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tv   Mad Money  CNBC  July 10, 2015 6:00pm-7:01pm EDT

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ouldn't even know how to use that in a sentence. i will tell you i think boeing's going to break to the down side and i think you look at september put spreads. >> looks like our time has expired. i'm melissa lee. thanks so much for watching. for more "options action" check out the website, 5:00 for "fast money," have a great weekend. 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. my job is not to entertain but to educate and teach. call me at 1-800-743-cnbc or tweet me at jim cramer. china better europe hopeful, those four words define today's rally which seems to be a much firmer footing than the other
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rallies we've tried to mount lately. dow only 220 points s&p pole vaulting 2 or 3%. nasdaq rocketing 1.53%. and roll over at the bell. but now the hard part begins. we know the chinese government has put through a whole bunch of measures to stabilize the market. we seem to be -- well, i never want to say we are at the curtain closing part of the greek tragedy with the lesser of two evils at least for the stock market might prevail. still one more bailout that could be destined to bailout a year or two from now. doesn't matter. in the short-term a resolution any resolution is positive especially when it comes to the dollar which is selling off for once against rejuvenated euro. no doubt because an end to the uncertainty could send europe's single currency soaring. the dollar really matters. something that's going to become obvious as we go through the next week's game plan.
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monday's going to be dominated by foreign affairs, greece and china. in greece we need to hear what the left wing government of prime minister are they going to embrace this package? i think it's a package i thought they voted against in last week's referendum calling it just more servitude to the germans. in germany we have to hear the iron chancellor angela merkel aka herbert hoover in a pantsuit, accept the package she wasn't even in favor of before the referendum. because she thought it was still a giveaway. it certainly seems like the market knows something, which means if it doesn't know something we will get hammered if greece and germany fail to compromise. actually, this is more of a chinese communist flag. as far as china's concern judging by the way chinese stocks traded on the market today could be a bit of a downer
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sunday night. remember in a bear market it's the velocity of the decline that matters. china's fall seems to have been stabilized by severe actions from their totalitarian government. more on my friends at the people's republic later. so we've got our hands full of foreign issues to deal with when we come in on monday. will the u.s. always now be a side sideshow to these foreign main events? on tuesday i think we'll find out if the financial equivalent of hollywood is going to take preem nans away from the foreign flicks when earning season begins in earnest with johnson & johnson, jpmorgan. j and j been a total hang dog of late. i can't believe this j & j stock down 5% for the year. and we've been buying it you can follow it. why buy a stock that's down? because i think j & j's gotten too cheap versus growth rate. sometimes when stocks go lower they get cheaper. however, it's got huge exposure
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to currency fluxuations and that could trip up this gigantic health care concern. you buy it. too many things are going right now for this aaa company not to put it on your radar screen. we also get the tale of two bags j.p. morgan known for investment banking and welles inging and wells fargo, the national bank for safing. these two companies are immensely profitable. you'll see tremendous numbers. the line people care about is this the interest margin what the bank makes on your deposits and that's probably as good as wall street wants it to be. there will probably be tears about these quarters. easier comparisons are coming down the road. rate hike could be back on the agenda if greece and china disappear from the front pages, good news for the banks. tuesday evening a first real read on the chinese consumer when yum brands tells us how it's doing. i know you have to ask yourself would sales of fried chicken
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really fall off in a bear market? possibly. as kfc's regarded as a luxury item by many people in china including -- i won't say i'm sure a lot of sophisticated investors who borrowed money at the top to buy stocks i can't wait to hear myself. next up as far as wells fargo goes, so goes bank of america which reports on wednesday. no frankly it hasn't been that way at all. bank of america has fallen so far behind its one-time rival. we can actually try to figure out a value for the company on earnings if that ever happens, this quarter, well this stock would finally go up. here's one that's going to cause a huge ripple. and i really want you to focus on this because this is a key leadership group. delta reports before the open. it's wednesday. now, the airline stocks have been in free fall for months but i've been saying you should buy half a position in delta ahead of the quarter. i'm standing by that even though it's now moved up a bit. the stock rallied today on the
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news that american airlines is scaling back the previously planned growth of the fleet. supply had been a huge issue here. remember when we had doug parker on from american? i got to tell you as long as we're going to be too many roots added the stocks were going down. i don't know if delta will deliver a strong number. the stock off 14% for the year it might not even have to. let's hope it doesn't go any higher than it is right now because then it might squelch the buying opportunity that i see. oh, boy, get this. netflix, netflix reports after close wednesday and this week we had not one, not two, but three analysts urging you to buy, buy, buy ahead of the quarter. including one who suggested this $41 billion company is well on its way to $100 billion market cap. wow, i guess it's got to go to 50 60, 70, 80 90 before that happens. this is an extraordinary prediction. but netflix's upcoming 7 for 1 split not to mention a very cool movie schedule the colt stock might work. i got one on thursday for you, the chapel trust position in
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google. this will be the first time the conference call has been run by a real pro. one of my absolute favorite and toughest ceos might bring some order to the asylum. and anything shows she's exerting discipline over spending and capital allocation and also be more transparent about where the company's making money, could send this stock soaring, especially since it's done nothing. did you know this? for 18 months the stock's done nothing. and now sells at a discount to the s&p 500 on next year's earnings. i would say use deep in the money call options please if you're going there pick up a copy of getting back to even for the 100-page essay about how to trade deep in the money calls to limit your risk. the most insistent company that i follow is domino's pizza and it reports on thursday. when the smoke clears it's like al ta they say what an opportunity. given the stock's 23% run the all-time high hit today, i would not be surprised if the pattern
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repeats itself and sells off on the good news. however, i love the stealth technology company asset light franchise model, i think that always wins. and, yes, i like the tomato pie, no cheese banana peppers. we get results from sclumberger. here's one thing might benefit. there's a reopening of iran's oil fields if you think there's going to be a deal. and even though might be down beat about north america, i got to tell you i think they would have -- i think they get a ton of business finally open. finally on friday we hear from general electric and honeywell. ge has had so many assets of late that we think they're going to announce something big, maybe a bigger buyback. however it's got an appliance dill in antitrust limbo and a french acquisition, some weird purgatory. they put a damper not to mention
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new sinking exposure. honeywell, the opposite. i think ceo david coatty will come out with guns blazing and tell a terrific story of air space boom. he wins no matter who the aircraft is. we know from earlier that the business of aerospace is flat out smoking. if the stock gets hammered over greece or china, pull the trigger. here's the bottom line next week a gauntlet. we got a gauntlet of greece china and earnings. my take? i think you've got opportunities, opportunities like delta, google, domino's on a pullback. and just plain old buy. honeywell. but with this market bad news monday may mean it's time to buy many of the companies i just addressed. and i got to give the aspect the companies deliver darn good quarters despite the global headwinds that seem to obscure all the good things going on at our great american companies. ♪
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frank in ohio -- ohio? no, that's a combination of idaho and ohio. i just want frank in idaho. frank. >> caller: hey, good to hear you, jim. good to visit with you. >> yes a good visit. let's visit. >> caller: -- technology and the release of their latest chip. where do you see that headed? >> they come up with a lot of new inventions. they got watson. what we really need is to see the kind of business that is fast, that is cloud, that is data, you know data search data mind become more of the company and less of the old. and if ibm can pull that off, the stock goes to 180. i don't know if it's going to be this quarter. you know what did we lose the number? ricky in florida, ricky. >> caller: hey, jim. i woke up this morning and saw the same thing i saw yesterday, so i sold. but, you know i like fitbit a lot. how long should i let it go before i get back in? >> my apple watch says you can
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buy fitbit up to 45. i think that's where the stock gets too expensive. this company has been on a tear. the watch does not compete with the fitbit. i don't know why people keep thinking that because you can buy two of the most expensive fitbits for less than the apple watch. my daughter texted me. oh anyway i expect to be presented with some opportunities next week. i wouldn't be surprised to see some selloffs but terrific quarters. and that's your opportunity. much more "mad money" ahead including a potential play on your pantry. should you be chowing down on megamerger of i don't want to tell you the names. find out what i think about the stock in a moment. and fast growing medical market oh, might not happen. you don't want to miss that either. but first, the drama in greece may have caused you to miss one major development, i'll tell you what it is. why don't you stick with cramer? don't miss a second of "mad money." follow @jimcramer on twitter. have a question?
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tweet cramer #madtweets. send jim an e-mail or give us a call at 1-800-743-cnbc. miss manager? head to madmoney.cnbc.com. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
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china, it's in big trouble. and everybody knows it. now, they didn't know it a few weeks ago when the stock market was flying high and millions of investors flocking into the very capitalist but also very casino like chinese stock market. but now everyone knows that the chinese bear market is well in the offing after 36% plunge in the shanghai composite from its peak less than a month ago, a decline that looks eerily and remarkably similar to the crash in the nasdaq after it peaked in march of 2000. plus china's government seems as hapless as the little dutch boy with the fingers in the dike while millions of people watch their life savings disappear. in an attempt to stem the sell
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of flood orders the government stopped a lot of margin calls and made malicious short selling a crime of some undetermined magnitude. now, we know the chinese government blew this hole attempt try to broaden the market, get more internationalized. and many people, we don't know how many, have gotten crushed in the downturn after coming in near or top of the frenzied runoff. that makes the one seemingly invincible party look like a crown shell, pa ja ma party. might turn out to be a sluggish economy even by western standards because of the decline in purchasing power from the stock market fallout. in fact the instant downturn is so bad that we're hearing about weaker auto sales, perhaps a slow down in cell phone sales too. that's why gm stock which is hideous has been clobbered as of late since it sells more cars
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there than here. taking semiconductor accolades, nxp down with it. although all these stocks rebounded fabulously today. enough with the negatives. because for the past two days the kmie neez market has had a respite from selling, no no really the markets roared. two back-to-back 5% rally -- back-to-back 5% one day and then the next holy cow that's not a bear market. which makes me wonder whether it's possible all the governments widely scoffed at measures, the changes in the margin rules, the ban on selling by big holders, the end of malicious short selling and the stoppage of new supply from the ipo market may actually be working. now, historically measures like these tend to fail. and market destined to go down on the fundamentals will ultimately do so. after these two rip your face off rallies it's worth asking whether the chinese government decision try to not march people out of holdings while created a
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better backdrop that can slow the decline by overwhelming supply. not only that but while there are many chinese stocks i wouldn't touch in a million years because the underlying companies are so lacking in transparency, some of the fastest growing companies like bido and albaibaba have seen stocks go from expensive to cheap in almost zero to 60 decline decline. that's encouraged some large foreign institutional buyers could be gigantic u.s. mutual funds to weigh in. mopping up any supply. sure, the communist party may look like it's lost its nerve. it's cool and its brain, but remember for heaven sakes this is a totalitarian state. if our government tried these various bans we presume people would try to get around them of course and they know they'd just get a slap on the wrist, maybe a fine. but you might end up in prison or worse if you do it in china. and without the margin clerk butchers doing their dirty work
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the chinese can hold stocks and quickly wean themselves off of margin, something that's been happening with great rapidity in the last few weeks. i'm not saying things are hundred ki dor ri in china, i'd be wrong. but finding myself with a piece of my old friend penned in the "new york times" why china's storkt bailout just might work, jet china screwed it all up. nevertheless historically willing to underestimate the chinese communist party ability to keep growth going to maintain civil order, something always in question. after this vicious decline, it might be a mistake to underestimate them again. why do we go to case in texas. case. >> caller: hey, jim. thanks for having me. i wanted your opinion on micron technology. as you probably already know they had disappointing earnings report and stock dropped big time. i was wondering if it was a good time to buy in at these prices or do you see the stock heading lower with what's going on in china. >> i had a cat sadly run over by
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a truck. it jumped about a foot after it got hit. a dead cat bounce could be in micron's way. next cat that i get i would name micron, but that would be a jinx. sure china's in trouble, but it's a heck of a growth engine that shouldn't be underestimated. more "mad money" ahead including my take on the combo. i'm so excited i don't want to tell you which ones they are. but maybe it should be in your pantry for the long haul. then another story to satisfy your hunger a silicon valley start-up that wants to change the way you eat. see which companies are in its sights. and a fresh face on wall street trying to shake up a multibillion dollar health care industry. it won't be easy. i'll introduce you. i want you to stay with cramer.
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in case you've been distracted by the drama in greece or turmoil in china this week, a new power house in the packaged food space began trading. kraft-heinz, the symbol is khc. it's a company created by one of the world's best investment duos, warren buffett, and the brazilian giant equity 3g capital, the latter we don't talk about enough that starts tonight. the new kraft heinz is the third largest food and beverage company in the united states. and the fifth largest food and
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beverage company on earth. buffett's already made piles of money from series of deals that resulted in kraft heinz. can investors profit from owning the stock? in other words what is kraft heinz really worth? background. back in 2013 warren buffetts berkshire hathaway and 3g capital took heinz private for $23 billion. then this march heinz and kraft announced they were merging. now, if you own the old kraft foods, like i told you to you got a special $16.50 cash dividend when the deal closed along with shares in the new kraft and heinz. and all giving you a 12% return even if you bought kraft after the deal was announced. but you know what? i think that's just the beginning. because the new kraft heinz i think it's got a lot of room to run. why? i'll tell you why. i got a bunch of reasons. kraft heinz is some incredible brands. this is exactly the sort of safe haven stock, strong dividend
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one that yields 2.9% which i think investors will flock to given the chaos in the world. and believe me even if the greek issue gets resolved investors still have plenty to worry about, china, iran the fed, you name it. the combined kraft heinz has eight different brands almost worth more than $1 billion in sales. another five brands worth more than $500 million. kraft gives you the name cheese brand along with oscar mayer, right? remember oscar mayer? lunchables. vel velveeta, planters peanuts, maxwell's coffee you can find their products in 98% of american households and very well recognized in a number of international markets. as for heinz, of course it's the king. king of ketchup with more than 50% market share in this country. and it's ore ida is almost as dominant in the potato business as this is in the ketchup business. they've got classico pasta sauces. heinz brings home international
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brands i'm a local guy. heinz is big brands are either number one or number two in market share in more than 50 countries. don't you think that's amazing? as i've been saying from the beginning there's so many positives from this deal that it's hard to know where to begin. when the merger was announced management said it could recognize potentially $1.5 billion. more important heinz can use giant international platform to bring kraft's beloved brands to the rest of the world in a major way. heinz is a global player, 61% of sales coming from outside the u.s. kraft is focused on north america. you better believe that's going to change because they can use heinz's international distribution shuttles to move kraft brands as well. the sheer scale of kraft heinz it's a huge positive. combined analysis is twice the scale of either kraft or heinz as an independent country which gives more heft when negotiating with supermarkets, big box stores that sell products to consumer. at the same time greater scale means they have a stronger
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bargaining position with suppliers. kraft heinz is being managed by the guys from heinz, not kraft. which always kind of underwhelmed me those guys. the ceo, was the ceo of heinz before the deal as well as being a partner in 3g capital. and the chairman of kraft heinz did the same job at heinz and also he's managing partner at 3g. consider two years after heinz was taken profit these guys increased earnings for interest taxes, depreciation amortization by a whopping 800 basis points. i got to tell you, i know that sounds like mumbo jumbo, but it's phenomenal. kraft one of the worst margins in the industry. i think they can dramatically reduce margins on the kraft side of the business. these from 3g capital, i got to tell you they are ruthless. when they take over a company they swiftly take several steps to improve profitability, implementation of zero based budgeting where every single
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expense needs to be justified every single year. in other words, they start from zero rather than judging your spending relative to the previous year. which means a lot of institutionalized fat gets trimmed. it's a brilliant way to run a company. 3g also likes to call the ranks of senior executives getting rid of positions. i don't like to cheer layoffs, the fact is 3g is very good at cutting costs by establishing incentive plans and firing people who don't meet targets. that's the formula 3g uses successfully at heinz. and now it's being applied to the combined kraft heinz. i bet results will be the same. i like kraft heinz the company, but what's kraft heinz stock worth? most analysts initiated coverage in a new company price targets in the mid-80s. that's about a 10% gain from the stock's current purchase 77 and change. based on the earnings estimates from bank of america, merrill, goldman sachs, i know.
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that's a meaningful premium to the average big food place, however, many of these estimates i think are fairly conservative when it comes to level of cost savings kraft heinz will be able to realize. and they're projecting little to no sales growth. come on that's add no confidence in the company's ability to introduce kraft brands overseas. that's wrong. in my view i think these numbers prove to be very conservative on both the top and bottom line. the international opportunity it's staggeringly compelling. and the company's 3g capital trained executives are too darn good at cutting costs. these guys are wonder kids. still kraft heinz may seem expensive right now, i think the price-to-earnings multiple may prove to be inflated as the company delivers far better than expected numbers. here's the bottom line put it all together and i could easily see kraft heinz's stock approaching $90 in the not so distant future. that's not beef bologna. making it a terrific core
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holding for your portfolio, especially if we get hit with another market wide bad turn. ♪ ♪ ♪
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last week we spoke to the ceo of conformist cfms the revolutionary medical device company that uses 3d printing technology to create individually sized and shaped knee replacements. this is total game changer, a real disrupter. that was right after the company had come public. since that interview the stock has soared up 16%. now, we were actually quite impressed by the conformist story here but i think it's important to remember that the company with the best technology unfortunately doesn't always win. in the joint replacement space
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you've got some very powerful entrenched established players that have standing conformisway. for those who don't remember or worse who might have missed the show last wednesday, they implant technology platforms where software designs customized implants for each patient, for you. then they use 3d printing which is pretty sexy but actually works to create either a full knee replacement or partial knee replacements which fit your body better than anything else on the market that's off the shelf. think of it as a difference of buying a suit and one off the rack. in this case you're dealing with body parts. conformis means patients experience less pain because they don't have to cut away bone and tissue like they would have to make a noncustomized implant fit. and better function with a new knee. it's also good for surgeons who need to do less work during the surgery when a simpler or more
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accurate procedure and good for hospitals because conformis gets you out of there faster. and fewer adverse efbtvents after the surgery. what a parade of fabulous news. you would think given all these advantages that conformis would be at the top of the world since the product has been on the market since 2011. the company's got a wall of 470 patents protecting them from all sorts of competition. and they're developing a customized hip replacement product that could potentially get approval later this year which would open a gigantic new market for conformis and custom hips. now, there are 600,000 knee surgeries performed every year in the united states. and you better believe that number's going higher as baby boomers like me get older. and become vulnerable to osteo arthritis. that's the number one cause of joint replacement. but before conformis can think of dominating this market, first they need to get past the market. in this industry the competition is fierce.
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specifically i'm talking about the four horse men of the replacement business which is a subsidiary of powerhouse johnson & johnson. quick rundown on these competitors who currently dominate the market. first dupi is part of the -- not to mention trauma spinal injury and neurotechnology. a major player. but somewhat tarnished by two major hip recalls in 2010 and 2013. developed a new implant for people with more active lifestyle but they became linked to higher failure rates and complications like unhealthy build up of metal debris in the body. these are some of the products that come up when you're dealing with the off the rack implants. next up striker, a $36 billion medical tengnologychnology company. and neurotechnology, listen the portfolio is incredible.
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hips, knees, shoulders, elbows bone cement soft tissue repair and bone substitutes. one-stop shop if you need joint replaced or be like the bionic woman or $6 million man. and while the growth has stagnated in the most recent quarter, wasn't a great quarter, i was a little surprised, the company does have some advanced technology. proprietary population based design platform includes a huge database of bone sizes and shapes. which helps the company design better devices that can fit more patients and accommodate a wider variety of surgeries. so not custom but close. then there's zimmer biomed all about orthopedic reconstructive products, spine, bone healing and dental implants. these guys are conformis's biggest competitor. more than 25% of knee products implanted around the world are made by zimmer. come up with a knee implant that doesn't require the removal of
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the acl. that's a big improvement. just like striker zimmer's growth has been stagnating though some has to do with the impact of the super strength of the dollar. finally there's smith and nephew. a $15 billion medical technology business with with sports medicine and trauma. they've also got a major piece of the knee replacement market. like zimmer that lets you keep your acl. none of these traditional joint replacement companies can give give you a fully replacement but they've been offering more and more options. 20 years ago they may have had three different sizes, ten years ago more like nine, now it's 15. the likes of zimmer and striker getting incrementally better. but when you compare the technology no one comes near
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conformis's customized knee department. called the holy grail of orthopedic products. all right, so why isn't product flying off the shelves? where do we start? the big boys all have decades long relationship with hospitals and surgeons. they feel comfortable with their products. in part because they've been using them for ages and also because in many cases surgeons actually get paid royalties from the products they use. in 2008 the justice department went after the industry for its alleged pay to play like practices. and wliel while they make payments to surgeons fact is these companies have deep pockets and lots of ways to reward customers for staying loyal. even with superior technology it would be very hard for conformis to crack into these cozy relationships. bottom line yes, a disrupter, game changing technology with the best technology in the knee replacement business. soon likely to have the best technology for hip replacements
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too, but they're a small fish in a big pond facing off against some very deep pocketed and well-established competitors. honestly i think the best way for conformis to succeed would actually be if they were acquired by one of the big boys. but then you got to wonder scratching your head why that didn't happen before the company came public. still we may be overthinking. while everyone else in the industry is seeing very slow or shrinking revenue growth conformis is growing like a weed. suggests they're making real headway here. at the end of the day even if conformis only become a product for the rich they can still take 3% to 5% of the market which gives the company's $880 million market cap means the stock still deserves to go higher, even after its most recent run. "mad money" back after the break.
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it is time for the lightning round. lightning round are you ready? time for the lightning round.
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kenneth in texas, kenneth. >> caller: yeah jim. proctor and gamble. >> i just think proctor's too low and sitting there long enough and i think it is time if you never bought it buy, buy, buy, i would buy some proctor. go to mark in wisconsin. mark. >> caller: jim, does lynn energy ticker symbol l.i.n.e. have a future? >> i think the company's future is hampered and i'm not going to recommend the stock. kurt in colorado. kurt. >> caller: jim, buy, sell or hold duhupont. >> earnings seem not so good. we're going to have nelson on delivering alpha next week i'm going to interview him, see what he's saying. he has a big position in it. let's go to pat in illinois. pat. >> caller: hello. >> hello. >> caller: how are you? >> i'm fine. how are you? >> caller: i'm good. >> you know people were telling me to circle back to puma.
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when i circled back i still didn't like it. i'm sorry. i bought this for my friend but puma is not for me. carmine. >> caller: yes. listen, i buy stock usually for the long term so they appreciate, the stock is i think is a buy for short-term cuda. >> i married -- i would not marry that stock. i was on that conference call. that was a terrible conference call. to insult my wife by calling her a cuda is a mistake. we're going to stay away from barracuda barracuda. let's go to todd in arizona. >> caller: jim, my semiconductor stock in free fall should i hang in there? >> yes, yes, yes and yes. i like cypress. people bought for they shouldn't, i think cypress is good. and that ladies and gentlemen, is conclusion of the lightning
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round! >> the lightning round sponsored by t.d. ameritrade. got the darn tail of china. can you imagine wagging us right now? wagging the united states of america. i wrote down here, no china. this is real life. this one's in charge now. i think they ought to call this one -- which one would be good? how about getting back to dr. evil. what stocks was he looking at? discipline. now a game. 3:30 a.m. wakeup call now i got to get up. when do i go to bed? this week an historic event shook the new york stock exchange to its very core. the world waited with baited breath for one thing and one
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thing only. >> very few retailers even post comps now, we did get l.b. >> geez victoria's secret wasn't that good. i may have to stop by and see what that's about. >> it's worth a visit. >> there isn't much i can do with that once again. >> mindy in pennsylvania. >> caller: hi, jim. >> yo. >> caller: we graduated together in springfield. hi. >> mindy, i know you. you had that place in bucks county. >> caller: bucks county? >> there was like a thousand mindys. i was thinking about one. maybe a couple mindys. >> caller: greenberg. >> oh, how are you doing, mindy?
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kind of a local show. there's like a thousand mindys. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
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♪ if you want to understand
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what's happening at the cutting edge of the hottest trends out there, sometimes you need to go off the tape and check in with privately held companies that are changing the game. take munchery, an on demand meal delivery service that employs gourmet cooks from top restaurants to make locally sourced relatively inexpensive meals they deliver right to your door. then heat them up for ten minutes and get eaten. munchery is taking the on demand economy to the next level by disrupting traditional grocery and takeout industries. companies only in los angeles, new york, san francisco and see seattle seattle, but they plan to expand across the country. after their latest round of funding where they raised $85 million like that, they got the cash to do it. the growth is astonishing. within two years of opening in san francisco has become half the size of chipotle in the san francisco area where it's quite popular by the way. and second week in los angeles the company's business grew by 40% week over week which is almost unheard of in bricks and mortar restaurant industry. and as munchery grows, larger scale means they can lower
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prices on meals to make more attractive to a broader audience. i think this is an intriguing story. earlier this week we had a better read at just how compelling munchery is with co-founder and ceo tree trand. tree, your company is so disruptive in so many different ways. why don't you tell us if this could have existed three or four years ago and what you're doing, cost lower, instant, natural and organic, it's resonating in places from san francisco and new york. >> absolutely. by the way, thank you, jim, for having me here. three or four years ago the mobile technology isn't quite there. yes, the introduction of the iphone in the early days but really the whole mobile market has really enabled us to reach a lot of customers very conveniently. a lot of people on the go, they don't think about food until last minute. and really they feel like, hey, otherwise they have to go to a local restaurant or cooking at home which obviously takes a lot of time people are really busy nowadays.
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that really helps us. and in the way that our business model is run is very different than a traditional restaurant. we call restaurants sub scale cooking. there's nothing wrong with that. >> okay. not at my place. >> basically in a restaurant, you know two people walk in, they cook two orders at a time. we cook hundreds of pieces say salmon at a time using these oven technology that existed for years except it's never useful in a restaurant environment. our motto is we cook the food we chill the food down we bring the food to a customer in chill format. simple instruction for them to put in the oven or microwave and get it prep and done exactly the way the chef intended to be. >> tri, is there some jiegigantic kitchen you're working out of in different borrowsoughs in new york? >> unlike a restaurant model or even a chipotle or shake shack
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or whatever they have to have a store in every neighborhood to reach customers. we deliver the foods. so our limit is not the number of seats in the restaurant but the city population itself. >> let's talk about city populations and how you have expanded. how quickly are you growing? los angeles, san francisco. >> so san francisco even in our existing market is growing double digit month over month. >> month over month. >> yeah. and for a new market like new york and l.a. we launched about a month ago, these cities are growing 25% to 40% week over week. i mean it's absolutely amazing. >> that's incredible. >> yeah. we really want to maintain quality, so, yes, it's growing really fast. but our priority has always been quality first. if the quality's not there, we're going to stop the growth. >> and you initially had much higher price point and you've been able to lower, lower, lower, looks like that can continue with your volume. >> exactly. we enjoy the benefit of buying power when we you know serve more and more meals. and then our motto like i said we have one kitchen we cook all day long we don't have real estate costs that a restaurant
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typically would have. you have to have a corner store, fancy restaurant. >> the rents are high. >> yeah. kitchen way out in the side of the city, we don't need to be in the center of things. >> one last question munchery how do people discover a munchery? when i heard about it and i'm certainly not the key demographic, i might end up being, munchery, you have no advertising that i know of. how do people know to download? how do people know to find you? >> it's the classic situation. word of mouth. people like it more than half of our customers and like a huge percentage of them are telling their friends and neighbors about it. and that's what we like. because that's the most genuine form of people being satisfied with our product and service. because anything else is just going to be short lived. >> tri, i can't resist one last question. you really are the american dream of today, aren't you? >> thank you very much for that. i mean it takes a lot of hard work, lots of grit and determination. >> but you got here when you were 11 years old. and what was the trajectory of your career?
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>> yeah i mean i was here with my older brother and my grandmother. my parents were left behind. i actually came off refugee boats you might have read about in the '70s and '80s off vietnam. yeah, went on a long trip to indonesia. after a few months refugee camp we got sponsor my aunt and uncle who live in san jose california. live with them for a few years. went to half of middle school high school, essentially zero english. esl, english second language level one at everything. and work really hard. and luckily got to m.i.t. for college. >> well i think the shows you work really hard do what you want to do, love is what drives this man. and i think this company's very successful. tri tran the co-founder and ceo of munchery. great to meet you, sir. >> thank you so much.
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try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back. tonight, it's an all-new america greated. a massive fraud for cures for cancer even baldness. turns out they were all fake. don't miss it 10:00 p.m. eastern and pacific on cnbc. greece, china, china greece you know all about it. i'm jim cramer and i will see you monday!
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>> narrator: in this episode of "american greed"... one man's bold scheme to get rich quick. >> the opportunity was there for them to make easy money. >> narrator: albert talton puts a modern twist on one of the nation's oldest crimes -- making counterfeit money. >> this one was different because it was just a computer and several printers that were utilized to print this large amount of counterfeit. >> narrator: talton circulates more than $7 million in phony cash around the globe... >> he was almost proud of what he'd done -- his perverted version of the american dream. >> narrator: ...and launches the u.s. secret service into the largest manhunt of its kind.

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