrific investment. like i said, there is always room for markets somewhere. i promise to find it here for you on "mad money." i'm jim cramer, see you
7:00 pm
tomorrow. >> you're watching an industry go from an underground -- what i like to call the "wild west days" -- into a respected, legal, licensed industry. >> there's endless business opportunities. it's like the internet boom. >> do you represent the new generation of cannabis entrepreneurs? >> this is america's new hot industry. >> so, it's always important to make sure that you have high-quality pot. >> with the medical marijuana, you take a hit of it, you're starting to feel, "okay, i hurt,

196 Views

info Stream Only

Uploaded by TV Archive on