>> time for the final trade. >> ten great years. google. >> pulte homes buy. >> retail stocks have not body. >> thanks for watching. see us tomorrow at 5:00 5:00 for more "fast." "mad money" starts right now. 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 but also to educate you. so call me at 1-800-743-cnbc or tweet me @jimcramer. we call the setup as in how are stocks set up going into events? today was all about the setup,

and i'm not as crazy about it as i'd like to be. it's a major reason why the dow still continues to elude 20,000 again. the average ended up dipping 76 points. s&p declined 0.35% even as the nasdaq advanced to a new all-time high, up 0.19%. exhibit a in the great expectations game, the banks. the bank stocks have been the leader of this rally. the banks are practically the be all and end all of this rally, led by goldman sachs and jpmorgan. they've got a phrase on aircraft carriers when navy pie lots are about to land. they say coming in hot. these two are the essence of coming in hot, maybe too hot. bank of america is in the same boat. it's fallen from $17 to $22 since the election. only wells fargo has lagged. surely it's jumped nearly ten bucks when trump scored his

upset victory. the issue with these stocks, so violate of the next leg of the rally is they need interests rates to go higher if they're going to keep rising, and interest rates seem do have peaked for the moment. sure, many governors are talking about the need to raise rates. we now that four rate hikes can produce $3 billion in extra profits for jpmorgan because it could make so much more money off your deposits. bank of america, same. we also know that deregulation, something that trump has talked about endlessly, will truly benefit these stocks. regardless of how you feel about dodd/frank, the fact is that banks haven't been able to lend or use their own capital as aggressively as sthad like and that's hurt earnings. but the more the mainstream media talks about the resistance from the senate, including republicans, the more worried we get that maybe the deregulation force of the agenda could be hamstrung. so the stocks are coming in hot with jpmorgan and wells fargo and bank of america all reporting friday, goldman reporting next week.

yet the backdrop is less than optimal. i don't like that setup, and i fear too great expectations. it would be better if the stocks were so sell off ahead of their quarters given the more negative news and interest rate background, but we don't have that, at least not yet. and there are only three short sessions before we see the results. now, we discussed this very issue in the halftime report with scott wapner today, and none of us around the table thought it was worth it to sell the banks because we liked them longer term. sell, buy, sell, buy, that's too hard. however, without a pullback, these stocks are vulnerable. maybe that's why a high-profile upgrade of the banks from wells fargo today had no impact. bank of america, their top pick, actually went lower on the news. i think that's coming in too hot. second problem with the setup, health care. we've seen a pronounced bounce in this group ever since the election as the market seems to have gotten over worries that president-elect trump might tweet about extortion at drug prices, but we've got that

jpmorgan health care conference going on. i think the whole fair is a little more muted because of worries about pricing. sure, the industry did get a boost today from te kay da's $5 billion takeover bid for airiad pharma, a 75 pr premierious, something important because airiad makes orphan drugs for obscure cancers. but pharma earnings are coming up too, and here my concern is the incredibly strong dollar. these companies have gigantic exposure to overseas currencies, all of which are weaker, all versus the dollar. and their numbers will have to come down across the board based on the stronger greenback. sure, the president-elect has offered the potential for lower corporate tax rates and a better rate of repatriation of foreign assets but those initiatives seem more pushed out than they were given the resistance we keep hearing about in washington to trump's wishes. these stocks are not set up for a trump tweet and a derailed agenda. we need these stocks to come in

some before we get the results from the companies. then there's those pesky oils. crude got crushed today, losing 2 bucks in a heart beat. those are two hard fauought buc. there doesn't seem a lot of room for the oil stocks to go higher. if anything, we have to expect them to move lower. with chevron and exxon key to the recent rally, how can we count on them to do the necessary heavy lifting? finally there's tech. out of nowhere, out of nowhere, we keep seeing gains in some of what i call the old new favorites, like alphabet and facebook and, most important, apple, which just got a high profile anointment from morgan stanley, calling it a top pick because of the coming iphone 8 as well as the possibility of repatriation relief. remember, apple has approximately $40 per share in cash, $119 stock here. so that's all kept overseas. so there's a real reason to stay long in this one beyond my endless admonitions to own it if not trade it, something very out of sync with the trade-happy

analyst who's cover it. but here again i gulped when i heard the call. today is the tenth anniversary of the iphone, and it's been a huge hit. however, we don't want to get too excited about the iphone given its saturation and a potential dropoff in sales. we especially don't want to embrace a term used today that always causes me to blanch. a call for an iphone 8 supercycle. forget the fact that the iphone 7 only came out a few months ago. we've learned the hard way that anytime some analysts call for a supercycle, we're usually approaching a top, like with coal and fracking sand, the last two trends to be cursed with supercycle hype. ten years in, and iphone's super cycle almost feels like a jinx to me, but it did cause apple stock to break out of its rut. i much prefer down beat talk that keeps expectations low although every time i hear this next iphone might have wireless charging, i start regretting that my wife gave me the iphone

7 for the holidays. that said, all is not lost. we got two huge down grades today from goldman sachs, which took both coca-cola and proctor gamble to outright sales. if you're an individual investor, you may not want to take action on either of these components. go however, i think coke and procter have things going for them that aren't be considered. these are world class companies with solid yields that might come down a few percent from here. if you take profits now, you might not get a chance to buy them back lower. i can't remember flipping either coke or procter. they're too high quality with fabulous long-term track records even as coca-cola stumbled of late and procter is higher than i want it to be. nevertheless, these down grades make me happy because we need more negativity about stocks in general after the run. we need more sell ratings. we need more down grades. now, that may sound counterintuitive, but the truth is pessimism is the important fuel for any big rally. when everyone is bullish, that

means there's no one left to buy. so we need more negativity if we're going to sustain this move and that's capital what gold man gave us. we don't want stocks to come in hot as we head into earnings season. we want things to cool down. there's too much heat right now. that's why i'm hoping to get some more down days this week just in case the earnings aren't important as they need to be to maintain this historic bull run. let's go to anthony in california, please, anthony. >> caller: booyah, jim. anthony from hemet, california. >> thank you for calling, anthony. how can i help? >> caller: yes, i have two tickers for you. first one is general dynamics, gd. where is the company heading in the next 60 to six months in comparison with textron, txt is the ticker. i believe this is going to become a high-quality stock shortly with their acquisitions into military equipment and the successful flight of the

scorpion jet fighter. >> general dynamics is more of a pure play on defense than textron, yet they both have the same priced earnings multiples. to me, that means the nod goes to g.d., a very good company. austin in indiana, austin. >> caller: mr. cramer, thank you for taking my call. >> of course. >> caller: your work ethic is an inspiration. >> thank you so much. >> caller: my question today is about red hat. in specific, comparison to the other company that james whitehurst said is their only true competitor, vmware, generally it's trading at a cheaper multiple and has a cheaper book -- or equity to -- market equity to book value. >> true. >> caller: i'm looking for your long term opinion on those. should i be looking at the fundamentals? >> i do have to tell you i am more partial to red hat. why? because i believe that red hat, once it had the bad quarter, that takes a lot of the risk out

of the stock. i think that mr. whitehurst tells a very, very good story and that that was just a one-off decline. and i think it is still in good shape. let's take another. let's go to susan in california, please. susan. >> caller: hey, jim. been watching you for ten years now. >> it you so much. >> caller: i'm an owner of visa and massacre tard. looking at very sa struggling around. >> charlie scharf has stepped down, and i think that he was incredibly good. mastercard, there you've got a company that is also equally well run. i have to feel that right now mastercard gets the edge for me because of the change in leadership at visa. so i prefer you to own only one, and that might be, yes, ma. it may be counterintuitive, but it's true. pes miz many can be profitable, at least in the long run. we don't want to come into

earnings season with expectations that are too high. so more down days could be a positive. on "mad money" tonight, to quote lady gaga, these stocks are the edge of glory. with the dow 20,000 in sight, i'm revealing the dozen plays on the dow that would push it over the top. then pets aren't just for cuddling. man's best friend can help warm your wallet too. i'm giving my take on mars' decision to expand into pet kwar with that remarkable purchase of vca and what it means going forward. and it's a company that helps make building smarter, connecting everything from air-conditioning and the light bulbs to the internet. but how can you profit off the technology? i'm talking to ceo of johnson controls to find out if it's worth owning in this environment. so stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a

call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. trnd lgeesocs anan whit's carogv

ueinevyd ♪ won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company.

with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy, you qualify for a multi-policy discount, saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. anything with a screen is a tv. stream 130 live channels. plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today.

we need to stop wondering if there's room for the dow to hit 20,000 and start asking ourselves just how conceivable is it for the dow to keep running after it hits 20,000? isn't that what we care about? we don't want it to get to an absurd level. i spent the weekend poring over this index. i think it's possible. in fact, when you look at how far stocks would need to rally to get back to their all time highs, you'll find many of these dow names have been much higher and much higher in less fortuitous circumstances. there are 12 stocks that would need to go a long way before taking out their fairly recent highs. i find that encouraging. let's start with walmart, which needs to climb 32% to get back to where it was just two years ago. frankly this one might be a tall order because in that intervening period, amazon has come on so strong that it might be very difficult for walmart to deliver the kind of numbers that would allow it to return to the $90 level where it traded. in short, i don't expect too

much help from walmart for the dow 20,000 cause. next up, though, this one's key. american express. american express would need to advance 27% to get back to its 2014 highs, and i think that's easy. i think it's easy because all that would take is multiple expansion now that the financials have come back into favor. not only have credit losses come down big, but its credit card brethren have had significant rallies. i think american express is fair fairly cheap, and i'd be a buyer here. third is ibm, which would have to amount a 29% advance to get back to its $216 high that it reached in 2013. in truth, ibm should never have been as high as $216. its earnings were inflightated buybacks. ibm is trying to get to a place where its business is defined by its cogny dance platform.

it has too much legacy business that's been holding it back. in the end, i don't see ibm getting the 15 and chiprice to earnings multiple that would be required to reach those lofty levels. four we've got nike. the company has got a lot of people buzzing about a trough earnings level after that last quarter. it seems to have stabilized in the low 50s despite the discouraging department store results. but nike would have to see its stock advance 28% to reach its old highs even as we keep hearing that it might get hurt by corporate tax reform because it imports so much merchandise from overseas. however, if trump can simply lower the corporate tax rate on nike, it could help get the dow higher. that said, i'm not counting on it to close the gap from 53 to 68, but i think it's good for the cause. fifth, caterpillar. it's already told us it's not doing all that well. that's a negative. but it's also worth recalling

this stock was trading at $93 when it pre-announced that things weren't so good. now, cat's a strange animal. it's the company most easily sacrificed if trump truly wants to start playing hardball with the chinese. but it would also be a huge beneficiary of the kind of gigantic domestic infrastructure program that trump favors. more important, if the global economy is improving as seems to be the case, then it might not be a stretch for caterpillar to rebound to just under 117, where it was in 2012, although that was at the height of the commodity boom that matters so much for caterpillar's business. my view? i think cat's down side is well known, but it's upside isn't visible yet. i bet it can creep toward that old level with some positive commodity data and big cost cuts that we'll hear more about more when the company reports on the 26th. next up, both exxon mobil and chevron need to tack on about 17% to get back to their old highs. frankly, i think that's asking too much of these stocks. as it s they've already had a

remarkable comeback from their lows a little less than a year ago. you can't look to either of these two big integrated oils to get us to dow 20,000. if anything, the longer oil stays here the less likely chevron and exxon can remain where they are without risk of pull backs, especially given that crude got crushed for two bucks today, which is sending all the oil stocks lower. number 8, can coca-cola mount a sustainable run. its 3.4% yield isn't all that appealing when you consider that ten-year treasuries give you almost 2.5%. there's a new ceo coming. i like that because there's some changes in the wind. i think the restructuriing the outgoing ceo has designed will mean coca-cola has no problem meeting the numbers. -- unless this market loses its animal spirits. no wonder goldman downgraded it from hold to sell. citing nasty headwinds.

nine, oh here's one that can do it. apple. apple is so logical to gallop higher here. it's got to advance a little more than 13%, and it's oh so close to breaking out as it is now. we keep hearing that there are already cut baques in iphone 7 production, that supply chain chatter, and only the super bowls think that's because the company is trying to set up a huge i phone 8 scandal. i'm concerned that apple hasn't augmented its service revenue stream and can't really understand why the company doesn't use its cash hoard to make some acquisitions that bolster that important business. still, apple would be a huge beneficiary of repatriation with about $40 per share of overseas cash and that would spur tons of debate about bigger buy backs and dividends. at 13 times this year's earnings, let's say the stock is a bargain. it's been true for a year now and really hasn't helped that much. own this stock, i say, which hit a 52 week high today. please don't trade it. number ten, that last quarter

from cisco was a real downer. i think cisco has to find some way to make it clear that their legacy business isn't hurting them as they transition to more of a cloud-based system. but let's be candid. you buy cisco, which we own for our charitable trust, because it yields a 3.5%. i like that. and has $60 billion in cash overseas that can be repatriated. still, i don't think it can rally even 6% back to its recent high based on either of those two factors. it will take a good quarter first, and that company does report in mid-february. it's ironic but the last two stocks that are more than 10% away from their highs are frankly giving her all she's got. disney and united technologies. they need to rally 13% and 12% respectively to get back to their all time highs. the whole narrative of disney has changed to the point where it seems like a huge mistake to sell given the ceo has created tremendous optionality with espn despite the decline in subscriptions. i think it's what we would call an upstock because of terrific attendance and movies not to

mention a corporate tax cut. i can't believe how disney was able to run from 93 to 108 base collide on the strength of iger saying he feels better about espn on that last conference call. but that's exactly what happened. united technologies, it could have a tough time gaining traction from here because it's had a magnificent run even though the numbers haven't gone higher. that matters. if anything, the numbers have trickled down. i don't see it climbing to its old high of 124 anytime soon. that's 12% too far. the bottom line, there's a dozen dow stocks that need to advance more than 10% just to get back to their old highs. but only in a few cases do i see that happening. still, the comforting fact is that they've been there before, and that could come into play if we do start to war. one thing's for certain. if these stocks have reached such lofty levels in a worse environment as so many have, then they can do it again now. can i speak to andy in florida, please, andy.

>> caller: jim, happy new year. thanks for taking the call. >> what's up? >> caller: i tried to do my homework with g.e. and i'm using internet and other sources. i'm getting a sharp difference of opinion. on the negative side, it's saying that management is flag, which i don't particularly believe. a slowdown oil, lackluster medical business, and they may have overpaid for the french wake sigs. on the plus side, i'm hearing the chip business is doing well. jet engines are doing well, and of course they have a very good dividend. my question to you is overrule, what's your opinion of g.e., and would you characterize it as a market performer or better or worse than that? >> andy, first of all, i think your analysis is a good one as so many of our viewers know so much about stocks. i would say this. my charitable trust owns g.e. because we like the combination with baker hughes, which is going to be able to make it so that they have optionality of the upside for oil. we do like aerospace very much. we like turbines. i'm not as negative about health care as you are. but overall i think the balance

sheet is so much better, and they can do big buy backs. nelson pelts is in there say going things. we follow anything he's done and he's up a lot on many different positions. i guess my bottom line is g.e. is an inexpensive industrial i think is worth owning. but i sense your budding dissatisfaction, and i feel that it is long in the tooth to not having advanced. i think a lot of people are feeling, come on, you can do better. so maybe that helps? i'm not sure. peter in pennsylvania, please, peter. >> caller: good evening, jim. big fan of the show. >> thank you so much, peter. good to have you calling in. >> caller: where do you see goldman sachs going from here? >> well, goldman sachs is going to report, and when they do, i think it's going to be a great number. but like i said at the top of the show, it's coming in a little too hot. i would love that if goldman sachs, the stock, would pull back ahead of that quarter. therefore, there wouldn't be such expectations built in.

many stocks in the financials have such high expectations that they may even go down if they beat the numbers. that's something i'm uncertain about. i think that's a negative term but not so pejorative that you get exactly what i'm talking about. i've give you the dow breakdown. it's comforting to know that these stocks have been higher in tougher times. i don't see any easy path back for many of the stocks. much more "mad money" ahead. whether it's caring for your pet or protecting a farm full of livestock, there's serious cash being spent in the animal kingdom. with news that mars is acquiring, woof, i'll tell you if the theme can still make you money. then my exclusive with johnson controls. can this power player get your portfolio buzzing in this environment? i've got the ceo. and the conversation doesn't end there. i'm breaking down the company's recent spinoff of addiant that so many of you care about. with trump's tweets driving uncertainty in the auto industry, how could the leader in automotive seating and

interiors perform? i suggest you stick with cramer. anpimp wilen™,

worr plinyocaus get t fullue ba g ec e bertalolicy licycon yo erag bebean™ rt.

you know i've been pounding the table on the humanization of pets as one of the greatest secular growth theme out there that i almost took it for granted that everyone knew about this story. what i didn't expect, though, was that mars, the privately held food giant, which also happens to be one of the most sophisticated companies in the pet industry, would pay such a gigantic premium for woof today, woof being the symbol for vca. vca's shareholders have be thrilled with the gain they walked into this morning as mars will pair this business with its own banfield pet hospital chain.

despite being viewed as a candy company, mars isn't new to this space. besides health care, it offers two of the best premiere pet foods in the business. why is this deal happening? a couple reasons. first, spending on companion animals has been growing faster than almost any other consumer outlay as pets have moved from the basement to the bedroom and finally the bed. american's spending on pets has exploded in the 21st century, more than doubling since 2001 according to the american pet products association. u.s. households own 77.8 million dogs and 85.8 million cats. those are huge numbers. second, pet care is often a cash business, so no worries about reimbursement from the government like in human health care. third, there aren't that many large scale companies with big exposure to the sector. i love equity scarcity. it bodes well for the other companies in the group. and who are the other companies? red star with idexx labs, the

leader in pet health care innovation. ceo jonathan arz, a frequent guest of "mad money," first put the humanization of pets thesis in front of us. his company has stellar groith. idexx is a tech company that comes up with new products for vets, with the latest being a urine sample diagnostic machine that arz is crowing back. in fact, he calls it liquid gold. we like zoetis, the pfizer spinoff that's all about livestock and pet health care. then there's henry shied, another frequent guest. these are all guests of our show because we love the thesis. they've primariily dent al supply. now i do have less enthusiasm for the pet food companies in part because of amazon, which has crushed the margins for so many of these companies. i'm luke warm on blue buffalo. used to be much more aggressive on it even as my dogs go nuts for the stuff. and fresh pet, which is that

high end refrigerated pet food that's confused with human meats we keep in the fridge. that's another reason why this mars bid for vca makes sense. anything that makes your company le less didn't -- plus if your dog accidentally eats a bag of m&ms, the company's marquee product, you got to take it to the vet. mars maybe gets you coming and going. of course i don't want any dog to do that. i know it's a terrible thing. i don't think the other companies in the space are takeover targets although i do think idexx can work its way higher over time. we'll miss vca as part of the cohort, but it reminds us how much more idexx is worth. why don't we go to patrick in arizona, patrick. >> caller: hi, jim. i really like hanes products, but they haven't seen to have recovered much from last year's problems. should i be dumping their stock or holding it? >> boy, i'll tell you, patrick,

i wrote a book called "real money" a long time ago, and i said accounting irregularities equals sell even if situations i like. even though the audit committee says not to worry, i must worry because i've had too many situations even though i like irwin simon, the product portfolio, where it turned out not to be the end. you know what, maybe it goes higher, but it's going to have to go hiezer without me. all right. every dog has its day, and today belonged to woof. so are there more takeovers on the horizon in fido's space? bug and everest don't think so, but idexx could head much higher. more "mad money" ahead including my exclusive with johnson controls internet. is the ceo worried about trump's tough talk on trade? i've got the exclusive. then i'm taking a closer look at the company's spinoff of adient. that stock is up more than 20% since it first began trading in november. i'll tell you if can continue to run. and all your calls rapid fire in

tonight's edition, beginning of the week, the lightning round. so stick with cramer.

it's been a busy time for johnson controls, jci, the diversified industrial company that operates in a host of different end markets. heating and air-conditioning systems to power management systems and security company. the company also makes batteries for cars and trucks, including both old-fashioned lead acid batteries as well as lithium batteries. you know i've been a big fan of the stock for a long time, but the johnson controls of today is a very different company from the johnson controls of even a year ago. in the last two months there have been two major developments. in september, the company closed on its massive merger with the remainder of tyco. plus this was a tax inversion

deal that lets johnson controls change its domicile to ireland. second in november the company spun off its automotive seating business. more on that later. suffice it to say i think this was a smart move i've been pushing for a long time. while the stock hasn't done much since the election, it's worth remembering that johnson controls is still up roughly 50% since we learned about the tyco deal last year. so could the stock be ready to resume its march higher? let's check in with alex molinaroli. he's the chairman and ceo of johnson controls inc., to get a better sense of how his company is doing and where it's heading. mr. molinaroli, welcome back to "mad money." >> thank you. >> there's been so much transformation here, and there's been so many good businesses that you really have a chance to dominate, building controls, power solutions, fire security. which are the most exciting for you looking forward to 2017? >> well, first i tell you it's just good to not be introduced as an automotive company. >> yes. >> we've been at this for a while, and we're finally there.

it's a great -- adient is a great automotive company, but it's somebody else's company now. when i look at our future and you look at where we are with building controls, fire alarms, security systems, you can't get anything but excited about that. you know, you just look at the end markets and what's going to happen, it's pretty exciting. >> i guess everybody, we know that the millennials always want to have less energy use. that's you. at the same time, we're never going to roll backfire and security regulations. >> that's right. well, part of it is a regulated business. then you think about security. i mean you can't -- it's not necessarily a good thing, but the world that we live in has become more and more important. then the interconnecting of all these devices and all these things that are going to happen, that are happening with your phone and happening in your home and happening in your car, it's going to happen in commercial buildings also. >> we've seen amazon develop devices and we've seen google develop devices. highw how far along are we in terms of commercial? >> i think that it becomes very intuitive when you think about your home. it's pretty easy to figure out

what you would do. when you start thinking about commercial buildings and how they're applied, you've got to get intimate with your customer. your customer will tell you here's how i'm going to operate my facility, my business. how does technology play a role in that? that's what we're learning. >> let's talk about batteries. our viewers are so interested in electric batteries, so interested in the future. is it really coming along fast enough? is it something that will move the needle for jci? >> you know, that's the question everyone has, and they've been at it last for the last five years, last ten years. there's going to be a place for electric vehicles. it's going to happen over some period of time. but when you look at where the reality is around the technology and where the reality is around the current car park, it's going to be a ways off. >> i'm glad you said that because a lot of people -- i don't want people owning this stock because of that. i want them opening it because of hvac and because of security because these are the issues that dominate now. you've got -- we're all focused on the new administration, and

you've got a lot of overseas business. worried about trade wars versus the compensation of perhaps being able to buy and bring back income? >> i'm not worried about that. you know, as i look at what's happening in the world and i think about our business, most of the markets that we serve, we actually manufacture and deliver in the markets. so we're not moving products from country to country as much as you'd think. we actually manufacture and serve the customers where they are. >> let he atalk about innovation. i regard you as a technology company, and both these companies have a long history of technology. what are some things you've got in the pipeline that you think maybe not move the needle but are exciting for our viewers? >> if you just look at -- think about the retail experience. we all know a bunch of companies in the retail space actually came with the tyco merger. when you go in and buy a sweater, in the past there's been security tags on these sweaters. >> right. >> well, that's a piece of technology that does nothing more than keep track and make

sure that you walk out with what you purchase. but now we've been able to repurpose that technology and look at not only what it is that you have but the inventory, what's selling, being able to provide information, data back to the customer so that they can move the products that they need to move, help them with their supply chain. it's a whole different business because of the data that we can extract from a technology that was just put in place just to protect the -- >> this sounds like a store of the future where unfortunately maybe fewer people are needed, but fortunately you'll be able to do a lot more supply chain planning. >> for sure if you think about the efficiency gain and what el sells and doesn't sell. >> i was concerned about the doubt. you've got a lot of floating debt. can we fix that now before rates get out of control? >> oh, for sure. i'm not too concerned about that. if you think about where our debt is and the cash flows that we have as an organization, we're going to be in good shape. >> very good. i think you're core to what people might want to own in this

environment where we have a faster growth worldwide. >> i appreciate it. >> very good. that's alex molinaroli. he's the chairman and ceo of johnson controls, inc. international. they've done a lot of thinks that we've wanted and i think it's all working out. "mad money" is back after the break.

>> announcer: lightning round is sponsored by td ameritrade. it is time! it is time for the lightning round on cramer's "mad money." that's where i take your calls rapid fire. you tell me the name of the stock. i tell you to buy, buy, buy or sell, sell, sell. we'll play 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 ken in ohio, ken. >> caller: baba ba booyah, jim. >> i like that. what's up? >> caller: what do you think about eqt midstream. >> i like it but i prefer magellan midstream. my charitable trust owns that one. i feel more confident about the earnings power. let's go to bret in south carolina, bret. >> caller: booyah, jim. >> booyah. >> caller: i recently purchased some shares of hormel, and i just got to know what you think about it. >> look, i like hormel long term because of changes that they're making to be more natural and organic. but remember in a trump rally --

>> not a trump stock. >> is hormel. let's go to jeff in ohio, jeff. >> caller: booyah, mr. cramer. >> booyah. >> caller: hey, i was wondering about bas, basic energy services. >> i am a guy who believes that you have to buy the highest quality in the business even if it's more expensive. so i'm going to tell you that my charitable trust is buying schlumberger because i am more concerned than most about the idea that oil doesn't go up that much from here. marcus in tennessee, marcus. >> caller: hey, how are you, jim? >> i am good. how about you? >> caller: i'm all right. i was calling concerning ca morris company. it's a spinoff from dupont, and it tanked when it came in around 20, 22, but around $3, it started gaining momentum. i was wondering what's your opinion. >> i think this has made a remarkable comeback from a lot of negativity. at this point, i wouldn't mind taking some off the table. i think it's had too big a run. how about bob in california, bob. >> caller: professor! >> what's up?

>> caller: buy, sell, or hold? >> on which one? i'm sorry. >> caller: a onnis. >> i think there's been a lot of good news here including a big stake taken and yet the stock hasn't been able to do much. i say that says -- >> don't buy. >> until we get to a lower price. moshe in new york, moshe. >> caller: calling from new york city. how are you doing? >> i'm good. how about you, sir? >> caller: i'm good. i've been tracking -- my question is with regards to gw pharmaceuticals. >> right. >> caller: i've been tracking the company for years. it seems like one of the few legal ways to invest in the potential marijuana gold rush. they're currentingly developing two new medicines. >> absolutely correct. >> caller: how much more room for growth do you see in the trump economy. >> i think the trustock is bein stalled. what is conservative about gw pharma is all these states that are making marijuana legal.

this is a good company, but i do -- you know, as one state after another makes it legal, the value of the company will go down. i still like it, but i can't be as enthusiastic given all these different electoral mandates. let's go to kevin in california, kevin. >> caller: booyah to you, jim. >> nice. what's up? >> caller: i was hunting for some dividend stocks. i want to know if i should pull the trigger on stag industrial. >> we like digital realty, and we like federal realty. federal realty doesn't have that big a yield. i can see getting behind yours, though. it's not an expensive stock, not a lot of risk. and that, ladies and gentlemen, is the conclusion of the lightning round! [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. whern giidea ede ket prals

knra binbere t fe.? whern giidea ede p tohenoed o otot kt mee.e.ere t fe.? whern giidea ede jt a

go a,nd es hybrfths rs of pctn.. whern giidea ede and they're absolutely right. they say that it's hot... when really, it's scorching. and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale.

whie just heard from alex molinaroli, the ceo of johnson controls, merging with tyco and spinning off its automotive seating business which he said he's so glad he's not part of anymore. now i do want to talk about that spinoff, adient, which began trading as an independent company a little more than two months ago. it's a stock many of you have asked about, particularly on the lightning round. since that breakup, adient's stock has rocketed up nearly 20%. that's a terrific movie in this stunning bull market. so i think it's worth asking

what's driving this rocketship higher and could it have more room to run? first you should know it's not surprising this spinoff has been so well received. i've been calling for johnson controls to break itself up for years. i even wrote about it three years ago saying that this auto seating business really didn't belong under the same roof as the rest of the company. even though this was always a high-quality division with tremendous market share, it had a slower growth rate than the rest. there you go. which meant that it could never -- hold it. i've got to pick that up. that's important to me. it meant that it could never really get enough capital to really kick itself into high gear. at least not while it still had to compete with the rest of johnson controls. but management recognized this problem, which is why they announced the spinoff 18 months ago, and it finally went into effect on november 1st. so now that adient is standing on its own two feet, what does this business really look like? i wirk thsh they didn't have th hard names. how about calling it seating company? it's the world's largest

supplier of automotive seating with 34% market share. they do business with all the major automakers. they've got nice diversification. in fact, they dominate every single category within seating. while driverless cars might be on the horizon, nobody would think of building a car without seats. back in september, adient held an investor day where the company laid out its strategy. management believes they can generation substantial margin expansion and also pay a juicy dividend in line with other auto parts suppliers. one of the big positives has gotten a bit murky given trump's attitude. you see, adient gets 32% of its sales from china. that's the fastest growing automotive market in the world. in fact, the company has 44% market share when it comes to chinese car seats. even better, management believes they can take a larger piece of the pie in asia thanks to joint

ventures with chinese, japanese, and korean car companies. by 2020, adient believes it can get to 55% market share in china. that would be pretty huge. how can they do it? even though the company already has tremendous exposure to the people's republic, most of adient's business is done in china's largest so-called tier one cities. but as the chinese population continues its big rural to urban migration that we often talk about, more automakers are setting up shop inland in chinese's tier three and four cities. at the same time as the chinese become wealthier, they're buying more fancy high-end cars that require more complicated seating structures, another business where adient is head and shoulders above its peers. of course the problem with this china thesis is that if we escalate our trade war with the people's republic, adient is the kind of company that could get hammered. as long as things stay somewhat friendly, i think you've got a massive opportunity for them. now that adient is an independent company, it can

afford to focus more aggressively on expanding their business. their consolidated bookings that are already expanded from $2.24 billion last year, and this year continue to ramp now that the breakup has gone into effect. beyond that, adient sees a ton of opportunities to cut costs. that is so often the case with these spinoffs is what they really start making the money on is getting rid of the overhead. for example, its sales, general, and administrative expenses take a much larger percentage of the revenue versus the company's next closest competitor, which is leer. that's a lot of fat that can be trimmed to produce higher earnings. perhaps the most attractive thing about adient has nothing whatsoever to do with the company, everything to do with its stock. despite the potential for double-digit earnings growth, this darn thing trades at just six times this year's earnings estimates. that's one-third of the average stock in absolute terms, but it's a heck of a lot cheaper than leer, the other big

publicly traded maker of automotive seating. so even if adient rallied 50%, five-oh, from here, it would still be selling at only a slight discount to its competitor, leer, despite 9 fact that it's got faster long term growth rates. i got to tell you stocks don't trade this cheap unless investors expect the earnings are going to shrink year-over-year. even analysts with the lowest estimates still expect adient to grow. i know it's already rallied 19% since the spinoff, but this is a stock that clearly still has plenty of room to play catchup before it's close to being fully valued. i like that. granted there are some real risks here. adient gets hurt by the strong dollar because it does the bulk of its business overseas, uniquely exposed to china which could be bad if president trump decides to put his foot down on chinese exports, and the whole market could be up ended if nafta was torn up. nevertheless, i got to tell you i feel the negatives are baked

in while the potential positives still aren't reflected in the share price. let me give you the bottom line. we've waited a long time for johnson controls to finally spin off this automotive interiors division, and while adient was never the part of the company i was particularly excited about, the fact is they're doing darn well. and as an independent entity, they've got lots of potential to grow the business. this is a classic example of why i love breakups. and even when you consider adient is almost the quintessential -- >> not a trump stock, not a trump stock. >> -- i think adient is too cheap to be ignored. stick with cramer. heffth aregh yoin w olv' yopartwith

anthrtaner p p wt to sey. he yxet?an inrp dhofeutilta g fyoaxesoingo t! o. your ndbeyou arged he yxet?an inrp dho?ow y ca reht at

coming in hot or coming in too hot, that's the question. we've got these bank earnings at the end of the week. i would like these stocks to retreat a little so that we would take some of the fluff out of them. it's my biggest concern right now actually. i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money." i'm jim cramer. see you tomorrow.

tilman: tonight on "billion dollar buyer"... we could throw a $100,000 order at you - every 90 days. - boom. tilman: ...i'm bringin' my buying power to austin, texas, where i'll give two small companies a shot at the big time. a glassblower who may be more artist than businesswoman. when you talk about these two hands - attached to this body-- - but-- but so what? a line of cocktail syrup that might be too costly for my customers. man: what do you want me to charge? i can't make this work in a saltgrass. tilman: if they deliver the goods, i'll take them to new heights. you will see how much money you'll make. but if they come up short, they could stay small forever. i'ma pour this son of a gun out. my name is tilman fertitta,