time for final trades. pete. >> j.d. >> tim. >> delta airlines. >> dan. >> intel. >> guy. >> southwest air, scott. >> that does it for us my mission is simple to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere. i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome into "mad money. welcome to cramerica my job is not just to entertain but to teach you so call me at 800-743-cnbc or tweet me at jim cramer the ipo cycle is playing out exactly, exactly as i feared hedge funds and mutual funds are

starting to sell their high growth stocks, so they could raise money to participate in the coming on salute of new deals. on a day with the dow shed 32 points and s&p sled back and the nasdaq lost 6.3% and as institutions learned of allocations in the lyft ipo that launches friday. now i've tried to explain what is going on behind the scenes in the market in piecemeal fashion. no one believes me so tonight i'm going to lay it all out for you. because you need to understand what we're in for as we run the ipo gauntlet behind the scenes there are things go on all at once right now. first list management -- lyft is talking to potential shareholders and they like what they hear. and why wouldn't they. ride share is a powerful theme

and like last week i told you, lyft has a great story but the numbers are incredible last year they more than doubled sales and while it is not yet profitable, the gross margin is rising rapidly even the lyft is flush with cash and short-term investments, the company is offering 30.77 million shares of a rankin creased from $62 to $68 to $72 to -- to $70 to $72 this very evening. and i've seen them go up another level and expand the size of the deal with that advised range tonight they are planning to raise approximately $2.2 billion and that is before you count the underwriter and that could add another $300 million to the company ipo wall it is a big deal lyft is compelling it fits the mold it is going to be massively oversubscribed which is a piece of wall street gibberish so let me explain what it means when a ipo is oversubscribed investors try to get some stock on the deal. it is called very tight.

really good customers might get a hundred or 200 shares from a broker but most of the lyft shares will be designated for institutional accounts multi-billion dollar accounts that circled stock mean they have a desire to own as much as they can get this morning the big-time money manager funds got initial allocations of what they might get and if they want to pay for the shares they need to sell something so today, if you notice, but right about when they found out how much to get on the deal, how many shares, they began the process of lick daiting the current holdings and stocks that look like lyft, the fastest grower, the cloud and semiconductor. you saw the nasdaq tumble. it is right on schedule. what i've been talking about for the proceed managers to take as much as the desk will offer them here is 500,000 shares and they have the money for it. most of the funds don't have a lot of spare cash lying around

they don't have much new money coming in over the transit either in fact a lot of money got pulled out of the market after that horrific swoon in the fourth quarter and when new capital does come in it tends to go to passive index funds not hedge or mutual funds. why does that matter because of those clamoring for the lyft deal need to have cash and the way they operate they'll buy more lyft in the after market to build up a position which means they have to raise more cash by doing more selling. let's say 10% of the deal -- and that is what me do and they never get that but that is what they try to do and they end up with 250,000 shares and if lyft price is at $72 as of tonight,s in an $18 million transaction so they have to come up with $18 million. if you are running a hedge fund that isn't big enough to make a difference to your portfolio so now they have to buy more when

the stock opens. so say there is a flood of orderers, those from home gamers who want in wherever the stock opens and they will bulk out the position say in this case maybe that guy got 250,000 shares gets another 250,000 shares in the open market when you average out the ipo price, price on the deal, and the higher price they pay at the open, these funds end up getting a good basis -- cost basis they are up nicely at the end of the day. because i expect lyft to surge out of the gate it means sense for the money managers to sell facebook or alpha or netflix and you know the drill and swap into this one notice i said the big funds will buy lyft at the open why not sell stock they have a big game why? because they're trying to show the brothers they are not flippers every syndicate desk hates, hates, hates and despises people who flip out of a deal they want a steady base of shareholders there are a bunch of big ipos

coming and the brokers decide who get a part of the next deal and i would say i didn't flip and that i still owned that way i get a bigger piece of the next sizzling deal that is good news for hedge and mutual funds that got stock in the lyft deal but it is bad news for everyone that own the stocks that we call sources of funds. glenn the cloud king and the social media and the biotech and the faang names and the imitator will be for sale, people because the lyft deal will make the money managers so much more money they are desperate to raise cash and they don't care how low she sell t-- so they wil price is irrelevant when you raise money for a red hot deal and i've been short-term bear on this market because of the ipo process that is why we raised cash from my trust which you know if you are part of the club it is not lyft that is the problem. it is not the fundamentals or the inverted yield curve

it is the fact that lyft is merely the first of many deals i'm betting to see an identical series of sales when they need money for pinterest or slack and not to mention the big daddy of them all, uber when we get to uber, you better believe the hedge funds won't have a share dime and they will sell anything that moves i'll sell the health care or the semi or the retailer and restaurant and anything with growth all so they could get in on the red hot ipos, especially uber. where they are counting on regular investors to come in and push that stock into the stratosphere once it opens when we get to uber, if that is the last one, you could expect the buyers will be exhausted and the existing stocks will be so darn cheap that they're represent real value they may even make you more money than the lower quality ipos that come out later in that cycle. at that point and only at that point can this really be considered terma firma for many

of the stocks in the market. the bottom line. you need to be prepared for many more mornings like we got today. okay in the end, the stock market is like any other market, controlled by supply and demand. with all of the big ipos coming, we're about to get hit with a wave of supply, that no matter how hot, something lyft might be, t these deals will push the rest of the market down until the tide goes out with the whimper, not a bang. let's go to sandy in new jersey. sandy! >> caller: hi, jim i'm disappointed that the stock of wayfair is so weak after announcing the opening of a retail store they are not using the store or stores as profit centers but as part of a broader marketing effort to reach consumers. where do you stand on this stock, jim. >> this stock has been one horrific short squeeze 25% of its actual shares outstanding are sold short

and they're looking for anything negative to hang their hat on and banging it down. sandy, stick with it i think it is overvalued like amazon but it could get more overvalued and that sounds like greater fool theory but i don't think there is something wrong with wayfair can i go to bill in florida. >> caller: hi. big time fan want to get your sense on newel brands nwl. i got in around $24 and it is down around $15 and do i lick my wounds and get out or stay long. i'm long and hold. >> if you are long and hold, i guess. we were talk that -- benand i talked about doing a piece about newel and the fact that mike poke is leaving, he's retiring and i need a catalyst and i can't find one i can't recommend newel. i don't have a catalyst. let's go to linda in new jersey. linda? >> caller: boo-yah, jim.

thank you for taking my call would you like your opinion on mrk, the merck company stock i know it pays a dividend and i've had it for many years and received it from my grandmother and what is your opinion on the stock since it hasn't been doing well. >> see i bet you linda you've made a ton of money on this. this is one of the great stocks of all time. periodically it has its ups and downs but saint merck is alive and well and keytruda is a jieg antig drug and could be one of the biggest ever so stick with merck. and stick with cramer. it boils down to supply and demand and that is why you should expect more days or mornings like we had tonight, calvin and tommy are the billion dollar lands but the whole sector is all stop can it get the swagger back on the wall street runway i have the ceo fresh off earnings and then the heart wants what it wants but should you listen to it

and i'm explain. and centene multi-billion dollar acquisition makes it one of the biggest government-sponsored health care in the u.s. but with the trump administration stepping up the attack on affordable care act, how could it impact the company plans for a gigantic acquisition. i've got the ceo so sty with cramer >> announcer: don't miss a second of "mad money," follow at jim cramer on twitter. tweet cramer at #madtweets at madmoney@cnbc.com or at 800-743-cnbc head to "mad money" on cnbc.com.

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has pvh gotten its groove back it looks like it it is tommy klein and then hill finger and then it got hammered. it plunged from 170 to 86 at the low in december and then rebounded 110 and change but

still well off the highs could that be about to change. pvh just reported an excellent quarter after close and 1.76 basis and strength strength in tommy hilfiger and the guidance for the upcoming quarter came in higher than anticipated. i thought it was a terrific quarter but don't take it from me the chairman from pvh to find out more about the quarter welcome back to "mad money." when you are here sitting here last time, you yourself weren't happy with the quarter and thought it was good and you said we made execution mistakes and you promised it would not happen again. and you were very tough on yourself but it didn't happen again, did it. >> that is right >> you got it dead right this time. >> yeah, i think we really reacted to the challenges we faced in calvin klein. we made the decision to close our collection business. >> that is a big move. >> and i think we repositioned the brand.

a lot of the fashion directions that were off, i think we've got them back on track and i think you see the benefit in the second half of 2019. so it is -- >> better or even ahead. >> yes we feel the results in the fourth quarter are ahead of where we talked about. pretty significantly the operating margins are up over 80 basis points and that is a big turnaround from the third quarter. >> you are internationally just on fire, aren't you? >> yeah. both brands. tommy hilfiger is up internationally and had a great fourth quarter here as well so that brand continues to put up strong sales growth. the earnings for the quarter at tommy were up 25%. >> that is amazing is it new designs or over -- was it e commerce? how did it happen. >> our e-commerce business overall is strong but we drove the tommy business is the continued connection with the consumer with our marketing and great product execution globally that is really continued

that brand is for the last two years is really continued to grow and it has been a rock star for us. >> how does a brand that has been around for a long time suddenly accelerate growth >> i think it is -- look, you have to be willing to make the investments and i think we really have done it both from not only a brand marketing point of view but investing in all of the new technologies and investing in e-commerce platforms that will drive the business going forward and then, listen, our stores are highly, highly profitable and we need to continue to invest in the stores consumer experience is critical and we're making connections with a younger and younger consumer. >> brick and mortar store, you have to go to europe and see the store and you won't believe the lines when they are open they are destination places. is that the way you defeat -- i know your partners with amazon, but just the pure online flavor of the day >> look, i think it is a -- we're all dealing with the challenge of the distribution model changing

but fundamentally we've always been a multi-channel retailer. so we have big businesses in brick and mortar both direct to consumer in our o-- in our own stores and through macy's here in the u.s. and galleries in europe and the key players are -- we continue to invest back into those platforms. >>what are we doing with denim and jeans for calvin klein >> globally, the jeans business got much better for us internationally. in the u.s. it continues to be a challenge. category overall and we've talked about that is the area in calvin klein that took the biggest hit. >> the f-corp getting rid of it and levi straus doing well, do you need to be into it. >> yeah, i think so. >> you do. >> and it is a lifestyle brand but put it into perspective. it represents about -- the calvin klein brand about 15% of our volume is denim for the brand and tommy it is an even lower percentage of our overall

denim. or our overall product category. and ath-leisure is hot now in both brands and they are big in that category. our refined sportswear business is very strong and accessories as well. but denim is a core category men and women wearing those denim products, we need to do a better job especially in the calvin klein. >> i want to contrast that ath-leisure theory which is a big secular trend. i went to milan for fashion week i have never seen so much money wasted in my life and then i read calvin klein disaster fashion is over and i thought it was a misleading line but you are talking about the trend-setting wardrobe but maybe it is not good business but just fun. >> i think the challenge with the high-end collection fashion business is are you connecting with the younger consumer today and how do you make your investments as you go forward. i think it needs to be more

balanced than it has been. i think specially today, younger -- younger consumers want to connect emotionally with the brands they don't want to just aspire for your brands or looking down the runway, but they want to be part of the life of the brand and i think it is -- when you could do that and i think tommy does it well, we had a fashion show in paris with tommy, selling product immediately after that and trying to connect with the consumer at more affordable price points than in the luxury point of view and i think that is how you build big businesses we're not trying to build niche selling $2,000 men suits or evening gowns, we're trying to -- we're about building big lifestyle. >> i don't think that is a great business any more. one last question. >> sure. >> when i ask my kids about fashion they say, dad, landfill sustainability, i won't buy clothes that won't end up in a landfill what is your think being sustainability. >> circularity is a key issue.

more and more of the product is recyclable so when it does end up in a landfill, it bio degrades and breaks down. the packaging today which years ago was very destructive, today it is all recyclable building in -- it is a key part of our initiative and our communication with our consumers. how we try to really bring in that whole aspect of sustainability back into the product. and clearly making investments in the dying and finishing we just opened a plant in ethiopia that is vertical and where we're growing the cotton there. making a product there right next to a river where there is hippopotamus and elephants in there and we'll be successful in that part of the world when i go back there five years from now and those same elephants and hippopotamus are in that river and that will prove what we're trying to do. so trying to make a positive impact on the whole environment. >> i'm so thrilled that is so great congratulations, manny on this amazing number you predicted you

would do when you were here three months ago that is manny chirico, chairman of pvh bankable as always "mad money" is back after the break.

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in advance for a full refund. so you can make your next trip... monumental! read reviews check hotel prices book things to do tripadvisor last night during lo"the lightning round" i got a call from a club member and he had a simple but devastating question. he said why do you own citi group and you could read the answer on my face. total dismay i wish we never bought it for my charitable trust so i won't justify the position out here or that is what my gut was saying but my head had a different response you own city group the stock for the tangible liquid value and if you return the proceeds to the shareholders, this is the single

most important metric por the bank and if you believe that the tangible value is wiped clean as i do and there is that much cash on hand, then it would be nuts to sell this stock because eventually the darn thing will work higher or perhaps a lot higher in other words, it is illogical to sell the stock of citigroup and no one should rely on emotions to make money management decisions right now it is cheap. trading at about $3 discount to the tangible book value and that is what it is worth if they closed the doors tomorrow. but here is the problem. of course they're not going to close the doors tomorrow so we do the -- will the market will lose the money or the money isn't there to begin with. citigroup has agreed to purchase 8% of the levels because the stock is cheap i can't believe when they are coming from but i think a dividend boost would give it a yield and might be more add van

tageous to shareholders. i know the more stock it stays the more we'll hear about the ceo leadership but the bank stops are awful and goldman sachs is trading at a similar value to its tangible book value but personalize forget citi or goldman talk about key corp. a parent company in ohio and doesn't hurt anybody and sells for the same price as citigroup and has a higher yield of 4.42% and it is strong enough to be taken over which is why stock trades at a $4 to the tangible book value and because they 1100 branchs across 15 states and you could argue there is more but that is the main states. it is extremely profitable and growing at a decent clip but no major bank has shown any willingness to acquire key corp and the big hedge fundss are steering clear why? the prevailing wisdom is you can't own the banks here because

the yield curve is in verted short-term interest rates are higher than some long-term interest rates and that hurts the ability to make money. plus everyone said that inverted yield curve is a sign we're headed into a recession which is bad for the business for key and citi i think the recession fears are overblown but the fact is there is no catalyst for the bank stocks unless the fed decides to cut interest rates several times but i don't see that happening what is the end game here? there is none. stagnation and stagnation is unacceptable to most portfolio managers beyond that the action in the bank stocks is a repudiation of the concept of value for moy 39 -- for my 39 years of picking stocks, the market always had a preference for growth but i've never seen a willingness to ignore or bail out of a whole class of equities with no serious problems and making mounds of cash. maybe this is a failure of the market's imagination but i can't think of anything that would make these stocks rally unless i

sell citi for the travel trust in which case there is a chance the whole group will catch fire because the universe is out to get me but maybe we're sticking with it. why? because of an irrational fear that the stock will finally start rallying the moment we decide to sell let's go to jim in colorado. >> caller: hello, cramer thank you for taking my call. >> you're quite welcome. >> caller: i'm looking at the chart of charles schwab and in late october i see what appears to be the first shoulder of an inverse head and shoulders pattern with christmas load being the head and most importantly on 3/25 there is a spinning top candlestick following a selloff which is an indicator of a reversal. and which also shows the bottom of the second shoulder if you look at this, you think it is going to climb back up. >> i see that pattern. i totally see that pattern it is an inexpensive stock but in the end it is a

financial. and i'm having a hard time recommending any financials because they're such houses of pain i'll include that one in the house of pain. jack in ohio ja jack. >> caller: thanks for helping us out, jimmy. >> doing my best. >> caller: i want to add a bank to my holdings and i really like the phone app and the yield right above 3% which isn't too bad for a bank >> okay. >> caller: it is u.s. bank corp usb. >> oh, i used to love that one and -- in the roaring days when bank stocks still worked i'll take a pass on that i just can't -- it sells 11 times earnings and i have banks selling at eight times earnings and nobody wants that so 11 times earnings without a possibility -- maybe someone could take it over but i don't see that happening i say don't buy. citigroup is a value name and it

should be owned unemotionally. and much more "mad money." $1 billion was spent on health care and another $17 billion just got added to the mix. i'm talking to the ceo of centene for what is ahead of the company. and then the jobs in the economy from paychex fresh off the report and all of your calls in the rapid round of "the lightning round. so stick with cramer

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last night i made a desperate plea for consolidation, what this market needs is a wave of mergers and acquisitions to offset the new stock supply coming from this deluge of pending ipos in particular i highlights the managed care space as being ripe

for more deals and the health care insurance stocks are pole axed with the most recent worried about the trump administration new plan to convince the courts to overturn obamacare. something that could wipe out a lot of businesses for the companies. plus i have to tell you, it seems unlikely because chief just us roberts upheld obamacare once i bet he zw it -- but i bet he does it again and that is where centene comes in it is a health plan provider for medicare and medicaid and obamacare exchange so they have exposure to washington and this morning we learned that centene is doubling down medicare and medicaid business by acquiring well care for $15.27 billion in cash and stock 32% premium and this should generate $500 million in the second year after it closes. wall street response skepticism and the stock got clobbered plunging 5%. i think buying opportunity but don't take it with me. let's talk to michael nydorf for

the care space welcome to "mad money." >> good to see you. >> have a seat so with so much uncertainty with people leading the news with what is going to happen and how we don't know where medicare is going and the exchange going you make your -- one of your biggest moves ever how can you justify doing it when no one has a crystal ball right now. >> there are no crystal balls. what i've found is a certain amount of uncertainty is a challenging environment, that is the time to act. that is when it is the best opportunity. nobody is watching nobody is expecting it you take a play that makes sense. this acquisition made more sense than i've seen in a long time. >> well tell me why. because i think the stocks -- i'll give you my view. i think the stocks are -- put my old hedge fund hat on for sale they are all going down. so why not wait? >> well we did wait. there was a time this stock was a lot higher. >> okay. fair enough. >> we did wait the time is right. and some things don't come back around. >> okay.

>> these are two good companies in my opinion. you're putting them together and they are high-growth industries and they have complementary products that work well together we've had the objective to build our medicare product they have a strong medicare product. we have a technology platform, they need for their work geographic and expanding our foot print in all 50 states in some form and we add three new states to the circuit and michigan and just everything and every aspect of it short-term i don't think about -- we have a lot of time and patience for a long-term investors and we have a lot of them and i'm willing to bet a year from now when we sit down and talk and you'll say you did it at right time. >> i want to ask you because one of the analysts said ceo nydorf contract runs out until 2021 it sounds like you did this because you're almost done. >> my contract runs to 2024. the board just extended it so he got it wrong okay >> takes care of that, right

wall street researchers, right >> and i don't want to -- i don't want to preach anything but i did my annual checkups -- >> well stay strong. >> i feel good we're having a lot of fun. the board asked me if i would stay longer. they're going to have a choice of about three or four people to choose from in the next three or four years and what is important is we don't want to change the culture of this company. >> right so now when i hear if i watch nancy pelosi, happy birthday, 79, and i watch ted cruz this morning and i listen and they have such fundamentally different views about what should be done with the government and health care what should be done with the government health care >> i think we need to -- there are things to do to strengthen obamacare and i call it the aca. >> right you use the name of it. >> right but think there is a lot of things that can be done to strengthen it. and i think the democratic party is trying to do that people want to have a card they want to go into a doctor and say here is -- we had 80% of

the people we had last year renew this year and that is occurred every year. we get 80% back. they like it they're pleased with it. if they bring in more people to hurt it, the costs will come down so there is an opportunity to make it for affordable and grow it and we're teaching people how to use insurance and so they understand what it is and you tail off the supplements it's ideal. >> why do you hear there is runaway medical costs when i look at your outcomes, they are better than almost everyone and i look at the cost and almost lower than anyone and why do i not hear about centene. >> i don't know. we're doing our things -- >> but it is true. >> i appreciate you saying that. i believe it is true we're using our system and technology to help reduce cost and get ahead of the curve if we can see somebody potassium going up or for a cardiac event

before the doctor knows about it and you save a heart attack or serious problem, you've saved cost but helped the outcome. >> you intd grate the apple watch and if you look at it, they know what they are doing. it is an idea. >> it is an idea it is headed in the right direction. it is technology it is making technology work for you. >> one last question, we're with larry mur low from cvs last week and i read this and i think judging from the q&a at the end, he's the big loser now you did say attractive opportunities for them to improve on the contract. so will he still have a shot >> we have this advanced rx which is the next generation and it is more -- it manages pharmaceutical costs and i want to move to net pricing and a -- and away from rebates at the end of the year. >> and your trying to help transparency and that hurts people. >> i don't believe transparency hurts anyone. >> being a little fess eeshs. >> i know. but i believe they'll be part of the system and they have a

retail outlet and other things and we'll try to work with everybody to make it more effective. >> next year at this time, this deal would begin to make a lot of money i want to know how it will do because i know that i saw president trump say today that -- yesterday that the republican party will be the party of health care >> right. >> how will the party of health care work with you >> well let's wait and see what they try to do first they have a lot of ideas they have no ideas what they have is -- let's eliminate it and we'll replace it and they've tried that. >> right. >> i believe it will hurt them politically if they keep doing it the last election, i believe people were worried about their health care. >> they worried about the cost and having it. >> that is right. >> worried about having it thank michael nydorf on a day where they created a medicare powerhouse and shou"mad money" is back after the break

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. >> announcer: "the lightning round" is sponsored by td ameritrade. it is time [ inaudible ]. >> and then the "the lightning round" is over are you ready? time for the "the lightning round. john in new york

john >> caller: boo-yah, jimmy. >> back at you, partner. >> caller: just got back from big ap south beach and dinner and i'm looking at my fave you turn me on >> thank you >> caller: emk. >> survey monkey dying. fabulous quarter a lot of people didn't react to it correctly at the beginning when they dug down and the stock came too cheap and should never have been done where it is now i'm going to tom in the illini tom. >> caller: boo-yah, cramer, how are you. >> i'm doing well. how about you? >> caller: i'm doing fantastic listen, i want to ask you about axom therapeutics. >> they have a great break-through designation on a new drug but we're not going to cuff it no how, no way we'll find out what that ramp is about. we have a list of homework and we better get -- maybe the dog ate it

focus. sean in ohio sean. >> caller: boo-yah, jim. your call from the shores of lake erie ohio first i would like to thank you for being the man. >> i try to be the man. >> caller: now my question is in regards to print two-device management. >> no. we're sellers. buy t-mobile which is the one i've been behind the whole way john ledger and t-mobile and john knows i'm behind it even when he's wavered, i've been there. bye bye buy. >> and rose in california krnks thanks for taking my call. i'm in the house of pain with neo down 50% in one month. should i cut my losses here. >> no, not down at 40. a lot of bad money at 60 minutes piece and then cratered i don't want you in the stock. but that would be a mistake. to david in wisconsin. david. >> caller: jim, big "mad money" shoutout to my wife and kids

my question is about ge. will it maintain the same dollar level even through the next earnings report. >> it does feel like it has been a poxy to ten. it is larry culp and he's doing his thing. it is going to take a little while. it is not an overnight fix he's approaching it correctly. i wouldn't touch it. okay i wouldn't touch it. and you go to steven in illinois. >> caller: jimmy, baby the stock is jd, the moving favorably for the past three months and i'm hungry can i get the whole enchilada on this one? >> no, i would rather have you to go to san miguel and treat you for a corona i saw one of the guys on "fast money" saying buy and to me it is a dice roll and i don't invest that way. i like to have more than dice. let's go to darrell in new york. darrell? >> caller: hey, what is going on cramer i want to ask a question about awk. what do you think of it as a

stock? >> it is fine. i would like that forever. i never had a problem with that one. it is a good stock it is slow growth. slow and steady wins the race. this is an asop stock. let's go to -- in nat lith, "the lightning round." >> announcer: "the lightning round" is sponsored by td ameritrade now? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

expectations are everything in this business when a stock runs up to earnings, the results better be picture perfect. so look at paychex it is growing side line in hr outsourcing and this morning they had a robust earning and with higher than expected revenue up 14% year-over-year but it wasn't perfect. management left the guidance untouched and they are conservative and something else we are hoping they would raise numbers and preliminary revenue growth some thought disappointing while i like the numbers paychex rallied 20% year-to-date so sears got a little ding and at one point was much more down but it pulls back after paychex reported solid reports and then climbing again can that continue. the ceo of paychex, marty, welcome back to "mad money." >> thanks, jim good to be here. >> you are putting on incredibly -- accelerating organic revenue growth

7%, that is four consecutive quarters of acceleration, up from forward change for q 4 '18, how are you doing it. >> it is our hr outsourcing. that is growing double-digit and strong demand for those services and we introduced more product enhancements in the last quarter that will help small and mid-size businesses to bring in more employees and keep them and retain them in the business. >> and the penetration of hr, companies outsourcing more than the hr spend is going your way you were getting in with one of the products and then you're landing and expanding with the rest, i imagine. >> we really are sometimes it just starts with payroll and basic hr support sometimes time and attendance solutions and then quickly grows to retirement and now our learning management helps train employees as well as performance manage them and data anna litdices where we're adding our

large client base for companies to see how they compare to other companies across the country. >> let's go there. because you did talk about -- you talk about bots. you talked about artificial intelligence and talked about a lot of tech that was the firm time i just heard you drill down on that. so explain to people, because we have all of the tech companies and a live person come on and this 5 nine come on and you are using chat bots or whatever to become more productive. >> we are. and it's because of the client demand clients and employees really are demanding self service and looking for ways to go in and get answers and do things themselves and the chat bots basically, we allow chat -- live chat but a lot of things can be answered by a chat bot alone which is an automaker response very quick and can take the client right to what they need to do over 45% of our chats now are done by the chat bot they are done and resolved right

there and helps the clients quickly resolve the issue without talking to anybody much more efficient for everyone involved. >> now on this call also you did a -- the best exposition about the macro economy. you talked about what it is like to -- the unintended consequences of full employment, right? >> yeah. as you know, small and mid-size businesses can't compete for employees in a tough market like it is today. but a lot of the products that we give them, these employees are looking for even if it is a small or mid size business and dove health insurance or retirement and that is why the demand is growing even as a small business today. >> how do you weave through the notion of the different cannabis laws and also the people who got arrested, went to jail for cannabis and they are -- they wouldn't be arrested it seems like state to state -- everybody is trying to figure out what to do with this stuff. >> yeah, it is -- this is a big challenge because it is state by

state. if it was a federal law it would be one thing but these are state by state some states allow it for recreational and some only for medicine purposes and others don't allow it at all. so we are working our 500 hr speci specialists around the country to work with clients to help them design a drug policy, evolve the drug policy and to really help them know what to do to stay out of any issues that they may have when hiring or terminating an employee. >> i've got to give you your due on oasis and it is a fabulous acquisition. tell people what this brought because peo said it is not as well known in your industry. >> from a professional employer organization we become a co-employer and so many companies we could give a much better health insurance plan to offer them much better options

than they would be able to as a small or mid size company and that retains employees and the combination of oasis the largest private peo acquired december 20th is strong for both of us. we'll have larger scale to give us better relationships with insurance carriers and expands into more states and allows us to sell our wide product offerings to the oasis base that has been in place already. >> now why were you able to get that to me that is a plum acquisition. people want to be in that business and it was just available to you you kind of -- i'm not saying you stole it because you are good people but that is a great acquisition. >> yep. >> how did you get it? >> well, thanks. well, we've been in the peo business ourselves for 20 years now so we had an expertise and bought heri and i think oasis and the leadership there mark proberg and the team staying with oasis and now ledding our

po e-business saw the strength of paychex and business and scale and likes our aggressive ability to offer to clients to drive growth together so the integration is well underway and we're feeling good about double-digit growth continuing in that peo business. >> and one last question you have a great handle on things i have to believe with unemployment the way it is the state of consumer is much better than we often chat about on tv >> yeah. i think it is. i think consumer confidence is still strong i think that the businesses -- the optimism is down a little bit for businesses but it is mostly because it is difficult to find someone to hire as we've talked about but they are finding ways to do that you are bringing in the fringe, those who weren't interested in being employed any more and coming in and being trained bit businesses and it is a positive thing and i think the economy is still strong and good consumer confidence and need for products it just filling the jobs is the

toughest part. >> let's leave it there because that is a high quality problem for our country. that is marty mucci. thank you so much, sir >> thanks, jim into we've been on this stock for double telling you to continue it own it. i think if you go up much more stick with it. [leaf blower]

you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated.

but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. great numbers tonight from pvh. and you remember that is calvin klein and tommy hilfiger and from lululemon those were two blowouts. and i think people were short these two stocks well that is nuts. they are going much higher even if you see them up 15 points, 16 points. do not sell. because both of these were bit against by hedge funds and now they have to come in and buy them back. yes, that negative there is always a bull market somewhere and i promise to find it for you here on "mad money. i'm jim cramer and i'll see you tomorrow a military wife and mom

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