happy birthday tim adami and whole foods markets. lots happening in the space, wfm. >> all right. i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00 for more 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. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you some money. my job isn't just to entertain but to educate and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer. there is always something brewing underneath. even when a seemingly sedate day when the dow edged up 16, s&p declined 1.3%, nasdaq up .4%.

do you know how you can tell? you look at pictures all weekend and they will let you know. no, i'm not talking about netflix. man, did i want to watch kwo"h " of cards" while is wife is away. i'm talking about the stocks standard & poor's sends me every weekend. i look for trends. fabulous-looking charts filled with pulchritude, probably worth 34 on the s.a.t. and what's working after this rally in the stock market. i count six groups in outside bull market mode where i would be a buyer right here [ buy, buy, buy ] and a bigger buyer on any market-wide pull back barring some shocker [ buzzing ] from the fed on wednesday saying it is time to raise rates.

what are the terrific six? not the tirty dozen or the hateful eight. it has to work. let's start with the predominant group, the utilities. it doesn't matter which you buy. they are all on the run from the best ones american electric power con ed, dominion to first energy or ones that never should have been down as far as they got like entergy which i pay courtesy of any new orleans-based daughter. maybe they turned the lights off or it's cheaper. the bills are smaller than any new jersey residents. i don't like to reach for yield. i'm not willing to take risk to get extra percent or two. the risk isn't worth it. for you tail ti i want something like a bond and growth. they will never be as safe as treasury bonds. i feelle the utilities will go into the fed's key meeting own wednesday with two full a head of steam. you can follow my charitable trust as a hefty and profitable

position in american electric power. you have seen them on tv. we'd like to buy more on weakness. second group on fire, how about the much loved auto repair shops and parts retailers which better for the fact people hold onto old cars for longer like me. the age of the average car is up to 12 years t. fleet is so old it hases to be maintained which is why o'reilly automotive, genuine parts and auto zone do well. regular viewers know i have recommended auto zone since the start of the show. it has the most voracious buy back on the stock exchange. it had a terrific quarter two weeks ago. i am a buyer here and into weakness. >> house of pleasure. >> third screaming sector is a wild one. yield stocks. they have been unrelent ingly bullish since the government.

♪ put a stiff tariff on chinese fuel at the beginning of the month no one talks about. this move allowed the stocks to double has mostly run its course t. staying power of the speculative steel names is amazing. they would do best to issue equity like so many oil companies. in order to preserve optionsment the steel company that needs to do it is new core which hasn't done much. looking for a steel maker to invest in, this is for you. up 12% year to date. not going to give you the doubles that aks and x have given you. there is not as much risk. next up, an unexpected group that's been in the dog house for ages. medical devices. the sustained runs in striker, zimmer, bio med and the stronger ones, bar and beck and dicken son. ed towards life sciences, these are down right aweso. i can't believe it.

my fave is ew, ed wards life sciences with the hottest device out there that allows doctors to perform open heart surgery without cracking open the chest cavity. more patients, particularly eld erly ones, survive the trauma. it's a miracle. striker and zimmer bio med feel take overish to me like something is going on. and the horse here is intuitive surgical. this sector that's roaring is the food group. here is one that's so strong you can assume there has to be both pending consolidation and a spur related to the embrace of natural and/or oh gan nick. did you see fresh market got a bid today. something we predicted. it was a good call. now this food theme, we highlighted it last week. i profiled the organic acquisition from campbell's soup. i would love the ceo to come on. general mills and hormel.

a look at the strength in clog's, tyson foods, smothers, mccormick the spice company tells you it may not matter what they do. the food stocks want to go higher. i wish i could say it's dividend related. it's bigger than the that. tyson isn't a dividend play. they are benefitting from the ingredients, packaging and the fuel needed to make and transport goods. keep an eye on the beverages. coca-cola is breaking out. my charitable trust is buying pepsico, best of the lot. as for the final red hot group it can still be exploited without much risk. the fed does pose a hazard. i'm talking about everything that goes into a home. i don't mean the home builders. they are not for me. i'm focused on home depot and everything it sells in every aisle. we have brigs and stratton on the show, the makers of gasoline engines for outdoor power. this was the strongest stock i saw the entire chart book weekend. we also have the usual suspects

doing well. fortune brands home and security. meanwhile the stone makers martin marriott materials have been rockets. they have to cool down first. we often forgot how correlated waste management is to home construction. this is a terrific one to buchlt which ones haven't run enough? i would focus on rpm international which makes rustoleum and other products in home improvement to stanley, black & decker. this one we have to get behind, newell rubbermaid. they have come down a great deal since it announced the deal. it represents tremendous value. management at stanley black & decker threw cold water on the forecast. it makes me feel the name is appropriately derisked which is the institutional term for a lot of risk is out of it. when you do this sector analysis it is only the first part of the research. i know the stocks. i want you comfortable.

i could have hit other stocks doing well in each sector. what matters is when you are buying a strong group that's filled with great charts, you're buying stocks with the wind at your back. the bottom line is that's precisely what you need to do after the markets had a gigantic run and you are afraid to give back gains as we go into a fed meeting that could cause a sell off either before or after its pronouncements. emmett in texas. em met. >> caller: jim, thanks for taking my call. >> you bet. >> caller: long time listener. thank you for all you do. so i put a lot of money in the market about a month ago. >> okay. >> caller: i'm curious. the model 3 will be coming out in march. i have an average price of 1.55 on tesla. the model s is doing well. they got an analyst upgrade. >> that was very good. i have to tell you those who love the tesla, i never stand in the way of them buying the

stock. i can't get my arms around any particular reason in terms of numbers, but i don't get in the way of people who think it is a great company, great car so therefore they want to own the stock. it is a cold stock and be my guest. how about tereck in texas. >> caller: hey, jim. thank you very much for taking my call. >> my pleasure. >> caller: all right. so i do have a question for you on disney. >> okay. >> caller: wanted to know what investors do with it. do we stick with it or not? i'm concerned about all the espn chatter that's going on. >> there is too much short-term thinking about disney. look at it like this. zootopia, i saw the coming attractions and said, i ain't seeing that one. i was the only person. people want to put too much weight on espn, not enough on what i think are multiple tent poles that is working. i was watching espn on my hand held this weekend.

i probably do not want to give up on disney. if you are buying into a strong group like one of the ones i just gave you with the wind behind their back that's what your portfolio needs now going into the fed meeting. on "mad money" tonight, their products may stink up the joint but tobacco products are winners in this market. i'm going off the charts for a special monday edition. then hp enterprise to see if the spin-off kucould pay. let's see. and art donnelly, is it time to take printing profits? i have the exclusive. so why don't you stick with cramer? >> announcer: 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 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. sales event is on.

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tobacco stocks for a while now. i worry about the rise of electronic cigarettes in the industry and i'm not a fan of smoking, to put it mildly. a lot of people have been calling and asking about the tobacco plays lately because there's been so much consolidation talk in the industry. plus as much as the products literally stink up the joint these companies are never less proven winners in the vice category. selling one of the most addictive products on earth unfortunately is a good business model. that's why tonight and another way to look at the group we'll go off the charts with the accept help of sue smith, happens to be portfolio manager with strategic solutions and explosive options.net. in order to visit the entire tobacco space. at least the big four. so why don't we start by taking a gander at vector group. that's vgr. okay? a smaller holding company that owns a majority stake in real estate brokerage firm douglas e lman, big in new york city.

i know . bear with me. it's not necessarily fitting in well. but this is mostly a play on cigarette smokers may recognize some of these. eagles 20, pyramid, grand prix, liggett select i remember from my folks and e-brand. they make son tons of private labels including zoom brand. when looking at the chart smith likes that vector group broke out above the 50 day moving average. that's the red line. see that? went up above that. it acted as a ceiling of resistance for a long time. bounce, bounce, fail, boom. now it's a floor of support. also points out that vector has a bullish flag formation which you have actually made for you here. that's when a stock roars higher in a straight line and looks like a flagpole and trends sideways for a bit which looks like a flag hanging off the pole. this is known as a bullish continuation pattern because it marks the middle of a missou

missouri -- move higher. smith suggests vector could be headed to $25.04. that's a nice big move, right? it's only a few cents below where the stock peaked in december. throw in the fact that vector supports a bountiful dividend yield of 7% and i've got to tell you, you've got a stock that could make a pretty solid buy here. next up, let's talk about one of the major players in the group where the stock has been roaring, killing me the stock's so high. like i said i have been avoiding the stocks. we have to face them tonight. this is philip morris international, pm. the world's leading international tobacco company. six of the world's top 15 global brands. philip morris international has marboro, parliament, virginia slims among ohs. the stock has broken out from a four-month consolidation basis when philip morris international

rocketed to new high after new high. what a chart. the relevant strength index or rsi is a powerful momentum indicator. positive territory. at the same time, the moving average is trending upward. another beautiful thing. it made a bullish cross over here. i don't know if you can see it. the black line cross it is red line. that's incredibly positive. one of the most reliable indicators there is. smith thinks philip morris international is making the whole section of a bullish flag. you can see that, right? it's likely to enter the pennant stage, trading sideways for several sessions before breaking to the upside once again. if that pattern plays out here you will want to buy the stock into any near term weakness which i doubt you are going to get. smith recommends a pull back on the 20-day moving average which would be currently at 93. okay? my view, philip morris has a safe and juicy 4.23% yield but

beyond the dividend i like the stock as a play on the bizarrely voracious appetite of foreigners, even young people to keep on smoking despite the terrible health hazards. as long as the rest of the world remains uninterested in quitting, philip morris international will continue to be strong. hey, let me ask you a question. have you gone overseas lately? one of the benefits of being bald is you don't have to wash your hair if you are going out to dinner to banish the notorious odor of cigarette smoke. it's a win-win. all right. what about pm's domestic cousin altria which is the same brands including marle bo ro, remember that? i can still hear the song. that's how old i am. i remember the jingle and exposure to snuff and chewing tobacco. only in the u.s. check out the daily chart. according to smith this picture is pretty much every charters dream come true.

it's been chugging steadily higher since last november. buying the stock near the 20-day movingle average, it's been a recipe for success. with altria at 60 you are close to what smith considers the perfect entry point right there. there is just one caveat though. the full oscillator, a tool that measures how over sold it is shows it is over bought at these levels, a sign the stock could be due for a pull back. smith points out it's been overbought for six weeks. yet the stock keeps rallying. it's one of the most bullish sto things a stock can do, get and stay over bought. that's happening with altria. i like that it's the number one u.s. tobacco company with the biggest brand marlboro, with

40%. regulators won't let tobacco companies advertise so the industry is frozen in time. altria will be number one because there is the no way for anyone elsele to take away market share. rates of smoking are declining in this country. altria has an unassailable position and the branding power allows them to raise prices and a juicy yield at these levels. look, the only reason the yield is so low is it's been an amazing stock. finally, not also good, let's not neglect reynolds american, rai. the parent company behind joe camel, newports, american spirit? and palmal cigarettes. i don't smoke. what can i tell you. i don't know. >> reynolds has been a major consolidator in the industry with 27.4 acquisition last year giving the company a boost. look at the dividend daily

chart. i don't like this chart. neither does smith. she sees the picture as a blinking yellow light screaming proceed with caution. why is she concerned? first the relevant strength index -- look at this. that's a turndown. right? trending lower. the stoichastic oscillator is turning down. the bears cross over is imminent. the action of the stock is looking like a head and shoulders pattern. that's one of the most reliable patterns. she still hasn't made the right shoulder so the pattern is yet to be set in stone. americans had a stellar run up from 42 to 51 at the close. she thinks rounds is due for a rest before we can think about the stock resuming the run higher. if you want to buy it she recommends a pull back to the

50-day moving average. right there. that would be 48 and change. that's been a solid support. this stock roared based on chatter that reynolds might be take over pattern. then it was hit of david faber shot it down. given that the stock is one of the smallest dividends in the bunch, 3.29% yield and much more expensive, i say take a pass on this stock. the bottom line, chart back to philip morris, altria and vector group are worth owning but stay away from reynolds american for the moment. standard warning, i hate tobacco, i despise smoking and if you are puffing away, you should quit right now. much more "mad money" ahead. a break up bigger than jen and

ben. don't miss my take on hewlett-packard's spin off. and i don't get that. buying opportunity or red flag? let's talk to the ceo. and it's a piece of the market that missed the rally. it could be too cheap to ignore. i'll tell you what it is. i suggest you stay with cramer! (gasp) shark diving!

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regular viewers know i'm a fan of corporate breakups. as a method for unlocking value to the point i devoted a chapter to the concept in "get rich carefully." lately it seem as lot of businesses have come around to my way of thinking. given that in 2015 alone, we saw 38 spinoffs where the parent company takes one of the subdivision s public as a separate publically traded entity with two dozen additional spinoffs in the pipe. earlier this month goldman sachs chief u.s. equity strategist dade kostin, smart guy, fabulous analyst, came out with a terrific deep dive into a number of recent spinoffs. this piece of research was so good i planned to spend the week highlighting the names he mentioned with other plays he left out that i like in order to give you a sense of what to do with the newly created public companies going forward. make no mistake this isn't an

homage to kostin. when he was putting together his analysis he found out spinoffs tepid to outperform the former parent companies and the s&p 500. especially when the spinoffice trade at a cheaper price to earnings multiple than their former par rent or operate in a different industry. of the 28 spin off deals done since last june, 18 have at least one of the three attributes although the best spinoffs are the ones that have all three of them. with that in mind let's kick this series off by looking at one of the highest profile break up stories of the past few years, the spinoff of -- hewlett-packard enterprises. it was officially separated from hewlett-packard, now hp inc. in october. after years of under performance at the old hewlett-packard management finally agreed to break up the business to bring out value, roughly 18 months

ago. unfortunately, the actual spinoff came at the end of last year. that was a terrible time for the overall market. >> the house of pain. >> hewlett-packard enterprise started trading independently november 2 at just below $15 sunk to as low as 12 bucks a couple months ago but is back to $16.41 as of today. the reason for the rebound, a lot of it had to do with better than expected quarter hewlett-packard enterprise reported this month. and a narrow top and bottom line beat that sent the stock scoring 13.5% in a single session. [ applause ] what do we make of the new hewlett-packard enterprise. hp is the good hewlett-packard while hp inc. got the growth challenge printer and personal computer division. hp enterprise is the higher growth segment of the company. caters to business clients, servers, networking products, software, storage, number of cloud offerings, consulting. the idea behind hpe is end to

end technology provider for clients. hp inc. is a cash cow and the guys at hp want to spend money on r & d and investments to grow the business. we like growth in cramerica. fortunately meg whitman who stabilized mult pakd before ork triezing the break up is at the helm as ceo. despite the fact hewlett-packard enterprise was the better part when the analysts initiated coverage the expectations were muted with most issuing neutral or whole ratings and price targets in the mid to high teens. the analysts like the cheap valuation but didn't believe the newly spun off company could generate decent revenue growth. no catalysts. however, when hpe reported the first quarter in late november we started to see encouraging signs. green shoots even as guidance was mixed. management told us about partnerships including a cloud

deal with microsoft and azure product where hp enterprise will sell as its preferred cloud alternative in ex change for microsoft making hp their preferred cloud services provider. that's a big deal. a red hot piece of software. hp's stock was upgraded which helped the stock close out 2015 just above 15 bucks slightly higher than the level where it was spun off. once 2016 began hpe had a brutal sell off, holy cow. it was energy related. anything related to the cloud that first week of february. the stock worked down to 12 bucks. but at these levels hewlett-packard enterprise was trading at just six times 2017 earnings estimates. that was insanely cheap. kind of hung there january, february. six times. i don't know. sometimes things get lost in the shuffle around here. by the time the company reported again a week and a half ago the

stock rebounded back to 13.50. since then the result that is came back hp has been roaring. why? first of all the company desired a nice revenue beat, sales up 7% on a constant currency basis. third straight year of year over year growth. at the same time hp enterprise delivered a one cent earn ing beat off a 40 cent basis. management reiterated guidance for 2016. where will hp enterprise go mention? what do we do with stock at these levels? it's important to point out though hpe has run up 32% over the past two months, the stock is still inexpensive. now at eight times next year's earnings estimates. that makes hpe is cheapest cloud computing play by far. the stock trades at a huge discount to the down and out names like oracle or is cisco. it's moving up nicely because of a series of acquisitions. second, i think the stock market doesn't give hp enterprises

enough for its relationship with microsoft. the partnership is helping hpe break into faster growth areas that the old hewlett-packard wasn't near in ages. for example, just today the "wall street journal" ran a good piece about hp enterprises haven on demand, a cloud based learning platform. it's very positive. on demand runs on microsoft popular cloud based operating system which gives hpe access to new potential customers. remember, microsoft has already transitioned itself from being an old tired maker of basic software into a cutting edge player in growth markets like the cloud. that's under the leadership of ceo sacha nidela. hp has to ride on the coat tails and they are large. at the same time, many analysts expect hpe will make savvy targeted acquisitions, build out the exposure to faster growing markets like the cloud. don't forget, a lot of unicorns can't go public.

cisco has been snapping up the unicorns because they can't access public markets. third, hpe has a built in restructuring program that should allow the company to cut unnecessary spending and bolster margins. this should get better over time. based on the most recent quarter it's clear the efforts are paying off. don't forget hpe has been killed by the super freaking strong dollar over the past few years like every other u.s.-based international company. for example, when they sell a product in europe, hpe has to translate the euro into a stronger dollar with the result being the overseas numbers took a big hit from currency. if the greenback stays the same as it has year over year hp enterprise will be in better shape going forward. so the dollar is already factored into the comparisons. don't over look the thakt that meg whitman can do wonderful things. i think it will shine on its own for years to come and she will

make it shine. she can make things happen. here's the bottom line. david kostin did work this month. one of the things he noted is spin offs with cheap valuations tend to outperform the s&p 5006789 hewlett-packard enterprise which even after the recent jaunt trades at a cheap price of 8 times next year's earnings estimates is a perfect example and i bet the stock goes higher. >> house of pleasure. >> nick in connecticut. nick. >> caller: hey, jim. how you doing? >> i'm doing well, nick. how about you? >> caller: not bad. george soros took a huge stake in ferrari. do you consider it a buy? >> no. i don't like any auto companies. this one is really kind of not great at all. i can see people warming up to ford, but no. just because soros takes a position, i don't care for it. tom in new york, please. tom. >> caller: hello. jim! my question is about xerox company. what's going to happen after a

split with my stock? >> it's going to bring out some value. i have been looking at this one. not part of my series but there is a lot there. it's just been hard to understand. it will be easier to understand. you're in good shape, tom. i like that. no blues in splitsville here. company spin offs are a good thing on wall street. hewlett-packard is going higher. much more on "mad money." i'm talking wth ceo for an update on that spin off into three companies. should you be flying the friendly skies of the airline stocks? they can be too cheap to ignore. i will reveal my favorites and your calls rapid fire in tonight's edition of the lightning round. we needed 30 new hires for our call center.

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in august we got big news

from the world's largest printing company with the desperate businesses. the nonprinting divisions weren't getting enough credit from wall street. they broke up the company into three entities that are easier to get your head around. financial services and data companies the most trusted name for publically traded companies and a multi channel communications management business and a printing business for magazines and catalogs. when donnelly last reported a solid quarter at the end of february we got an update on the break up which is coming by october at the latest. the printing business will be spun off as lsc communications, the financial statement business will be donnelly financial solutions and the remaining business will focus on helping customers create, management and execute highly targeted multi channel communication strategies. this break up is to create a tremendous amount of value. when i see the stock is down 8% since last august it makes you want to circle back.

this is worth more. you get the juicy 6.4% yield while waiting for the break up. let's check in with the president and ceo of r.r. donnelly and sons to get a sense of where the company is headed. welcome back to "mad money." have a seat. >> thank you, jim. >> there is so much excitement and the problem may have been that all people care about now unless you are organic glout is they don't see the potential. i want people in the stock. >> sure, jim. i think we were down a little bit over 2% on organic growth in the fourth quarter. when you look at what the economy was going through i don't think we did bad. >> almost everybody in industrials shrunk margins. you held up. the three companies we are going to spin off when you think of donnelly financial solutions there is 135 ipos still waiting to come to the marketplace once the market is set we know the feds will meet this week throughout the world. we'll see how it goes.

there is a company that's going to be a billion dollars in sales. it's got scale you can take on additional customers without incurring additional costs. it covers you from a product line from ipo to bankruptcy. tailored proprietary financial technology solutions. we have great customer relationships. we are globalle in that respect. we are excited about that and what it will look like. lsc communications, again, it will be two segments, print and office products. we have scale there. when you think about, you know, the printing products, the usps case in april will go away. there is a reduction in cost of physical materials. >> interesting. >> we believe that's also going to help things. we made the announcement today about block chain and for us we think it's going to help publishers get rid of the fixed costs that are there. get to know your customer better as they go through things.

we are excited about what that looks like. it will be a business with great cash flow. rr donnelly itself is a fortune 1,000. end to end supply chain. >> each one of these, you are the only major player. >> we are the leader in all three. one is number two. the others will be the number one player. for the first time e-read rs went down and publishing went up. that has to play to you. >> it does. there are 24 hours in a day. no one has figured that out and with the e-readers we didn't run away. we have technology to distribute content physically and electronical electronically. we think there haven't really been great best sellers out there but the book market continues to grow from a physical standpoint. >> what happens to the cash flow in terms of you've got yield. that goes away. these are three growth companies when we are done?

>> the donnelly financial solutions is a growth company, a technologiage company. it's in the cloud. software as a service will be one of the main tag lines. when you think about donnelly itself servicing the fortune 1,000 it will have growth with it. from a multi channel media communications standpoint. quite frankly lsc communications will be levered appropriately. we'll look to do acquisitions and go ahead and look to pay. >> the company, okay. that's going to have a healthy dividend. other companies in the industry like quad are down on their look. you have been an endlessle con sole day tor. anything with happen. >> we'll continue. we believe the dna of the three companies will continue to look to do acquisition that is make sense from a capacity standpoint, a customer standpoint and from a synergy standpoint. >> who are you staying with? >> that's going to come out at the end of the month. >> oh, come on. when the k comes out. >> when we file the forms that will be there.

the ceos and the chairman of the board as well. >> to me this is quantifiable down side and i think the $20 stock after this is finished. that's the president and ceo of r.r. donnelly and sons, number one in everything. three different companies. "mad money" is back after the break.

>> announcer: lightning round is sponsored by td ameritrade. it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the lightning round on cramer's "mad money." i want to start with anthony in new york. anthony. >> caller: boo-yah, jim, from the big apple. how's it going? >> man, it's great. how about you? >> caller: a little rainy here. in this volatile market lack luster earnings report and over weight upgrade by morgan stanley what do you think of perth. >> the business is too competitive. i'm nervous about that rental group. let's go to corbin in nebraska. corbin. >> caller: boo-yah, mr. jim.

>> calle . >> boo-yah. >> caller: i purchased nvidia in 2011 and after recent earnings reports i didn't know if i should invest in more stocks or just take my money and run. >> no, no. nvidia is my favorite in the group now. [ buy, buy, buy ] other than sky works it's fantastic. gaming, automotive. no, please. i would rather have you be a buyer. peter in oregon. peter. >> caller: boo-yah, jim cramer. >> boo-yah. >> caller: i think the ocean here is throwing all the water at us. it's going to dry it up and put it right on us. >> i don't know. my daughter lives in the high desert in oregon. something beautiful to behold. i can't wait to get out there again. >> caller: i've got to ask about canadian solar. >> no, no. i ian canadian solar is okay. we have first solar, fslr. we don't need another solar.

we like first solar. it's cheap. bill in new jersey. bill. home state. >> caller: hello. >> hey, bill. it's jim. >> caller: hi, jim. how are you? >> not bad. how are you? >> caller: calling from fairwell, new jersey. i have a question on a stock called somewhere partners. >> this is a cemetery business. i don't understand the 10% yield. i liked the stock. we'll do homework. that 10% yield is too much of a red flag for me. i have to come back. i can't be certain. dave in rhode island. dave. >> caller: boo-yah, cramer. >> boo-yah. >> caller: i have a good question about noavack. >> we like the ceo but the vaccine, anything biotech, speculati speculative. [ sell, sell, sell ] . that won't always be the case but now it is. bill in south carolina. bill. >> caller: hey, jim.

veriphoneme veriphone. >> everybody is giving up on the stock when the year is here. i like it. that, ladies and gentlemen, is the conclusion of the lightning round! [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. thank you. imagine if the things you bought every day... ...earned you miles to get to the places you really want to go. with the united mileageplus explorer card, you'll get a free checked bag, two united club passes,

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are the airline stocks too cheap? you bet they are. don't take it from me.

take it from the dean of the group, the cofounder and chairman of southwest airlines, the most profitable airline in history. we got to interview herb on "squawk on the street" and it was a treat. he speaks his mind and he's the straightest shooter i can recall with the possible exclusion of john ledger from t-mobile. listen to what he said about airline profitabilitile this morning. >> it's a miracle. to have a lot fewer airlines today and people have more confidence in their future. we are finally producing returns equivalent to the rest of american business and industry. long at last. >> he was asto niched that the stocks are trading at low levels given the discipline in the business, not a lot of planes added. no new airlines emerging and the balance sheets of the debt laden group. his favorite is southwest. of course it's his company.

despite that record and what should be a big year, the darn stock sells at 9.5 times next year's earnings estimates. that's absurd. the really ridiculous valuations belong to american, united and delta which trade at just barely above six times earnings. average stock is 17 times earnings. crazy. insane. delta earned 5.9 billion dollars in 2015 t. company shelled out 6.2 billion in defensive lends. brought back shares at barely a couple bucks below where it is now. it's possible the passenger miles won't be as good in part because of the stronger dollar but the fuel costs will be down big. that makes a huge difference for the bottom line. united continue nen tall is being challenged for under performance made $4.8 billion or $11.88 per share. put that in perspective this is a $58 stock for heaven's sake. company brought back 1.2 billion

in stock. now ceo oscar munez returned today from a heart transplant. he's have his hands full with the board which is like, i don't know, issues about disclosure maybe got him involved. no doubt is stock is too cheap. american airlines raked in $6.3 billion in profit. that's a 50% increase year over year. it repurchased 85 million shares, only $25 billion market cap. it will benefit from the decline in oil prices. now it's hard to beat the percentage increases from last year. that's part of the under valuation. this is an industry that's never earn ed back the costly capital until now. without new competition and the planes full almost everywhere in the world except latin america which is hurt by the zika virus and a downturn in south american economies and the strong dollar. the strength of the industry is

incredible. it is indeed a miracle as herb told us. keller is worried about the government getting revolved in regulation. take a listen. >> taxes and fees are incredible on the airline industry. you know, they are higher than cigarettes and whiskey which is a triple whamy for me. >> hard not to -- i couldn't ask. well, anyway, i told you he shoots from the hip. the airlines are a buy, plain and simple. i couldn't stress it enough. who could disagree with that man? stick with cramer. staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor. right now get up to $650 in credits to help you switch to at&t.

when i did my game plan on friday i told you i would touch on the travel centers of america. kind of astonishing. there hasn't been a pickup in actual driving despite the decline of gasoline. it is true that they did more business as a retail. i was shocked. it is not a demand side that's driving oil. it is just not. it is a supply side. demand is being constant or else ta would have seen a big pick-up in the amount of driving in the country. they are the best ones to know. remember, it is supply. i like to say there is always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer. see you tomorrow.

. >> tonight on the profit... >> marcus, nice to meet you. >> i go inside jacob maarse, a high-end florist and gift shop in pasadena, california that hasn't earned a profit since its founder died in 2010. how much money will this business lose this year? >> close to 200,000. >> sloppy business practices... do you have an inventory system? >> no. >> together with lax management has driven down sales and piled up debt. so are we going the right way? >> i believe so. >> we need to know where we're going. if they don't make changes, this 47-year-old family business will be forced to close its doors. this business is a total mess. i'm fighting against time to light a fire under these people... this is the thing that will help us go from the red to the black in one month. before this business crumbles and dozens of employees are out on the street.