what carter worth didn't mention is viacom which is too cheap at current levels. >> thank you very much, gang. i'm simon hobbs. catch "fast my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now! hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make frinltds, i'm ftrying to make yu some money. call me at 1-800-743-cnbc or tweet me @jimcramer. it's all up to you. that's right. you have to figure out what you want and what you can handle in this market now.

because as we go higher and higher, the dow closing at record highs again today. the risk grows, and you need to foe not just the rewards but possibly what could go wrong after this historic run. dow putting on another up day. let he give you three familiar examples, amazon, facebook and microsoft. to demonstrate this risk/reward, aum three ha all three have that. and they offer a window on ways you can value the stocks. we'll go from cheapest to most expensive, first we have the $44 billion that is microsoft. much better than the previous of that disappointed so many

investors. microsoft is transforming itself from a software company to one of the world's largest cloud providers. now, if you look at it statically, growing at about 7%. sales at 19 times earnings. that's right. even after today's epic 5.3% move, it's nowhere near the balance sheet that microsoft has with $100 billion in cash, unbelievable. they pay a 6% quarterly dividend. that's better than the 2.1 average yield you get from the s&p 500. why is this to inexpensive? simple. if it's about history. for a long time, it was a "also

ran." its previous ceo, steve ballmer made a series of bad bets. the last was to get into the cell phone business, with a purchase of nokia's phone business, one of the most bone headed acquisitions in history. it precipitated a 7.8 billion write off years late other. it would have been better to set that on fire. but, as i always say, what matters is the future, not the past. and i think microsoft's growth rate is accelerating rapidly because of this cloud that is paying off. of now, as i said, the previous quarter was a widely-panned disappointme

disappointment. i got to believe that microsoft's really making real progress to the point where i think it's selling at 16 times its likely earnings in the year 2018. that's how you value these growth stocks. you don't look at them right now, you look at them in the out years. microsoft is still, even today an outstanding stock for anyone who wants a fairly decent risk/reward ratio. in an era when there are precious few rates to get income, microsoft after this incredible quarter i think represents a strong opportunity. how about facebook? the social media king ping sloesed at $122. these are amazing market caps. the stock's on fire. in part because we learned that facebook messenger has 1 billion users, having gathered 200

million users since the year began. that's a pretty monumental thing in light of the prediggs that people are abandoning facebook for snapchat. you have to compare to its monster 31% growth rate. with that rate, it's astoundingly cheap. because growth stocks tend to trade at one to two times their growth rates. this was at the bottom end of the range. it's cheap, relatively. more important, i think, facebook's growth rate is accelerating here. right now it looks like the stock is trading at 20 times again. puts it on the same footing as the average stock on the s&p 500 on the outyear numbers. i think facebook could earn a lot more than the current wall street estimates. this thing may turn out to be 17 times 2018 numbers. now facebook like microsoft has

no dividend. and it's in a faster-moving the space where someone could come out of nowhere with a better mousetrap. i mean, who ever heard of pokemon go until a week ago? or who would have thought that apple has no growth. that said, i believe facebook is relatively inexpensive, suitable for those individuals willing to take on some risk in order to get a lot more reward than you'll ever get from a stock like microsoft. now here's the real quandary. amazon. here's a company that doesn't really trade on earnings at all. or you clearly never touch the stock. because if you actually rtried o compute it in the way that you did with microsoft or facebook, it's just not easy, paubecause trades at 117 times next year's earnings estimates. so why is it so difficult to nail down? because amazon doesn't play by

the rules. there are points in time where it doesn't really care about what it earns, because it's interested in rapid growth above all ilelse. it will sacrifice. if it sees a way to grow rapidly in india, for example. it might be willing to take some hit to its bottom line to stop the bentonville giant. you don't want this company to pay a dividend. because that would mean its ceo, jeff besos couldn't come up with a bottom line. it's amazing. it's apr''s anticipated to have

billion in sales. amazon, you really have to believe that it will do the same thing to every other retail category that it's already done to books and electronics and even apparel. you have to believe amazon will destroy the mall if it thinks it can advance far past its closing price of $745. amazon might very well be able to do that. the rest of the retail stocks are sure trading as if that's what's going to happen. for me, that means if you're a young investor and you take a lot of risk, as this stock is risky by nature, given it's hard to nail down valuation, amazon is definitely worth it. witness the amazon button it's offering in your house that you can push, instantly order dozens of household items. witness the same-day selling that can make it more convenient than walking across to the store. there's nothing in this company's dna that makes it think it can't disrupt retail.

so here's the bottom line. you need to assess your risk and reward after this gigantic increase in the averages. microsoft is close to ideal for anyone who needs income and is not looking for a home run. facebook may turn out to be a lot cheaper than it looks. could be ideal for a growth seeker. and amazon? leap of faith. if you believe, by all means, do some buying. but recognize that a lot more things have to go right for this thing to keep climbing. even as history suggests, that's exactly what's going to happen. let's take calls. let's go to ken in south carolina. >> caller: boo-yah, jim. how are you today? >> i'm doing great. how about you? >> caller: i'm good. ep, would you hold it or go into a technology or possibly a tobacco? >> tobacco, if you want yield, you're not going to get the kind of risk you get with bp. people don't think that the problems are behind them. i think the big environmental problems are. i'm just not recommending a lot

of fossil fuels here. tech, i mean, i would be in a microsoft, i would be in pretty much any of the big tech stocks that we talk about all the time, more than bp, because at least you get some growth that way. coty in new york. coty. >> caller: hello, mr. cramer, pleasure to speak to you, sir. >> thank you. what's up? >> caller: first i'd like to thank you. i've a long-term investor. it's been indispensable for my financial growth and instruction. >> thank you. >> caller: may question is i am fairly light on retail, i want to know the about walgreens stock or whether you prefer cvs. >> walgreens is buying rite aid. i think judging where it's trading, a couple bucks below where it's supposed to be

bought, i think that deal's going to fall apart. i don't care anymore. if that paulsfalls apart, i thi wa walgreens will buy its own stock back. on mad tonight, pets aren't just for comfort, man's best friend can help warm your wallet, too. then, with the market on quite the tear, i'm going to tell you why it's not all good news. you're not going to want to miss that. oil just came down. i'm cutting the core of the issue with a ceo. so stick with cramer. don't miss a second of "mad money." follow@jimcramer on twitter. have a question? tweet jim, at #mad tweets.

end an e-mail at mad mcnbc.com. it's time to discover that in a lexus suv... ♪ ...there's no such thing as adverse conditions. ♪ come to the lexus golden opportunity sales event this is the pursuit of perfection.

s as the market continues rm rerent russry to work its way eyer, i want to circle back to pets post of it's spent on cats and dogs, it's the humanization of bets. i wanted to beat the heck out of our puggle who raced across t highway. we've gotten to the point where

some pet foods cost as much as human food. we only ehighlighted idxx, the animal dying fog particular. i want to cover all the other ways you can play this theme. pet food is a big cat goegory. blue buffalo is all about

premium pet food. the stuff at that you can forgive yourself for. at the make treats for dogs and cats, blue life protection formu formula, blue wilderness. we think it tastes good, not that we would fknow. a couple weeks later the stock peaked, trending at $15.50. it's been on a rebound, bouncing up to nearly $26. given the momentum, it's not hard to imagine them making new

highs. here's the thing about blue buffalo. it's been less about the fundamentals than the correction valuation. given at that it's accelerating, i at this it's reasonable to think that it deserves to trade at an e higher price. next there's fresh pet, it's so high-end at that it has to be refrigerator eighted. it went into a tailspin. and it didn't help when we heard mold was found in some products. i had to stop my kid from making

a sandwich of the stuff. how about the numbers? fresh pet has faster groechlt it's decelerating. it's not something i can get excited about. let's start with jm smucker. it makes meow mix, a host of others. now smuckers is giving you a 17% gain.

it's up 5.5% since last month. hen hen henry shine. it accounts for 27% of the k company's sales. especially it's given a platform for animal products. i got one pour name. c echle centa. toys, pet carriers. where do i come down on these?

we need to choose between blue buffalo. i told you to avoid them. it turned out to be a good call, because they went into free fall. it was about growth. and people didn't want it. right now, i like blue buffalo. trading at 30 times next year's earnings estimating. how about the more diversified, like jm smucker?

this one this one's fritriblgy. at the moment, i'd recommend smuck smucker. i would buy the rest when it comes down 5% to 8% to get a better basis. as for central garden and pet -- you invest if blue buffalo or smucker or henry shine. a fabulous place to invest on any scare, whether it be from the fed or overseas or from the

p madness of the upcoming presidential election. don't make a move until you hear my take. and a company completes 8 million deliveries a year to homes, maybe yours. i've got the ceo. could be an interesting story. stay with cramer.

i've got some good news and some bad news. let me give you the bad news first. the market's gotten quite expensive. of a this huge run, the s&p 500 now sells at 20 times earnings. not like the 29 times valuation we had the week before the great

crash of '87, but it's not cheap, like the 15 times we've been in the last few years. there are only two ways out of this, either the stock market comes down to make it cheaper. or the companies in the s&p 500 start earning more than we expect because things are better than we expect. ♪ hallelujah and i believe the latter's happening. i believe the s&p will be cheaper. and valuations will be less expensive, allowing us to get out of this. what makes me so sanguine? let's deal with companies that have reported in the last 2 h4 hours. let's start with microsoft. last night, microsoft delivered a quarter with 1 huchb% growth in its cloud big but saw better than expected numbers.

the company took pains to talk about how good the personal computer business is. said it was selling better than expected levels in the developed world. now i believe that the ceo of microsoft is back on track. after stumbling the previous quarter. that's why this huge stock soared. what's more relevant is you can't see this kind of stock unless you have an economic tailwind going for you, both here and worldwide. in other words, we may be breaking out of the prison of anemic revenue and corporate profit lines that have made the valuations of companies look steeper than they are, it's all good news. second instance? illinois tours. here's one of your basic industrial companies. it has a lot of cyclical parts

to it. it can grow without a strong economy, so it won't blow up on a quick slow down. the maker of industrial fluids among other products reported sharply better than expected. now you simply don't get that kind of beat and raise quarter that illinois tool works deliver, one that proi pelled its stock up to $3 higher. it's not booming. globally, because only 46% of the company's business is domestic. centas. it rents out uniforms 900,000 businesses. you don't order more uniforms when you're shrinking your workforce. now centas earned $1.08 per

share. it guided up its revenue forecast substantially. that's a fantastic sign of expansion. it has to mean things are getting better, and not just for centas, which rallied $9 on the news. here's the bottom line. microsoft, illinois tool works and sen tass, all higher on better than expected numbers that signaled morrow bue robust growth. that's how on betting will beat the nose bleed as we enter an economic expansion. if we didn't get the economic expansion, i would tell you to sell, sell, sell, sell. simply, because like dustin hoffman admonished lawrence olivier, it's not safe. be careful.

with these numbers, maybe it's safer than we think. dennis in texas. >> caller: yes, a big sad boo-yah from texas. >> what's going on? >> caller: my family thanks you throughout the years. my big question is mfa financial. i bought it for about 7.5 some years ago. i have twice my shares back at this point. in the past, of course that nice dividend north of 10, but in the past, you said it's kind of hard to figure out in kind of a black box, and you like more traditional, can you dwell on that a little bit for me. >> they do mortgage residential. we don't know what they open. we know during the great crash a lot of these companies did quite poorly. that company does not offer a

lot of transparency about the assets it has. that said, you've reinvested in the dividend and done well. i just like companies a little less opaque. jt. >> caller: i have an investment in ford. it's been stagnating. do you have any idea why? >> i want you to hold it. i think a lot of people think the auto industry is challenged. they're worried about self-driving cars, uber, people not getting licenses when they turn the age when you can drive anymore. ford has a good yield. ford has a very good book of business. lalten america's still i have bad. i think you're fine. i would hold on to ford. don in new york. >> caller: hello, jim cramer, thank you, thank you a million for helping me build what i call my beloved portfolio. >> there you go.

guy likes his stocks. >> caller: thank you, thank you. my question is about a food service equipment manufacturer out of florida. i call it the company. and they mailed my catalogs of all their equipment. >> okay. >> caller: and it's beautiful. and it's called manta wok. >> i wanted to put it aside and give us that pure food service company. that is a winner. and i would do some buying. there's no use denying the markets are expensive. they may end up being cheaper. much more "mad money" ahead. with so many unknowns in the oil and gas sector, i'm drilling down for answers. and could xpo logistics start

the shifting in your portfolio again? our very special edition of the lightning round. so stick with cramer!

given that the price of oil seems to have found some stability, say, in the mid-40s, which is exactly what you would expect given that you have a lot of supply coming on, what do we make of the oil service stocks? how about a company like corps labs. cob. they use their technology for rocks and reservoirs, helping clients figure out where to drill. it peaked in 2014.

stock is now down more than 40%. but it is starting to bounce back. the company itself bought them. and the stock has rallied nearly 50%, 5-0, putting up nearly 14%. they have slightly-higher than expected revenues. let's take a closer look with the chairman, president and ceo of corps labs to find out more about the quarter. welcome back to "mad money"." >> hey, thanks, jim. our 13th time on "mad money." we know that's a good number. >> you're sticking by this idea that there is a v-shaped recovery happening in oil. it seems like every time we get to 50, david, we then go back down. how do we penetrate that 50 level with more companies hiring

you to find more oil? >> one of the things that happens is we have a lot of small producers, end pipts producers. that's a good target to get through. once we break through, we're probably heading up to the $60 range. so as the demand continues to increase, which we see, and we still see supply falling in the u.s., year-over-year, we're down now over 1 million barrels. we're losing month on month, about 100,000 barrels of production, and by the end of the year, wei could be down another 500,000 to 600,000 barrels down from the peak of 9.6 million barrels in april of 2015 to around 8 million barrels a day by the end of this year. that tightens the crude market, and that should push crude ahead of that $50 market that is such a resistance level.

>> okay. i want to try to balance that against the fact that more people are hiring you. business is a little better than the previous quarter. halliburton said they'd seen the bottom. at what point do we have this self-fulfilling prophecy that more people hire corps lab, more people find oil and we're stuck at this level for longer than you think? >> the laws of physics are i am mutable. and the decline curve never sleeps. so the overwhelming decline curve is about 10%, maybe more year-over-year to overcome that we're probably going to need to double the rig kouchts for about a year and a half, use corps lab technology. that should get us back to the stabilization of oil production in the united states. so it's going to take that kind of an effort to stabilize production in the u.s. and to do that around the globe.

it probably will take even a longer period of time. >> let's talk about around the globe. it might be great for people to understand, you've got a best example, in reservoir description. what you're doing deep water for exxon. it's amazing. >> yes, correct, if you look at the liza ii prospect that was drilled it isle 800 million and 1.4 billion barrels recoverable. one of the largest discoveries in many, many years. opposite that, on the coast of africa, we are also working offshore senegal on a parallel geologic structure that is also probably going to be a giant oil field in the making. so those two projects probably will start supplying crude to the market some five to seven years out. and in five to seven years, we're going to need every drop of oil from those two, giant oil

fields in waiting. >> the south africa, south america, one in guiana. what price are those profitable at? are they profitable right here? >> yes, costs have come down for drilling and developing these wells and then for the infrastructure, top side to produce that, some billions of dollars have been taken out. you look at bp, the mad dog ii project in the gulf of mexico, they've taken billions of dollars of cost out of that project. that makes these projects somewhere between $50 and $60 oil very economical, and gives them a nice return to their shareholders. >> how about onshore. you've got an example of trying to get a little more from mobi?l

>> we thought this was possible. remember the recovery factor from u.s. shale is about 9%. by injecting co2 and loosening up more natural oil and gas, we can get that recovery factor to 13%, 14%, 15%. it helps in the of scoop and the stack in oklahoma. >> last question. you did say, listen, increasing demand, what gives you a feel even with cars that are using less oil every year, even with the world not growing that much. what gives you such confidence that the demand side's going to get stronger and pick up? >> you know, jim, we're mainly

quoting eia numbers there. however, if you look at the eia numbers here in the u.s., last week our gasoline usage per day went up to over 10 million barrels a day of gasoline usage. that's a near record high. so, as america goes back to work, we're going to burn more gasoline in our cars. led by india, china and demand here in the u.s., we pretty confident that that demand level stays at a pretty constant level, and that's at about a plus 1.4 million barrels a day year-over-year. >> that would bring it into balance and more so. you're absolutely right. david demshire. >> thank you for having corps lab back on "mad money." >> corps lab is a company that did well throughout the trough, it's not going back to 28. i'm not as certain that it's

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. it is time! time for the lightning round! >> sell, sell, sell, sell! [ buzz ] >> and then the light nning rou. let's start with cory in massachusetts. >> caller: jim, thanks for having me on. hope all is well. >> all good, what's going on? >> caller: the allergan deal is going to be closing very soon. and that's going to cause an uptick in m&a activity. and i think it's way overblown, but when m&a heats up, what do you think of this stock? >> for the exact reason you indicated. i, too, many frustrated. i do believe the allergan money will come in in the next few weeks. let's go to howard in new york. howard? >> caller: hello, jim, howard

from new york. thanks for taking my call. >> of course. >> caller: i'd like your buy, sell, hold opinion on communication sales and leasing. >> we like digital. this is a red hot stock. and i think it's a good one. they're all trading at their highs. but i like you, i like this. it has a good yield. let's go to south carolina. >> caller: hey, jim. what about monsanto? >> they're in talkover talks. i would not the stock on an earning basis. i would not touch it at this level, and that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. thay trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right?

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12 the last time we checked in with xpo, they were coming off a tricky few months, with their recentcquisition of conway. it is down from a year ago. so what do we make of this unique logistics company?

before the $3 billion conway purchase, they snatched up a european shipping company. they posted a smaller than expected loss. so can this stock get some lift here? i think this company has its pulse on global commerce. if it can do well, the whole stock market can continue to levitate. i want to take a look with the chairen wh chairman and ceo. this is actually a kind of a seminal moment. >> for the last five years, we've purchased 17 fantastic companies. we've built the company like a tank, put the whole infrastructure in place, the technology, and now we're reaping the benefits of that. >> you've found some refinancing that makes it so i shouldn't be as nervous.

>> we raised 2$2.5 billion in equity. >> it looks to me that you caught the bottom in europe. are you seeing that? >> it was luck. >> better to be lucky than good. >> i was just over in the uk and in france and spain for a couple weeks recently. the mood is better than there than it's perceived to be from here. >> and brexit, i understand that you are hedged. >> currency's fully hedged till the middle of next year. most of our business in the uk is contract logistics, very stable, long-term contract business. >> you've got your pulse, really, on pretty much everything. and technically, the omni channel. i want you to describe to people, your macy's, home depot, lowe's, you're the other guy, how's that business look? >> we do it on both ways, we deliver the last mile to the

houses, home electronics, appliances, but we take the reverse logistics, the returns, which is a fast-growing business. >> it's pretty new that people are buying heavier equipment. the heavier stuff is in vogue, and you have a huge market share in that. >> queer'we're an a leader. >> five, six, seven years ago you wouldn't have bought a stove or refrigerator on the internet. >> you have 35% of the business coming from mexico? >> of the trucking business in north america. >> what are you bringing from mexic mexico. >> white goods mainly. auto parts and full-finished autos coming back. >> where do you think we are in the full global economy? our view is this. things just aren't as bad, but there actually may have been, like your company, a bit of an

inflection point in the last couple months, where despite brexit, it looks like things are better. >> you kneurope's in a differen of the cycle. they're not raising rates, they're almost having negative rates. they're p they're putting capital in the market. it's more buoyant than it is here. >> that's not what people are thinking. i wonder how you can change people's impression on that? >> show the results. >> now i want to talk about the concept, we had a guy from federal realty, a graeat shoppig center company. he was saying amazon isn't necessarily what you love. weigh lo we love the cop septembncept oft now. >> whether people go into bricks and mortar stores and buy it, it we deliver. >> this is from the postal

service. why is the postal service using it? >> we have two things, contract logistics for the postal service, and weigh a are a cust in that we go into the big warehousing and do next to the last mile. we go in at 2:00 in the morning, put them on the truck, get them to the post office so our customer's customer can get them delivered by 8:00 in the morning. >> i was concerned that you were going to continue to buy things and instead you should be integrating. are we done for now? do you need to do more acquisitions? you've done a bunch. now isn't it time to take out costs and watch the cash flow bloom? >> we are going to do about $1.25 billion of ebid of.

i'm very bullish on the company right now. >> if you do believe that the economy's getting better, xpo logistics might be the way to go. you heard him, it's an inflection point. i believe it. stick with cramer. >> if you do believe that the [beekeeper] from bees to business expenses,

i'm in charge of it all. so i've been snapping photos of my receipts and keeping track of them in quickbooks. now i'm on top of my expenses, and my bees. best 68,000 employees ever. that's how we own it.

all right, three good, one not so good, united rentals. soaring. qualcomm, very good, china orders, i think that matters. an internet structure company. and a lot of people think that company's going to get a takeover bid. intel, on the other hand, the stock had run. so that one's taken a bit of a pause. there's always a bull market somewhere, i promise to find it for you right here on "mad money." i'm jim cramer, and i'll see you tomorrow

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