tv Mad Money CNBC November 18, 2014 6:00pm-7:01pm EST
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>> next year. >> it looks beautiful. >> there's an elevator. don't worry about it. >> dan nathan is a funny guy. >> qualcomm bouncing. >> old jokes never get see you back here tomorrow for more fast. "mad money" 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. other people want to make friends, i'm just trying to make you a little money. my job is not just to entertain but to educate and teach you about how this market works. call me at 1-800-743-cnbc or tweet me @jimcramer, preferably at 3:43 a.m., when i do my best tweeting. days like today, i want to be a
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little more negative. i really do. think about it. we've run so far, so fast, so much right now. and yet we don't have any new data points of consequence. we're simply paying more and more for the same exact insights. but it doesn't seem to matter, as we strike towards another set of new highs. dow gaining 40 points. s&p advancing 0.51%. nasdaq climbing 0.671%. not trying to be a naysayer, but pessimism has back the enemy of profits. negativity isn't being rewarded at all, except in a narrow handful of situations like the funk in social media, the endless pain in autos, or the relentless decline in the mineral stocks and offshore oil drillers. frankly, it's downright amazing how giddy this market can be. and in doing so, it's punishing even what i regard as healthy skepticism. so why don't i give you concrete examples of what i'm talking about. examples of even questioning what we call long-side opportunity and how that has
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become toxic. yes. it has become death-defying. this morning on "squawk on the street," i started talking about how buoyant the market was. how resiliently bullish things are. exhibit a, the continued run in activist. playing a huge premium for allergan, which is widely acknowledged as being way too expensive. this is a $66 billion with a lot of stock involved, so you would there would be at least some pressure on activist, given that massive issuance. no? heaven knows there's been a lot written about how the moniker of merger monday so richly deserved it after $100 billion in deals yesterday. could be an astounding bid by the second largest company, halliburton, has to signal some sort of top, doesn't it? doesn't it? you just don't get such dramatic
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overpays versus where stocks were a short time ago without wondering about the wisdom of these deals and the expensive nature of the stock market. "the new york times" put the skepticism best when it wrote, yet, there are some dark corners in the dazzling successes of wall street's deal makers. even as companies spend on mergers and acquisitions, they are not spending on other areas. moreover, whether mergers are even positive for the economy, and for the company striking them remains a subject of debate. but activist has now rallied an amazing 26 points or 11% since announcing the deal just yesterday. you stay skeptical, you lose, at least in the short-term. how about the long-term? who cares? we who invest are not necessarily in the business of making long-term decisions about how a merger works. we're in the business of capturing legal points wherever they can be had, under any time frame. if you thumbed your nose at activists yesterday on the deal,
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if you dismissed the possibility of $25 in earnings power for activists out of a couple of years for this acquisition, something that bret sanders, the ceo of activist says they aspire to, what the heck did you accomplish, besides missing a terrific opportunity to make a ton of money. you know it takes years for some stocks to make moves like the one activist is having right now, after this pay through the nose acquisition. if you can claim those points now, why not? get those points! and if you miss them in the name of prudence or cynicism, what have you really succeeded in doing, other than making less money than the other guy. when you put it like that, you have to question your questioning, don't you? i know this is cynical, but i've got to talk about it like this. it's funny, even as i was asking my morning partners if i'm too bullish, the stock climbed relentlessly, while i was talking about it. it went from being a real question to a rhetorical one in a couple of minutes flat. second example, david faber was
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expanded this morning about how plaquestone, which had been an incredibly shrewd buyer, now seems to be selling off properties left and right. >> sell, sell, sell. >> including the just announced disposal of a manhattan office tower for $2.25 billion, an astounding price tag, especially when you consider how little the building would generate versus that purchase price. i chimed in saying that blackstone announced it's selling 25 million share of pinnacle foods. this is the private equity firm's second tranche of sales, as pinnacle failed to sell itself to hillshire brands. these two dispositions come after the stock of blackstone. and the nearly $2 billion sale of the storied waldorf astoria. david wondered aloud that it has to give you pause when you hear about a really smart buyer who's now off-loading properties furiously for a turn that it must believe is too good to pass
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up. i found myself nodding knowingly. i regarded it as a worrisome sign. i've got prudence too. but isn't it blackstone's job to buy and sell properties, buy low, sell high. maybe the takeaway is to go and buy the stock of blackstone, which is something i've been recommending for ages. third hazard of skepticism, the airlines. there was a moment not that long ago at the height of the ebola scare where the airlines could do nothing right, despite the concern in fuel costs. now they can do nothing wrong, and a dollar decline in oil immediately translates to the incline in stocks. i thought it made sense to express a bit of a jaundiced eye about the virgin america deal brought to you by richard branson. i wanted you to stay with my faves, notably american and spirit. how'd that work? given that va closed at 37 today, my jaundiced eyes got nothing but a sharp stick in it to show you from my prudence.
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however, lest you think ahah, stay critical of the oil stocks, they're enjoying a rebound. and even as if i can be a stock contortionist, i have no reason why these are running. that's what happens when you're in this phase of the bull market. over the last few days, we saw a couple of real stallouts and some very hot areas. health insurance, international manufacturers, and biotechs. typically, you could argue the waning of momentum in these three groups means, look out below. i have seen time and time again that the biggest rollovers start just like what has been happening to those groups, that were heavy put buying, short sellers were everywhere. instead, what happens, they explode higher, all at once. three groups that usually trade in very different directions, all in this one session. i reiterate that i remain fond of honeywell and i remain devout in support of celgene and
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genron. gopro were in their glory last week when the company announced 10 million shares were filed for sale in a long-awaited secondary. usually that depresses the stock, perhaps for some time. that's what happened in the spring. remember those secondaries? this time, though, we're seeing a nonstop run, as word gets around that the offering is well spoken for, before it even occurs. that's why gopro is moving up, even though the ceo is selling more than $300 million in stock on the deal. skepticism, unrewarded. that and an early reward that holiday sales are encouraging for the most expensive of the new products. i would like to put a gopro on the heads of the research analysts, who suggested shorting this one to the bosses, if only to watch the pummeling that comes from being on the wrong side of a trade. of course, there's an obvious takeaway. whenever someone decries being too skeptical, that defines the top. i say, go ahead. use me as a foil.
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doesn't bother me. here's my bottom line for tonight. know this. i want to be more questioning, i want to be more critical of this market. but then again, right now, that's like being skeptical of the damage that an 18-wheeler going 70 miles an hour can do to you as you stand in the middle of i-95. frankly, i think i would prefer to take my chances jumping to the shoulder, rather than just taking one for the skeptical team. john in california. john? >> reporter: hey, boo-yah, jim, from out here in sacramento. >> hey, tenth and p, where i used to park and sleep. what's up? >> caller: there you go. i got involved with warren buffett a while back, berkshire b., then he bought duracell, and after doing some christmas shopping, i think it's a pretty good buy. >> duracell has not been able to be knocked off by the perrigo issue, by the knockoff plays. i mean, people aren't buying the cvs batteries like you would think, right? they're buying -- they love the duracell name plate. another great moded purchase by berkshire hathaway.
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another reason why i reiterate that berkshire hathaway is a great stock to own. arnold in florida, arnold? >> caller: yes. off great show. i'm a first-time caller. >> thank you. thank you, arnold. >> caller: i would like to know, with the price of oil going down and down, is my stock, conoco, cop, still good stock? >> well, conoco has a good yield, comes in at 4%, has some good natural gas properties, the old burlington, which natural gas prices have held up well. i think you can do fine. it is a runaway stock to the upside, absolutely not. oil keeps going lower, but i think you can hold it. let's go to toby in minnesota. toby? >> caller: big boo-yah from frigid minnesota, jim. >> not bad. good to have you on the show. >> caller: i bought sprint when you originally recommended it four years ago, and then, of course, you know, they did the buyout. i bought it at 386 and 4-something. >> okay. >> now it's down over 50% from its 52-week high when dan hesse
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left. what should i do on that? >> well, i've got to tell you, when dan left, when the company was not able to make that merger with tmus, and when dan hesse left, that was the time to go. now, below 5, do i want to sell it? no. but understand, they have to spend a lot of money to build up that network, and the pizazz of the story, the thing that was going to really drive the stock higher is now gone. and the ceo, whom i respected more than almost any ceo in the country is also gone. and these are big negatives. when someone condemns skepticism, that's supposed to define a top. i would rather take my chances playing it safe than take one for the skeptical team, though. on "mad money" tonight, investors are wringing the register on home depot after reporting. time to join them? or could to deep freeze gripping the country bring you holiday happiness? plus, it's a biotech taking on mental illness. can they keep these healthy gains coming? i'll ask the ceo. first, amazon seems lost in the
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is the recent run in amazon over the last few weeks the real deal? tonight we're going off the charts to answer that question with the help of bob lang. he's a brilliant technician. he's the founder and senior strategist at explosi explosionoptions.net, as well as the star behind the street.com's stock news letter. this is a seasonally strong period for amazon as we head into the holidays. but thanks to new and newly invigorated competitors like walmart, target, alibaba, the company is under pressure from all sides. that said, amazon usually tends to deliver on the holidays, with terrific sales number, even as any notions of actual earnings may feel like a bit of a pipe
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dream with this country. so can the stock keep running? bob lang this is that amazon, which set a new all-time high slightly less than a year ago, but is now down 20% year-to-date, could actually be ready for significant rebound. he says the stock has had a great move of late, and unlike amazon's rally in august, this run seems to have a lot more staying power. but the key to lang's thesis here is that the holidays are right around the corner. take a look at this. this is a great exposition. in four of the last five years, amazon stock has rallied, rallied dramatically, from november through year end. signaling serious interest in the name before, during, and after the holiday shopping season. this is when amazon does a massive amount of business. now let's take a look at amazon's daily chart. first of all, you can see the stock's recent rally off its late october post earnings low has been very strong. that's a monster rally. amazon making a higher low in the process and really roaring higher. this is the key moment. and then really roaring.
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beyond that, though, the stock briefly broke out of its 200-day moving average on friday, and did so again, that's that little yellow area, before settling back down a few points below that level. crucially for lang, amazon tested its 200-day moving average back in september, and that turned out to be a peak for the stock. see, look at this. right there. but he thinks this time is different. in part because this latest move occurred on much higher volumes. now you've got to look at the bottom here. this is the volume. look at this explosion in volume versus here, okay? suggesting that there's now serious institutional buying in amazon, skand that's what's propelling the stock higher. this was a fakeout. for the same reason that when you look at the volume bars, you can see that much more money is flowing into the stock this time around. look at that phoney, okay? that's real. if you look down at the moving average, convergence/divergence line, that's an important indicator that helps technicians spot when a trend might be changing.
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amazon made a bullish crossover right here, where the black line crosses over the red one. that was less than two weeks ago, november 6th. since then, this stock has taken off like a rocket. this has been an extremely consistent indicator of strength in various stocks, lang views this signal as a very positive sign. i've worked with lang now for i can't tell you how many years, but he has really nailed these changes of direction. now, amazon has already filled in its post-earnings gap from october, okay? so that's been done. that's taken care of. but we've got another gap, a big gap when the stock plummeted from 358 down to 324 back in july. and for technicians like lang, strong stocks tend to fill these gaps, and that would mean amazon is headed back to 358. that's your number. 358. that said, the last seven days, amazon's run up more than 10%, which suggests to lang that the stock might be due for some consolidation before making that charge up to 358. however, with amazon trading sideways, he said he would pull the trigger and buy it and pull back down to 320.
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for 300 and change stock, that might be splitting hairs. how about we take a step back and check on amazon's weekly chart. this gives us a somewhat different picture. whereas the daily chart shows amazon freeing itself from a downward trend and perhaps forming a new up trend, in this weekly chart, amazon stuck below the down trend line at 328. on this chart, you can see how amazon made a double bottom in april and october, all right. see that? that's a nice double bottom. and in lang's view, this double bottom could act as a springboard that propels the stock above its is resistance at the down trend line. in the next two weeks, lang says he'll find out if the stock breaks out or merely rolls over. when you look down at the mac d, this is always at the bottom here, you can see that amazon is very close to making the same bullish crossover that we saw in the daily chart, but not quite there yet.
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lang says it will happen if the stock can breakout over 328, just a couple points above where it's currently trading. i bet you that would cause a quick upward move. on the other hand, you have this williams percentage oscillator, indicator developed by the accommodators. right now amazon is right in the middle. but it's sitting right below a level that's acted as a ceiling of resistance. boy, this is interesting. right there. in the past, we got to watch this oscillator see if will be a problem. this is the biggest question mark, the williams percentage "r." let's go back to the weekly chart of amazon. there's almost always a spike of amazon stock going into the holidays, 2009, 2010, 2011, 2013. hmm, 2012, that was the one year it was week. but remember, in 2012, that was when washington decided to give it to big budget fight for christmas, as everyone freaked out that we were driving right over the fiscal cliff. every other year, amazon rallied
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nicely into the holidays and lang points out that options trading has been pretty brisk lately. a lot of people buying call options, bullish ones over the next couple of days. lang wants to call out one particular options purchase, which is mentioned by our own dan nathan on fast money last thursday, where a buyer bought 7,100 amazon 300 call contracts, expiring two years out, january 2017, for about $72 a pop. in other words, this buyer came in and he paid $50 million. $50 million. $50 million premium to buy this position. which will only break even at $3.72 or so, up $46 or 14% from these levels. that's a lot of time premium. of course, whoever bought these options has two years for his or her these to play out. but this is one of the biggest options lang has ever seen. and it sends a pretty clear signal that someone with deep pockets sees something positive happening down the road. always want to take advantage what big money might be thinking. when you look at the charts interpreted by bob lang, even if
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amazon takes a brief pause, the stock could have some serious upside as we head into the holiday season. i don't know anybody else who's thinking like lang. he thinks the recent rally is likely to spawn even more buying. don't bet against amazon when christmas is right around the corner. historically, it's been a real bad idea to sell the stock down. and despite newfound competition from other retailers, and even though amazon stock is ridiculously expensive versus all other internet plays, i don't think the holiday season will be any different this time around either. hey, how about lou in my home state of new jersey? lou? >> caller: hey, jim. about five weeks ago, you recommended an israeli-based company called cyber -- >> yeah. >> caller: congratulations, because that's a home run, jim. that stock is up 50% since you mentioned it. >> thank you very much. we got -- we did good on that one. thank you. >> caller: i did some research and came up with another fast-growing israeli cybersecurity play in virtual and cloud data centers called
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radware, and i would like to know if you think -- >> it's funny, i saw this -- i was going over the charts this weekend in my incredibly lonely and ridiculous life and i saw it. and i was kind of blown away how good radware was. and i did a little fundamental sleuthing and i think you're right. i think it's a real good idea. is amazon far from its prime? the charts seem to say so. and i agree. don't bet against amazon heading into the holiday season. much more "mad money" ahead, including getting our hands dirty with home depot. and addiction is a deadly disease. tonight, the stock with a drug to treat it. plus, pvg recently sealed a deal to take over a major pain player south of the border. but it will help you coat your portfolio with green? stay with cramer! in this accident...
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you've been matched. linda s. is only 3.2 miles away. no no no. request accepted. match confirmed. message from linda. what's up brandon? control your entire home without your private data ever being shared. introducing wink. it's like a robot butler, but not as awkward. okay. repeat after me. stocks have run up in advance of earnings, often trade down when they report. even if they deliver good results. how can this still be shocking to people? yet today it seemed to mystify investors why the retailers in general and home depot in particular are so week. if home depot's quarter is as strong as people initially said it was. but perhaps it wasn't. perhaps hd's peaked. i've heard these questions asked numerous times today. i'm going to stimulate right here and right now that home depot reported a terrific quarter. i loved the conference call.
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but it didn't matter. the stock had already had a magnificent run. the last bit tacked on right ahead of the report. i believe this sell-off conundrum on the run-up that started last week with the astounding success of macy's stock. not macy's, macy's stock, even as the guidance offered by management on the conference call was really nothing to write home about. in retrospect, i think it's safe to say the whole retail world was rocked when macy's cut its forecast and the stock went up anyway. >> buy, buy, buy! >> that's just not supposed to happen. but when it did, investors believed there was something larger, something magical working here, namely a strongly, more willing to spend on the holidays consumer because of lower gasoline and better labor markets. after the run in macy's, everything in the retail world rallied, because as many wondered, if the stock doesn't go down when it cuts its forecast, well, when is it ever going to go down? that made the retailers a safe haven no matter what they said, or at least, that's what we thought, until today. i understand this. hedge funds short the stock of a company ahead of earnings and
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expect to get paid when they see so-and-so cuts forecast. that stock almost always drops. i would always shout, it's payday when i saw that lingo. and i was short. but nobody got paid on macy's. the stock rallied instead of getting hammered. >> buy, buy, buy! >> so mark your players then got very complacent about all retailers. they bought with reckless abandonment, only to see that verified when walmart reported a slightly better than expected number. now, though, today, after last week's monster run, we have people reacting. for example, to home depot's report, and saying that it's peaked. we have a downgrade of macy's from meryl saying earnings growth has peaked. we have urban outfitters reporting a hideous quarter. all these mattered and contribute to what looked like a funk in retailer, that isn't exactly based in reality. it doesn't help that urban outfitters, after a tremendously disappointing number from its flagship store, talked about how the malls no longer as exciting
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as it used to be, and the stores have lost their pizazz. as ceo richard haynes said on the conference call, it is no longer sufficient to build a store, stock it with tables and racks and wares and open it for business. he says the store's experience must become a performance. but is this true? the weakness in urban outfitters was about its flagship play. could this just be an excuse, one of many offered for the underperforming division. how do we explain the strength of "l" brands if the mall is a elect out. there's no cautionary, except an admittance that with low gasoline and high tail winds, the stock can recover after the decline. as i am confident home depot's will. but you don't execute, your stock goes down. and stays down. exactly as it should be. jason in new york, jason? >> caller: hi, jim. how you doing?
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>> real good. how about you, jason? >> caller: no complaints. maybe you could tell me when am i going to see you on "shark tank." i've been dieing to see you on that show. >> i don't know, i like the aquarium in norwalk and the one in boston. oh, the show, love it! no, love the show. what's up? >> caller: yeah, a question about gap. i used to work for them a long time ago and the one thing i realize is that they are always advertising, they always have sales going on, the stores are always business, but i don't know if all the advertising means they're doing great or if they're suffering. where does gap mean? >> gap means inconsistent. if you do wikipedia and look up inconsistent, it's going to be gap and vice versa. the big problem is we can't game how well gap is doing, versus a home depot, where everything's going up very, very, very nice. and you know what? i would love to be on "shark tank." i just -- no, i would love to be on it. can we do something about that? put me on it! retail rut or retail rally, depends on execution.
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you execute in retail, your stock can recover. if not, your stock deserves to go down and stay down. much more on "mad money" ahead, including a plea to be on "shark tank," a biotech with the science to make medications more effective, find out what this innovative tech means for the industry. then ppg is a lot more than paint. from the brand-new dreamliners to your winter tires, this innovative company is there. but can the stock keep climbing? i've got the answer. and i'm getting charged up for a rapid-fire lightning round. stick with cramer! (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find.
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at a time when the health care space is on fire, let me tell you about a cramer fave, biopharma company that's transforming itself in a really profound, really positive way. a company that specializes in drug delivery technology, which allows them to create longer-acting formulas of existing medications. it makes it possible for people to make their medication regularly, okay? that's really important. and they do it with extended release injections that you might need only once a month, rather than taking pills every day, which they might not want to do or stop taking.
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historically, this company has been all about taking existing drugs and making them better. lu lately, they have gotten into the business of developing its own compounds. they have one on the market, a once-monthly injection that helps addicts stay on the wagon. last month, they submitted a new drug application for a long-acting version of abilify. that's about to go off patent and this could be a blockbuster. plus, the company which has a special focus on relieving symptoms of the central nervous system has a exciting depression candidate in phase iii development that's been fast tracked by the fda. alchemist had a strong year, the stock has rallied a quick ten points in the last month. let's take a closer look with one of the thoughtful ceos that we deal. richard pops, the chairman and ceo of alkermes.
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i think we have to start with the fda file for the schizophrenia drug. it is so big. why is it so important to have a once-a-month formulation. >> what's so amazing about these psychiatric disorders is, number one, their prevalence. they're the major disorders that affect human suffering all around the world. depression, schizophrenia, addiction, anxiety. and the treatments, we have a lot of good medicines, but actually to map from the way people live their lives, they're quite poor. the idea of a once-a-month injection for a schizophrenia patient, where they have adequate levels of medicine for an entire month is a very powerful thing. part of the citizen is patient's unability or unwillingness to take their medicine every day. >> now, a lot of people are buzzing about alks 5461. a totally different way to approach depression. for people who are resistant to the current drugs. what's so special about this? >> depression is one of the great burdens of disease in the
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world. nature just put out a publication this past week about depression. 350 million people in the world suffer from depression. the treatments that we have, and there are many of them, are quite effective and quite safe. as you know, the ssri, like the p prozac. 11 million people a year go on these drugs. and 5 million don't just fail one, they fail two. our drug has a completely new mechanism that are going after these patients who are not getting adequate relief from the current medicines. and we're quite excited about it. >> is it a derivative of anything or just greenfield? >> it's based on the observations that opioids can affect people's moods. but opioids are addictive. the problem with an opioid is that it can be addictive. so we've removed the addictive of the opioid. >> like oxycodone, you've removed -- >> no, it's a different, it's a partial opioid. but we've added to it our own
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proprietary molecule that blocks the addictive property. >> this is lightning nothing out there? >> nothing like it. that's why it was granted fastrack by fda. >> i was trying to figure out why it's so special, it's clearly not a derivative of anything. >> it's a new thing, but builds on a fapharmacologic foundation that's been around for years. >> okay, vivitrol, how'd you get the numbers there, after trending good. >> you've been on this for a long time, jim. you saw, there's such an inherent logic to the idea of using vivitrol. it just takes forever to change current practice. and interestingly, if we give a once-a-month injection to somebody who is addicted to opioids, you can't give it to somebody who's actively addicted to their opioids. they have to be detoxed and make a commitment to being drug free. and not every opioid addict
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wants to be drug free, but for those who do, this is a very powerful medicine. because they detox, day get this injection once a month, and they cannot reestablish physical dependency. >> how about those who have to? the recidivists, the people that the state does not want back in prisons? >> this is a huge opportunity for vivitrol, the criminal justice system isn't totally supportive of some drugs that can be addicted themselves. so instead of keeping people incarcerated for being addicts, we should release them with medicines on board to keep them from becoming dependent on drugs. >> our pipeline so is rich right now. >> you don't need anything. >> our job is to do what we're doing now responsibly and get to the finish line. i think everybody will be better off. >> i think they're going to. you've done remarkable work. richard pops, chairman and ceo of alkermes. just go look at this before you buy, so you know exactly how exciting alkermes really is.
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♪ the "lightning round" on cramer's "mad money." rapid-fire calls, where you say the stock, i don't know what the stock is. when you hear this sound, the "lightning round" is over. are you ready, skee-daddy. time for the "lightning round" on cramer's "mad money." let's start with dan in new york. dan? >> caller: boo-yah, professor cramer! >> nice. >> love the show. love, love, love the book. >> wow. >> caller: yeah. all right, i work with a lot of women in my profession and with this cold weather, i see an endless sea of pumps in my office. how high is deckers going to fly? >> i think deckers will do well, but i've got to tell you, i think columbia sportswear is
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going to do well too. don't forget, that sorrell, they've got some really good momentum. don't count that out. i like deckers. and remember, deckers brands now. got to go with that broad thing. let's go to joanne in new hampshire. joanne? >> caller: hey, jim, what do you think of jacobs engineering. >> too related to oil and gas. that's what people are going to say. they lump all those infrastructure stocks together. i am on the fence, which means not so great. let's go to nick in pennsylvania. nick? >> caller: hi, jim, thanks for taking my call. >> of course. >> caller: i'm calling about noles corporation, symbol kn. i got some shares as a spin-off from dover, is&it was doing okay, but then it hit a wall and dropped about 35%. do i hold, sell, or buy some more? >> we're going to do some work. i want to do a little segment on this. this is a very intriguing company and i've never really understood why they got rid of
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it. but maybe we get the ceo on too. let's go to david in new mexico. >> david, we appreciate you very much. love your show. please give your take on adt. >> i continue to think that adt is an underperformer that has not been able to deliver to its shareholders and i don't want see why that should necessarily change. let's go to randy in pennsylvania. randy? >> caller: big boo-yah, jim! >> good job, man. >> caller: i picked up transocean before the dividend and i was wondering if i should dump the stock now or if there's some longer term upside. >> that is the biggest house of pain out there, along with c drill, a stock that my charitable trust owns, esv. i can't wish this one on anybody. i think the stock still has more drown grades to go. i think it's probably maybe on three, four points from the bottom, but a lot of people can't take that elbow pain. you have to judge whether you can take the house of pain. elaine in ohio. elaine? >> caller: hi, jim. i want to know what you think of a stock called wpv.
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>> i think it's a cheap stock. i like it. i also like wnb. i like the williams complex, i guess you can say. i like wmb a little bit more. that's a friend of, my friend has completely brought that to my attention. that's up 40%. if you want to, though, i think that your situation is excellent. carlos in california. carlos? >> caller: boo-yah, jim, from the bay area. >> good to have you, man. i like the oakland, maybe they can get a win. >> caller: raiders, raiders, raiders. anyway, what's your take on alcoa? >> someone started alcoa with a hold today. and i said, you know, this stock could be ready to breakout. but it is part of the minerals complex. i remain convinced that longer term alcoa is going to go much higher. let's go to james in connecticut. james? >> caller: hello, jim. james in connecticut here. i'm calling about dplo. diplomat pharmacy out in michigan. >> yes, these are -- this is a highly speculative situation.
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we know very little about how the company is doing. you have to have some sort of edge. i do not. let's go to mark in wisconsin, mark. >> caller: jim, your thoughts on an adr french company. >> yeah, everybody always wants these drinking water plays. you know what, i am not there. i think it's too hard. i also think that i don't really like the european stocks. a lot of contrary views thinking i'm late on that. i don't care, i don't like them. maybe later. and that, ladies and gentlemen, is the conclusion of the "lightning round"! >> announcer: the "lightning round" is sponsored by td ameritrade.
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few industrial companies have been as consistently terrific in their execution as the company we're going to hear from next, ppg. here's a company that sold the writing on the wall. get out of commodity businesses, move it to the food chain, all the way to proprietary parts of the chain. and prosper no matter what kind of an economy you get. that's why ppg is the leader in the chemical industry. total dominance in the coatings markets. highly value added. ppg has also been an incredibly shrewd deployer of its bountiful capital. earlier this month, ppg closed on its purchase of mexican paint maker for $2.5 billion, in a deal that's set to be immediately accretive not company's earnings and in a big fashion. also giving it much more exposure to latin america, it's been a terrific buyer of its own stock, seriously increasing its
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dividends. now this stock got hit. it got hit badly during the worldwide slowdown fears. then they reported on october 16th, the company delivered some very strong results across the board, which is part of the reason why the stock's come roaring back ever since, to the point where it's now only a few bucks from its all-time high. and to think that this $208 stock traded at just 176 bucks a month ago during the height of the sell-off. while ppg is only a few bucks up since we last spoke to the ceo back in july, it's given us a phenomenal 418% gain with reinvested dividends since i first got behind it in 2009. so let's check in with the incredibly bankable chuck bunch, who is the chairman, ceo of ppg, and find out more about how his company is doing and where it's headed. mr. bunch, welcome back to "mad money". >> jim, it's great to be back with you. >> chuck, i've got tell you, a lot of exciting things here, but to me this closing on the comex deal is gigantic. you've got some outline of how much synergies there are, how much can be taken out. what is your feeling about what this deal could do if you get
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all the synergies right? >> well, jim, as we spoke earlier, this deal is immediately accretive. this is the second largest acquisition in ppg's history. we're acquiring comex, the number one coatings company in mexico, the leader in architectural coatings. we have good synergies, we have a great distribution and supply chain. we should be able to move ppg products in areas like light industrial coatings and protective coatings into the market and we are already the leader in automotive oem and large industrial customers. so we think it's a great fit for us, good synergies, and we're going to start seeing the results in here our first quarter of operations. >> all right. one of the things i was fooling around with their website. is it possible that they have a technological edge on other companies? optic play, rare sensibility, human nature? i'm talking about some of the versions of paint they have.
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can they actually help ppg's core paints in the united states? >> i think eventually, they will be able to help us in other areas in emerging markets, as an example. and i think there are some things to learn from them. they have a great supply chain, they're more back integrated than we are. and they have products that i would call fit for use in developing markets, like mexico that we participate in around the world. so we're going to be able to take advantage of some opportunities with their products as well. >> all right. let's talk about raw costs. now, in a recent conversation we had with your ir, with vince morales, he's talking about, people want to relate, lower oil prices necessarily to some of our products, but the best way, perhaps, is to relate gasoline prices the to distribution. that's got to help you. you've got stores all over the country. you're sending paint, your bills are going down in terms of getting the paint from the factory to the store. >> yes, it usually takes a while on these lower commodity prices, for it to move through our
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supply chain. but, obviously, the most immediate benefit isn't distribution costs. so, with all the trucking and movement of product in this market or even in markets like mexico, where comex has 3,800 stores, we're going to see those benefits sooner, and i think then it will work its way through the rest of the chemical value chiang chain on the petrochemical side, especially here in the u.s. market. so we should start seeing those benefits over the next few quarters. commodity prices have been quite benign in terms of inflationary pressure, but we should get some help earlier on the distribution side on gasoline and diesel prices. >> chuck, a lot of people are worried about emerging markets here, but you've made a real big bet on mexico. what are you feeling about mexico that you're willing to put so much money toward it? >> we are very confident in mexico, especially for the long term. but we've been very successful there in the automotive oem and
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industrial markets. the country is really rapidly industrializing. it's participating in this nafta opportunity. a lot of new automotive manufacturing facilities are going up or have been announced in mexico. so a lot of growth there. the government is liberalizing economic policies in mexico. it has a young and growing population. so we're very optimistic about the opportunities in mexico, both for the near term and the longer term. >> one last quick question. you have -- you generate so much cash flow. next thing, buy more stock or still on the hunt for acquisitions? >> well, we're going to do both, jim. we're still in the market here in the fourth quarter for our own stocks. we have a strong balance sheet, even after deploying a little over $2 billion for comex. but we think there are other opportunities for acquisitions. we have an active pipeline. probably not something quite as big as comex.
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and we've made a couple of smaller bolt-on deals here earlier this year in north america. and we think we have some good discussions going on, so over the next year, we're looking to deploy another $1 billion in terms of acquisitions and share buybacks, so we're quite active on both fronts, jim. >> chuck bunch, chairman and ceo of ppg. thank you so much, sir, for coming on the show. >> thank you, jim. >> this company reminds me of big ben, the way he was playing last night. i think ppg is truly the best way to play industrial renaissance in north america right now. stay with that, stay with cramer.
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this is the microsoft cloud. two stocks i like very much for different reasons reported after the bell, and i think i like what i see. the first is jack in the box, qdoba. they did a monster quarter. i remain that these should be two different companies and they're both worth a lot more than they're selling. and i had always thought petsmart, maybe there could be a deal lurking. this company lacks so good. i don't think they need to do anything except to continue to execute. two more retailer restaurants that remain terrific in an environment where gasoline remains very cheap. i like to say, there's always a bull market somewhere. i is and promise to try to find it just for you right here on "mad money." i'm jim cramer and i will see you tomorrow. lemonis: tonight on "the profit,"
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greenville, south carolina, is home to west end coffee... ...a regional roaster with great product... that's pretty awesome. ...but even better margins. -we sell it for how much? -john: $48. lemonis: that margin's killer. co-owners are living proof that you should never mix business with pleasure. john: [bleep] you're horrible at doing the right things until you're forced to do it. lemonis: i not only have to put the right process in place... you made a huge inventory mistake. ...i have to figure out a way for the owners to coexist. you're so busy fighting that you're not busy selling. if not, west end coffee will grind to a halt. all right. rookie mistake. my name is marcus lemonis, and i fix failing businesses.
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