rangers game six and brings us back to game seven and ms g get up. >> i am melissa lee, thanks for watching. see you tomorrow at "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. methamphetamine "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job is not just to entertain you, but to educate and teach you so call me at 1-800-743-cnbc. the fed is about to raise rates. is that why the dow plummeted, the nasdaq tumbled 1.1%?

that's certainly how it feels on today's like today and the perception everything is going wrong is absolutely at the heart of the decline. but i'm also sure of something else. what's good for the stock goose isn't necessarily good for the stock gander. not everything can be bad all at once for all stocks. some groups are going to be winners. even if the big name industrials could get a further beatdown. so let's pull the negatives apart and is see where they take us. first the dollar was very strong today. that's being viewed as a huge negative for all companies. i think the action today was contrary to the major trend. i'll go off the charts later to demonstrate the technical case for betting against the dollar and in favor of the euro. but let's say i'm wrong. do you remember how the market reacted to the sustained strength of the green back that was the story for most of last year? while our international stocks did indeed get pounded, many

domestic stocks performed fabulously. the domestic restaurant chains put up some incredible performance. the america first health care stocks rocketed higher endlessly. now it's true we would often get days like today where everything got hammered. that's because when speculators want to bet a series of negative events is going to occur or is occurring, they come in and they sell the s&p 500 futures. it's easier, cleaner and faster than selling individual stocks. it's a machine gun approach. as opposed to a shotgun. the hedge fund managers who react like this don't say you know what this is stupid because many of the stocks in the s&p shouldn't go lower, given the circumstances. they know they can sell the futures to reduce the risk of owning stocks in general. maybe they have another part of the portfolio, or make a quick bet the way the circumstances over multiple days at least initially, which is what all the traders care about. they don't care if their selling takes the whole market down with it. they don't philosophyize.

even though a stronger dollar is not bad for all stocks it causes traders to sell the s&p futures, which knocks down all 500 stocks including stocks that will soon emerge as winners, just like before. second, when the dollar gets stronger, interest rates tend to go down and that's what happened today. there are stocks that thrive when rates go higher namely the banks. however, almost every other stock actually does better when rates go lower. the stocks that pay good dividends which yield more than bonds, they thrived over and over in a low rate environment. that includes the consumer package good companies and real estate investment trust and utilities which have all been dogs. they performed hideously. why? because they're anticipating an imminent rate hike from the fed. of course it's possible we could get that rate hike sooner rather than later. we have comments from fed vice chairman fisher saying they will go up a lot, and we shouldn't fret. i think the market had already priced in fisher's comments in advance during the decline. in other words, the market anticipated the rate hike and we still haven't had it. part of that anticipation

involves the bombarding of can exactly the kind of stocks that at last now deserve to rally, given the fact that interest rates are going lower. i think it would be very wrong to sell these higher yielding stocks right now, because they have already been going down for some time. to me, this is the time to buy them, not sell them, try togetting that point across on an ugly day. nobody is going to listen. but they should listen. and they will if the ten-year treasury which now yields 2.14% goes below the crucial 2% level. the clam or for yield will be palpable, like the foods, drugs, power companies and health care reits which have been crushed. what else? remember last week when we got earnings from home depot and lowe's. we heard a story of increased household formation and homeowner investment. i think that's why lowe's bought them and it's now turning up. take a look at that stock. the strength can be threatened by higher mortgage rates. but the stronger dollar is a magnet for money.

even as we hear talk of fed -- fed guys could you just should up for a while? so the housing and home improvement related stocks make sense here especially given that we're seeing real house appreciation from a bunch of indicators. lower mortgage rates keeps homes affordable. keeps the investing in your house. how about oil? okay, the oil complex was under tremendous pressure today and i think that hung over the whole market. as these stocks have become winners. but a strong dollar and news that iraq will increase oil production could put a dent in the price of crude. some of the cheaper oil is viewed as a negative for the entire market. yet there are whole groups of stocks we used to like before they got clubbed by herer gasoline and jet fuel. i'm talking about restaurants and retailers and airlines. we know the airlines have been in a world of hurt lately. it's hard to resist if oil has truly paeked and headed back down. it's another negative that's actually a huge positive for a sizeable chunk of the market if

we would just open our eyes and not be so negative. let's say the fed is going to tighten and will slow the economy. do you think that bad news is -- for the industrials is bad news for the recession-resistant health care stocks? do you really want to sell those stocks bet against the hospitals, phrmas, when they outperform during a slow down? these health care names are what you want to buy, not sell here. use some common sense. now i'm not such a pollyanna to say we should be looking forward to a rate hike. no. it's been so long since the fed raised rates, if you thought a rate hike would come next week i wouldn't be inclined to suggest you consider buying stocks until a week or two after. you've got to let the selling run it's course. but i don't think it's going to happen. and i think it would be a huge mistake to raise rates. our economy is getting weaker not stronger. that's the polar of opposite of being dependent and the janet yellen fed claims it's being dependent. a lot of damage globally because money will be pulled out of emerging markets which we

always have to fret about, while the export portion of our economy can hit the skids. in short, rate hike bad for business. that's not what we're talking about right now. i simply want you to recognize even if audiologist the negatives are true, there are some stocks worth buying even as the case for u.s. companies that sell overseas weakened especially the large industrials and technology stocks. the case for other domestic stocks is strengthening. and when all is clear, you are going to wish you bought many of the same stocks put on sale today. here's the bottom line. this was a hideous day for all stocks. you know that. i know that. it should have been a hideous day for some stocks. but that won't become obvious until later this week when cooler and calmer heads soar through the wreckage and start buying up the bargains. let's go to mon in georgia. >> caller: boo-yah, jim. i'm in the house of pain with whole foods. what should i do? buy, sell or hold? >> i think whole foods is too low to sell.

i saw fairway had a bad number. i think the natural organic wave is for real. or else hormel which is going to be on the show later this week which not have just bought applegate farms, one of my absolute favorite natural and organic food plays in your supermarket. i don't want to give up on whole foods, but i recognize that right now it's going lower. sharon in texas. sharon. >> caller: hi, jim. how are you? >> i'm good. how are you, sharon? >> caller: i can't see russia from my front door but i can see a very depressed oil field from my front door. >> fair enough. >> caller: should come check it. i'm calling today about box. i bought a good price after the ipo and then it wept lower and i bought more and it seems to be stagnant. >> they've got to tell a better story. the narrative they told in the last call was not that good and they have to really start explaining why their market cap should be bigger than drop box, which right now in the private market is valued about four times their value and even though they've got the

commercial and drop brox box is free for a lot of people. they have to tell a better story. otherwise, it's not going to do anything. how about garrett in the hard-hit storm-filled texas. garrett. >> caller: a big old university of texas horns b-b-b- boo-yah, jim. >> we're in favor of that. and we had a great time when we were down there. too many years. i missed my college tour. what's up? >> caller: i'm good. congrats on your marriage and ten years on the show. and here's to ten more. >> a lot of stuff happening this year. thank you. this is like the biggest year ever in my whole darn life. what's going on? it is! >> caller: i wanted to thank you for helping me pursue a major and career i wanted to pursue. and if there was an intern position with as much energy as you i would love to apply for it. >> well, okay. i'm looking at my executive producer who actually does the hiring. i'm more of a figure head and marionette on that issue. that's regina gilgan does that.

regina, let go. okay go ahead. >> caller: so after falling 15%, i started looking into the company, and after i visited the site i realized it was a interest-spiked website where you could buy the arts and crafts people made. and at first i saw etsy as something amazon could buy. however last friday amazon released it was working on something called hand made. and even trier trying to lure some of the top sellers to sell goods on amazon. i was curious if you thought even though amazon wasn't looking at buying etsy now, do you think it's a good buy at some point? >> no, i didn't like that quarter. i didn't like the expense structure. i didn't like the whole ethos of it. and the fact that amazon is moving in is just one more strike against those guys. and i have to tell you, i think that etsy is a troubled stock -- you don't want to touch it.

there are so many other better stocks and they were all going down today. here get this. not everything can go bad at once. the truth is it shouldn't have been such a oh hideous day for some stocks. keep an eye out for bargains. you'll see they surrenderface. remember noodles and company? can this stock get cooking again? don't take a bite until you get my take. and after climbing 31% in a week steak shack lost some steam today. nothing to do with the menu trust me. plus, a major marketer and loyalty card player that has been such a red hot stock. i'm talking alliance. stick with cramer. >> don't miss a second of "mad money." follow at jim cramer on twitter. have a question tweet cramer #madtweets. send jim an e-mail to "mad

money" at cnbc.com or call 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. (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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what the heck happened to this noodles and company. former high flier that ipoed in the summer of 2013. maybe even if not the entire market. noodles talked a big game out of the gate and the stock nearly tripled in the first few days publicly traded company. then spent the next six months trading sideways. once the lockup expired, noodles started to get pummeled. lately the stock seems it's totally given up the ghost after reporting a truly hideous quarter earlyier this month. there was a lot of chatter how it could be the second coming of chipotle. now the stock is trading at 14 bucks and change down nearly 20%, 37 points off its all-time high. so what happened here? how could investors have been so excited about a company that only turned out to be a total dud? main reason is pretty straight forward. the company has consistently

failed to meet wall street's expectations in both the top and bottom line and failing to establish any kind of positive trend for same-store sales growth despite guidance. when you look back at noodles and company can's performance, it became clear this company took itself public right as its concept was peaking. consider that noodles has now reported eight quarters as a publicly traded company. noodles beat wall street earnings in sales estimates, something you have to do if you want creditability going forward. since then, the company has missed wall street's earnings per share estimates for the past six consecutive quarters. noodles has also underperformed on the revenue side. and the company's same-store sales number which is the key metric for the restaurant industry have been abysmal, failing to meet its own guidance. two quarters before they generated 6.8% sales growth a pretty good number. after the ipo, everything started to go downhill. first quarter out of the gate

company posted 3% increase in same-store sales. then in the third quarter 2013 noodles reported a 2.4% increase. an uptick in the next quarter at 4.3. then down 1.6% in the first quarter and that's when we flag it as an alarming concern. and then up 1.7% and up 1.3%. finally in its most recent quarter, the first quarter in 2014 noodles delivered .9% same-store sales growth. remember, most did great. that's not all. to make matters worse, their margins steadily deteriorated. what went wrong here? if anything i think you can boil down all the problems to one key issue. management was way too optimistic and promotional during the honeymoon period after the company became public. we spoke to the company's ceo in august of 2013 very charming. and the picture he painted back then was much more positive than the reality has turned out to

be. i like ceos who believe in their companies and make grand plans. they have to be able to execute on those plans. consider the company's agenda. noodles has always been -- talk about putting up lots of new locations. that's a huge part of the reason why people got so excited about the stock back in 2013. but while the company has managed to meet its new store rollout, the growth is slowing. 2013 noodles increased store cap by 16.2%, and then 15.5. this year forecasting a 12 to 14% increase. but the final straw for investors came may 5th the stock dropped in a single session and hasn't stopped getting slammed. if you exclude the softness the company has seen in colorado washington, d.c., and austin, texas, their same-store sales actually grew at a 3.2% clip, much higher than the figure that noodle reported. the problem with that alibi, those three markets account for

nearly 30% of noodle's footprint. and colorado is their home state. so if consumers are sourg on the concept in its most established market, that doesn't bode well for the company's new locations in the rest of the country. ready seems to have been way too optimistic about colorado when we spoke to him shortly after the ipo. take a listen. >> how is colorado doing? >> colorado is doing great. in fact, i would tell you, one of the things i'm most encouraged by is our mature markets where we have better brand awareness and we have been there longer. we're still building restaurants, we have plenty of growth haven't hit a point of diminishing returns. we're still growing. >> now, though it looks like those mature markets are, well let's say overripe and wilting. so what do you do with this stock after its gigantic washout over the past three weeks? has noodles gotten cheap enough to become a value play? not really. in fact it's still way too

expensive versus its cohort. see, despite the huge decline in the stock, noodle still trades at more than 32 times next year's earnings estimates, which makes it more expensive than panera starbucks or chipotle and its numbers are worse. on top of that you never want to own a stock where management has tarnished it's creditability. let me give the bottom line here. when a formerly high-flying growth stock loses it's mojo no telling how low it can go. the entire growth trajectory has been called into question. i think it can go lower, and the only reason it was so high in the first place, management was way too confident. and the concept sure seems right for the time. i just wish someone else had come up with it. much more "mad" ahead, including my take on the wild action at shake shack. there is more to these moves than just the menu. i'm going to explain it to you. then the strong dollar flexed its muscles today. is the euro done going higher?

and the ceo of alliance data systems, the company behind many loyaltity cards in your pocket. stick with cramer.

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tonight we need to talk about the anatomy of a short squeeze. simply, the short squeeze in shake shack which may not be over despite the stock's more than 7% decline today. perhaps there are some people, really, who are out there who have been buying the stock, who genuinely believe the average shake shack store is worth more than $40 million. 40 times worth jack in the box. 20 times the value of a chipotle. that's what it divides into it. make there's investors who think it can be explained by the acceleration to 11% same-store sales on a quarter basis. most people are looking for a loss. but the truth is the rally in shake shack which was finally halted today has more to do with the mechanics of the stock market than it does with the fundamentals of this burger chain created by the brilliant danny meyer. it all starts with shake shack's tiny float, the number of shares they currently trade,

5.6 million. the underwriters placed the shares in the ipo perfectly, meaning the syndicate seemed unwilling to sell them. they're pleefrsbelievers. they would be released from commitments after the stock gains 50% from the ipo price and shake shack is way past that. why does this matter? the obvious overvaluation of shake shack using a per store basis isn't lost on the portfolio managers who like the short stocks given the dramatic disparity and valuation between stores that in the end just serve food. the shorts figured the stocks notice price tag had to bring out sellers, although today was the first day we have seen them. plus, what buyers would be so reckless as to pay those mid '90s prices we saw before the opening on friday? in fact there is someone who is willing to pay those prices. who? the clerks in brokerage houses responsible for delivering the shares borrowed by the short sellers to the actual buyers of shack. remember, when someone tries to short a stock they're supposed to call the broker and get

what's known as a locate meaning they ask if they can borrow the stock they want to sell short before they do it. it's not like the shorts can just create stock and sell it. they have to deliver something to the buyer on the other end of the transaction. so they borrow stock that is sitting in the vault of their broker and then sell it. but right now, apparently all the available shares of shake shack that can be lent out to short sellers already have been. that shouldn't be a surprise given that 43% of the 5.6 million shares are sold short. so when a new buyer comes in, the broker who executes that trade has to find stock to give the buyer. he can't just say, sorry. we can't deliver that stock. so you can't buy it. what happens then? those early morning blocks that traded in the mid 90s last week they were purchases made by brokers going in and paying any price to anyone offering stock out there, in order to make good on the delivery for real buyers. you might think the broker is taking a beating on these trades but you would be wrong. when the short seller checks his run, he might find out the position was closed out the day

before at an outrageous price by a clerk. don't believe me? this happened to me 25 years ago in a bank stock i was shorting. the bank was insolvent. the stock was trading 13 bucks on its way to 0. one day i came in and discovered my short had been bought in at 18 bucks. i was obliterated because my broker couldn't find stock to deliver to a real buyer so he closed out my short position and gave the stock to that guy. and that's what's been happening with shake shack every morning for ages. maybe the current investors realize the surge is buy-in based and finally started selling, perhaps spurred by the "wall street journal" article. enough of the 7 million locked up shares will come when the market and bust the short squeeze. maybe management recognizes the gift they have been given and is writing a secondary offering to fund years of expansion and try to get approval for that. here's the bottom line. please just know that these premarket purchases that you might have seen in shake shack, they may have been the extreme

top of the short squeeze. that's not normal buying. the stock's sky-high valuation is a product of the flawed short selling process. so gawk at the lines in the restaurants, wonder at the double digit same store sales growth. understand the short has gone awry behind most of the levitation and might be worth getting out while the getting is still good and it is still good. lance in illinois. lance! >> caller: boo-yah, cramer! >> boo-yah, lance. >> caller: hey, do you think mcdonald's with the third pound burger is doing their turn-around? do you think it's started? >> you know what i think you're being paid to wait for a turn-around that i do think will come. because i'm beginning to believe that mr. easterbrook, new ceo, is winning back the franchisees. it's not necessarily with that particular item but a streamlined menu that no longer takes geniuses from oxford and cambridge to figure out how to work it. let's go to sean in

pennsylvania, please. sean. >> caller: hey, jim. a big bucco boo-yah to you from pittsburgh. >> why not? i like pittsburgh here. i'm actually following the steelers and the bucs. what's up? >> caller: like it. hey, i currently own sonic shares. they had a huge run up to earnings last quarter and then of course the cold shower came which i still don't understand. but i noticed last week we start to see higher volume on the stock which i like. and obviously, there could be another nice run into earnings report in a couple weeks. i was considering adding to my position. what do you think? >> i think you're right. that's why i recommended it very hard when we had the ceo on recently. i think it's coming at the right time. as the dollar gets stronger, people rotating back no those, as gasoline comes back down which it will. people rotating back to those. i think you have horse sense, sean. i like sonic. sometimes mechanics trump fundamentals. that's the case with shake shack. sure, there's plenty of fire in the grill, and darn it the shack burgers taste great.

but these levels are just not normal. so maybe you consider selling a little while the getting is good. much more "mad money" ahead, including the dollar versus the euro. contrary view coming up. knowing what's next. you don't want to miss it. then alliance data systems, millions of people you've got them in your wallet. can it master the move to digital? rapid-fire lightning round, stick with cramer.

on a day where we're back to fretting about the possible meltdown in greece and now the recent rally in the euro seems to have petered out, i think it's worth taking a closer look at what might happen to this incredibly important currency. that's why tonight we're going get a sense of where the euro is headed with the help of carley garner

brilliant technician, co founder of carley trading, author as well as my colleague at real money.com. before we get going, let me explain why we should care about this. i tend not to talk about currencies much. when the euro is weak versus the dollar, that makes it hard for companies to compete with european ones. with a weak euro all the profits that are multinationals translate back into fewer dollars. a recovery in the euro can be a huge positive for gigantic cohort of american stocks and any continued decline demonstrates how hazardous euro weakness can be for a stock market particularly for those big industrials to sell not that long ago was that the euro and the dollar would trade one day at par. a one-to-one exchange rate. that seemed inevitable. yet despite the universal bearishness, even when the euro was collapsing it never trade

above 104. that was versus the dollar during its plunge in march. that price didn't last very long. the euro only hung around for 105 briefly. just in the european -- traveled as high as $1.14, early this month and that's a level we haven't seen since. just because the euro failed to plummet versus the dollar during its first quarter swoon, that has not stopped the bears one bit, arguing it could happen later this year especially since it's taken a tumble going back to below 109, pretty ugly out there, hence why we're so ugly today. the bearish chatter has been growing. we heard lots of widespread pessimism implying the euro's recovery has gotten rich and the down trend toward par should resume any minute. garner is has a very contrary view. anyone who thinks it's richly valued she thinks is kidding.

why? let's start with the monthly chart. this is a monthly chart of the euro versus the dollar. as painful as the euro's recent rally has been for the short sellers, well you can see when you look at the long term chart, the rebound over the last couple months looks like nothing next to some of these very -- versus currencies previous collapse. and garner thinks the euro could recovery a heck of a lot more from these levels. you'll see why in a second. from this chart, well the euro has been stuck in a real down turn for many years, all right? but garner points out that the past rallies within that down trend have tended to be pretty substantial, much larger than the gains we have seen the past few months which makes her think the euro could have a lot more room to run. consider that in mid 2010 when we first started worrying about the euro and about europe the euro bottomed nearly at 118. and eventually traded to just below 150. that's a huge move. hey, how about let's go back to october 2008. euro rallied from 123 to 151.

although a lot of that had to do with the weakness in the dollar. still, these past rallies each covered roughly 30 cents. the current rally in the euro ten cents at best. right now 4 cents above where it bottomed. if this repeats itself the euro could trade for a buck 34 a gigantic rally, takes us back to the top of the trading range, a gigantic short squeeze. holy cow. i don't know many people in position for that. also you can see the euro has two long-term floors of support. one at 106. and then a second one at 104. if the currency somehow breaks down below that 104 level, which happens to be below where it bottomed in march, garner says we've got to worry. if that doesn't happen she assumes the euro will travel back to the top of its trading range. even though garner believes the euro is ultimately headed higher, she thinks it's possible we'll see consolidation, flopping and chopping. which is why we need to check

out the daily chart. here garner sees a powerful short term support for the euro at 108. which is less than a penny below where she is trading. she believes that level will hold. another floor at 106 and 104. if you get a pull back it would be a screaming buy. so bounces here but if not, this is where you have to buy it. and, again, the way charters think, if it goes below, they'll be worried. this is a lot of floors to support. it's like a bunker! still, garner expects the euro could trade sideways. she's not getting super excited until the euro breaks out above 115, which should give the momentum we need to make a legitimate run for 119 and then 130. wow. in the end, garner believes the path to least resistance is for the euro to go higher not lower, like you hear from everybody else. one more piece of evidence. we're going to look at the commodity futures trading commission commitments of traders report or the c.o.t.

report, which tells you exactly what the big institutional planners are doing in the futures market including currencies. according to the cftc there is still a gigantic short position here. large speculators, meaning hedge funds, okay. that's the green one. and mutual funds only covered 25% of the bear's positions as of last week's peak. specifically reduced their net short holdings down to 168,000 contracts. in garner's view this leaves the door opening to weeks ahead. i bet there was a lot of shorting in the euro today. the fact is the euro has a long history of overcrowded trades in both bull and bear markets. and honestly we have never seen such a one-sided position in the euro futures, not even when the euro zone seemed in danger of falling apart. in other words, nobody has ever bet against a euro this aggressively before despite the fact the european economy is recovering. that's why garner thinks we're

likely to see the same snap back rally in the euro we saw in days of 2008 2010 2012 all cases where this class of large speculateor shorted the euro too heavily and got wiped out. wouldn't that be something if that happens again? she says it most likely will. here's the bottom line. the charts as interpreted by carley garner suggest the recent rebound is still in its infancy. i believe her, even though i think few people do. and it jives with everything we have heard about europe's rebounding economy. remember, a stronger yuri is good news for tons of american companies, good news for the dow jones industrial average and tremendous for the broader stock market. opposite of the pounding we saw today. "mad money" is back after this.

"lightning round" sponsored by td ameritrade. it is time! it's time for the "lightning round." we play this sound and then the "lightning round" is over. are you ready, skedaddy? it's time for the "lightning round" on cramer's "mad money." let's start with john in

virginia. >> caller: hey, jim. how are you doing? boo-yah to you. my question today is prta. you had a guy on there a couple months ago. i think the ceo. would like to know what you think the stock is doing. >> i think the stock is a good one, being a great speck for the second half of 2015. it's been a winner. i think it's going to stay a winner. i want to own pro thenna. let's go to mary in colorado. mary. >> caller: hi jim! i have a boatload of chesapeake energy at just below the strike price. how about a merger or a takeover? >> no. i don't think you'll get one. i think that this is actually not one of my favorites. i think that it's an expensive stock. and the group is headed lower right now. i would be careful with this one. of let's go to ken in north carolina. ken! >> caller: jim hi. it's ken from leyland, north carolina. thank you for everything you do. i'm curious about cigna.

i'm up about 30% and i want to know what your thoughts are. >> we had a good game for actionalertsplus.com and it kept going higher and higher and i think it will continue to go higher. this group is very hot. i would not touch that stock. i think it goes higher. allen in georgia. allen. >> caller: hey jim. >> allen, what's up? >> caller: appreciate your show, and i watch it every night. >> include thank you. >> caller: i recently took a position in six flags, and i've done pretty good on it. i was wondering if i should take -- buy some more or just hold it. >> no just hold on. i saw six flags on. with can kelly earlier today. that's another stock i like. i'm sorry, cedar fair. i saw fun on and it made me think geez i ought to go back in. we just had six flags on. they're doing great. fun is doing great. this is a good group to own. mark in washington.

mark. >> caller: hey, hbac communications. >> i like the tower stocks. i still believe in american tower, too. jim in arizona. jim. >> caller: hello, mr. cramer the hardest working man in the investment business. >> unfortunately, i can only work until 11:30 tonight and get up at 3:30 tomorrow i've got so much to do. what's going on? >> caller: quick question for you. the oil sector coming back to us. i want to ask you about sea drill and i want a lightning two-fer jim. core he'so oil. what do you think? >> i like corezo but when it comes to sea drill, it's sell, sell, sell time. and that, ladies and gentlemen, is the conclusion of the lightning round! >> the "lightning round" is sponsored by td ameritrade. t td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions.

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after a nasty day like today, you need to find a powerful, long-term organic growth theme that will keep working. which brings me to alliance data systems, the largest provider of transaction based companies. in short, other companies outsource their loyalty programs and data. when you consider how loyalty cards become staples of all things retail you can see how it's riding a terrific secular growth trend. robust quarter last month. strength across the board. raised guidance. this was the first quarter since the company's 2.3 did his

billion acquisition of conversant. i think the deal is paying off. ever since we spoke to the ceo last june the stock has given us a 14% gain much better than the 9% return you get from the s&p. let's look with ed heffernan president and ceo. welcome back to "mad money." good to see you. >> hey, jim. >> i don't know if people understand how big you are. you're 37 million households you touch. that's got to be the most of almost any company i deal with. >> yeah we're probably -- we've been referred to the largest company no one has ever heard. so that's probably a good thing. that's our job -- >> you don't want to be. the goal is if you're -- like i'm a big walgreens customer. until i read the notes, you're walgreens. >> right. so if you were to look at most of the very, very large loyalty programs out there, to your point, whether it's hilton honor, citibank or walgreens or the victoria's secrets or

pottery barns of the world, we're sort of the guts behind that stuff. we're collecting the information and using that to help drive incremental sales, engender loyalty for the client. >> now, in some cases, there are stores that seem to want to know more about me and do more with it. are you able to offer sweet and some guys just want to be aggressive and other guys say thanks but we're not going to apply it? >> yeah, it really comes down to what the client wants. if you really want to really make use of the tools and assets that we have the deeper you go the more effective it is. so for example, our sort of i guess sweet spot is the extraction of what we call sku level information, which is down to really, you know she bought the dress, it was a blue dress, it was this size. it cost this much. and if you can get that type of information, then you can reach out across multiple channels to

reach her with an appropriate message. >> now, i think it's really important, because you talk a lot in your -- in all of your work about targeted versus traditional marketing. you are now with this most recan cent acquisition the king of targeted -- targeted marketing. tell people how that's different from just traditional. >> sure. if you look at the $400 billion or so that's spent in marketing and advertising in north america, 20 years ago, the vast vast bulk of it was spent on general brand advertising, which is a tv commercial or something like that. and that worked great, right, in those days when you had three channels on tv and little bunny rabbit ears. and things have changed. what you have is this massive fragmentation of the consumer base. in other words, it's a lot harder to find big groups of folks all watching the same thing. so what we do is we go out there and say, okay there's a certain type of person that a cnbc wants

the to attract. so let's figure out who that person is, let's get some information about what makes them tick let's do something that gets them excited about coming to the website or watching the show on the tv itself. and that's what we do. we look for these micro segments and then it's a very effective marketing tool. if we can use data to gainin sites into who these people are, and then reach out to them through the right channel. it could be a direct mail piece, it could be all digital. it could be at the point of sale. it doesn't matter. but to get them excited. >> i saw you -- social media. i mean five years ago, you wouldn't view social media. >> it seems integral now. >> yeah again, if you look at where the digital world has come from a thousand years ago, you know, just the concept of collecting inventories of sites that can be offered to advertisers was considered cutting edge which is what

conversant does. now that's considered sort of something that can be automated. so you need to continue to evolve and figure out that if i'm going to reach jim, maybe permission-based e-mail isn't the right channel. maybe it's social. maybe it's on his mobile device. maybe on the tablet device or on the desktop. so we need to be very careful, because you don't want to overwhelm people or it won't work. >> now speaking right at the guys do -- you can do mobile and it's the app. you'll download the app. but we had a fellow by the name of brian billingsley on. he's from alliance data working at this private company, and they're also offering kind of instant credit. you know they kind of know a lot about you. we meet these guys from a firm and lending club. is this something you have to get into where you're checking to see whether a guy can pay immediately from an algorithm or is that something you should let the other guys handle? >> what we try to do is to make sure that the shopping

experience itself, more and more of the folks who are actually acquiring a private label card for example. we run a lot of those programs for the specialty retailers that they have the opportunity to apply for that card as they're shopping. not at the point of sale. so exactly to your point, right, there's a qr code on the wall you whack it put in four pieces of info kind of interesting. you get scored. you get your credit amount approved and get a virtual amount on your phone and pay with that at the register. what we're finding is people are more comfortable doing it while they're shopping. >> okay. last question. you have big european business. i know you're buying back stock to offset the currency, which is great. currency was bad for strong dollar today. but it seems like europe has gotten very strong for you. >> yeah. what's -- it's interesting. it's always nice to be lucky sometimes. and buy at the right time. but, you know the business over there called brand loyalty does a lot of the things we do here.

and that is primarily in the grocery space in the various european countries, as well as what we would call you know the old east block and into ukraine and russia. a lot of those areas are just beginning to get excited about the whole loyalty and data and marketing. >> is and you're there for that. >> and we're there for that. wow, better be lucky. you've got the right time. you didn't have to go through the big depression and your numbers are very strong over there. congratulations. that's ed heffernan, president and ceo of alliance data systems. this has been a winning stock forever, guys. you need to look at stocks like this. because you may not be evident to the naked eye. but they're there behind many of the purchases you make. thank you, ed. >> great, jim. >> stick with cramer. ...and takes the wheel right from your very hands... ...this isn't that car.

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auzozone. some people thought the quarter was light. remember this is when i say you should start buying it. if you're right in there with the can company, which buys back shares voraciously. a company that doesn't buy back voraciously, workday. i thought they would have a good quarter. but just not good enough. and that's causing that stock to trade down in after hours. could take a lot of cloud stocks down with it. i like to say there is always a bull market somewhere, i promise to try to find it for you. i'm jim cramer. i will see you tomorrow!

lemonis: hi, there i'm marcus. tonight on "the profit"... we head back to some of the business i've partnered with over the past year. -carolyn? -carolyn: i'm carolyn. -nice to meet you. -lemonis: when i make a deal i come in with a plan and a check. man: thank you, marcus. woman: i was gonna work you a little bit more. lemonis: [ chuckles ] but what happens after the cameras shut down... michael: i've let it slide for three freakin' years! lemonis: ...may surprise you. one struggling novelty sporting good company has been totally transformed. wow. look at this place. but the owner is still making the same sort of short-sighted decisions that nearly brought them to the brink. i'm pissed that you bought the printer. i'm not gonna lie. if you were me, would you stop putting money in this business? at unique spa in long island