tv Mad Money CNBC October 7, 2015 6:00pm-7:01pm EDT
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biotech down draft and not expensive here at 13 times earnings. >> and dan. >> go pro. i'm considering a long here in the 20s. let's see. >> i'm melissa lee. thanks for watching. see you back herewatching. see you tomorrow at 5:00. "mad money" starts right now. mission is simple. to take you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i must help you find it. "mad money" starts now. hey, i'm cramer. welcome to mad america. welcome to cramerica. i want to teach and coach you. so call me or tweet me gently @jimcramer. are we banking too much on a turn from bear to bull in china?
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we'll find out pretty darned quickly when the chinese market finally reopens for business. but i can tell you a lot of what's working in our markets with better numbers coming out of the people's republic, not out of the united states. in fact, much of the strength we have seen in the last three days comes from a belief that the chinese government is working to refoot their economy, which helps explain today's strong results. s&p advancing. nasdaq too. i'm seeing signs of hope everywhere. in china, that is. morgan stanley, after disliking the mining sector for ages, went positive on two of the biggest minors. and the market loved it. stocks roaring hard. a couple of weeks ago that would have fall own deaf ears. total bellwethers rocketed.
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real gain 8%. these two left for dead companies were the most heavily shorted. they were short-selling annuities. a dream come true for those who bet against stocks until the comeback story come about the last couple of days. thanks to copper, it has fallen 44% year to date because of china's weakness. suddenly it is the best reforming stock in the s&p 500. up 10% since yesterday. beyond that copper, long down trodden, the red metal is finally putting together a winning streak of its own. it's been years. joy global down an astounding 63% for the year jumped from 14 to 17 in a few days's time. they extract coal. it has been a permashort until we started getting hopeful about
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the chinese economy. remember caterpillar with that announcement a couple weeks ago? yesterday cat stock climbed up where it was trading. how is that for a recovery on hope? here's a huge $50 million debt. some people think it needs exposure to banks. will will say on this one that it is is completely on the ropes. but after being crushed lately the stocks come roaring back like a phoenix on the hopes of more copper to demand from china. not the united states. i can't stress enough how positive to take glen core off the critical list i think the perspective chinese recovery could be behind the skwraogigan rally in oil.
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until then, oil was the commodity to own. high 30s to high 40s. any increase in the price of crude is because of the stock market. oil companies have so much debt that a total collapse couldhigh market. a lot of those need financing. they can sell is futures in the market because it is so bubbly. speaking of big deals, the rebounds in oils, petro brass, which i have said is the achilles' heel of the global market, because the company owes $170 billion. many fear they might have to default if oil keeps going down. after a lowly $3.72, stocked bounce to $5.77. i know. mall potatoes. for bondholders, maybe they got nervous. because there is a refinancing
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that can happen. maybe will not be dooms day. nat has run up 30% off the bottom, screaming up over 16 bucks for their oil tankers. why is that? oh, come on. you know. it is the sum total of hope. they ship a huge amount of oil to china. and wynn resorts. $52 to $72 in less than a week. why? data from the china niece gambling mecca. it came directly from the chinese communist government. it had cracked down on expensive junkets. didn't want to show be excessive. hey, maybe it has finally relented from the pure botanical streak, turning back from the excessive spending spigot.
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remember, they had -- jonny walker blue and the gambling and the presence. all that shut down. wind storm surge tell me it is back on. this time, this time, this time the chinese really mean business. while they may have sped up, they could be on the verge of igniting the real economy in some lasting way. this is all anyone is talking about, people. every big portfolio manager saying this is it. we are seeing some of the tech stocks come back. mainly ibm. it is isn't all publicity related. it has been horrendous in china. it could have positive repercussions for the ailing old tech giant. general electric, boeing, nighted technologies have been acting better. listen, it's all based on hope for a return to the old pattern
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of aggressive chinese revenue from turbines, boeing, to otis elevators. that's the positive scoop. that's what has been popping things out for down and out sectors. let's talk about the other side. the more real side. i don't know how long. china high stock market has been holding above the key 3,000 level. maybe down another 33% to where an old rally began. if data isn't positive or at least less negative, then they have to revalue its currency some more. how about the chinese consumer how do you explain yum! brands down because of dropoff in
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business at kfc and piece hut in china. apple, starbucks, there's nike. i'll answer that question later. i know it posed a lot of worry. in short, there's a gigantic amount riding on china getting stronger. namely, this entire rotation we have seen into the once hated cyclical companies and the companies we love so much just a couple of weeks ago. before we panic, let me give you the other side of the trade. this is great growth. pure storage, flash storage, 17. it went below that. or the high gross stocks. they have been such favorites or the best health care stocks which can't get out of their way other than a short-term rally in biotack. he will see everyone out of those mineral and heavy industry stocks right back in high growth. china holds the key to figuring
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out where the next bull and bear face might be. it's not the fit. eye not the economy. it's china. don't let anyone tell you otherwise. here's the bottom line. brace yourself. set your alarm for 3:00 a.m., a half hour earlier to see how china is doing. get ready for a monster move in either direction that has little to do with the vets in our country. joseph in new york. joseph. >> caller: hey, jim. thanks for taking my call. curious where your thoughts on where we have seen pressure with renewable industry. a big selloff in that area. >> we did a big take out of sun edison. the stock went down so low. let's put it this way. every dog has its day. it's bounce now. it can bounce couple more points geri in virginia. >> caller: hi, mr. cramer.
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>> hi. >> caller: i value the work that you and your staff do. it is informative and educational. >> thank you. >> caller: i read all three of your books. now they look like a college student's books with highlights and note margins. >> thank you. >> caller: i was calling about ann health service. >> yes. >> caller: on september 23rd it closed at $37.21. since then they have acquired two companies. both seem like a good fit. but the stock has been dropping like a rock. >> yeah. you know what, let's not isolate it. geri, this is part and parcel with companies. we fell out of love with health care companies. susan's copy is being confused with that. i think it is a good buy. these stocks are out of favor. i would rather bank with sauka. made us a ton of money.
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can you take us on the win? there sure is a lot riding on the peoples republic riding back. there are signs of hope everywhere. mad tonight. are you playing to the recent flurry in biotech? don't worry. guess what, there might be some buying opportunity. they're not the sexiest positions on the football field. they are often overlooked. we can make or break a matchup on any given week. i'm drafting them for your fantasy stock portfolio. kickers and defense. listen up, i've got the right names. now u.n., taco bell, kfc, pizza hut. what's the problem? yum got fried. but what's the real reason? you have to stick with cramer. >> don't miss a second of "mad
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money". tweet a @jimcramer. send an e-mail to madmone madmoney @cnbc.com. or give us a call at 800-743-cnbc. miss something? head to "mad money".cnbc.com. are we in a turnaround for an oil crisis? legendary oil man boone pickens on impact of troubled economies. and opportunities for investors. tomorrow 6:00 a.m. eastern on cnbc. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus, powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours.
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this has been a very trying time for biotech. etf down roughly 14%. until hillary clinton's tweet about price gouging. they managed to rebound once today. we have witnessed a flurry biotech ipos this week. does the market give you an incredibly good opportunity to pick up high quality biotech stocks at prices much lower than where they would be trading over had something drug pricing. interesting, right. this is where you get the bargains. maybe the soft is creating actual opportunities in biotechs you have never heard of.
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after all, who the heck will pay attention to a biotech ipo in an environment where this group which was so loved is now totally hated. that's why tonight i wanted the three biotech companies that have come public over the past week. no one has talked about it. in order to help you sort out the real opportunities it is is best to be avoided. this could be a time where i could talk 45 minutes about what the fed should do. 47 minutes? no. let's talk biotech. novocure. this is one of the most intriguing companies i have heard of in ages. it ipo'd to 22 bucks and sank to $18 and change on its first day of trading. it came down below $16 level as of today. you would think it was a broken ipo. the kind of stock you wouldn't
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want to touch with a 10-foot pole. but that's crazy. when you think deeper into the fundamentals it becomes obvious this company has a lot more going for it than the vast majority of newly public biotechs. it is is not a moon shot. all pipeline. this company has invented an excite proprietary cancer therapy called tumor treating fields. they use alternating electric fields to disrupt key molecules inside cancer cells making it difficult for them to replicate themselves, which is the involvement in this horrible disease is exactly what cancer cells do. and they do it quickly. it has farfur side effects such is as surgery, key mow radiation. it owns all the commercialization rights to this technology. they are protected by a wall of 52 patents. their platform has already proven already.
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the first optune was approved for myeloblastoma, brain cancers. just yesterday it got approved for treating that stage of the phase. we know it can produce prethen douse resultsment we already know the data. increasing the survival rate from 32% with chemo to 48%. that's remarkable. you would think it would have spiked in the news. yesterday was a bad day for biotech. it's already got one product on the market. it faced two trials for five types of cancer, nonsmall cell
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lung cancer, pancreatic cancer. it affects millions of people. given the way it works, it's possibly it could work for any solid tumor. which could mean a million of people in the year in the u.s. alone. while it is not yet profitable, i assume it will rant. nobody paid attention from the fda. and post ipo they have enough cash to fund its operations for quite a long time. it is exactly the recent biotech ipo that is worth betting on. it is down 30% from where it was public last friday only makes it more attractive. what kind of newly public biotechs would i be skeptical of. take edge therapeutics. ipo'd at 11 bucks. spiked 17%. just below 13. and just rocketed up to 17.
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it has no drugs on the market. this product is a better way to prevent complications from bleeding in the brain caused by ruptured aneurysm. it allows for a higher more sustain sustained. that's good. it's good. it might turn out to be very exciting. it has a number of potential applications. everything else is early stage. the lead drug still has yet to move into phase three trials. it is totally depend on the success of the trials. given a catalyst until the middle of next year. this is not my cup of tea. in this environment, they kill cell genes and come down on
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genron, too much. claris came down with a whimper. more talked about carly fiorina's record at hewlett-packard. aclaris is a treatment for a type of common, noncancerous skin tumor with a cheaper, less alternative to cancer. this is another one too risky for me. 8 million surgeries to remove these skin lesions every year in this country. i wonder where that one drug hasn't even approved the process yet. even with the proceeds of the ipo, they might need to raise more money in the not too distant future. i especially like to hear from
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that company. here's the bottom line. it might be creating opportunities in space that you don't know about. you've got to be careful. i really do like novocure. with so many high quality biotechs well off their highs, it's the wrong time to speculate and the highest risk biotech name. much more mad ahead. are you ready for some football. ? pizza hut, kfc got whacked today. do bad things happen to good stocks? good question. apple got news yesterday. stock didn't budge. stay with cramer. (vo) what does the world run on?
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which companies i would draft to key positions that every portfolio should have. rounding out the team with a kicker and defense roster. these two positions are often overlooked in fantasy football, often taken last round. they can make or break any given weekend. when it comes to your stock port 2308eo, they are absolutely crucial. you are looking for something consistent. everything else doesn't matter except consistency. when they happen, you want a player you can play every time. over the past four seasons, he made 113 out of 129 field goal attempts. he's money. and 16 misses, six were due to blocks, meaning not his fault, i think. for this season so far, his record when it comes to delivery
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on extra points, flawless. a lot of people have more extra points missed now than they did all of last season. what kind gives you the level of consistency we're looking for? how about pepsico. beating wall street's estimates seven straight corners. that includes the pepsico reported yesterday, 9 cent earnings off 1.26 basis. it kept posting strong numbers. the strong dollar cut into overseas products. the consumption of soda, diet and regular, is in secular decline. it doesn't matter. they still sport a 2.9% yield. the facts that they had a second day run, 1.45 yesterday shows this kicker is not a one-game wonder. how about another kicker.
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i like this guy justin tucker. he has only been in the nfl since 2012. he is one of the steadiyest kickers the past three seasons. tucker is perhaps the short--range kicker. never missed a field goal 20 to 29 yards. only one in 30 to 39 yards. what is the stock market equivalent? of course it's nike. the global footwear and sports apparel titan beat estimates for the last eight consecutive courses. better than expected sales in six of the eight despite facing what has to be one of the toughest macro environments ever. what did nike do? spectacular chinese numbers reported a couple weeks ago. air jordans never go out of style.
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year 30, by the way. it has more than tripled in the last five years. it has more room to run or kick, to fit the metaphor. what you want from your defense in fantasy football is pretty darned simple. you want your unit not to screw up. every fantasy league is different. your team loses points as your defense gives up points in the real game. an excellent defense can-can put more points on the board. more defenses have detracted from the final score than included. i think it is an amazing stock. in stobgt market terms, you want minimal down side risks that give you a chance for up side. for fantasy football, go with the seahawks, right? seattle's defense gave up fewest points per game. they led the league by significant margin with lowest total yards allowed. it is more than capable of generating points for your fantasy team. they are ideal.
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what is the stock market equivalent? when you think defensive, much like cyclical than others, give you real down side protection. just as seattle has the best defense in the nfl now, i think clorox is the highest quality defense stock in the market now. it is worth the price. the storm dollar hurts them amount worse than companies like proctor, which is doing well right now. clorox quickly found its footing. this is rebounding like crazy. the ceo is is doing a good job. 119. a few cents behind its all-time high with a 2.6% yield. how about if you want to pick up an undervalued detail. you know who is really number one this year? denver broncos.
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deserves more respect than it gets. some clown dropped it on the waivers. it is is just as important as what i talk about. well, maybe not as important. denver's defense has been less important over the course of the last year. we have peyton manning with the offense. denver's defense has been asked to step up. and they have done it in a major way. number one defense in terms of total yards allowed. and two interceptions in each of the three games. they have been the reason why, frankly. it reminds me of kimberly clark. consumer goods packaging company that reinvented itself after sweupbing off its health care business pretty much, by the way, at the peak 11 months ago. that allowed them to focus on its core products. diapers, tampons, toilet paper. they even made this for me.
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denver broncos, what have you made for me? they reported a strong quarter in late july. but with market wide selloff in august and september, you can buy it for less than what it was trading for. 3.1% yield. sit a steal among the company's next quarter in two weeks's time. when we pick a quicker in fantasy football, we're looking for consistency. i like tucker. and the stock market equivalent. as for your testimony's defense, down side, fantasy and stock. willing to pay for the best. go with the hawks. that reminded me of clorox without the 12th man. but i picked the broncos defense and kimberly clark if you put a gun to my head. dorothy in florida. dorothy. >> caller: hi, jim. thank you for taking my call. >> oh, you're welcome. >> caller: when disney split, i bought it.
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it has been down ever since for me. any chance it will go up? >> a few years ago abc started getting band. and everyone said sell, sell, sell. now everyone is saying sell, sell, sell because of espn. i think disney is fine. shawn in maryland. shawn. >> caller: a stock split for skechers is coming out. do you think it would be a worth while investment? >> those who get caught up in the waoebg to week or month to month dynamic missed the big picture. that will continue to be the case. i like skechers in the morning. i like skechers in the evening. i like it for a two, three-year period. you want to play it for two or three days, get out of my zone. if you're looking for consistency, stick with nike and pepsico.
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much more mad ahead. yum! brands. what do you do after one of the stoblg's worst days ever? hillary clinton's in famous tweet about stricter rules for drugs. and could have positive twopts out of the company and help turn it around? i'll take a look. of course i'm taking your calls in an electric addition of the lightning round. stick with cramer. tomorrow, kick off the trading day with squawk is on the street. live from post nine at the nyse. >> keeping it in stock. david, i only have two taps. i don't need anymore taps. that is my best seller and it is for a lot of people in this country. >> it all starts at 9:00 a.m. eastern.
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single day? how can they destroy so much capital on earnings. i'm surprised the stock wasn't down even more. that's how bad the story and the dissemination of the woeful news truly was. first the setting. yum is a big international company. for years investors have ridden this transformation, if you wanted to play the growth of the great chinese middleclass, it's simple. more shares of yum. play they did. with the stock rally from 7 bucks at the turn of the century to $95 this spring. it hasn't been all smooth sailing. they hit a huge speed bump about sanitary conditions that was once considered to be the most pristine, cleanest and safest places to eat in china. many couples held their weddings at kfc.
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there has been a three-year store decline of just like this. but over time the numbers have been better. a couple major hedge funds wanted to unlock all the hidden value in china. it didn't poo-poo the notion of a breakup. go back to mid-august listen to this. i'm especially pleased this leadership transition comes at a time that same store sales have turned significantly positive demonstrating continued recovery in the business. in case you think that is a fluke, they said this about china. as we have discussed, we expect to have a strict second half of the year paved on the continued
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progress in china, and fully expect yum to deliver 10% earnings per share growth in 2015. they are looking for north of 10%. especially considering that yum's last positive forecast was given within this very quarter. it gets worse. while the stock was down 10 points in after hours trading, yum told an even more negative story on the actual conference call, which was horrendous. it not only revealed kfc was terrible. but pizza hut in china has hit a wall. mediocrity in alarmingly rapid fashion. price cutting everywhere. open rebel yon in the analyst's q&a as the entire community doubted the management. but also to execute.
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yeah. with one fell swoop, it also demolished some of the parts arguments. because who wants to own a piece of the climbing chinese operation? the only good thing about the whole call was the recognition that most of the damage came from competition and poor execution. not a specific chinese slowdown. very good companies likes nike, apple, starbucks where china is doing well. it left everyone holding empty boxes of pizza and kfc. it has been colonel sanders has come down to private. they have been radioactive for the foreseeable and maybe even unforeseeable future. stay with cramer. >> donald trump with john harwood on speak easy. >> some of the things you were talk building are not real.
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>> caller: hi, boo-yah from washington. >> all right. >> caller: hey, jim. i own ferrell fas. >> the price of propane has collapsed. it should be making more money. i have to do more work on why that deal was so hot. isaac from pennsylvania. >> caller: thanks, jim, for taking my call. i'm calling about united reynolds. >> i'm on the fence with that. i was talking with somebody on that trifecta. i think it is starting to bounce back. the other side is getting pushed back. if caterpillar is going higher. and uri is down too much. dee dee in nebraska. >> caller: jim, good to hear your voice.
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beat. >> i do not know it. that is embarrassing. i have to do more work. i don't want to disappoint people where my grandmother lived her whole life. al in california. hi, al. >> caller: yes. here i am. the transports seemed to lag the major averages. what about union pacific. >> it's my favorite rail. it is incredible. i've got to tell you i'm late to the party. i am willing to like union pacific. this group is having a major move. union pacific, i don't think it is having that good of a quarter. i don't think anyone cares. it's a buy. jim in florida. jim. >> caller: yes. i'm calling about raytheon. >> they're even cutting the budget here. look at the paper. i want it in my backyard.
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and i like my neighbors. zach in texas. zach? >> caller: boo-yah, jim. i want to know about gilead. >> i have been waiting. it sells at 8.5 time earnings. that's ridiculous. it's one of my four or five. i think gilyead is a buy. >> i can hear greg in north carolina. >> caller: yes, sir. >> can you hear me? >> caller: i'm looking for mlm. >> mortgage applications are up. huge. this company is doing everything right. and howard ward is a good executive. ward and i we had him on. i will tell you that the stock
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trains very difficult. high dollar stock. one more. carl in texas. carl? >> caller: yes, jim. >> yeah. >> caller: this is carl bradshaw. i have a quick question about bbep. >> not my favorite. we have to say no. that one is too dangerous. that is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. 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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even though the drug stocks were down, the whole group is is down huge since the political firestorm ignited three weeks ago. i think this decline created real values. as i'm not ready to say the whole group hit bottom. a alks has its own proprietary medicine ises. they help opioid addicts. ever since drug pricing become an issue, nothing has changed about the story. it's gotten better. the fda approved the company's long-acting version of
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anti-psychotic drug abilify. people had trouble staying on their meds. they think they are cured. while other release meds are out there. i think it can could represent real value. chairman and ceo here more about companies doing it more. welcome back to "mad money". good to see you, richard. i saw approval on any other day other than this horrendous market, it would have been up three or four points. we have real head winds here. >> when you develop a drug for seven years, it one day doesn't matter at all. we are so thrilled this is approved for patients. there is worry about the transpacific partnership and its affect on prices around the world. fundamentally, if you make
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important medicines that help patients, you're doing okay. >> biologics. >> different molecules. >> everybody gets scared. let's talk about this drug. people are confusing thinking it is up against another drug like it. it is is just regular dosing. >> that's right. the way we treat schizophrenia is almost a tragedy. people are diagnosed in their late teens, early 20s. we tolerate multiple relapses. mostly because people aren't taking their medications every day. >> late 20s, when it could have been early teens. >> you're right. we just put that data out today. we surveyed doctors and found the average time somebody is diagnosed could be three times. >> three critical years. >> correct. >> you have a line that says we think it part of the convenience factor in the chaotic world of
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the community mental health center if you have something -- you can just pull something out of the fridge and reconstitute it is a lot better. chaotic world they're in. people don't speak about their world being chaotic. >> alcohol and opiate addiction. this is the real world. this affects millions of patients. one of the things we do is try to put ourselves inside the patient's experience living with a chronic disease and make medicines that map on to what they experience. >> let me give you the other side. say you do a six weeks dose. two weeks go great. then facial tick, restless legs. what warning do you have four or five weeks they have a side effect that you haven't thought about. >> they are best for patients who have been on the oral medication. know they tolerate it. they found the correct dose. then you segue them. if you start a four-week dose,
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there may be a potential for six week dose and eight weeks. but you wouldn't start with that. >> that's important. all of a sudden numbers are going up. this could be recidivism. other methods that we think have worked. aa. are people recognizing this is another method. >> it takes 10 years to be an organized success. we have been riding on this for a long time. i just flu in from washington, d.c. slowly overtime with experience people are seeing there are alternatives to incarcerating people addicted. let's treat them with an antagonist medication. >> do you think if i asked these people they would just be
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confused or think i was embarrassing them? this is such an important part of what's wrong with the criminal justice system? >> when you talk to governors, they are well aware. >> they are? >> absolutely. it affects their whole health care and criminal justice system. i think more and more people are talking approximate this. >> your medicines uniquely try to solve situations and make people better and also are much morin expensive. >> that's the idea. >> that is richard pops, chairman and ceo of alkermes. this man and this company is is doing everything right. stay with cramer. we've got trouble in tummy town. peptocopter! ♪ when cold cuts give your belly thunder, pink relief is the first responder, so you can be a business boy wonder! ♪
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china reopens most of the love the last 10 days has to do with china coming back on line. i remain skeptical. i think there could be a rotation back into the group. but there are still some cyclical stocks worth owning, namely the large industrial companies. i think that that company is a long-term buy, alcoa. there's always a bull market somewhere. i'm jim cramer. and i will see you tomorrow!
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