>> seeberg. >> money will shift into the ibbs now, i would be a buyer. >> i would trade chevron not fade, trade. >> you got it, finally >> shoot the bird? >> i'm melissa lee thankswatching be back here at 5:00 for more "fast money. "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. welcome to cramerica other people want the make friends. i'm just trying to make you some money. my job is not just to entertain you, but to educate you. so call me at 1-800-743-cnbc or tweet me @jimcramer. if i had to sum up this market in a word, identical it extremist. we rush from one extreme to the other, sometimes in the same day

when the dow gained 198 points is s&p advanced 4.8% what do i mean by extremism? at the opening this morning we saw a screaming nasdaq rally based solely on the strength in one stock, alphabet. there was no other reason for that index to be running while the nasdaq partied, we got some truly hideous action in the big industrials, in part because the president praised tariffs, and most of these companies are being hurt by tariffs, and in part because many traders made up their minds that things weren't so hot before they even knew what the industrials were going to say two glaring examples 3m and salesforce.com. from -- before the get-go, that's right, before even the opening bell -- [ bell ] -- 3m's stock got slammed after reporting a better than expected quarter. the culprit? there was one. the company saw strength in

almost every business line, managed to reverse some of the committee kleins the previous quarter. it really called into question the bearish narrative. that's been developing ever since the ceo announced retirement and michael roman took the helm. no matter that the stock opened at its yearly low, crashing down to $190. that's off 8 bucks from yesterday. it was simply hideous. i struggled when i did my mad dash with david faber. i couldn't find out what the heck was wrong it was an overreaction to a misunderstood quarter was definitively better. was it perfect some of the gains came from incredibly aggressive buyback which moved the needle of the bottom line. there were some one-time positives that did distort the earnings per share too but i kept looking and looking and looking to see what people hated given that stock had already lost 19% for the year, and i couldn't site.

3m was too heated. the stock started ramping furiously and only closed up $1.84. >> up! >> ♪ hallelujah >> that's more than a 10-point stream or to put it another way, the morons who sold 3m down refused to wait for the conference call to see how 3m was really doing from the top of the range for the full year forecast, but what mattered was an incredibly strong return to organic growth. that's the metric we were all looking for which is why the stock ended up bouncing so hard. with salesforce we see the reverse. the stock was coming in hot, up more than 44% for the year and it opened with a bang, a gain of more than a point to its all-time high. but it was absolutely no news. ironically, a note put out this morning entitled we'll be pigs, kent that's a reference to the line in the hilarious european vacation it's okay to be a pig. that analyst told us while buyers should be aware of lofty levels in tech stocks, i quote, as it relates to digital

disrupters and the digital trans formations, we think investors absolutely have to own salesforce, end quote. i agree him. however, the note happened to come out on what we call reversal day, so to speak, where the industrials got dumped at the opening and the nasdaq soared salesforce stock especiallying up at an all-time high, gaining more than a dollar before doing a stung pirouette and going into the red. 3m sees the stock get pummelled to its yearly low before blasting off >> all aboard! >> while salesforce.com opens at its all-time high before plunging into the abyss, along with most of its cloud king compadres. what gives how can 3m get crush and crush it while salesforce comes out strong and takes it on the chin. you know what? you can blame the macro. you can blame the headlines, but don't blame the companies. what we saw was an overexuberant nasdaq relying on the fantastic numbers

from alphabet to pull up the whole index. i thought alphabet gave you a green light to buy alphabet and possibly amazon because of the cloud similarities, but not much else i guess you can say what's good for google is good for google. 3m, on the other hand, was buoyed by a truly better than expected quarter but also by a belief that maybe the global economy is accelerating. i know wall street has given up china as a source of growth because of trade friction. but last night the prc injected serious stimulus into its economy, something that will indeed help the likes of 3m and united technologies which also put up a terrific quarter. it was initially dismissed by the market and breaks. it's not just chinese stimulus the commodities markets, they're just red hot bzzzzz >> including metal the baltic freight index, a measure of shipping that is used as a proxy for chinese growth roared ahead too when you get commodities higher

and china stronger, money managers crack out their sales book interest rates have been going higher because of commodity inflation, and that allowed the bank stocks to rally once again. we also got a nifty number from eli legally and a strong one from biogen. still, though, the session was dominated by the money flowing into the techs and out of the industrials in the morning and uthoff non-fang techs andinto the industrials for the rest of the day. done as surely as the tides go in and out, something that's natural when it comes to the ocean, but insane when it comes to stocks. so how do you navigate your way through the crazy environment? simple like i said last night, individual stocks still do matter, but the corollary is that individual stocks don't have the kind of pin action, even the drugs like i just mentioned, they don't have that kind of pin action like they use to because eps has less power to drag the whole session it's absolutely true that alphabet had an amazing quarter. but that doesn't mean you should

buy all things tech, even though that's exactly what happened at the open it's true that 3m had a good quarter, not a bad one, but the selling knocked down almost all the industrials. when the investors figured out 3m was doing just fine, they took the group higher, but there is still staying power for the whole panoply, especially for the ones that haven't reported yet. the bottom line, the moral of the story is the extremes have to be avoided. don't buy up don't chase when there is nothing but rampant pin action like we saw in the case with alphabet don't sell down when there is nothing wrong. and by the way, if you haven't heard the conference call, which is what happened to 3m, you're just being silly in fact, here is radical idea for everyone who dumped the industrials this morning maybe try to figure out what's going on before you take action, otherwise what you should do is you probably should take your bat and your ball and your scotch tape and then go home let's go to neil in alabama.

neil >> caller: boo-yah, jim, and roll tide. >> holy cow! oh, man. i think that was a young un ♪ hallelujah >> what's up >> hey, jim, neil from alabama my son walker. he has been a "mad money" fan since he was 18 months old every day when i came home from work he used to say we're going to watch sell sell today because that's what he used to call your show more serious note, i want to ask you, what about this new hot stock called till ray, ticker symbol tlry. the stock exploded last week it's been up big, but it's starting to pull back. what should i do >> it went too crazy this is a pot stop, medicinal marijuana. i think the better one is gw pharma you know i like canopy too the group gets hot, cold, hot, cold it was up huge and now it's simple profit-taking like to own a portfolio of

marijuana stocks, not just one let's go to carol in florida carol? >> caller: this call makes my day. i'm calling about swn. >> sure, sink ronnie. >> which will be reporting on friday i'm interested in your thoughts on the relationship between paypal and synchrony since they recently acquired paypal's consumer credit portfolio. how does this enhance their position >> they want volume, and that gave them some volume, gave them some heft. i think they're okay, but i've been a huge fan of paypal and dan shulman. now the stock is up a couple today because we saw some -- dan loeb who is an activist who said he thinks the stock can go up big from here. paypal is my favorite in my charitable trust that you can follow along by joining the club

is the way to get the information. tom in indiana, tom? >> yes, mr. cramer, how are you today? >> i am good how about you, sir >> caller: i'm great, thank you. hey, here is my question i own stock currently in dominion energy, and, of course, there's also dominion midstream partners which is dm with dominion midstream partners also be a company worth acquiring stock in as well >> i don't think that it's bad it's down almost 50% it's not that low quality. we have got a firc modification rule i've soured on that group, but this thing has gotten too cheep. i like d very much they're involved in the acquisition in south carolina that has kept that stock back. all right. avoid the extremes, people you saw what happened today with the stocks of 3m and salesforce. it's essential to find out what's going on before you take any action

is that so hard? on "mad" tonight, within a stone's throw, the all-time high in january could we see a similar swoon we saw in february? i'm going to tackle the technicals to find out then not even a $5 billion fine can slow down the stock of alphabet all-time highs i'll tell you why investors could continue to go gaga over google and it's been one of my favorite health care plays forrer ages, and the stock continues to rally after earnings, until, well, let's just say let's find out what's going on could they have more room to run or it is stalled i'm giving you my take so stick with cramer. >> don't miss a second of "mad money. follow @jimcramer on twitter have a question? tweet cramer, tuite. send jim an e-mail at madmoney.cnbc.com. or give us a call at 1-800-743-cnbc miss something

head to madmoney.cnbc.com. this isn't just any moving day.

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clawing its way back to the all-time highs we saw in january before that big sell-off so how exactly should we feel about these levels incredibly important could the s&p 500 be preparing to break out to new highs? will it be smooth sailing or time to be afraid? because we could be in for another february-style swoon, something i cannot let happen again. got to be prepared so to answer that question, we're going to go off the charts with mark sebastian. he is a brilliant technician he is the founder of optionpit.com as well as being my colleague at real money.com so far this year it's been a darn good predictor of where the averages might be headed just reminder, the vix works by managing the implied volatility of s&p options over the next month. how do options measure volatility a lot of investors like to buy puts and calls as insurance against wild swings in the market when they expect a lot of volatility, the price of that insurance goes up. that's why sebastian's methodology comparing the action

in the vix to the action in the broader stock market has worked so well for us on the show now let's get to the major issue. using that methodology, how similar is this moment to where we were in january, the last time we got up at these levels, when the market was roaring higher and everything was sunshine and rainbows right before we walked into one of the worst downturns in ages. okay take a look at these two daily charts of the s&p 500 and the volatility index going back to the beginning of the year. focus right here on this part. now, before we get into this, remember that in a healthy market, the vix and the s&p should not be moving in the same direction at the same time during a rally you want the vix to be going down i mean, it's called the fear gauge for a reason, right? when the vix and the s&p are climbing at the same time, this is a sign that something could be very, very wrong. and when the vix and the s&p are both falling, that tells you bottom might soon be at hand a falling stock market where people feel less afraid is a good sign the stocks could be done going down. a bottom so what did happen in january? sebastian points out that as the s&p was hitting new highs, this

is that great period that we were all so bullish about, right? the volatility index was also rallying wait a second. that's the opposite of what we wanted to see. or as sebastian puts it, when the s&p and the vix have a strong positive correlation, that's real bad sign for the market because they never stay correlated for long. something has to give. either the vix goes back down or the s&p plummets sure enough, in late january, this relationship went back to normal as the s&p tanked and the vix spiked just like it's supposed to during a major sell-off. so it played out in form sebastian says that most of the time when the vix and the s&p are trading together, the vix turns out to be right and the s&p turns out to be wrong. in short, the volatility in january was major red flag he told us a similar brutal impending sell-off that very few people saw coming. so how about right now this analogous do we have to worry? let's move over to the right side of the chart. does this current situation look anything like january before the

big breakdown? since jun 27th, the s&p is up 120 points, almost 5% gain in less than a month. nice action. and what has the vix done over this period? well, precisely what it should it went down from 18 to 12 in short, the vix and the market are moving in opposite directions from what we saw here it's the opposite of that, okay? sebastian says it's a very bullish sign unlike in january when the market was getting nervous about the rally and the stocks kept climbing, traders not reaching to buy putt options to protect against swings just the opposite. in other words, this chart tells sebastian that the smart money believes in this rally, the kind of big institutional money managers who use options insurance like what they see now obviously we start seeing very disappointing earnings reports. this backdrop could get real negative, real fast. so far the earnings have been darn good, including today but, and this is important, according to sebastian we almost never see the vix plummeting like this as we head into the

most densely packed part of earnings season. when you have a ton of huge companies all reporting at once, things do tend to get kind of volatile so the action here is kind of weird, although not necessarily in a bad way in january, the vix spiked going into earnings, even if a lot that of had to go the market's epic sell-off. going into earnings season in april, the vix also spiked, although once we started seeing the numbers investors calm down, the vix pulled back. this time we saw an actual decline in the volatility and that decline continues on this surface, sebastian thinks it's a pretty positive development. what about being at the surface, though let's go to another chart that can really show you something. take a look at these the normal volatility index, okay, the vix, and the vvix, which measures the volatility of the vix itself if you can remember anything from calculus class, think of it as a derivative of the vix what does sebastian make of this picture? while the vvix certainly isn't popping here, the fact is it is

still holding near one hispan10. while the volatility index has come down dramatically, the vvix has been pretty steady what does this mean? sebastian says if the vix does go below 12 for a few days, but this vvix fails to go back to 90 or even lower, that could be a warning sign why? because it would imply that volatility will be going back up and if the vix does start to rally along with the s&p 500, then we know that's not a good sign, right? in short, if the vix keeps going lower but the vvix doesn't come down wit, sebastian thinks you should expect some choppy innocence the stock market, maybe at a painful month of august although to be totally clear, it hasn't happened yet. it's just something he wants to look out for at the moment both the volatility in the vix and the vvix are painting a picture. the charts suggest that unlike what happened in january, the s&p 500 is headed still higher he thinks we could be making new all-time highs by the end of

earnings season, and he wouldn't be surprised if we get a second half rally that takes the s&p to 2900, maybe even 3,000 with some kind of positive resolution on tariffs and trade. that's how much he likes what's going won the vix versus the s&p. by michigan view, i think he has a point, but given the recent run, i am watching the vix like a hawk for any signs like we got going into late january because, wow, that peak and that february bruising, we got to spot that before it happens. all right. much more "mad money" ahead. alphabet may hold the answer to why naysayers have been so wrong about the bank stocks. i'll reveal it just ahead. how does the stalled market darling gets its groove back i'm giving a case study in danaher. is it red-flagged or maybe it's the long-awaited buying opportunity? i'm talking with the ceo so stick with cramer

about halfway through alphabet's conference call last night, smack in the middle of the q&a, i had an epiphany i realized why naysayers had been so wrong about fang it hit me when ceo sundar pishad was asked about the use of google and how pervasive it's become in our daily lives. he said, and i love this, the uses are vast. quote, we want google to be the source you think of when you run into a problem, end quote. now that's it. that's a pretty ambitious manifesto, isn't it? after all, who wouldn't want an unbiased source to help us solve those problems it's universal we're talking all seven billion people on earth, or at least the ones with internet access, a number that's grow big the day

and that's just the market that google is shooting for think about it who hasn't got lost? google maps is there having added 110 buildings on to their maps this year alone who hasn't been in a foreign country and had no idea how to ask a question google translator's got your back with some explosive use by the way during the world cup who hasn't tried and failed to remember something google has the answers the answers for seven billion people think about that how many companies besides alphabet can claim they have billions of people worldwide clamoring for their wares? i'll tell you how many others, three. facebook, amazon, and netflix. that's who each of them solves a particular problem in a particularly digital way. amazon solves the problem of getting you a product where and when you want it netflix solves the problem of entertainment worldwide by going direct to the consumer via the internet, and facebook solves a problem you didn't even know you had, the problem of self-expression and keeping in

touch. it's not identity theft, it's identity creation. almost every other company i follow has limits. they're either tapped out geographically or face incredible competition it's always zero sum there is always someone else even apple suffers from vicious competition. but is there really a compete competitive search in high quality streaming content? while google may not be exactly monopolies, it might be fair to call them mind share monopolies. alphabet in particular so, many different product lines where it's pulling away from the competition that you to ask yourself, do we really need to be worried about what they're paying to bring in new customers if they're the only game in town i think the costs have gone up simply because that's what happens when you go from desktop to mobile. they aren't running out of demand, it's just mobile is more expensive to dominate. perhaps a $5.1 billion fine from

the eu, missing the point. it's only in the cloud that there are real competitors namely from amazon, microsoft and ibm. he said, and i quote, i do think there is an inflection point, and that's why it feels from the zero sum game, end quote they're spending like mad on data centers to meet demand. that's the kind of spendingy live with on top of that alphabet's autonomous driving platform is way ahead of anybody else in that category. you judge that by commercial miles driven hey, they've done eight million miles. it wasn't that long ago that skeptics were predicting the clasp of youtube because advertisers were up in arms because of the content appearing next to scatological nonsense. it didn't come up. and they get stronger and stronger despite government intervention in europe so are you late to the google party, up almost 4% to an all-time high? no, i don't think so why not? as excellent ceo told us, and i quote, 90% of commerce is still

offline, and we do see a great opportunity for digital play a bigger role, end quote if a company is only 10% into its total addressable market, you call it early, which is why even though alphabet has an $870 billion market cap, i still think it's got room to run and this, by the way, was the best conference call they've ever done. before you chastise me for saying alphabet and these other fang stocks need to be higher, if they solve problems for whole world and create value for billions of people, we should stop wondering if the stocks are too high and start asking ourselves if they're too low bob in florida, bob? >> caller: boo-yah, jim, and thanks for taking my call. >> of course how can i help >> caller: question about baidu, ticker symbol bidu they're reporting earnings at the end of this month. should i buy it before or after or don't buy it at all >> we don't really play the earnings game on the show as you know, because you're a constant listener but you can do half and maybe

half after i'm not trying game the quarter. i am trying to tell you that baidu and alibaba are the only two chinese stocks i recommend, and i think you can buy them with great confidence. let's go to ben in massachusetts. ben? >> caller: hi, jim thanks for having me on. >> of course >> caller: so i just want to talk about oracle real quick they beat their numbers by a good margin at the end of last quarter, but there is also a pretty negative reaction to their new reporting format since then, we've seen the stock come back to roughly the same levels, and i think that there is still plenty of upside. do you think that this rebound was the signal that that dip was an overreaction? >> i don't know, ben i know that mark hurd called it a nothing burger on the conference call right at the end. i thought it was significant because i like to know how cloud is crowing, and i think it was red flag and i'm not going to back away from that, and i think that you do not want to own the stock of oracle john in alabama, john?

>> caller: hey, jim. a big roll tide boo-yah to you are you ready for some football? >> you bet i am. i love 'bama football. what's happening >> caller: hey, i'm calling about blackberry they were king of the hill back in the early 2000s, the stock going for about 150 a share. i guess around 2006, apple kicked them to the curb hard and fast with the iphone >> right >> caller: but they got a new software business division, growing with sells almost 800 million. they're doing sales with qualcomm and nvidia, baidu do you think they're poised for a comeback >> i've been on the comeback bandwagon since the mid single digits that last quarter was not stellar, and that brought the stock back to earth. but i'm with you i think there is value here. i would not sell it. google wants to solve all of your problems. and that's why it continues to lead itself higher, along with the rest of fang there is much more "mad money" ahead. i'm telling you how danaher's

decision to spin off its lackluster dental business could be best smiling. could today's drop push pause on the move i'm not sure let's talk to the ceo. and rapid-fire, tonight's edition of the "lightning round. so stick with cramer ♪

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♪ every now and then, a really high quality stock with a stunning track record that's delivering long-term gains will stall out for a period of months or maybe even years. even the best run companies in the world can't owls translate their strength into higher stock prices, and they'll fall out of

style on the wall street fashion show so how does a stalled market darling get its groove back? let's consider the case of danaher, dhr, the life sciences diagnostics environmental technology play. over the past few decades, decades, danaher has been perhaps the single best conglomerate on earth. ask anyone in the business and you say what's a good conglomerate, they're almost always going to come back and say danaher there was a time when people talked about this company as the second coming of berkshire hathaway i'm still a fan and that's why we own it for my charitable trust which you can follow along with in recent years, though, the company's gone through a major transformation the old danaher was a lot less focused. but in 2016, they spun off their many different industrial divisions as whole new company since then both stocks have given you some remarkable gains. this is yet another reason why i'm such a fan of breakups while investors were always willing to give the old danaher the benefit of the doubt, it's just that well run, it's the fact that conglomerates pay a

penalty when they're too diversified. why? very few investigators want to own an amal gags of health care company. when the company is roaring money, the managers prefer to swap out and buy the cyclical industrial stocks that can produce enormous gains during a major economic expansion but when the economy slows down, these same institutional fund managers swap out of the industrials and move the money back into the defensive health care stocks that toned do just fine in a recession. you know that means? it meant that the old danaher was often pulled in two different directions so the company split itself up, rather than have this thing where it was constantly -- >> sell, sell, sell, sell, sell, sell buy, buy, buy, buy, buy, buy. >> the company split two, different pieces, much easier to understand danaher got the slow and steady businesses and fortive got the cyclical once. sure enough, that unlocked a ton of value, especially at fortive as the economy quickly went into overdrive. it was perfect for fortive it's also been good for danaher

because as a health care technology play had a larger consistentsy on wall street. however, after years of performance, danaher's stocks stalled out. the stock pulled back to the mid 90s and spent the next six months basically trading sideways the darn thing couldn't get any traction why? it started when the company reported a good quarter at the end of january, but also gave you some mildly disappointing guidance and even mild disappointments are not what investigators have come to expect from a company that is as well managed as danaher. by the way, they're never talk, they're never promotional. they keep grinding it out. so the stock pulled back a bit, and then it got hit even harder by the market wide sell-off that crushed everything in february but, and that is a big but, we start to see some truly worrying signs in the spring. for starter, danaher preannounced some positive numbers, telling us that the first quarter results would be above the high end of the previous guidance thanks to strength in their diagnostics and life sciences division hey, great, right? well, while the stock initially

bounced, it quickly gave back those gains as investors freaked out about the impact of president trump's new tariffs because danaher does a lot of business overseas. then in april, danaher reports an excellent beat and raise quarter, right even better than the preannouncement. but nobody cared why is that? what made investors give up on the company? well, the only bad thing here, the one problematic division was danaher's dental business. the company's life sciences diagnostic environmental segments all drew by anywhere from 12.5 to 14% those are nice consistent growers. also saw some hefty margin expansion. love those too but dental was a whole another story. you see the whole dental industry has been getting hammered lately, and danaher dental saw the sales grow by 2.5% it would have been down 3% without the impact of currency fluctuations plus, the dental margins are experiencing massive declines. so dental has been the albatross around danaher's neck, even as

management remained a manhattan that this business would start to turn the corner later this year, maybe 2019 the other issue is china danaher gets more than 10% of the sales from mainland china there are concerns that the company could get caught in the crossfire if the trade wars keep escalating, although i doubt the communist chinese party is dumb enough to slap tariffs on danaher's medical equipment. still, the stock was stuck in a rut between the drag from dental and the china worries, danaher shares couldn't get any lift and i've got to tell you, i used to dread watching the release to see how bad the dental line was. it just kept hurting everybody we had henry shiner on remember, the dental line was tough. i was worried until last thursday when the company report and excellent quarter, but also told us, heavenly, about plans to spin off the problematic dental business, which combined to send the stock soaring 4.5% environmental diagnostics and life science also remain strong.

i have to admit dental remains strong, 2% core growth, for the first time since 2016. of course, the real positive sheer that they're spinning off the dental biz, separate companies, second half of next year danaher is confident it can perform better as a stand alone company. management likened the spin off to a fortive spin-off. but there was more to it than good numbers and getting rid of the dental albatross on a conference call, danaher addressed the worries about tariffs and trade. cfo daniel con necessary explained at least so far that the tariffs will cost this company maybe a penny per quarter, mostly because the components became a bit more expensive. but then the company is doing -- suddenly the two biggest overhangs have been removed or alleviated people could actually focus on

the actual numbers again remember, the previous quarter gainer gave great numbers, but nobody cared because of china and dental now it appears the china impact is minimal and manageable, and dental will soon be no longer part of the company, and i won't have to fear when the release comes out, as i have for so long think of it as addition by subtraction. danaher's diagnostics life sciences, and environmental divisions, they're all double digit growers, they're what investors want to own, not that beleague erred dental business given the company's track record, you have to believe in danaher's ability to unlock value by breaking itself up. nobody thought fortive would be a huge winner when it was spun off in 2016. well, not everybody. we liked it on the show. it turned out to be a better performer than done her itself when it comes to value creation, these guys know what they're doing. even better, i think management's guidance was still conservative now, with the stock trading 21 times next year's estimates, i think it's still a buy given that consistency and the

acceleration of the numbers and even for this recent bounce, i would scoop some up. bottom line, danaher is doing everything it needs to do -- to do to generate higher stock prices, which is why i think this baby has more room to run without dental to worry about, with the tariffs looking manageable, this already terrific story is suddenly looking a heck of a lot better "mad money" is back after the break. the employee of the year, anna.

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dates, deals, done! tripadvisor. visit tripadvisor.com it is time it's time for the "lightning round. >> buy, buy, buy, buy, buy, buy, sell, sell, sell, sell, sell, sell, buy, buy, buy. >> sell, sell, sell. [ buzzer ] >> and then the "lightning round" is over are you ready, skee-daddy? let's start with greg in new hampshire. greg >> caller: yes, how you doing, jim. thanks for taking my call. >> i am doing well >> caller: my question is a stock that's been on the tear for the last 52 weeks. it started off at 20 it's now trading at lying $80. i'm wondering if i missed by buying opportunity the stock is wwe

>> i think you may not have. how compelling this business model is and don't forget they're a prescription business. no, you haven't. i'd buy half and see if it comes in let's go to brode in new york. >> caller: jim, talk to me hey, what are you seeing on wall street worldwide >> i like the whole business i like the footwear business i prefer nike over it. let's go to don in kentucky. don? >> caller: hey, jim, hough are you, man thanks for taking my call. >> quite welcome >> caller: calling you about khc. i bought it at 76. it went up to 90, and it just fell back and what should i do >> well, they need to make a deal meantime, i cannot countenance selling it this low. it did go a little lower than this i think the company is trying to get religion about growth. if they're trying to get religion about growth, then the stock can go forward or they can make an acquisition and the stock can go higher. rick in florida, rick? >> caller: hi, jim. >> rick, what's up

>> caller: i'm interested in getting into some oil possibly i'm looking at the royal dutch shell rdsb shares, $70 a share with 5.2% dividend versus chevron, 123, 3.69. >> let's put another one in the mix. i like bp. bp with a 5% yield actually has more growth than even royal dutch. that's the one i would go with tom in colorado, tom >> hey, jim. boo-yah. >> boo-yah. >> caller: from the rockies. are ho are i don't >> i'm good. how are you? >> caller: good. twofold question why are consumer staples lagging the market, and one of those stocks is coca-cola. >> okay. the reason why they're lagging the markets is they haven't been able the show a lot of growth, coca-cola is on a growth path. it's doing a little bit better they're to be report i think that quincy is doing a good job and i think it's slow and steady does it come in place in the race not a show, but not quit let's go to gus in new york. gus? >> caller: hey, boo-yah, jim.

>> boo-yah >> caller: okay. i'd like to know your advice on the scott miracle grow. >> you know how i feel about scott? they keep, keep screwing it up and therefore i think it's absolutely right that it's lower. and you know what? i know people are playing as a pot play we've got real pot plays now and the one that i still like is gw formula but i also think canopy is good. i'm keeping track of the whole group. let's go to allen in new jersey. allen? >> caller: boo-yah, jim from the garden and mall state. how you? >> i am doing good how are you? >> caller: excellent i'm a long-time listener and a first time caller. my question for today is a recent ipo, columbia savings bank here in new jersey. >> you know, look, these often do very well you have to get -- you have to look at them and price to book value, and i'm not sure what the price to book value. but i will say this. we've got jpmorgan selling so cheap. why do we have to go down and buy a bill lil' bank when

jpmorgan is the best and that's the conclusion of the "lightning round"! [ buzzer ] >> the "lightning round" is sponsored by td ameritrade so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99.

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okay what -- what the heck happened to the stock of sinteen? a health care provide they're gets most of the business from

medicare and medicaid. it's been red hot. a 342% gain over the past five years. it's up a quick 35% year to date then the company reported this morning was less than pleased with the stock pulling back $6 of 4.5% today. what happen while centene posted a top and bottom line and modestly raised the earnings guidance, the company had fewer managed care members and the health benefits ratio, the percentage of the premiums that they spend on medical care came in at 85.7, and that was 30 basis points below what people were whispering about. plus, there was also a small increase in sales, general and administrative expenses troel s to the obamacare exchanges i get it the stock had run up pretty dramatically in earnings i think it was just a garden variety sell-off thing is a lot to look forward to thanks to the acquisition of the nation's largest managed medicaid provider.

the chairman and ceo of centene, find out where the company is headed welcome back to "mad money." >> thank you, jim. it's great to be here. >> all right first, michael, i'm going to not take my cue from the stock, because the company had a $103 stock and the stock burst up what i do want to know is how have medical costs fared the first half of the year, and what are you seeing as a trend with medical costs? >> the medical costs have been very stable. the trend continues to be stable we commented at the end of the call, low single digits, as we have expected. >> okay. >> they've been very good. >> and that would mean for say fidelis, something you talked but i really need you to expound on it. with better technology you can make a lot more money than fidelis has been able to do

given that fidelis was not supposed to be a company that was supposed to make a lot of money. >> if you look at fidelis, we have said all along that we'll be helping them with their medical management costs as a result, some of their g & a will go up, but the medical costs will come down and it's not a cliff we'll take over the next two or three quarters expect to start to come down at the new york plan. >> what technology do you use, sir? what are the analytics that you referenced in the conference call that makes it so that you're so confident about this >> we have a case management that looks at everything that's been done, what's been ordered it's electronic. it works with high risk patients do they know how to do that? we have interpreter that predictive models that considers what could happen. he looks at 12 million cases and 12 million files in about 30 seconds, 60 seconds. so it manages high data, large

data, as we like to talk about >> well, one of the things why i brought that is because a lot of people are very excited what jeff bezos, warren buffett and jamie dimon think they can do, try to try to keep health care costs down i think you're the nation's premier company in keeping health care costs down why can't they just hire you >> well, i think in the end, they're probably going to want some of our system's capability, but i'm glad they're doing it. it's a real disrupter, and i think the industry needs disrupters whether be one ourselves >> you were very disruptive on this call, tabbing about obamacare exchanges and how you're very excited about how they're doing. i thought they were going away you're talk about making some money with them. >> we're doing very well, even today. all the confusion was over the risk adjustments, which people didn't take time to really understand we had a great quarter the risk adjustments worked. obamacare is working we're doing very well with it, and we're anticipating growing

it >> okay, you know our president every time he talks about this says that obamacare is just a terrible failure you just said that it's not. can you please explain to me how a president could so disagree with someone who is in the field? >> you know, i'm going to be very careful not to be specific about him, but i think just in general, we have moved from policy to politics, and if you look at what's the right health care policy for this population, the aca works. and we've proven it. we've been doing this for five years. it's been very successful. it's at the top end of our margin range well continue to grow it high satisfaction. 80% the last two years have reupped the following year >> do you think that any of the restrictions that they've been putting on are going to make it so that's a less profitable business for you going forward >> i don't think so. i think they're doing everything they can to be disruptive of it. they're cutting back the

enrollment fees and what they're spending to get people enrolled. but this past year we thought we were going to grow 100,000 and we grew 500,000 live. >> holy cow. anyway, look, i want to congratulate you for another good quarter look, the stock ran a lot. your quarter was terrific. thank you so much to michael neidorff, the chairman and ceo of centene i would use this decline to buy the stock. "mad money" is back after the break. is this at&t innovations? yeah, wow..this must be for one of our new unlimited wireless plans. it comes with a ton of entertainment options. great, can you sign for this? yeah.

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