up. and day rate is very strong. >> guy? >> may 27th was a capitulation day in kors. tim bought it last week. michael kors. >> sure, get my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer! welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to save you some money. my job is not just to entertain you, but to educate and teach you. so call me or tweet me me @jimcramer. is the market too expensive? are stocks overpriced? should we be worried that we're on thin ice as we charge into

this notoriously ugly month of june? cap stocks have notoriously done poorly. were we just whistling past the graveyard today? let's break it down. let's break it down from the concept of overvaluation and see if it adds any value to our investment process. maybe we can make some money. we usually value the entire stock market by looking at what people will pay the price to earnings ratio multiple for the collective earnings of the s&p 500. trying to figure out the p.e. of the s&p. right now it's trading about 18 times earnings which is a little higher than historical month. what are historical earnings really worth? i've seen the market trade at 29 times earnings. that was a huge red flag. and guess what, that happened right before the crash of 1987. hey, by the way, that was not a coincidence when you saw that.

i've also seen trade at 12 to 13 times earnings. that was typical when estimates were at lower, not higher. so we can't look at this number in a vacuum. for example, we know that we need to consider the relative worth of stocks as an asset class versus bonds, the other major asset class. when i look at the pitiful 2.18% return i'm getting from the ten-year treasury i've got to figure stocks are more attractive than bonds, even with the increased risk. it stands to reason that the multiple would be elevated. everything is relevant isn't it? stocks may not be a bargain, but bonds are downright expensive. so i discount the 18.5 times earnings issue as the kansas of having some crumby competition from the bond market. the entire notion of the market is something that i personally balk at. when we talk about the market, we're dealing with a construct that i find very misleading. in reality, the stock market is made up of pieces of paper that represent ownership interest in various different companies.

while there are some expensive stocks out there, no kidding, we've got plenty of cheap ones. and others that are simply influx. today on twitter @jimcramer someone was offering me own don't trade apple t-shirts. somebody was listening. why do i reach such a charitable verdict on iphone? is it because i like my apple watch so much that i've ordered four of them for my friends? is it because i think apple pay will become the de facto payment system for worldwide retail? or maybe -- maybe i just want to curry favor with ceo tim cook since he called in on our tenth anniversary show as tim from california. tim! no, actually it's because of the valuation! apple says it 14 times earnings. the average stocks represented by the s&p i just gave you, yet it gives you the same yield that you get from a five-year treasury. if you back out the balance sheet, the darn stock is selling

at just 12 times earnings. i've searched far and wide for stocks that have potentially double digit growth rate. it's not supposed to happen people. but it has. and it has with a $750 billion company. it's one thing when the biggest companies are selling at 80 or 90 times earnings. that was the red flag of the year 2000. 80, 90 times earnings. it's quite another one. the largest company is selling at a fraction of the market multiple. next, the drug companies. we know big pharma names trade at a discount to the average stock. we always hear about how expensive the biotechs are, right? biotech, whoa frenzy. well, how about gilead? it's got the number one growth franchise in the world. a cure for hepatitis c. so what is this company with the best balance sheet sell for? how about ten times earnings? ridiculously cheap. you think apple and gilead, maybe they're aberrations. so what's the largest domestic bank valued at?

wells fargo sells at 13 times earnings. how about the largest international bank? that's jp morgan. ten times earnings. how about the biggest and best brokers? goldman sachs. ten times earnings. if stocks are so dramatically overvalued, how do you get those price multiples? after all the market share gains and all the opportunity versus what they had just seven years ago, how can these stocks be valued so low? and we're supposed to be worried? or consider that we've been spending a lot of time on the airlines. last week we spoke to gary kelly, the terrific ceo of southwest air. wanting to grow capacity by 8% and that's caused tremendous pain in the group, particularly when the ceo of american airlines came on. suddenly southwest at 11 times earnings and american at five

times earnings looked expensive. the expands growing the wrong way. but today kelly came out and said he isn't going to increase capacity by 8%. he's capping it at seven. it does signal there could be a true spot. stocks suddenly will go a lot less dangerous. the estimate cuts may now be muted or not at all. remember, we want to see the main numbers. because may was not that good. or we could be in some bargains here especially if oil goes lower. finally, there's the matter at hand. the situation we found ourselves in every day, the world of mergers. company sold at 17 triemimes earnings. the growth rate was bumpy at best. we know the semi conductor stocks were at elevated levels. if anything you know what i thought about going into the

month of april? it seemed perfect. then this morning, $54 a share in cash for altera. now you have a stock that sells at 40 times earnings. so what? altera may not be the microcosm that they want all stocks to trade like. am i not making any sense given the competitive threats out there? does it really matter though? do you want to argue with intel, the biggest semi conductor company in the world? you want to tell the ceo that he's not playing by the rules, that he's overpaying that the average stocks should be much lower, and what was he doing wrecking everybody's paradigm? i don't know. i think i'll take a pass on that accusation. truth is he does much more than i do. there you have it. a series of situations that are cheap or influx, or look expensive and turn out to be worth a lot more than we thought. here's the bottom line on whether i think this market's overvalued. let's just say the market is the sum of what people and companies and ieacquirers and seekers of

income would like to pay. i would think there are pockets of undervaluation like apple, segments that are influx like the airlines and the semiconductors that seemed expensive until a giant like intel suddenly makes them dirt cheap. dhiren in >> caller: thank you very much for taking my call. i want to thank you very much for getting me interested in pharmaceuticals, vrx. some positive news about a new drug. the stock is up more than 20% from where i bought it. should i sell it now and buy activist? >> no, no. look, i like them both. it was very hard for me to figure out which one to own. jack moore and i have gone back and forth. we think that valeant is less expensive, but we like brent saunders more as the ceo of activist. i think you're fine. kelly in california.

kelly! >> caller: hi, jim! boo-yah, and congrats from dry sunny, california. >> thank you very much. still in that zone i guess. go ahead, what's up? >> caller: i wanted to ask your opinion on the wonderful world of disney dis, and what you think will happen with the new cfo. and also, what effects on the stock do you think the new disney land in china will have? >> okay he's a very powerful guy. i was trying to put it in the context of what was happening. but then i said don't get too much with disney. you've got "star wars" coming up. shanghai coming up. many things going right. there isn't a person i know who doesn't wish the stock would drop 10% so they could -- >> buy, buy, buy! >> so you're lucky. stick with it. things are exactly how they should be. some stocks that are cheap, some that are expensive, some that are going for whatever price

investors will pay for them and some that aren't. that, my friend is what makes it a very fair place to be. on "mad" tonight, the stock-buying capital coming apart at the seams, but is pvh a buy? i've got the exclusive. then target! yes, right here. appears to be hitting the market again, a massive cyber breach baby apparel, and more. i'll see if this turnaround can stay on track when i talk to the new man leading the charge. plus, i'm kicking off a new series here. "health care hot list." with a name i think can soar over 20%. i'll reveal it here just ahead. stick with cramer! >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-8

1-800-743-cnbc. miss something? head to madmoney.cnbc.com. for the millions of americans suffering from ringing in their ears, there's no such thing as quiet time. but you can quiet the ringing with lipo-flavonoid, the number-one doctor-recommended brand. relieve the ringing with lipo-flavonoid.

i'm a big believer in the value of skepticism, but you

never want to get so negative that you become blind to some very real opportunities. consider pvh. calvin klein, tommy hilfiger some smaller labels. pvh is a global operator with a ton of exposure to europe which is a major reason why this well-run company has had kind of a rough time the past couple years. there was a lot of chatter about how the strong dollar is going to crush the company's results. bountiful overseas sales translate back to fewer greenbacks. a lot of people were worried. pvh blows the doubters away by some fabulously better than expected numbers. despite taking a big hit in currency, the company still earned $1.50 per share. revenues came in higher than anticipated. plus pvh also authorized a substantial $500 million buyback, something you know we've been waiting for and talked about. let's take a closer look with manny chirico, the chairman and ceo of pvh. welcome back to "mad money." good to see you, sir.

first thing i think of is like is it for real? 500 million$500 million buyback. an actual strong beat. within the numbers, it's still not going on all cylinders. but if this is what you can earn with these numbers, a lot of things get better. >> absolutely. when you think about the underlying businesses the calvin klein business put on a 25% constant currency earnings increase on a very strong sales increase as well. so that investment, that acquisition is really starting to pay dividends. tommy hilfiger business with its significant exposure in europe you know beat our internal plans as we went forward. so we're feeling really good about those two drivers of the business. and i think once the economies settle down it's just -- it's just what we can really deliver. >> i remember when you first came on and how long it was taking to turn calvin.

was this the number you hoped to get, that you thought you could get someday? >> i think this is the beginnings of that. i feel that strongly. we still have a european business in calvin klein that is break even to marginally profitable. we're starting to see some margin improvement in europe as well. that business is really starting to see the benefits of better product, the investments we've made. i think that really portends well in the future. >> u.s. not as strong as i would have liked. some negatives. that's highly unusual. but you also talked about how strong dollar hurts here, too. >> the beat clearly has been driven by our international. it's very, very strong. in the u.s. the challenge with the u.s. dollar is a big portion of our power brands calvin and tommy, are driven by a lot of international tourists.

the west coast, l.a. san francisco, las vegas. these are big markets. they come here with suitcases full of calvin klein and prada. so that market has been tough for us. >> you mean actual merchants? >> actual merchandise. >> it's so much cheaper -- >> being in the u.s. market the more promotional nature tends to be a greater value than you would see in asia or europe. >> now, how about trends? i haven't talked to you about denim. somehow denim got hot again? >> i would say denim has recovered. i want to be careful when i say -- >> you had flagged me that denim had been weak for a while. >> yes. clearly heard everyone talking about it the last three years with this athleisure trend that's gone on. both men's and women's denim as a category has started to improve. and in the calvin klein denim business, both men's and

women's, we're seeing significant increases. in the u.s. another retail the business is up double digits. >> that's fantastic. i had been worried that maybe what would happen is there had been such a football product, that i can get it at costco. but it's maintained its price point. >> absolutely. it's actually increased. our price points are up double digits across the board. turning that business around as you said, it's been footballed around the last four or five years. we're at the business to correct that. we're really seeing the benefits of that business. >> any retailers in this country worth calling out that you think are doing a really good job for you? >> i think all my retail partners are doing a great job. in particular, with the two big brands, our largest customer is macy's and they do a fantastic job with showcasing the product. our business with kohl's continues to be very strong. that business continues. our business with jcpenney continues to really deliver for both them and for us.

so i think we've really been able to target the segments of the business with our brands. >> okay. how about this buyback. significant because i know that i've been pushing for it. but you've given it over three years. is that just a conservative way, and if you maybe finish it earlier, or is it really just going to be staged? >> i think it's going to be staged for now, jim. i think the reality is we did the -- we got our balance sheet right-sized. we want to continue to have a balanced view of that where we will return dollars to our shareholder base continue to pay down a portion of our debt and make the strategic acquisitions, take back license business. take direct criminal of our license businesses. continue house. china, mexico some of the other asian markets that have real significant growth opportunities for us. i think those opportunities will really start to show themselves second half of this year into 2016 are they for sale and just you haven't felt that your

balance sheet was ready to take them? >> it's a combination of our balance sheet and the arrangements with our licensing partners are, our ability to call the businesses at certain points in time until the future, staged on the next three or four years. >> i sense a confidence in you that i haven't the last couple of quarters. that is me because i've gotten to know you. been on the show many times. you've always been insistent that i not get too far ahead of the story. take it easy jim, because you know that i like pvh and i think that you do a great job. but this seems like you've got some momentum going. >> your personality is a little bit more excitable than mine, so i always try to keep it down. but besides that i don't want to say that this is the turning point in the business. but we're really starting to see the befs of all the investments we've made on the calvin klein side of the business to really pay off.nefits of all the investments we've made on the calvin klein side of the business to really pay off. it is unfortunate to have a lot of that with what's going on

with currencies and multi-nationals like ourselves are dealing with. absent that, we'll be looking at growth at double digits as opposed to business that's actually down because we're dealing with $1.25 of currency hit this year. >> that must end. in the meantime you're getting it for 15 times earnings which i never thought you'd be able to trade down to. that's manny chirico, the chairman and ceo of pvh with a terrific quarter. is it up too much? no. probably can go higher. "mad money" is back after the break. coming up on the mark? it's moving past a massive cyber breach and embracing new initiatives with a fresh chief executive executive. but can target keep hitting the bull's eye, or will the competition put a wrench in this turnaround? cramer's got the exclusive with the ceo.

few things are more difficult than turning around an ailing department chain. that's exactly what brian

cornell has been doing with this once troubled now thriving retail. cornell has rapidly gone about getting target on track. not only did cornell shut down the ill-conceived canadian venture, but he's managed dramatic improvements. a week and a half ago when targ posted a seven cent earnings beat of higher thantarget posted a seven cent earnings beat of higher than expected revenues. it represents a fabulous 260 basis point improvement from the year ago. they i think target's got more room to run. let's check in with brian cornell, the chairman and ceo of target and hear whereabout where his company's going. >> good to be here. >> a year ago you walk in the stores. what do you see versus what you see now, and what of that is you changing things? >> you're going to see more of

our signature categories. we've elevated our focus on style. apparel, home, beauty those are core categories to target. we're raising the bar with our focus on baby and kids and starting to get into the wellness space. so over the last year the team's done a great job of understanding our shopper, what we call our target guest, and making sure that when you walk into your stores we're giving them what they expect and making sure we tune into the brand promise. it's all about making sure every day we deliver that expect more and payless experience. >> i know target is a place of great excitement. v home depot and lows you go outside, they've got this great stuff. the other guys have caught you. what are you doing? >> we've got to leap ahead. we spent time understanding

today's consumer, and what they expect from us. and how we make sure we do differentiate ourselves those competitors. retail is a very competitive space. you know that as well as i do. we've got to make sure we continue to bring great newness, great innovation, excitement. we've got to continue to dazzle our guest. >> so give me some examples. the collaboration reminded me out of the old days. stage ones coming out. are there going to be five things that blow me away in the next five months? >> let's go back to lily. we were able to create black friday in april. we had hundreds and hundreds of guests lined up all excited to get in there and shop that collection. so it's up to us to make sure we continue to do that again and again. we were doing this for a long time. well before i got here. lilly was 151st collaboration. and we've got more in the pipeline. so we've got to continue to understand what the guest wants from target. we've got to make sure we bring great excitement and design. we have a phenomenal design and

development team. they're going to make sure the next collection wows the guest as well. >> so you were at sam's. you were at safeway. you were at pepsico. you were at michael's. what are we starting to see from the impression you made at those places at target? >> it all starts with understanding the consumer and making sure we understand consumer trends and how we meet those trends. i spend a lot of time at target making sure i was listening and learning. talking to our team. getting out with the guests. talking the our vendors. making sure i understood what they expected from us. and we're a very aligned team right now. >> but the consumers -- even the last 15 years, the consumer's gone from being a largely for years striving middle class, largely white typically, to being many different demographics, many different race. i know that hispanics have been a driving force behind a lot of your growth. it sounds like the consumer is the consumers. how can brian cornell and his

team appeal to all those different constituencies at once? >> you know, jim, we really can't. we've got to make sure we stay very focused. and we understand our sweet spot. our sweet spot today is what we call the demanding enthusiast. they're the millennial families more and more they are hispanic. they love to shop. they expect great value. so we've got to really understand how to meet their needs. and more and more jim, they're very digitally connected. they are out there shopping and in one hand, they might have a shopping cart, but in the other hand they've got their smart phone. so we've got to make sure we embrace this new shopping environment. i recognize more than ever before that we've got to combine a great in-store experience with a great online experience. and you know the focus we're putting on. 38% last quarter online. so our best guess is the one that shops in store and also online. we call it on demand shopping.

i know sometimes you're going to enjoy shopping one of our 1,800 locations. some days you're time-pressed. you're going to be at your desk in your kitchen. you want to place an order. and then you can come to one of my stores and they act as pickup centers. sometimes you just want to place the order and i'll deliver it to your front door. so for us to win, we have to make sure we meet the demand no matter how they want to shop. >> the other guys have spent so much money -- when i say other guys i'm talking about nordstrom, even wal-mart, even amazon. >> all competitors. >> you need to spend on technology. need to spend on design. you need to spend on making the stores look great. target expression. you've got to return money to the shareholders. brian, it's not an easy job to get this right. >> jim, it's not. and that's why we've taken a pause and made sure we're very focused on five key initiatives. we can't do everything. we recognize that.

we have to make sure we have the organizational line around five key priorities. i talked about this on demand environment. we've got to elevate our game both in store and online. it's not an either or. it's an and. we need to make sure we're true to those signature categories. we sell in lots of different categories. we're going to be famous for style, apparel, home beauty baby and kids and more and more wellness. >> okay, let's go wellness. i'm going to a target now. i'm not ready necessarily to see the hanes celestial lineup. you have to break the habits of others who want velveeta. and quinoa and velveeta in the same aisle, i don't know if it works. >> we think it does. because the guest is telling us they want both. we're not walking away from conventional products. we recognize that there's great traditional brands there in the pantry. we're going to make sure they're

in our stores. and we know our guest is focused more and more on wellness. they're asking for a more organic, natural, gluten-free products. we've got to deliver both. we realize we also have a local assortment. what works in miami may not work in new orleans or seattle. we've got to localize. we've got to personalize. we recognize today's consumer in the u.s. they're moving back to urban centers. so we've got to find a way to get into those urban centers. and we do that through formats like city target and target express. >> okay so can you put a target express -- well you're got a target express at the university of minnesota. >> we sure do. >> there's 2,000 colleges that want a target. i know you want baby. but when you take your kid to college, you go to target. that's what we know to do. but we like the target to be closer. >> big part of our focus, jim. so we went from university of minnesota with our first targeted express. we're now next to berkley.

so cal berkley. opening up next with the university of maryland. so we're still in the early stages, but colleges play a really important role. both for small formats. but i have a number of my traditional stores, they are really important to the college student. and parents are there with their kids on the way to college. they stop at target. i want that shopping trip. so colleges really important, today and even more important tomorrow. >> okay. now, college kids love their apple. i know you spoke last week. it was terrific. you talked about how listen if they really want it we're going to give it to them. do you think -- i know you said listen, all they do is ask me about the hat. do you think, have you been the fifth hack instead of the first hack, we wouldn't even be thinking about it because there's now a hack i don't even care. but second, do you think that apple pay is something that is safer and therefore you'll go with anyway?

i know you met with tim cook and i know there's pressure all over the place to have apple everywhere. but they get the client. >> we were one of the very first to offer apple pay online. so we recognize we can offer the payment vehicles our guest is looking for. but we can only do so many things and do it well. i want to make sure we're doing a few things really well with excellence. i want to make sure we have chip and pin technology in all our stores as we go into the holidays. it's a commitment we've made and we want to make sure we're guarding the safety of that information across our system. >> when you go into a store, are you happy now? you see some of this you're saying i still can't believe i've got this kind of stuff when i walk in. that's not right. the food the first thing i see is the equivalent of spam and that's not right. you're a two-day workout guy. from queens. a tough guy. you're not an easy guy. you go in these stores you talk to people you don't have big regal presence with you. are you liking what you see?

>> i'm certainly liking the trend, jim, but i've been doing this for 30 years. i haven't been in a perfect store yet. so the day you find one, let me know. but every day, we're trying to get better. and we have opportunities. we have to continue to evolve. we're never going to be satisfied. we have to continue to make sure to elevate our game. >> we're going to continue to expect more from you. >> expect more from ourselves. it's been a theme that we've had for the organization. we need to expect manufacture from ourselves, from every member of our team. if we expect more for ourselves, we'll deliver more for the guest. >> i think you're going to win. >> that's our plan, jim. >> ceo brian cornell. i mean, the place is coming become. "mad money" is back after the break. coming up prescription for profits? cvs recently made a huge play snapping up health care services company omni care for $12 billion. but could more deals in this space give your portfolio a

healthy boost? don't miss cramer's take when he unveils his health care hot list.

there's no way around it. it's become increasingly clear that we're headed toward a world of slower growth all around. either the federal reserve is going to raise rates, putting the kaibosh on the economy, that doesn't mean you should freak out on everything. there are plenty of winners, you just need to know where to look for them. trends that can keep growing regardless of how the economy is doing. i think the most promising sector of our era right now is health care cost containment. at a time when more and more americans are getting access to health insurance a gigantic segment of the population, the baby boomer generation is starting to get old and therefore requires more and more medical care. every health care provider is desperately searching for ways to control the industry's runaway costs. you saw it at the meeting just this weekend for the american

cancer -- the oncology conference. the health care cost containment plays are in the sweet spot right now. riding a powerful long-term trend when the stock market is about to get desperate for consistent growth. starting this week today, i want to highlight the companies that are on the front lines of the battle to hold down the cost of health care. i think we're witnessing the emergence of an elite tier of companies that use their expertise and scale to keep costs down for consumers and providers by acquiring the competitors as part of a massive wave. humana, the big hmo put itself up for sale and there's a lot of interest from potential buyers. sounds to me like anthem. over the last few weeks, i plan on introducing you to a dozen health care companies that i see as the biggest winners from this industry. i bet these stocks are going to get very popular as people realize that health care is one of the few areas they that can continue to produce consistent growth. when you hide it goes higher.

kick things off. we're highlighting the major drugstore chains starting with walgreens. a stock from my childhood trust. you can follow along. walgreens a very different company from the walgreens of even a year ago. the new walgreens is a pharmacy that finished acquiring alliance foods back in december. this new walgreens boots is an absolute titan. more than 13,000 stores across 11 countries. it's not just a gigantic drugstore chain. it's also the largest wholesale and distribution network. it's delivering medications to more than 200,000 customers, including doctors, health centers, hospitals, and pharmacies in 19 countries. in other words, wba is the largest buyer of prescription drugs. they have more scale than anyone else, which means they're in the best position to negotiate for lower drug prices. the company still gets 78% of its sales from u.s. business

which includes more than 8,200 stores. also gets 15% from alliance health care overseas as well as the global wholesale business, which includes a growing generic drug business. finally walgreens gets 7% of its brand from the boots retail pharmacy business made up of 4,600 health and beauty stores. the new walgreens alliance boots, i think there will be many more quarters like this one to come. that's why the stock shot up although it's since pulled back to 86 where it's currently trading. in other words, oddly right now you can buy walgreens boots for less than where it was trading than before its recent wonderful results. consider that after multiple years of mixed same store sales growth, the important metric for any retailer the new walgreens alliance boots is seeing accelerating same store sales in both the front of the store and the pharmacy. on the prescription drug side the company's comparable count

increased by 5%. that's a terrific increase from the 2.2% growth the year before. stunning. we also know the retail same store sales increased the next quarter. an acceleration from the previous quarter and the 2% growth from the year before. but a lot of room to go. on top of that walgreens has laid out a compelling strategy. we know that in the u.s. retail business walgreens alliance has a 500 basis point margin gap compared to cvs health. i believe they can close that gap by importing best practices from the retail business. i think walgreens has attempts to be a serious consol day or the. it's not good the company necessarily has the appetite to do another big deal. still, i think walgreens could do very well by acquiring, say, amerisource bergen. it would really bolster the wholesale business.

the classic cost control business. i think the same plan would work. i think it's a must-have in order to compete with cvs and rite aid. we it makes the stock fairly cheap. only a point above the average stock. slightly more expensive than cvs and much less expensive than rite aid. i think wall greengreens is superior to both of these competitors. here is the bottom line. the plays are about to come into vogue on the wall street fashion show. i think walgreens very much thanks to its terrific earnings power fits the theme. while the stock is up big over the last year i think it's very attractive here. down seven points from its highs? and that's why i'm kicking off this whole series with something that i think is an immediate buy. stay with cramer!

you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. it is time! it is time for the lightning round!

this sound and then the lightning round is over. are you ready? i'm going to start with carmen in georgia. carmen! carmen? speak to me. maybe we should go to the next one. maybe we should go to frank in new york. frank? frank? >> caller: yes! >> you're up. >> caller: hi. i'm frank from new york. i was wanting to talk about general dynamics. >> i like general dynamics. we pushed for it last week. these are about exports of military. i want to go to patrick in ohio. patrick? >> caller: hello, dr. cramer! >> yeah! >> caller: i was wanting to know, you're short a long-term view on jcpenney. >> i think jcpenney is going to be dead in the water, frank. in the meantime i think target

could go substantially higher. travel trust owns target and not jcpenney. target yes. i need to go to rick in michigan. rick! >> caller: hello jim. pleasure to be speaking with you. symbol sfm. >> space is too crowded. i respect strikeouts as an operator, but target's in there. costco's in there. the space is too darn crowded. byron in oklahoma. byron? >> hey jim, what do you think about waste management? >> i saw him on "squawk" the other day. i know the u.s. economy is not doing strong enough to be able to propel that stock back to 55 but i am not going to back away from steiner. i think the stock is right down to 48 47. and pull the trigger! david in florida. david? >> caller: hi jim. i was wondering what you thought of -- it looks so undervalued. >> we know today that it looks like we got from southwest air a little bit of different tone

than what we got from gary. if we see main numbers come down a little bit -- >> buy, buy buy! >> and that, ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade. 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. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.

what do you do when a stock you own gets slammed after what

looks like a perfect quarter. do you dump it based on the a assumption that the selling throng must know more than you do? do you move on? or do you sit back and ask yourself, wait a second maybe the market's got it all wrong! if the stock in question is ulta salon, which reported an astounding quarter on thursday night and then got crushed on friday, i say hold it. now, whoa! i think it might be sorely mistaken. no one denies that ulta delivered fabulous numbers. an 11.4% increase in same store sales. the analysts expected all that to earn 93 cents a share, put up $1.04. but when trading opened friday the stock initially popped about three quarters, from where it went out the day before. and then pirouetted down seven

straight points. falling more than 2% for the session. it was a stunning and hideous reversal. what was the ostensible reason for the selloff? i think it had a lot to do with the fact that ulta offered conservative guidance. seems like a bit of a slowdown from the just reported quarter. that plus some delayed marketing expenses, which we'll hit this quarter, hurt the earnings per share. and a heads up that a new distribution center could still have some kinks to be worked out, caused traders to head for the hills thinking that's the last good quarter we're going to see from these guys. but i beg to differ. ever since mary dillon took over as ceo in july of 2013 ulta has transformed itself from a somewhat sketchy, overhyped and inconsistent growth stock into a well-oiled machine that just gets getting it right. this quarter was no different. she got this company on a sustainable growth trajectory that's not yet fully reflected in the stock. even after the 55 points it's tacked on. it wasn't just that ulta put up better same store sales.

it was how it did it. 7.2% more transactions. 4.22% increase in ticket size. that's the perfect balance. it wasn't just that ulta had a better strategy than other retailers. it was the fact that their online business which was up 49.8%, off a pretty large base contributed 170 basis points to the company's same store sales numbers, with the average online ticket sales coming in 50% higher than the in-store variety. ulta didn't just have more customers coming to the store, it got them to spend more with higher sales from their 15.5 million person loyalty program, a number much higher than the typical program. we know how valuable those are for retailers. the truth is ulta is executing at a fabulous level. the company's leveraged social media with programs like #mybeautifulmom, which pulled in millions of page views. ulta's managed to convince some of the most expensive beauty brands out there like clinique

and l'oreal. everybody must want to be in that group. in the meantime the company's got plenty of runway to keep adding stores and plans to keep adding about 25 new stores a quarter. maybe that's too slow for some of these growth hounds, but it's perfect for dillon who favors profitable growth over growth at any price. so what do you do with ulta now that it looks like a broken stock? i say you ignore the trajectory take out the emotion and face the facts. ulta salon in the early innings of a growth story with a chain that could double in size and still not scratch the surface of this incredibly fragmented category. i say you take advantage of the panic and you buy ulta betting that mary dillon simply underpromised, because when she overdelivers in the first quarter, you and not the fleeing traders will get the last laugh all the way to the bank. stick with cramer!

there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.

let's talk target and pvh. i think brian cornell's got an uphill road but so far he's totally delivered on what he wanted to do. he doesn't have that canadian distraction. target is not an expensive stock if he gets it right. manny chirico, pvh. i think he got it right. the buyback says that to me. the turn in denim. the price increases. the fact that europe is so strong. pvh, even up three, good. there's always a bull market somewhere. i promise to try to find it for you somewhere. i'm jim cramer and i'll see you tomorrow!

[ soft music plays ] >> i knew it was wrong. i didn't know how illegal it was. i figured it was illegal. i just didn't think i was gonna get caught. >> i'm pretty sure i convinced myself that i wasn't harming anything or anyone. >> i wasn't the slut. you know, i wasn't the partier. i wasn't the bad girl. i wasn't the druggie. i was a liar. >> i was kind of like the big man on campus. it kind of got a little easier with each one that i did after