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tv   Mad Money  CNBC  September 28, 2016 6:00pm-7:01pm EDT

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>> karen? >> yes, ticker wi-fi, a new name that i haven't talked about before. but the growth in wi-fi happening. >> bk. >> if oil keeps rising, we want to sell some tlt. >>tlt. >> ra ficky. >> thanks for watching. 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 friends. i'm just trying to make you some money. my job is not just to entertain you, but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. this should be a halcyon time for so many different stock groups. instead, it's a treacherous time where some things are working, but other things that should be
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working are downright toxic. specifically the banks, the restaurants, and the retailers should be on fire right now. but instead they are houses on fire. and there's no letting up in the flames even as the averages rebounded hard today. after opec announced it might cut back half a million barrels of production in november. i think this is more of the same where they rumor the price high, which worked again, and then kind of do nothing meaningful. nevertheless, as i have said over and over again to you, anything that drives oil higher takes stocks higher, and that's sure what happened today with the dow ultimately gaining 111 points, s&p climbing .53 percent. the linkage remains that great even as i urge you to be skeptical of any so-called deals when there is such a worldwide glut of oils. we need millions of barrels to be cut, not less than a million. this means the amount will not
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give you a lasting impact. i want to talk about what's happening with these beleaguered groups i mentioned earlier. let's start with the banks. it was clear the stated policy of the federal reserve to raise interest rates several time because the emergency fund rates levels that we came into the year with are certainly not in keeping with the rate of job growth in the country. and the banks make a fortune when rates go higher. so they were very favored. now, you could argue that given the amount of job creation, which is strong, and the price of housing, which is so robust, the fed should have raised interest rates perhaps as high as three quarters of a percent, if not more from where they were a year ago. instead we've only had one hike, that december hike, because there's so much else that's not going well in this country and the world. for example, we got a durable goods number this morning that showed almost no growth whatsoever. that's on top of various pmi numbers and retail sales growth that's pretty sickly.
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of course the rest of the world is cutting interest rates. so if we raise them, the dollar would theoretically skyrocket, making our exports even more anemic than they already are. meanwhile inflation is pretty much nonexistent. digitization keeps costs low. we've rarely seen such pricing pressure on foodstuffs, and it's impacting every aisle of the supermarkets, including the once hot natural and organic section. it doesn't help that klein almost imploded and the price of oil repeatedly threatened to break down. but oil did break down back in february causing the fed to put its plans on hold for what looked like an ideal time. if it isn't one thing, it's another. that might as well be the fed's mantra for doing nothing in 2016. and that caused immense pain for the banks since they're the group that had the most to gain from rate hikes. it just didn't happen. and their soon to be reported
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numbers, i am telling you i think will most likely prove to be too high, which will cause -- >> sell, sell, sell. >> there have already been a couple of offsets, for example, auguments the profits by offerig more services to customers, services with a steady stream of fees. that was called the virtuous cycle of cross-selling, and the more aggressive you were, the more accounts opened per person, the greater the profit for the bank. but now because of multiple transgressions by wells fargo, admitted multiple transgressions, where employees opened far more accounts than the customers even knew about, cross-selling has become a vicious cycle downward that the banks somehow have to stem. of course that's that pretty bloodless way of saying it. what we're talking about is taking away the premiere that wells fargo stock has enjoyed for years versus other banks because of what is now regarded as fraudulent cross selling. wells fargo's board of directors has managed to claw back some of the compensation coming to ceo
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john stumpf and the now retired carrie toel stead. this so far silent leader of the bilking division, but it's not clear if the law makers who are set to grill stump tomorrow will be appeased. it's possible that stump could lose his job as we actually talked about when he was here on the set, and the cross-selling that helped profitability will lose its champion. either way no one is going to pay as much for the stock, which then trickles down to what the whole market will pay for all the other banks. wells fargo was the gold standard. that is no longer the case. it gets worse. the european banks are a disaster. the london banks which seemed to be finding their footing have seen their core franchises obliterated by brexit. and deutsch bank is in dream land when it comes to somehow it believes things are hundredky dory despite relatively low
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reserves and expensive legal problems. deutsch bank has historically been totally clueless about the american way of justice when it comes to banks, which is basically to stick it to them for mortgage transgressions from the great recession. hence why without much due process at all, bank of america, jpmorgan and citigroup paid 17 billion, $13,000,000,007,000,000,000 respectively. now it's deutsch bank's turn, and the justice department would like them to fork over $14 billion for their role in the crisis. deutsch, which only has been $5 billion and $6 billion of reserves regards that as ang opening bid in some kind of negotiation. the ceo saying he hopes deutsch bank will be treated -- and i quote -- with the same fairness as american banks that have already agreed on a compromise, end quote. has he talked to any execs? has he talked to their attorneys? if he gets the same level of
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fairness they got, deutsch bank could end up needing a bailout. due process? the second sector that should have been rosie, retailers and restaurants. holy cows these stocks have been bad. last night sonic, pre-announced a truly dreadful number which comes on the heels of a devastating number from cracker barrel. both of these companies should have been beneficiaries of lower gasoline prices, and the negative pin action? it's hammered the whole rest of the group. retail is no better. credit suisse -- the stock's miserable taj ektry has been a harbinger for most of the rest of retail. and the death star of the industry, which of course is amazon. which continues to go higher as it should. even the retailer that have been
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making a stand like urban out fitters, they've been smacked down beyond all recognition. this is all very extraordinary given how plentiful jobs and how much spare change the consumer has in their pockets thanks to cheaper gasoline. and nike, with u.s. sales flagging, it feels more like a retired nike missile. i do think it is say matter of time before it regains its sfature. these stocks have become the third rail of investing. if you can avoid touching them, i recommend it. of course there's still plenty that is working. tech's been strong, the semiconductors stocks are up 20% this year. the faaa stocks, facebook, alphabet, alibaba, have been running, but the latter got slapped with a sell call. i didn't like that call at all.
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it's been apple that's been the real star, though, with the stock rallying from $95 to nearly $114. this whole higher than expected sales for the iphone 7. an exploding phone from competitor samsung clearly superior optimal. and a new initiative announced today, this afternoon, with deloitte, a huge information technology consulting company that could make the enterprise the stickiest customers out there. finally tilt toward what the employees use, apple. you need to watch this deloitte deal's ramifications. it's strategic, which means it could move the needle by taking the pressure off this whole how many cell phones did you sell today treadmill that apple has been on. wouldn't that be a godsend? here's the bottom line. as this quarter winds down, we have a paradox of banks and retailers and restaurants, what we thought would be the strongest stocks in 2016, devoid of footing, while tech stocks -- it's the opposite of what you might have expected a year ago, and it's a major reason why
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things feel mighty gloomy. david in new york, david. >> caller: hey, now, jim, what's going on? david in new york. >> man, i don't know. i'm just having a good time today. how about you? >> caller: sounds good. my question is regarding solar city. i really do believe in elon musk. he terms this merger as a no brainer, so my question to you, is this really a no brainer, or is he going to hit us with -- >> i got a reference at delivering alpha. he said solar city he felt basically was a company that may not even survive. that said, i was with someone last night. i took a ride in a tesla and then bought the stock. just like that. ride tesla, buy stock. as my great friend jim stewart,
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who is a freak writantastic wri tesla people like their tesla stock, and they don't sell. so tesla, the stock, i think you're still in a cult situation, and it's going to go higher. incredible. how about norman in california, norman? >> caller: hey, jim. big north hollywood booyah to you. >> i lived there for a while. booyah right back at you. >> caller: the reason i'm calling. i have some shared in a diversified construction company that has sizeable infrastructure and road-building division, and given the urgent need for upgrades in our infrastructure, how do you feel about fleur corporation, flr? >> you really want to be in martin marietta stematerials an vulcan materials. fleur, i regard as being an oil and gas play, and that's why i think you take advantage of this new rumor about a production cut and maybe even do some -- >> sell, sell, sell. >> this is far from the market many expected going into 2016,
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but as the quarter winds down, well, we got to go over restaurants, retail, financials. they may be weak, but standouts in tech are helping us get through an ugly month, of course also a production cut rumor. on "mad money" tonight, with names such as sharpie, grayco, mr. coffee, elmer's, now newell is the product powerhouse that rules the aisles of retailers like a target and a walmart. can it also rule your portfolio? then is nike losing its footing in the sneaker market? i'm trying on a different play in sports apparel after the swoosh's slip-up today. and radius health is up. after a shaky start to 2016, is it still worth investing in a company that has the patch? i have the exclusive with the ceo. i suggest 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
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call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. it's peyton on sunday mornings you like football? it's directv nfl sunday ticket. i can watch every sunday ticket game live on any device. well i'm retired now. so i just sit here watch nothing. if i were you, i'd work as long as you can, son. get nfl sunday ticket - only on directv. and watch live football anywhere. switch today and get $100 reward card.
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earlier this year, two terrific companies merged to create a consumer products powerhouse. the old newell rubbermaid and jarden. 100 brands including everything from bicycle playing cards, mr. coffee machines, coleman camping gar. now the combined company calls itself newell brands. this is a holiday special. i've been recommending this stock since the deal was announced last december and so far the stock has rallied more than 18% year-to-date not just because this is now featured in every store near you. actually i've never seen it before other than on the set. now, a number of the analyst who's cover the sector were hesitant to get behind newell brands because they feared the complexity of these two companies or they didn't like all the money newell was borrowing in order to pay for jarden. all along i've said this deal
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creates fabulous cost synergies and earnings boosts while diversifying the company's portfolio of products, meaning the positives, in my opinion, totally outweigh the potential negatives. i said in my opinion because not everybody feels that way. in fact, now that the deal has been consummated for a few months, i am more confident than ever about newell brands, which is which wee recently added it to my charitable trust. i'm referring to myful and my co-manager. he and i have worked closely on this. let me explain why i think this stock makes a fabulous core holding for anyone's portfolio. [ blending whirring ] i like that. i like to put things in -- oh, thank you. our staff is always so good. i just have to do this. let's see if it works. like a charm. first of all, the old new rubbermaid was itself a great company, making of writing
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products, containers, baby products, including products like paper mate, mr. sketch, rubbermaid, and sharpie. jarden on the other hand was a house of niche brands. they were number one in a ton of different categories like blenders. oh, my -- i'm -- oh, green moon food. yeah, put it all in. let's see what we come up with. blenders, slow cookers, coffee makers, sleeping bags, skis, tents, toothpicks, scented candles, and so on. now, these -- let's just give it some time. you have to give it some time. we have to change this in post-production. okay. these might sound like two fwarly -- okay. so it doesn't work in all situation situations. when you zoom out, which we have to do while this works, they're both specialists within the durable goods businesses that also sell a bunch of high margin
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consumables. and as they put it on in the conference call, they both, quote, compete in large growing, unconsolidated global markets that have lost cost of growth and in categories that are responsive to innovation and investment. look at this innovation i've got going here. go ahead, give it a try. anyway, point two, these companies have combined in newell brands stronger than ever. the deal has increased scale. wow, they really -- this is going to be one nifty -- do you have any quinoa. giving them more bargaining power to distributors, more ability to compete overseas and online. newell brands is 2.2 times as large with its key strategic customers versus the old newell rubbermaid, and it's 2.4 times as large as the companies top 12 geographies. third -- just a second. let me see if it's ready. mmm, needs some yankee candle. third, many of these brands are
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extremely complementary. jarden and the old rubbermaid had baby care, commercial products, especially kitchenware. now they can combine these businesses not unlike my combining of these fabulous flavors in this particular blender. what i really like about the deal is it took two consistent growers, companies that had been growing their total business at a healthy 4% to 5% clip for years and it put them together with the added advantage of some major cost savings. speaking of cost savings, the ceo has got a proven track record of cutting costs since he took the helm in newell rubbermaid in 2011, and martin franklin, the founder and former ceo of jarden, another great cost cutter is also on the board. so when newell brands talks about seeing $500 million in cost sinnergys from this deal, i think they're being conservative, frankly. 30b8ly very conservative. typically with large mergers, you see about a 5% reduction in lower costs. if you apply that number to
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newell brands, it could be looking at $700 million in savings. at the same time, on top of these cost synergies, management is confident that the jarden deal will be significantly additive to easternings. that's more of a long term consideration, but even this latest quarter, newell brands posted nearly 22% earnings growth. that's a phenomenal number driven mostly by adding jarden's brands to the portfolio. there's one more point. the old new rubbermaid was disciplined about keeping its brands lean and having a narrow focus but jarden was with never willing to sell off any of its extraneous brands. i wouldn't be surprised to see newell branding selling off some of the more tepid businesses they got from jarden. what about all these negatives the analysts talk about. many analysts pooh poohed the merger because they thought integrating jarden would be too difficult. i'll grant you, newell took on roughly 10 billion in dez to pay for jarden, which is a huge increase from the 3 billion of
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debt before the transaction. even with all this extra debt, moody's reairm iffed the rating of newells, saying they expected the company to immediately start paying it down. in the latest quarter, the company already paid down $750 million in debt. getting the balance sheet under control asap. if newell brands keeps paying off its debt athis pace, this will come a better balance sheet story. what about the other objection, that it would be too hard to gobble up jarden and make it all work? here's the thing, both the old newell rubbermaid and jarden were already working through some major acquisitions when they announced their merger. newell was buying elmer's. no. save that. definitely save that. newell was buying elmer's, and jarden was buying joss ten's, the maker of class rings. the fact they even managed to get this merger done while they're handling all these other
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deals, incredibly impressive. so far, at least newell brands seem to be crushing it as far as integration of jarden is concerned. on their latest conference call from the end of july, mike polk told us, quote, with respect to the jarden txz cost synergies, we are well on our way to deliver our $50 million to $80 million with a good probability of delivering toward the high end of the range. so we're on track and foresee no issues here and perhaps some opportunity, end quote. that sounds very good to me. if the commentary sounds similar when newell brands reports again a month from now, then i think the bears will need to eat some serious crow or at least this great dish i've concocted. we talked about newell brands the company, what about the stock? i think newell is cheap, putting it at a modest discount to the average stock on the s&p 500. edge well, that's a personal care spinoff from energizer, that sells at 20 times eerngsz.
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there's no way newell should be this cheap, especially since it got some multi year growth thanks to the jarden deal. so let me give you the bottom line. i've liked the newell rubbermaid jarden merger ever since it was announced roughly ten months ago. now the deal has been consummated and we've gotten some numbers, i'm an even bigger fan of newell brands. that's why i put my charitable money where my mouth is and bought it from action owners plus.com. it would make a great addition to your portfolio. scha amazing management, some tremendous cost savings catalysts. i don't know. what more could you ask for? much more "mad money" ahead. interested in buying nike? slow your stride. i'm eyeing a company. then approximately 10 million americans have osteopor oes sis, placing them at high risk. with few treatment options in sight, i'm eyeing one company trying to help solve the problem
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with a little device. and i've got one of the largest payroll players in the land. the stock took a hit after earnings today but could the decline present an opportunity to buy? don't miss my exclusive with the head honcho of paychex. stick with cramer, and my stage manager is going to drink the whole darn thing. what's critical thinking like? a basketball costs $14.
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what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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long knives were out for nike today and it didn't matter what the company had to say on that conference call last night. the combination of a 1% gain in north american futures orders, considered to be the best indicator of the company's
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future growth and a decline in gross margins crushed nike stock, took it down two bucks despite some tremendous growth in china and europe. it's a tough comeuppance for a company that increased its revenues from $16 billion in 2007 to $32 billion today. there's been a huge amount of down beat chatter about the selling of north america in the last few months causing nike stock to be the worst performer. the hidden culprit behind nike's weakness, the return of adidas to the forenever even came up as the company told the statement story as ever, as if all were well. and that more than anything else rankled the bulls and rankled yours truly. it was really reminiscent of the u.s. same-store sales decline below 5% at starbucks. yet unlike nike, starbucks ceo was willing to call it disappointing on his conference call. if you don't hear mea culpa off a big miss, then you tend not to
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believe the company can turn things around anytime soon. worse, when you hear explanations that offer one time excuses for the decline in gross margins instead of newfound competition, as well as a relatively hit and dismiss -- you know, kind of non-important dismissal of futures orders, this was very sudden. well, you get down right worried. you get down right worried despite the company's fabulous chinese and european numbers. futures orders don't mean that much anymore? wait a second. you taught us that they do. these are uncharted times, not just for nike but for its analyst acolytes, who have deservedly always found reasons to buttress owning the shares of this terrific company, while adeed as wasn't blamed as part of the problem, we did get some questions on the call about whether athletic apparel had approached a slowdown mode. i wish the analysts had been more forceful on an athleisure slowdown question maybe, but i think you would have heard management say, well, nike isn't about that. it's about sports performance and innovation. they go hand in hand and
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everything else follows. they've always started with the athlete, and there are 7 billion athletes, at least what they say on the call. so the total adjustable market is still up for grabs. of course that's how many people are in the world. here's the issue i have with that concept. where in some new era where millennials may not buy into performance as much as they used to. sure, jordans still sell, and the kyrie, k.d., lebron are hitting the numbers. however, something is not resonating to explain the slowdown, and that's the company refusal to admit the slowdown exists. that makes it harder to physicifigure out what's wrong? is the business going to under armour? is it going to adidas? is it going toward these retro, decidedly non-technology stan smith tennis from adidas, which i think is barely in the performance footwear category and is certainly not at the forefront of innovation, which happens to be nike's real hallmark. these are the hottest shoe in the world. now, of course, nike will say,
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wait a second, that's not fair about jordans. you've got the lebrons. but this is what's tearing up the world. sure, there were some excellent callouts in the exchange. i like what i heard about flex. that's that technology company and quick to market shoes. i continue to warm up to this hp ink story because of the emergence of industrial 3-d printing. nike's involvement with the apple watch facilitated through tim cook, that definitely resonates with me. still, though, i struggle to come up with reasons to buy this stock right here at 23 times earnings when i can pick up the sports wear panoply of all of these at foot locker for 14 times earnings. that's clearly the play here, not nike. more broadly, i also searched for a takeaway for lululemon, but i couldn't find one. you know, that's actually bullish for lulu because it confirms the company is not a competitor with these guys but is going for a whole new brand of non-performance apparel based on yoga with a sideline in
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spinning and casual clothing. the bottom line is until nike admits the slowdown is for real in north america, they can't solve it. foot locker encompasses the ultimate win here, even if there's no slowdown as nike contends. while i find nike's domestic weakness puzzle, i hope they do too. edgar in colorado, ed guard? >> caller: jim, booyah, thanks tore faking my call. >> booyah right back, edgar. >> caller: so nike is a good segue to my question regarding guess. >> guess had a good quarter. >> caller: yeah, so my question is i'm wanting to pick it up to diversify my portfolio and add some retail exposure. 6% dividend yield. it's near its 52-week low. what do you think in. >> i'm going to have to say no, and i'll tell you why, edgar. i think -- i was halftime with judge wapner the other day. you know, fashion apparel has
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had another leg down. i had been buying into it for the month of august, and actually july too. but right now we got to wait. now you're going to get into tax law, that stock down almost 25%. be careful out there. the first step to solving a problem is admitting you have one. nike needs to recognize the impact of its competition. in the meantime, if you want exposure to sports apparel, i got an idea. why don't you consider the much cheaper foot locker. much more on "mad money" ahead. osteoporosis. i'm eyeing a company working on finding a solution. then pay checks. with its temporary rate hike off the table, i'm talking with the ceo fresh off earnings and all your calls rapid fire on tonight's edition of the lightning round. stick with cramer.
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great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. what the heck just happened to the stock of paychex, the second largest payroll processor in america? also an outsource provider of human resources and benefits. here's a stock moving steadily higher all year. then falling nearly three bucks
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or 4.6% today. why did it get hit? was the quarter a disappointment? nope. higher than expected revenue, up 8.6 year-over-year. those are good numbers. the problem was with the guidance. paychex slightly lowered their forecast for the 2017 fiscal year and investors always care more about the future than the actual results because i always tell you it doesn't matter what happens. it's about what's going to happen. however, there are some reasons to think the guidance cut isn't as bad as it looks. according to management they're cutting number because of a change in policies. they also said their payroll service revenue growth, its main business, would come in somewhere between 2% to 4%. that's down from last quarter, not just a tax issue. we got to drill down. should we concerned about a softening in paychex business or are we getting a rare buying opportunity here in a stock that's been working its way higher for quite some time and, by the way, supports a 3.2%
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yield at these levels. let's talk to the ceo, mr. mucy, welcome back to "mad money." >> thanks, jim. >> it is highly unusual for me to hear you do anything other than keep guidance, maybe even raise guidance a little -- i'm quoting from the conference call. you said service revenue growth anticipated to be in the range of 3% to 4%. we had said 4%, and from our perspective, it's fine tuning. from my perspective, i would have thought it might actually have gone up given the fact that employment rates have gone down. so explain to me why i can't -- i should think that paychex didn't lose business to others. >> well, i think it is really fine-tuning. we had a guidance out there at about 4%, approximately 4%, and when you look at the year, we lost one payroll day this year compared to last year the way it falls, and we refined that. we refined it to be 3% to 4%, and we're always -- you know, we try to be on the conservative side of making sure there's no
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surprises, and we're very transparent. so we went with a little bit of fine-tuning there. i think it was a little overreaction. the stock is up 25% since last year, even where it is today, so we're pleased with that. by the way, the net income, there was some confusion on the call on the net income. the net income guidance didn't change. we just reported it on a gap basis versus non-gap. so we're still expecting that income when you remove the discreet tax items from both quarters, to be around 8% growth, which we think is solid and certainly it was a solid financial quarter. >> it was definitely a solid financial quarter, but you mentioned that the different -- the fine-tuning about the day. you obviously knew when you made your guidance that there was a difference in the number of days. why does it suddenly play a role this time? >> i think we looked a little closer at it, and we have some thought there that maybe we're not as close to 4%. that we're somewhere in that range. we decided to put more of a range around it. i don't think there's been any big surprises at all in the first quarter to us.
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again, it was a solid financial performance. sales were up, and reps were fully staffed. our turnover is at its lowest point it's been. maybe a little overreaction to us being more cautious. >> there were questions about the competitive environment to try to isolate whether that was again the shade in guide angsz. you've reiterated it is not more competitive right now. it's pretty much business as usual. >> right. that's exactly right. we feel very strong about the products that we've been putting out, and we just had additional time and attendance products to handle the overtime new rules coming in december 1st. we feel very good about the product set. the service continues to be add record highs. so we feel very good about the competitive environment and about our ability to produce. so i think we'll be fine. >> it's some of the things i'm involved in. labor department, final overtime rules become effective december 1. it's going to span over time to
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millions of workers. how will an employer know what to do? >> well, basically the most important thing they've got to do is be sure they track that time. i mean you're talking about employees that typically made $23,000 or less. now it moves up to about a little over $47,000. as you said, that's impacting millions of employees, and so these companies that have not necessarily tracked time or been as careful, they really want to have a time and attendance solution where they're tracking time and making sure that they're managing their time and being sure that overtime hours aren't wrackiracking up for the employees that they didn't think about in the past. >> not everybody is a small and medium-sized business who watches. i know it because i use paychex. if you could explain to people what happens. the government comes and if they think you're doing it yourself, they're suspicious. if you have an outside company,
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they're likely to think you're doing it right. >> this is our 45th year in business, and we've been in time and attendance for over five years. we have tens of thousands of clients on time and attendance. so they're going to know that, hey, i'm expecting that the products and the software and the technology that we're using to track time and report time and pay the right wage for that overtime is going to be correct. if you don't have anyone, they're probably a little more likely to go in and do some compliance audits or, you know, possibly enforce some penalties on you. >> last question. any areas of the country surprisingly stronger? i know that you've got -- we've seen state of washington be good. i know we've seen some of the midwest not be so good. where are we right now? >> yeah, right now the east -- it's a tale of two coasts. the east coast has been coming on stronger, particularly the southeast. i think home building is back up. prices are coming back up on some of the more expensive homes, so you're seeing construction build up. the west coast kind of saw their growth early, jim, and so that's coming down a little bit and
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flattening out some. and the middle of the country, you know, still in the more negative range because of energy jobs and fracking and so forth, and manufacturing, you know, still not strong of course because of the strong dollar. so we're hoping things will -- you know, it's been positive, growth and jobs, but slower. and we'll have to hope that the election doesn't have much of an impact on that. hopefully it will pick up. >> well, that's my thinking too. the president and ceo of paychex, always good to see you, sir. thank you so much. "mad money" is back after the break.
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>> announcer: lightning round is sponsored by td ameritrade. >> it is time! it's time for the lightning round! you'll hear this sound -- [ buzzer ] -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning round on cramer's "mad money." i'm going to start with bill in california, bill. >> caller: booyah from marina del rey, california, jim. >> so beautiful. what's up? >> caller: you always say to look for value in today's market, and i think i found an undervalued stock in aar corporation. >> i like the aircraft service business, always have. you're absolutely right. our viewers are very smart.
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paul in florida, paul. >> caller: hey, jim. south florida booyah to you. >> beautiful. what's happening? >> caller: okay. i'm talking about aerospace. i did a lot of research. >> i do like it. it did have a couple of bad quarters and it did try to at one point sell itself. i do like it but let's be a little bit careful of aerospace in general because we know that boeing's numbers were a little squishy last time around. let a go to susie in kansas, susie. >> caller: hi, jim. this is susie in kansas. >> how are you? >> caller: i'm fine. i was in your special class on june 10th of 2015, and you recommended biotherapeutics, atra, atara -- >> good spec. i reiterate good spec. these are working right now. they are working. let's go to dwayne in tennessee, dwayne. >> caller: booyah, jim. >> booyah. >> caller: how about them
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eagles? >> yeah, go eagles. >> sun coke energy. >> that's met lurge cal coal. this group is red hot. i think if you like this group, you're going to like tech resources more. thank you to mr. bishop from delivering alpha. i'm taging one more. let's go to don in hor. don. >> caller: cramer, this is don from ohio. big buckeye booyah to you. >> what's going on? >> caller: i like your opinion on lieu men item holdings, lite. >> this is a red hot stock, and i've got to tell you, it's a telecommunications play that i like, but i like cisco more because i am far more conservative and don't want to risk a stock that sells at a gigantic multiple, although next year could be very good earnings. that, ladies and gentlemen, is the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade. so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right?
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oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
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some of the smaller biotech stocks have come roaring back from their lows over this year although most of these names are still off their 2015 hiez. take radius health, a biotech company focused on treating osteoporosis and other endocrine mediated disorders. this thing is up more than 130% from its february lows though it's still down 5% year-to-date. now, radius drug is a treatment for osteoporosis in post-men pausele women is just waiting on
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the fda to make a decision. we'll know whether that gets approved by march 30 of next year. the company just published some positive phase three clinical trial data showing it did a terrific job increasing bone density and preventing fractures. at the same time, the company had some fromissing results with a transdermle patch version. they also have an early stage treatment for a certain type of breast cancer that's still in phase one. it's been mostly marking time, trading sideways over the past six weeks. you have to wonder has it run out of steam or is this a pause that refreshes before another move higher? the company had its annual investor day today, so let's take a look at bob worth. he's the president of radius health. welcome back to "mad money." >> thank you, jim. great to be here. >> when i was reviewing the notes, a lot of people were excited. two different things they're excited about. one is we got to talk about the
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breast cancer, and how those tests are going, but the patch seems like a real breakthrough versus what's out there now. let's talk patch. let's talk price of patch. let's talk what it means. >> well, what patch means is today, jim, the market leading product from eli lilly, forteo is a daily subcutaneous product. we developed a subcutaneous application because patch has been difficult for people to get right. what was super exciting was the new data where we've shown that a short wear time patch that would be put on, we estimate five minutes once a day, could be a potential replacement for what would be considered for a typical sub cue. now, these are microneedles, so they only penetrate the top layer of the skin, not even deep enough to feel. >> so if i'm -- my doctor is using the lilly product, what's the different? how does that work versus this? >> well, that's a pen that you use for a period of time and a daily subcutaneous injection, but it's a very small volume. >> okay.
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so cost? is this much cheaper? >> well, for osteoporosis, the cost of treatment is really a couple of different things. >> okay. >> this year in america, more patients will be hospitalized for a longer period of time with osteoporotic infrastructures that are hospitalized for myocardial infarc. >> this can put people in hospitals more, and once they're in hospitals, fatality right? >> there's mortality associated with fracture, but it's preventing that next fracture. there's a window of an opportunity to come in with anabolics that build bone to reduce the risk of the next fracture. >> because there's so many political issues these days involving drugs, how much can this save the system versus what we have right now? >> one of the things we talked about at the american society of bone and mineral research was what's called number needed to treat. this is the question of how many patients would you have to treat to avoid one fracture? and the numbers that we showed are really remarkably low.
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not too dissimilar. remember, with an hmg co-a, if you treat 100 patients, you avoid a myocardial infarc, we show that our numbers are well lower than 100 to treat to avoid. we think the ratio is the right ratio. >> lilly is a powerful company. lilly has patents. lilly could go to doctors and say we don't want you to use that. what is the system set up so that the income bent -- does the incumbent have a big edge over you? >> it's really down to clinical data for physicians leads to a decision of which drug to choose. >> lilly could have all the marketing power in the world. if the clinical data is better, radius wins? >> well, in the u.s. today, there's a large number of patients who we have that an osteoporotic fracture may not be diagnosed and may not be offered
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treatment. so if you said in our health care system today is there a need to fix what happens for osteoporotic patients, absolutely. and lee yea sons are there to connect patients up. there are some issues around systemic care we want to change. >> all right. last question, some people were very -- you know, the receptors in breast cancer, which is very early on, but it's something we're very excited about what they saw today. if you can give our audience a sense without too much hope because i know it's very far -- >> well, in breast cancer, we have two different molecules. one is very early. it's not yet been tested in humans. so this is an early-stage investigational drug that hits a new pathway for -- >> we have charles river labs on all the times. is it something that might be in rats or just on the bulletin board? >> for round 140, it's something that's currently being tested in rats. but for 1901, we have a phase one trial in advanced metastatic breast cancer.
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we have confirmed clinical responses, and we're reporting that in december this year. the clinical results from that trial. >> then you have to come back when you do that. congratulations on this little patch that obviously can save the system a lot and maybe save some lives more importantly. thank you so much. that's bob ward, president and ceo of radius health. always has some good stuff. this seems like very special technology. stick with cramer.
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have you guys been watching the stock of caterpillar? this thing has been on fire. it is going up, going up, going up. it's at 85. that's the breakout level according to bruce camish from real money.com, and it's become mining is coming back in asia retail sales numbers for cat are looking good. i like it. i like to say there's always a bull market somewhere. i promise to try and find it just for you right here on "mad money." i'm jim cramer, and i will see you tomorrow!
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letonight on "the profit"...s. we head back to some of the business i've partnered with over the past year. -carolyn? -carolyn: i'm carolyn. -nice to meet you. -lemonis: when i make a deal, i come in with a plan and a check. man: thank you, marcus. woman: i was gonna work you a little bit more. lemonis: [ chuckles ] but what happens after the cameras shut down... michael: i've let it slide for three freakin' years! lemonis: ...may surprise you. one struggling novelty sporting good company has been totally transformed. wow. look at this place. but the owner is still making the same sort of short-sighted decisions that nearly brought them to the brink. i'm pissed that you bought the printer. i'm not gonna lie. if you were me, would you stop putting money in this business? at unique spa in long island,

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