that in european banks. >> i'm melissa lee. thanks so much for watching. pr more, check out the website. have a great fourth of july weekend. enjoy your weekend. "mad money with jim cramer" starts right now. pie 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've promised to help you find it. "mad money" tastarts now. hey, i'm cramer. a lot of people want to make friends, i'm just trying to make you some money. call me at 1-800-743-cnbc or tweet me @jim cramer. the next time you feel like

panicking panicking, the next time you're thinking about selling into the crowd, think about what happened this week and remember that panic is never a strategy, given that we all ended the week in a positive note. nasdaq climbing 4.41%. and amazingly, the best week of the year. still, people certainly panicked on monday, that was the second big down day after brexit. upon was the seventh biggest day of redemption on the stock market in the last ten years, seventh. $9.5 billion pulled out of the global equity funds. no matter how hard that i preached that nobody ever made a dime from panicking, and selling on monday was pure panic. people can't take it.

they don't fknow what they own. it was right to minimize its impact on u.s. stocks. the companies away from the banks, interest rates did get hurt. sum total of little significance. however, we caught a classic, emotion out rout. you had to buy, not sell. or at least you had to stay put. all right, what were the news cues that the market was going to bounce? most people who came on tv were alarmist. the redemptions occur because people take, look at you've got to get out. that's how it happens. they scare people.

but the tostock, what would the stock say? they told you a different story by mid tuesday. the first day, we didn't have brexit on the top of our minds, and anyone who did focus on brexity had seller's remorse on how little impact it seemed to be having on u.s. companies and their stock. first the bounce, the bank stocks, that's what they a're wt to do. facebook was pure recovery after a few nasty days. but amazon and netflix were pushed hard by analysts every single day, and they kept pouring higher and higher right to today's close. google's become a quandary, it's become so unloved, it's time to give it the boot. thank you for giving us some ideas on twitter about that. but either way, they staked out

their uber growth. next, by the end of tuesday's session, the recession-proof names came on, now i'm thinking about clorox and the giant tobacco company. by wednesday, the vast bulk of investors started to realize that maybe brexit has not a positive spin. but the stock competition just became less competitive, as they were furiously bid up by those taking safety in a world where the european union might be unraveling. and when you bid up bonds, that lowers the yield. acce since then we've seen a parade of buyers. the run has been so good since the brexit low, it may be too good. it wouldn't be such a bad idea, nobody ever got hurt taking a profit, maybe do a little

ka-ching, ka-ching. it might be a difficult earnings season, given for the propensity of the dollar to go higher. and the stubborn slowness in asia and south america. let's not get too cute. you have to believe that our game plan for next week, we're likely to get another exoj nenous event. something worth waiting for. when you see something up ahead, you know there's something looming. next week's our independence day, but these days we're focussed on another independence day, and that's britain's from the eu. what do we see? what do we want in how about the sta stabilization in the weakest group over there. the stabilization of barclay's,

and lloyd's. these are at the epicenter of ha went wrong with brexit. a lot of times through the bond market, i'm telling you, i was quite cheered by how well bonds traded, hence, why i say it may be lloyds, who trade at lyg may be a ticket to punch. i don't know, kind of intriguing. we're watching some of these big british stocks. i'm going to watch diageo. it's a british seller of liquor, of spirits. it just had a price cut by 12% due to the halarge decline in t pound. think about what those sales are

going to be like, 90% overseas in cheap pounds. tuesday, i'm expecting we might see a more fetching bid for hershey from mondelez who badly needs to buy hershey in order to spur its own growth. i think it can happen. i know that's contrary to what a lot of people said today. i would hold onto it. the first bid was clearly a non-starter. i think mondelez can easily pay $130 and make it fit. wednesday walgreens reports. i suspect numbers might have to come down. the stock may not be able to handle it yet, but you know

what's more important? walgreens is trying to close on its acquisition with rite aid. i think they will let this deal happen, given that the government's become vehemently antitrust lately. i wish they'd just fill our tiller in this one by now. starting to just really weigh on all of us. thursday we hear from pepsi cco. and i think we're going to get another beaten story. the ceo's turned this into the largest consumer products enterprise in the world. now i know some of you are worried about soda taxes like the one that just passed in philly. i think that pepsico's got those under control and they've got frito-lay, the king of snacks, and that's where the growth is. there's some speculation that pepsico may be interested in

hershey. why mess with the best? fry friday we get the big bad jobs report. the fed is believed to be on hold pause of brexit. but if we get a stronger number, they'll be talking again about rate hikes. that chatter's never going to go away. when we spoke with the ceo of the fabulous paychex beware that their survey doesn't take enough into banking and oil technology. it's too early to get a read on the employment number. i want everyone to have a happy and healthy fourth of july. then gear up.

because earning season is back up. larry in massachusetts. >> caller: commodore cramer, now are you? >> we had big shows this week, and we're glad we're wrapping it up a little bit. i did want to do a saturday. regina said she had to go to the beach. >> caller: i'd do it for you. thanks for the focus to guide the good ship bull market through the stormy seas of the brexit. now that a judge has ruled that ete doesn't have to buy williams, does that improve your outlook on etp which has recovered nicely with the price of oil? >> geez, i don't know. larry, here's the problem. didn't kelsey warn the ceo kind of screwed up? he got lucky when there was a legal opinion from latham and watkins that didn't hold up

under close skrut any, and he got out of a yield that may have hurt the company very much. i'd rather see you own an mlp that owns these where you can keep it so that the big isn't so freigh great. tom in florida. >> caller: good afternoon and a big roll tide boo-yah. high question is on met. met life. it has a current 4% plus yield, stable dividend growth and a favorable payout ratio. assuming low interest rates and the new eu the uncertainty is baked into the price, is met below 40 a good opportunity? >> i talked to a friend, he said nah, that seems too cheap. people want travelers. and chub and travelers are indeed best breed.

we saw one heck of a rally after the brexit-induced panic selling. but if you missed the move, it could be time to sit on the sidelines and wait for your pitch. order up, which restaurant stock ranks at the top? and it isn't about luck but what you do with it. i'll tell you. and water, water everywhere, and a job to invest in? the pay in that space. so stick with cramer! don't miss a second of h"ma money." tweet cramer #madtweets. send jim an e-mail at cnbc.com or give us a call at 1-800-743-cnbc miss something?

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as we enter the second half

of 2016, i think it's certainly time to reevaluate some industries that we care about, to see if the old pecking order still holds true. it was more about measuring the ability to spy than the hostile environment. we've got a lot of good feedback on that series. so tonight i want to go back and think about the restaurant chains, see which wins are worth owning. specifically, we want to look at six of the largest ones. mcdonald's, young brands, chipotle, darden, domino's pizza and restaurant brands international, the new name for burger king. unlike the department stores, some of these restaurants are having a good year, technically dominoes. and then yum is up 14%. although, as sonic told us earlier this week, lately the business has got and little bit softer, so we're a little wary of the entire sector. for those of you who don't

remember how the process works, we rank these things. we rank the restaurants from one to six, with first being the best and six being the woerrst. the one with the highest score, that's called most dangerous. let's start with same-store sales, also known as comparable store sales. the absolute numbers are less important than the trend they represent. that's why mcdonald's comes in first. they have accelerating sales growth, and a year ago mcdonald's had trailing scores. in the most recent quarter, they came up plus six. now there is some chatter, we hear from analysts that there's been a deceleration with mcdonald's, so i don't think it's a bad time to do a little buying ahead ever the quarter. yum! brands comes in second.

they've spent the last threeing. i'm sanguine about the situation. in the middle of the path. we have restaurant brands, thanks to solid steady eddie numbers at burger king. it's been very well run that company. and darden's in fourth place, you might know them as olive garden. it decelerated a bit. i was looking for 2% same-store sales. got an a little better than 1% for olive garden. a little disappointing given that my daughter and i went there and had a bang-up time. and dominoes has seen its numbers decelerate draw mat

clay. and the slow down will likely continue given that the company's up against difficult comparisons. finally, the obvious loser is the beleaguered chipotle. it's because of the big health scare late last year. i believe chipotle can bounce back, but for now they are at the bottom of the heap. the company's margin performance measures how much they're managing, food and operational costs. yum comes in first. that's the percentage of sales that they have excluding profits. that's despite tough -- that's very impressive. darden comes in second with 180-basis point increase. new management came in there. even as they're expanding from a much lower basis than yum.

third place goes to restaurant international. i put them up higher on the list, but for the last 18 months, bubur burger king has b rebounding from when it invested heavily in remodelling, and those are paying off big time now. but the company hasn't notten back to where it was three years ago. first place goes to mcdonald's. the top margin was back up 32%. dominoes comes in fifth, which had seem fairly slow but steady increase. i know this is tough to say, but chipotle's taking it on the chin. they're experiencing rising labor costs. the operating margin declined by really, just, wow, 2,300 basis

points. >> the house of pain. >> they're losing money at the moment, but they're doing it correctly. they're doing massive promotions to get you back in the store. what are these companies doing to make their earning stream heavier. they're remodelling. or with franchising, with creates more stable, higher margin business. first place gear goes to mcdonald's. last year they announced they wanted the golden arches to become 95 franchised. that's up from 80% at the time. they've been good to their word. second place goes to yum! brands, which is doing something similar, even as they're spinning off their chinese business to unlock the value there. it's also moving to become 96% franchised by next year. this is a better business model for yum when you do it right

because you're collecting royalties, but they're the ones who have to cover all the costs of running a restaurant at a time when all labor costs are going higher. third place goes to dominoes. the pizza change is already in the midst of a remodelling. but they are he 're already one biggest franchises out there. and burger king has been remodelling. at the same time, the company's also become focussed on building out a franchise-led strategy, particularly in europe. darden comes in fifth, while they don't franchise domestically, they have been using a plan choicfranchised mo expand overseas. not talk about franchising going forward. oh, well, that's not going to happen. finally, chipotle and last

again. they haven't franchised any of their locations. as we've seen lately, it means they've not all the down side on the plate. they like total control, and frankly, in chipotle style, it's take it or leave it. we need to consider not just the restaurant companies but their stocks in valuation and yield. the highest is 16.2 times next year's earnings and a juicy 3.56% yield. and that was augmented by a 11% dividend boost. mcdonald's comes in second. the stock is falling. yum brands is third. restaurant brands internashl comes in fourth. 1.44% yield. dominoes is even more expensive, 27 times earning.

still based on the numbers alone, it's in fifth place, and last once again we've not chipotle where the value has remained sky high. apartme and the earnings estimates have been slashed. so let's add up the points. in terms of the restaurant brands, darden and mcdonald's are tied for first. but i'm going to get a slight edge to yum. darden's in third. domino's in fifth pause we'beca concerned about the decelerating growth. stock's starting to creep up. and chipotle's coming up last. because i think it can turn things around, for now it's still stuck in the doghouse. my advice, i want you to stick with cmg. a year from now, i think the scare will be bottle of mind.

and the burritos on top. sdz, stocks go up in a year. are they lucky ? or are they good? or are they both? and the u.s. spends hundreds of billions of dollar on water. there's one way to keep your money rising year to year. i suggest that you stick with cramer!

♪ lots of times people wonder what really drives a stock. how did nike go higher after weaker futures orders? the answer? people were concerned that nike had high inventories in the u.s. they were scared.

and it just plain didn't. less discount being, profit margin is sky high. why did general mills start rising ahead of the mondelez hershey deal. because they took out artificial ingredients you got a sudden double digit growth. no one was expecting anything like that, plus the offloading of green giant for $765 million to b and g fields, a great deal for everybody, by the way. it enabled general mills to raise its national organic exposure. if it were to buy wwav in a stock for stock transaction right now, it might become a majority. do not put that past ceo ken

pal. you merge those two, and voila, you've got a growth powerhouse. anyway, that switch in secereal not to skew. and then constellation brands. the justice department forced them to divest the u.s. rights to corona. allowing constellation to buy them for a song. of plus, they took a non-premium beer in mexico, pacifico and turned it into a hit in america. then last november he took the

profits from those beers and used them to buy ballast point, one of the fastest-growing craft beer companies in the country. dramatically accelerated constellation's sales growth. you hear so many cutting back on cost, shrinking production because it's really not way. that's not constellation's way, it's building the world's largest brewery in mexico. capable of produce 300 million cases a year. it's also putting up a brand new brewery in virginia to meet ballast demand. they buy meiomi and then prisoner. and pinot noir. my wife won't even drink them.

at the same time they snap up casa noble tequila growing tequila in the united states. constellation has gone up to $163, in 12 months, and in the past three years, the stock has more than tripled. line, stocks higher for many reasons. maybe because they've accelerated their growth like cop se constellation. i like that reason the best. and constellation's living out its glory days right now. lou in pennsylvania. lou? >> caller: hey, jim, thanks for taking my call.

i bought kimberly-clark last month, and i'm looking to buy some more. can you give me a good price to buy. >> it's a company we have liked forever. wall street tends not to like it. wall street doesn't really like kimberly-clark, clorox or smucker, and i like all three. roy in new jersey. >> caller: hey, jim, what's happening? how you doin'? >> i'm good, how are you? >> caller: calling from new jersey. >> excellent. >> caller: wanted to know what your take is on mgm resorts at these levels. >> my writing partner september me numb -- sent me numbers saying may wasn't doing well. mgm is the best of the best, and i think it's a buy. the best, well, accelerating

growth. and that's the holy grail of wall street. much more "mad money" ahead. turning the tap off and the volume up. i have some things that could have you swimming in profits. then the brexit we experienced is just one thing to prepare for other potential hurdles. plus a brand-new edition of the lightning round is just ahead, and a look back at the week that was. i suggest you stick with cramer. what's better than "mad money" in how about more "mad money." follow "mad money" on facebook, twitter and instagram to go one on one with cramer. >> what other questions do we have? ah, i always tell people you've pot to start wi got to start with an index fund. >> get more with guests and go

behind the scenes with the most interactive show on television. >> if you can't explain in three bullets why you're buying a certain stock, don't buy! >> follow "mad money" today.

the incredible outperformance, the two publicly held water utilities, aqua america and water america to privatize their water systems in order to raise money. take a look. money has already been made. there may be other ways to play the water business. i'm thinking of flow serve, and xylem. companies that provide everything from irrigation, pumping, valves and other things we need to spend on infrastructure alone, and that's money in somebody's pocket, and we want in. flow serve is the world's leader

in providing pumps, seals, valves, automation to the chemical, gas and water industries. while the king of flow management equipment, only 4% is dedicated to the water is segme. they'll make desalination systems and water purification systems, i like those guys. how about xylem? they have a water transport system that transports water from the roots to the leaves. they spun off their wastewater and water control businesses into a separate entity in 2011. since then they've become a major provider of water technology and wastewater solutions. of these three companies that

are water related, only xylem has been a solid performer. pant air is flat. when we look at just the last six months, they have all outperformed the s&p. and xylem is up 23%. flow serve and pent air have a lot of energy exposure. >> boo! >> all sell into the industrial market, which wasn't doing well until the dollar peaked this year. but in the last six months, flow serve and pent air have turned around. what's driving the turn? let's start with flow serve. it gets the majority of its revenue from commodity processing industries, specifically oil, gas and

chemicals. you can understand why it not hammered in 2014 and 2015. the company also gave up, we did a piece, a piece that said expectations matter more than what's already happened. still, we really need to see oil and gas companies start fracking again before i'd be willing to give my blessing. fracking is way down. how about pent air? pent air made the situation worst for itself by acquiring tycos valves, but it happened just when the chi weconomy was starting to slow down.

the company's been focussing on finding new revenue opportunities. for example, pent air's expanding triple offset valves. and valve automation, another $100 million business. at the same time, the company's trying to become more of a global player in water pump the where overseas lags behind domestic. and they've nottengotten aggres about cutting costs. you can see how they've been able to deliver impressive numbers. oh, and there's one more positive catalyst. s after last month, the wall street journal reported they are looking to spin off their valve business. now it would allow investors to focus on the stronger parts of the company, giving the stock a lift while providing a big slug of cash. you now piggybacking off nelson

pell ty -- i like it a lot. what about xylem? >> buy, buy, buy! >> the other two companies are about fluid handling, but their focus is more industrial. xylem gets a third of its sales from water utilities. and we know business has been on fire, thanks to last week, the strength in american waterworks and aqua america. 44% of their revenue, that business has been lackluster, but what they don't have is energy exposure. something that's been the real bain of existence for flow serve and pent air. it's the public utility side of things that makes this tostory exciting. think about it, as millions of

people move from the country to the city in places like china, they need to expand water systems. in the country, they may get their water from a well, and the sewage system may not be much more than an outhouse. and developing nations need to replace their water structure. china's is over 100 years old. and in the united states, over 5,000 are below standard. they're likely to spend $600 billion upgrading water and wastewater systems, some of the money is going to go to xylem. not many companies have that kind of gain. i think it's too much to pay for a company so much oil and gas exposure.

they need producers to start fracking again. pent air is cheap, cheap, cheap. they had a couple good quarters. they might have a couple of cat cat -- catalyst. stocks are at an all-time high of 3$37. if you're looking for ben fisheries from the water business, xylem. that's the one i like. although ideally, you should wait for lower prices to buy a lot of it. i would pick pent air any day of the week. i think it's a little better than flow serve. but remember, you pay a premium not to have any oil and gas exposure, and there's only one that fits that bill, and that's

xylem. mad money is back after the break.

♪

it is time! it's time for the lightning round. are you ready? it's time for the lightning round. sebastion in virginia. >> caller: hey, what's going on, crame cramer? >> not much. >> caller: what do you have for m me. >> take $5 stock can't get out of its way. there's too many other growth stocks i'd rather see you in. let's go to darlene in texas. >> caller: i listen to you all the time. i want to ask you about med app. what do you think of that? >> storage, you know, not a big storage guy right now. i just think it's become too

commod advertised. i'm not going to go there. let's go george in california. >> caller: bnr. >> technology-related real estate is very hot. john in missouri. >> caller: hey, cramer. >> yeah. >> caller: it's been over a year, and down quite a bit. should i hold it or sell it. ? i >> i'm sorry, what was the name? >> caller: westinghouse air brakes. >> i saw truck sales being weak. you can hold onto it, but i don't expect the prospects to be that food in the near term. how about anit.

>> caller: me and may brother-in-law got in at 48 to 50 levels. >> i think gopro is limited. of those ones, gopro fit bit, twitter, let's go to reid in alabama. >> caller: mr. cramer. >> calle i'm a new trader, and i'm learning. i was looking at office depot. >> no. keep looking. that is a very challenged group. and i saw a note about amazon wanting to come into that very aggressively. pete peter. >> caller: this is pete calling from largo, florida. my question is about nxp

semi-conductor. >> we decided we liked it. we have been buying it. and there's no doubt about it, nxp is a sweet spot. because, remember, they are in the auto, not just the cell phone, and that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. you're a bet ownpet owner, owner. pets are moving from the barnyard to the bedroom. >> i'm going to go outside. i can't hear well. i'm not hearing myself. no. >> my job's not just to entertain but to -- [ bleep ]

get a peek at this latest model. they make, [ bleep ]. >> this can go as slow as a snail and can went the kentucky derby, all automatic. you can drive it easily, better than your car. >> oh, i hope so, because i'm not that good a driver, but what does fainbu mean? what do you think? you tell me. 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.

this brexit business has been good for two things if you ask me, the absolute chaos that ensued hopefully convinced any other eu country that maybe this move would be suboptimal if they went and did it. and secondly, and more beneficial to you, it showed the value of being diversified. having a diversified portfolio can be a lifesaver. it is key to riding out the wave the. th maybe you didn't mix it up enough. let's start with a tweet that

says, top five holdings, xerox, sirius, and grew pon. and vale's terrible and sirius is okay. you've got to upgrade this portfolio. where's honeywell, where's the 3m? let's upgrade the portfolio. the single value stocks sometimes can be a little too speculative. let's go to o'meet.

>> caller: i have ford motors, good year tires, gt, rite aid, and hbi. >> let me go to work. interesting. so we have semi-conductor equipment, tires, good year, apparel, not bad, i do prefer -- i'd rather see you with walgreens. and auto and drugstore, apparel, tire and tech ♪ hallelujah i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military

to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.

a bull market somewhere. i'm jim cramer. see you next time!

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