tv Mad Money CNBC June 22, 2017 6:00pm-7:01pm EDT
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>> typical now, look at the turn in macy's today. i know you were watching it. seven-year low reverse, goes higher letter m, first time in a while. >> i'm melissa lee, thanks so much for watching. see you back tomorrow at 5:00 for more "fast money." meantime, jim cramer starts rig 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 i'm cramer welcome to "mad money. welcome to cramerica i happen to have some friends here with me today my job is not just to entertain you, but to teach you. tweet me @jim cramer at any given time the market can be gripped by fear whether it's fear of political
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crisis, or fear of rate hikes, or fear of inflation, or deflation for that matter. it may seem odd to talk about fear on a day when the average is basically me and erg higher for most of the day. nasdaq edging up that's because the market is in fear of one thing, it lives in fear of amazon specifically the power of amazon over the whole industries. we saw health care stocks rally again today. every stock in the group of the drugs, biotechs, medical devices and especially insurers and hospitals, which makes me think that they rallied because the bill is written. looks like it might be too draconian to pass. there's no universe for the hospitals to make more money under a plan that slashes
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medicaid and causes millions to lose their insurance still, though, i think the undercurrent, or i should say the undertow of amazon is such a dominant threat to so many consumer related sectors, in a consumer-driven economy, that it's sinking whole swaths of stock once again if your company's in the crosshairs of amazon, even if it might only be in the tentative crosshairs, your stock gets taken down does the company have amazon exposure, and how much that's the question analysts are asking on so many conference calls. it's become the major core of the moment will you beat amazon is the verb of the day, how badly will be hurt by amazon's web services or consumer interface the fear is logical. just this evening, bed, bath & beyond reported a miserable quarter. i'm saying it's the proximate
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cause of the misery. something's happening now. small places, no one seems to be noticing that's the characterization seeping in, that amazon, loved by consumers, might end up being viewed as the evil empire. ever since the announcement that the whole foods is letting clothes be tried on without being paid for, there's a queasy feeling that amazon is overstepping its bounds. it's becoming too big, too powerful we all know consumers who chatted about how they aren't sure if they like the new all-powerful amazon. as if it's some sort of government entity. or maybe it's more like skynet, a powerful artificial intelligence system that knows your thoughts and can predict it before you articulate. i'm not buying that backlash amazon has created an irresistible bargain
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i'm sure that when whole foods foods gets consolidated, thelg's make deals too compelling to avoid. free eggs, discounted milk amazon stock is impacted by the gross margin declines. investors have become immune to it they only care about revenue growth >> bye, bye, bye, bye, bye >> consumers may adore amazon, but companies are another story. plenty of businesses are being threatened by competition from the online titan even amazon suppliers get a raw deal because it's got so much bargaining power so who at last, who at last is standing up to amazon. why don't we start with walmart, the giant, the largest grocer in the country. it's not taking amazon sitting down anymore sure, they bought jet.com which
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compete on gs, that's not what i'm not talking about. they don't want suppliers to use amazon's web service system. it wants it to switch to other web services, namely, alphabet you might know it as google. mic microsoft, or maybe ibm. now, oracle, last night's conference, brilliant quarter, told us it will have a better offering than amazon and they can compete with amazon on price no one has really competed on price with amazon. now ellison's doing it then there are the investors who are saying that amazon's power is being overestimated in the marketplace. last night we heard that staples might be taken private by
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sycamore, a very private equity firm long been considered amazon road kill nordstrom is very much pursuing its own private transaction. i think buying that stock here makes sense. it will most likely be sold at a higher price both deals are based on the idea that amazon isn't going to wreck their business perhaps all that selling in the marketplace, including, of course, the bed bath selling tonight, is overdone meanwhile, there are other companies that are taking advantage of amazon. yesterday, nike stock went up because of talk it might partner with amazon. amazon, biggest customer in terms of clothes, is the biggest customer of clothes for pbh. that's right, pbh has amazon as a terrific partner a potential deal for nike is good, it's great for pbh the stock rallied almost 4% today.
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huge disconnect in the market when it comes to amazon fear the biggest winner in the destruction of them all is by far tjx. they mark up for a lower price than amazon can charge and they still make a boatload of money no one cares, though no one cares right now seems to make a new low every day. again, no one cared about home depot showing it beat amazon, and the stock went up. upon further review, let's say ultimately home depot has had a good rally here's the bottom line not everything can be crushed by amazon and the empire is striking back. so am a son better not get too cocky. the force may at last be with its competitors, if it does. let's take some questions. right here >> hi, jim given that interest rates are rising, and there's plenty of
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uncertainty in the price of oil, what do you think of pipeline companies and tall grass in particular >> first, i have to tell you, i love the thesis, but the thesis has not been working tall grass is a very good entity it's got a nice yield. the fact is all those stocks trade together and they've all been going down as if they're just oil companies and trading specifically with the price of oil. so even though you've got the great yield, it's not protecting it that's what i've got most concern about with that group. the yield will not stomp you out. i'm questioning an investment in tall grass right now yes. ma'am? >> hi, jim gina from jersey with the ups and downs in oil, where do you see oil in the next 12 months? particularly royal dutch shell >> i'm not a big fun of royal dutch shell. i know they're trying to trim things here's the problem i think oil is trying to make a stand here at 42 we don't have enough buyers. the reason it's trying to make a stand, is because at 42 a lot of
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people think the u.s. will stop pumping. they sold a lot of oil in the futures market i think it will bounce between 38 and 42. but don't get sucked in. it's not sustainable yes? >> hey, jim, i would like to give a first but yeah to the police department that i work with. >> absolutely. >> thank you i'd like to ask you about my tech systems since they're pretty mobile company, and they're about deposits and capture, do you think they are a takeover target or do you think that -- >> it just went up gigantically. that stock has had a huge move kind of invideo-like move. it sells at 30 times earnings, up 40% this year technology is hot, though. we don't recommend stocks on the basis of stb buying them i think it's too hot it's too hot right now for someone to buy thank you.
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yes, sir >> hi, jim, i'm paul from the jersey shore. >> all right. >> i wanted to ask you a question i own some alibaba, and i wonder what the impact of the deal with china unicom -- >> no, you're in good shape. i think you've got a winner. and i would own it and some other stocks in the group went down but didn't get hit that badly i like alibaba a lot all right. listen up, amazon, hubris can lead to a new. i'll tell you if the competition in the liquor space is heating up looking for something to snack on i'm sitting down with the ceo behind brands like or owes, some of my faves, see if we can
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willing to shell out a fortune for this brand most categories of liquor are pretty much stagnant right now tequila's on fire. with total buying growing at a 7.1% clip just last year tequila volumes more than doubled from 2002 through 2015 and they're still rising dramatically but even more empressive, super premium tequilas, costa amig os, 650% over the same period. j & b whiskey, hennessey, captain morgan, among many others, sweet tequila action it's so incredibly popular, that we can't keep it in stock at a mexican place in brooklyn. clooney founded this company back in 2013 by last year they had sold 120,000 cases. this year expected to grow
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170,000 cases. amazing growth but the idea here is that it will keep the company, it will help the company take share in the super premium category also giving them a perfect platform to grow its tequila business overseas. diageio has distribution channels, this could really take off outside of the western hemisphere the thing that blows me away about this deal is just how much they had to pay to get the hands on his company why don't we do something here let's compare this transaction to the last big tequila deal when constellation brands bought for $30 million for casanobla.
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granted, it was smaller at the time selling about 120,000 cases a year but it's doubled in the first year after the deal, and more. according to constellation if casanabla had been -- i'm not saying they overpaid they're just later to the party than constellation the liquor business is about premiumization they've got a bunch of line extensions that the acquisition won't take long. with what diaogo is paying, it could be three years for it to be added to the company's
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earnings i don't like that. the endorsement of the coolest man in the room never hurts. what i come back to is how smart constellation brands is. that they remain the best liquor company on earth they fought casa noble for next to nothing and the beer brands we know so well corona, pacifica, they could load them up you take this one, you'll take this and it is a premium tequila. get this, we charge $16 for a nice glass of casa noble we charge $14 for casa nebles. i like this stock very much. but for another reason it's a british exporter, which means it will benefit enormously because of the weak pound because of brexit. prime minister theresa may's government balancing on a knife edge
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historically they sold high-end liquor in china. china's government started cracking down on corruption a few years ago. finally they're letting up again. reese just reported great numbers last night another perfect bribe -- another perfect gift if you're trying to do business in the people's republic faster growth, and a faster operator by far. they got in tequila early, they got in wine at the right price purchased high-end whiskey at the right moment all thanks to the perfect leadership of the ceo rob stance crazy to me. constellation remains one of the best companies out there the fastest growing in all the business lines it deserves to trade at a higher
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left than diagio they report their earnings next week at the end of the day i can't help but like them both. alcohol is the only product on earth that you can charge more for your merchandise than you could not too long ago there are no real beer price wars these days anymore like there used to be and premiumization means people pay up for an aging product. here's the bottom line i love them all. i go back and forth, for myself. at bar san miguel. the bottles are right next to each other in the middle of the bar. based on what diagio just paid, i have toinclude the constellation is by far the better buy here. they got casa noble for so much less and their stock made a huge run. it remains nicely undervalued.
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let's take some questions. yes? >> hi, jim raquel from new jersey i have questions about scots miracle grow, being used by marijuana growers. is cmg a buy >> it's interesting, they reported on a quarter that people thought was weaker. the market's a little shaky here down 10% for the year. that is the hydroponic use of one of the divisions of scot's is being benefited greatly by marijuana growing. i think the stock is fine. i want to be careful it's had a big move. because of that, yes >> i'm elliott from tenefly. i love your show. >> thank you. >> last summer on my honeymoon with my wife, we were looking around for some buys so there are 235 mcdonald's in hong kong. i said, i'm going to buy some. it went up, then it west down. now it's at 150 and i don't own
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it anymore 158. what do you think? >> this is one man, he's turned it around. i think 154, it is still a buy buy some here. buy some lower that's the best way to approach it one tequila, two tequila, three tequila, profits constellation great liquor company. if the spirit moves you to buy one, i say stick with constellation. much more "mad money," and my exclusive as more consumers buy food outside grocery stores. oracle is going through a met metamorphos metamorphosis, and it could help you make money i'll tell you what's behind the change it works with marriott, and berkshire hathaway stick with cramer!
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could the stock of the stack food giant that has been in the 40s for the last few years ready to break out from this range you've all chowed down on their wares here nabisco, oreos, cadbury, so many other great ones stock has been trading sideways. they're trying to come up with terrific new growth strategies it's starting to work. costs have come down mightily. i think it's being ignored since the last quarterly report which was quite good there could be consolidation in the industry that might boost things further nestle announced it's putting up the u.s. confectionary business for sale is it finally time for this company stock to take off? let's check in with the chairman
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and ceo of the company, how her company is doing welcome to "mad money. great to see you you have put it together over the last five years. you've cut costs remarkably. top line growth. are people going to start recognizing the breakout of the pack which does not have that kind of growth >> i hope so i think we've delivered about 500 basis points over the last couple of years, double-digit eps growth, and dividends and buybacks we've got a really strong story. the challenge has been the top line growth, has been a little more muted as you said, it's still distinguished -- we've distinguished ourselves relative to the beer companies. >> emerging growth markets are fabulous for you can they grow faster than they are now? >> absolutely. when we formed the company in 2012 and split off from the north american grocery business, that was the thesis, about 40% of our revenue is from the
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emerging markets they were growing at healthy high single-digit, double-digit rates. >> you brought much better return than the s&p. that's really important to point out. one of the things that people might say, wait a second, it's snack foods. how much are people still eating snack foods? are they good for you, or just treats how are you dealing with the healthier consumer >> we love snacks. the reason is, because it's a $1.2 trillion set of categories globally it's growing everywhere. if you look at the demographics of the consumers around the world, you have more women in the work force you have people commuting longer distances to work. so they're not eating traditional meals. they're eating snacks. >> right. >> so we like the margins. the margins -- there's private label penetration much lower in snacks than you would see in other food categories. we feel terrific about our portfolio and we feel it is poised to break out. >> you're doing terrific social
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media, probably one of the most advanced companies recognizing where people are how are you allocating your marketing dollars? >> well, we've got $14 million facebook fans. we're in the top five food brands we have an incredibly loyal following. in today's digital world, that's really important as we think about how do we continue to build the equity of the brand. >> don't challenge kind of thing. >> don't challenge kind of thing. people serve oreos at their wedding. there's a whole site to give you different ideas of what you can do with or owes at your wedding. there's a lot of leverage in these brands and we are taking every action we can to shift our spending from traditional media into digital. there's going to be about 30% of our spending by next year in markets like here in the u.s., about 50%. >> you won back donald trump i love or owes he said, nabisco closes a plant,
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announced in chicago, have you resolved that? does he understand what was going on >> in fairness, i think there was a lot of misstatements in some of those early statements the fact of the matter is, the united states is a major manufacturing and business hub for us. >> good for you. >> we've got 17,000 employees here in the u.s. we absolutely continue to manufacture all of our products here in the u.s. we just happen to have located four lines in mexico we've invested over $500 million in our manufacturing facilities here in the u.s. >> you do something else that i think younger people now follow. and make decisions about where to work and also where to eat. sustainability development goals. talk about your cocoa products. >> obviously cocoa is a very important input ingredient for us we're the largest chocolate manufacturer in the world. and we care a lot about the future of our supply and so we have invested over $400 million in a program we call cocoa life. the intent is to help improve the livelihood of cocoa
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producing farmers. many of these are family's owned businesses many of them are small leasehold farms owned by women the opportunity to help these farmers earn a more attractive livelihood to learn how to use modern state of the art farming methods, all of that is good for them, and it's good for us. >> tens of thousands of people. >> yes, it is. >> fantastic i want to ask you, you know nestle's put this up, you can't necessarily say yes we're going to bid for it. butterfingers, baby ruth, these are old brands you've been able to revitalize old brands do you kick the tires on them? >> we look at everything out there. i feel very comfortable with our portfolio as it exists today we have a very robust set of growth strategies designed to take these iconic brands and bring them to the next level. >> it seems clear you've got power brands would it pay to say maybe trim the ones that aren't and put more money toward power brands
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>> we want our power brands, 70% of our revenue, and they're the brands you know best they typically have higher margins, growing at twice the rate of the rest of the portfolio. about there are good brands in about a third there, like nila wafers, and nutter butters there's a portion of those brands, like cheese nips, for example, here in the u.s., that just provide scale for us in our trucks and on the shelf. there are some that actually are candidates to be taken out and slowly but surely, we just announced a deal for some of our french confectionary brands that we sold. and we will continue to look at opportunities to do that but we want to do it in a disciplined way. because i don't want to give up the shelf space and we don't want to open the door for competition. >> one of the guys you guys have been great is online
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i know that with amazon. even in the june conference, you have to think it's a stunner, this whole foods-amazon tieup. does that cause kind of like a battle station meeting mondelez, what do we do? >> no. >> okay. >> i think if anything, it's a clear validation of the notion that the consumer is shopping everywhere and all of us better pay attention to that. >> you recognized it early on. you do a huge snack business on amazon already. >> yes, we do. snacks as a set of categories are not yet that big only about 2% to 3% of sales here in the u.s. but over time, we intend to be the snacking leader online as we are in the bricks and mortar spaces. >> i was going to ask you about brick, but other than brazil, it seems like you're getting great traction, russia coming back, china. you're doing -- germany is remarkable it seems like there's -- as the
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economies come back, they snack more. >> absolutely. that's why we have great confidence that this portfolio is poised to break out on the top line as it has on the bottom line. >> you've always said there has to be more consolidation in the industry is it imminent, or is everybody left doesn't want to be taken over >> every time there's an announce rmt of any transaction, people say, that's the beginning of a big wave of consolidation i think each company has to think about that for themselves. i come back to our company, we have a fabulous portfolio. we have a fabulous geographic footprint. 40% of our sales are in the emerging markets they are coming back they will come back even more. and we feel terrific about the supply chain of this >> one other question. i know the u.s., you were not happy. you said that in the last quarter but you've made some changes. i look at this i think that this is brilliant i think the or owe candy bar is fantastic. you're doing a lot of fun stuff
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with oreos >> we have the most robust health and well-being pipeline in our u.s. franchise that we've ever had we actually have a number of products that are renovations of existing things. velveeta with ten grams of protein, very, very strong item for us we actually introduced a product called good thins last year, that's selling quite well. it will be over $100 million this year for us we have a gmo-free version of triscuit coming out. we're renovating our core portfolio. crisp and thins, a fabulous chip-like product that's off en-baked, not fried, 50% fewer calories than regular chips. but probably our most exciting item is this one called vea. it's a whole new product we're launching in july. the combination of all of these items, together with very strong
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we've goot to be extra careful with ipos. i introduced you to a newly public tech company with a cloud based platform that helps businesses manage important information online like their location, phone number, hours of operation all this stuff with a hundred services, including google maps. so you don't need to coordinate with dozens of different social media places they're easy-to-use technology to send you accurate information. i was skeptical. i fear competition at all times. i'm wary of companies not making money. so even if they're growing very fast however, on this show we're always willing to listen to the other side of the story. let's take a closer look at
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howard, the co-founder and ceo of yext. welcome to "mad money. good to see you, sir. >> thank you for having me >> thank you okay so when i go to your website it says you're the single source of truth for the public facts about your company tell me how that works >> well, jim, we are witnessing a massive platform shift from mobile to intelligence it used to be that when you looked for something you would find ten links back on a page. now when you get a search for something you get a direct answer if i was to go and ask, hey, siri, where is the nearest mcdonald's >> here's what i found. >> she just tells me the answer directly there's no web result there. for every business in the world, this is a huge deal. because their websites used to be centerpiece of their digital experience now it's maps, voice search, and knowledge cart answers
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that's why we founded yext. >> i like this idea. i'll take it further, if i wanted a broccoli cheddar soup, i would be able to get to where i got it, right? because that's how you talk about panera >> that is a detailed part of what we call digital knowledge every intelligence service, whether it's google or apple or facebook, they all have three layers they have their ui, their algorithms and their knowledge base their knowledge base is where yext comes in. we sync all the details, for example, panera, or if citibank wants to change the phone number of one of their branch locations, they just put that information into yext, and boom, it's up. >> they would have it right on their site, but everybody else, it would have to be by hand. you would have to call each person. >> every intelligence service, remember the three layers? that knowledge layer, that's
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almost like a giant data base of all the facts about the company. and every intelligence service compiles this knowledge base from multiple third party sources. like web crawling or user generated content. the challenge is when there's conflict suppose a company's website says they open at 8:00, but a user reports they open at 10:00 it's not enough for a business to just sit back and hope that the right information is found be proactively push the truth into the world. >> now, one of my concerns, you've got great revenue growth. you're doing land grab, which is right. you want to make it so nobody else comes in. but at what point do you think that you will be profitable? >> well, last quarter when we issued our guidance, we went on the record saying we believe we'll be profitable on a cash flow basis by the end of next year, give or take a quarter. >> we've got to hold you to that, obviously.
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i know that we are always wary, because we want to see both that expansion, but we also have to balance that with bad losses. >> this is a huge market there are more than 100 million locations in google maps alone we have a million. we're only 1% penetrated into what we can do that number doesn't even contemplate other entities like menus, like we talked about, which we charge for, and charge by we have more than a $10 billion addressable market where we can go out and win we believe, by the way, this is a winner take all market our business benefits from a huge network you can't just call apple and tell them you want to update a fact on siri. >> in the last minute, june 13th, new product, how is that doing? >> all the biggest software companies, from sales force to work day, are all platforms. they have the platform for work days employee work force management
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yext is all about digital public knowledge. the facts. it's expressed on a company's website in an unstructured form now. we want to structure that knowledge and push it out to the world and enable them to integrate with one click, internally across the enterprise like hub spot, sales force and sandisk. >> it's growing like mad now i'm going to hold you to the profitability idea you're in the right spot >> thank you, sir. >> that's howard learned, the ceo of yext, and he wants it all. they are right now the only game in town. "mad money" is back after the break. [vo] when it comes to investing,
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hopefully you remember, you said at the belmont stakes you and your wife for the triple crown, and i made you some money. so today hopefully you can make me some money. new york community bank. >> i like new york community bank i think it's good. i think as the fed raises rates, it's going to be good. the jockeys didn't seem to get it at all. sir? >> jim, thomas from new jersey finally got a raise. >> which one >> citigroup >> they just reported the stress test that flying colors, next week, i think they'll ask for a bigger dividend. i like it. sir? >> hi, jim steve from san antonio, texas. i want to thank your staff for all you do, for the small investor, what you educate and what you teach >> thank you thank you for coming on. >> my stock is the crossroads of
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the stay-at-home economy, where that's become much more important. and the humanization of pets there's a medical company that has a potential blockbuster drug for allergies in pets that do not suppress the autoimmune system, not reflected in the revenues yet, zoadi. it's approved in europe and the u.s. >> like it vch i think it's good. by the way, i do prefer idex that's the best one. yes? >> hi, jim auggie from berkeley heights, new jersey big ba yao from berkeley heights. with patent pressure on the horizon, what are your thoughts on avity >> business is good. it's real good i'm not worried about the patent ex per ration. i think they'll pull it off. i like the group very much
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>> i'm denise from new york. i love your show. >> thank you. >> u.s. steel -- >> no, no. within the next five days, i expect the president to announce he will shut down chinese steel. u.s. steel will go up. you have to sell but newport could go up 15 yes? >> what do you think of crc? >> way too speculative wait, crc? >> yes. >> no, we're not going there you know, that's a company that -- that was the spin-off of oxy. i don't even like oxy anymore. yes? >> boya, jim. >> no doubt about it bill martin is saying it's good. i don't like the balance sheet
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i recognize that hoe's e's doin good job i know an up stock when i see it momentum play. yes? >> jim, mike from new york eastern long island. asking about mattel. >> we've got hasbro. why are we going down the food chain? you buy hasbro i think it would be great. >> jim, i am looking at editas medicine >> don't know that name. yes? >> i had a question on lexicon with the management changes, do you think -- >> yes, i think both of them work i like both of them. that, ladies and gentlemen, that is the conclusion of the "lightning round"! tuff,
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obviously the market felt the same way as the stock levitated throughout the conference call and kept climbing to an all-time high in after-hours. reproduced today i often stress how important the quarterly conference calls can be it's where they give you the true forecast, warts and all oracle is a huge company so to see its stock rally this hard tells us we're witnessing one thing. and on the fly, rerating of a company from value status to growth status. the metamorphosis is deserving. giving out the earnings, revenues and guidance, triple the triad. exceeded expectations. it was as though somewhere between the last quarter and this one oracle woke up one morning as a totally different company. i didn't mind that the co-ceo as well as the chairman larry ellison were totally over the top in the effusiveness of this quarter. they deserve to celebrate.
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they deserve the end zone dance. and i for one am not throwing any flags, because i think occasionally it's right to crow when you do something very right. and make no mistake, oracle's nailing a transition from on premises computing to the cloud. i can share all sorts of the hyperbole that they dished out about how this wasn't the culmination of the transition, but the beginning of the faster growth buy, buy, buy! on cloud nine, ten and 11. i love the in your face answers to whether the new client queue is still growing the pipeline is big. how confident am i in more cloud booking this year? stwreemly. put quotes around it extremely. under line it. i love when larry did some trash talking about challenging growth, and amazon on better
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economics for clients. it does help that oracle has many more cloud vert kals. it seems like they can keep the clients from migrating there oracle does play hard ball it serves as a lesson to ibm when i spoke to the ceo over this week about how ibm is trying to grow its business, while stemming declines in the legacy or incumbent division, it's clear her company is just not there yet. the transition is taking too long for many investors. including warren buffett who sold his position. nevertheless, when they got it right, after good acquisitions and selling, you can see what happens. if ibm had the same kind of quarter that oracle gave us, it would be a 180 up from 154 in a heart beat buy, buy, buy, buy
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congratulations to the question ratio. eight gave them some form of congratulations. onld goldman sachs' heather belini resisted the siren call normally i would like the impartial different kind of question, but not this time. come on, heather, join in on the fun and embrace oracle like everybody else why? because that stock is going higher buy, buy, buy! stick with cramer.
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>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ i'm from trophy club, texas, and my business is inspired by my beautiful girlfriend. i'm 11 years dusty's junior. and when i started dating dusty, it just clicked. getting the taste of dating an older woman, i-i noticed so many more attributes that she has, opposed to a younger woman. she's respectable, she's playful, sexy.
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