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tv   Mad Money  NBC  August 30, 2016 3:00am-4:01am PDT

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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 cramerica. my job is to make you money. so call me at 1-800-743-cnbc or tweet me @jimcramer. the market speaks in tongues. that's one of the reasons it can be so confusing. but fortunately, i'm crazy enough to know the language. so in a day when the dow gained 108 points, let's go through what the market is really
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stocks that lead us higher for the last few years, no longer in charge. this time buyers are swarming over the banks. that's right, the banks. why? because last week in jackson hole we learned we could be facing not just one rate hike but two this year. not only did janet yellen tell us that a rate hike could be on the table, but vice chair steven fisher said there might be time for more than one rate hike in a sht now who benefits from rapid rate hikes? who makes the most money? the banks. they can take your deposits and invest them risk free at the higher rates that the fed controls and the risk share automatically goes up. and that's why bank of america is definitively breaking out at last. that's why the stock of wells
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that's a gigantic move. that's why j.p. morgan lost lustre. do not ignore this move in the financials. the fed is telling you it's going to happen. and if we get a strong employment number, watch out for the banks. stronger loan growth, which comes in part because of great earnings per share numbers that are much better versus last year's comparison, and that almost always leads to higher stock prices. and when the fed pronounces the economy strong enough to handle more than one rate hike that makes investors more bullish about the state of the world. and that mind-set causes people to buy the industrial stocks, because they feel confident that they can meet other beat the
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and illinois tool works start to shine. that's what's happening today. meanwhile, honeywell technology and 3m, they continue going higher. i say continue, because these particular industrial stocks were never abandoned in the first place during this whole time when we loved the health care so much. they reached for the rails, and the commodity cyclicals. union pacific, they've been among the best performers. even though coal is declining. the big money managers, they follow a playbook. they don't particularly care about how the railroads are doing right now. these fund managers are saying at the beginning of an economic expansion which is where they think we are because of what the fed said, the rails are the stocks to buy, because they've
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could the big boys be wrong? i can't tell you how many times i fell prey to the playbook, meaning some copper or aluminum stock buying only to be blown out. if you're concerned about the playbook blowing up in your face, you can revert to the high-quality industrials like 3m. how about the commodity cyclicals? typically, when the economy gets better, you should buy the papers and chemical makers. this time what do you buy? international paper and dow chemical, they've broken out to the upside. at this stage in the economic expansion, the buyers always fall back on tech. traditional techs are doing fabulously, microsoft keeps creeping up.
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they're reinvesting themselves. microsoft becoming more cloud, less window. i think they're both very strong here, even after this run. but nothing, nothing in this entire market is stronger than the semi-conductors, classic leadership, the parts that go into all sorts of devices. the market leader happens to be broadcom. and not far behind, charitable companies we haven't talked about in ages, micron. with micron doing well in cell phones. it's working. micron got an extra spur last week.
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of flash and d-ram chips are tightening. that's micron, that's what they do, they make those. lamm research, you've got takeover names in semis too. how long can marvell stay in effect. meanwhile, if tech has their own equivalent of honeywell, now, doing so, so well, alphabet not as well, but it's still happenin'. what else? we're seeing a major rotation in retail, led by total cramer fave, nordstrom. but they're selling stocks that
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stores. finally, we have the conundrum companies, which you have to understand the language of tongues. talking about oil, we've got a huge glut of oil. the stocks won't quit. what's that about? again, if, it's the playbook. you're supposed to buy these stocks. because a robust economy consumes more oil, however, when it comes to the independents, many are buying stock with acreage. it's going to be a big theme of mine over the next month. where are investors getting the money to buy these stock, given that there's no money coming in? a lot of it's coming from health
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and it's an election year. you know we're always just one step away from either candidate saying it's time prices are rolled back, because these drug costs, drugs cost way too much. so i can't recommend any of these stocks unless they're worth the risk. you could run into a buzz saw, like gilead which has come up with a cure for hepatitis c. we're in a what have you done for me lately environment. but the wind fall for its drug to work. be wear of utilities and real estate trust. when the fed speaks, investors
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the big money at least. if the feds decide the economy's healthy enough to warrant a rate hike or maybe two, then they dust off the playbook and go to things that historically work regardless of the fundamentals. that's rosetta stone you need. just be glad i'm old enough to remember this almost-forgotten language. rochelle of california. >> caller: hi, cramer, welcome i sure did miss you and your show. >> well, periodically, you've got to spend some time with the family. >> caller: i know. but, you know, us cramericas, we can't go without you for a very long time. >> i wish my wife would say that. >> caller: so cramer. >> yeah. >> caller: twilio.
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just got excited there. how can i help now? >> caller: i believe that this company is definitely in its infancy, and i'm trying not to watch the daily gyrations, because there's only like 10 million float out there. >> right. >> caller: do you believe long-term, and this is long-term underscored, do you believe this could be the next amazon.com? >> that's a total worry, i do think twilio's business model taking a little piece of action is good. i want you to sell one quarter of your position and let the rest ride. and congratulations. judy in florida. >> caller: it's nice to hear your voice over the phone. i love your show. >> thank you. >> caller: i'm pretty sure i
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hold or sell? >> it's had such a big move. i got to tell you, it's got such a big move, i need you to cut it in half. this has been a huge move off the bottom. and i want to press our luck here. cut it in half, let the rest run. i know just how this offense is run. let's get out there. plenty more "mad money" ahead. if there's one thing people around the world have to do, it's eat! then dollar stores are known for luring customers with discounts, but after the drop on average last week, maybe it's time to buy them or look elsewhere? and thor! it's looking better than chris hemsworth, although my wife
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i'm talking with a ceo, stick with cramer! don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #mad tweets. send jim an e-mail at cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ? ? one day a rider made a decision. the decision to ride on and save money. he decided to save money by switching his motorcycle insurance to geico. there's no shame in saving money.
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sometimes a company will do something so surprising that it leaves you wondering how on earth could we have been so mistaken about these guys. look at deere, the gigantic for years, deere had been a pretty sub-par performer. everyone, especially the analysts who covered the company assumed that the broader weakness in the agricultural culture would keep weighing on deere's business and share price. but less than two weeks ago, the whole environment changed when
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even more surprising than deere's strength was the fact that nobody seemed to see it coming. there was nothing the company could do to compensate, another disappointment was said to be ahead. how did deere manage to fake us out. if you paid attention in previous quarters, you saw a pretty glum picture. when deere r they managed to deliver nice top and bottom line b, but when you checked under the hood, many of the other line items were down right discouraging, they lowered their guidance pretty substantially. their equipment sales would sink 9%. the next quarter would be even worse, numbers down 12%.
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decline for its north american ag business. south american ag, which is gigantic, down 15% to 20%. the only strength was in north american turf and utility equipment, the gator. i called it ugly, ugly, and more ugly. when we heard from them in may? there were a slough of reasons. and elevated levels of used equipment sales, in other words, promotion and discounts coming. in south america, deere was getting slammed from the seemingly endless down turn of brazil. while deere's execution had been inconclusive.
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the stock punched 5% the day after the report came out. they fled from this thing. and they summed it up in the title to their estimate cut piece, oh, deere, not this again. most of the analysts took deere's management at their word, that things were pretty awful and things were getting something funny happened after deere's late-may blowup. after that initial decline, stocks started going down. it caught an upgrade from goldman sachs. it was the first sign. of the come back. when a cyclical's numbers are at their worst, that is often a
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nearing the bottom. so goldman pointed out that the demand for high-horsepower equipment was at a 30-year low. and if business picks up, deere would be a huge beneficiary. it bottomed and expectations for the company remain pretty darn muted. layoffs. sure enough, on that news, the stock was downgraded. they predicted a strong corn crop. and when farmers aren't making much money off their crops they tend not to buy a lot of new machinery. and they've become skeptical
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the deere loathing seemed to know no bounds. given all these negatives, it was surprisingly strong. it was a classic underpromise and overdeliver short squeeze. the company posted an earnings beat, no one was looking for that, with its revenues coming in substantially higher than expected. not only were the headline numbers fabulous, but deere's commentary was more positive than the last time they reported. management totally shut down the nay sayers. as if their gigantics earnings beat wasn't enough, management suggesting they have more room to cut costs. for anyone who thought deere was
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better, for the first time in ages, management raised their four-year earnings forecast. they can protect the margins by keeping costs down. they did not up their guidance because business is getting better, demand is pretty lousy across the board. deere's generating terrific numbers, simply because their execution is so darn good. the street doesn't care how it gets there, a beat is a beat is a beat. that said, there was one positive about the state of deere's end markets. brazil is a theme going forward for us. brazil started to show some improvement, with inflation coming down and sentiment getting more positive as the new government gets its act together. in short, the ag equipment
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but they continue to do more with less maybe for years to come if necessary, and that's why the stock rocketed up 13% with analyst after analyst raising it. you know what? the stocks really never looked back. deere's hardly the only one following the playbook. caterpillar. they were able to blow away the numbers at the end of july, not because the market improved, but cutting costs. i don't like to chase a stock after a big run, but the next time wall street seems to give up on deere, remember how they faked the analyst and proved they could do more with less. the dollar stores took a huge hit last week. does a dollar still go a long way these days? and a little over a decade, knee
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then i'm taking a look at a pure play on orthopedic that's up. plus i'm taking a road trip, and you're all invited. stick with cramer. coming up, jim goes under the hood with a ceo who wants piles of growth. >> there's so many positive signs for our industry that are headed the right direction, that give our customers the confidence to go buy an rv. >> cramer kicks the tires with thor industries when "mad money"
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when is a stock not a bargain after a brutal 17% mark down? when it's the stock of a dollar
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miserable earnings, which is exactly what happened to dollar general stock last week, in the wake of its incredibly ill-fated quarter. last thursday's butchering of the dollar stores came about in a way that was so unfathomable to the unsuspecting analysts, so confusing and in such disarray, that you have to wonder if any one who follows this company didn't get the memo. how about the 10% price reduction on 40 of 50 of their best-sellingms how about the incredible new price competition from walmart? again, seemingly oblivious to many from either walmart's conference calls or the tour of the stores, or the price deflation hitting the supermarkets, and the memo mentions that 500,000 people who lost federal food stamp
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mattered big time. how could it not? these are dollar stores. plus, at federal reserve actually notes, we're at the point of the business cycle where the people who are doing better have started shopping nicer places again. the wholesale wrongness of the dollar stocks going into this quarter is one of the great mispricings. i had to stop flogging them. i had liked them. the dollar stores with the polar opposite of macy's, kohl's and nordstrom, the companies could mess up big time and they still wouldn't go down. they went higher. now i normally want to take an interest in a high-quality company like dollar general, and it is high quality. but what this decline tells me is that we're dealing with what's known as a reset, a gigantic reset. could the new food stamp eligibilities affected more
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how often is the pricing, how much of a gap is it between it and walmart? it had to make these price cuts, which came right out of the bottom line? how did the analysts miss that? how did food deflation get so out of control. and they're being crushed by dimes and quarters. how much of it is secular? what's impact of these trade-up stores, trade up out of these dollar stores. historically, dollar stores act counter cyclicly. however, given the positive changes made at these dollar stores, consumers were taking to these places more than ever before. a newly post-recession frugal consumer wasn't about to trade up.
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have cut the prices so much they can capture these people back. kroger could be doing it too. if the only issue was food stamps, we could price the stock. if it was walmart, we could discount. hold our noses, buy, by the combination of an improving economy has historically been bad for the dollar stores. a cut in food stamp eligibility and in dollar general's case, conference call. it all tells me, take a pass. let them go down to 90 cents on the dollar, then maybe we can think about taking a swing. joe in new jersey? joe. >> caller: hello, mr. cramer. since i've been watching you over the years i always beat the broad markets by double. >> there we go. thank you very much. love to hear that. >> caller: my question's on cvs.
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generic epi-pen being launched, do i buy on weakness? >> it's an incredibly well-managed company, and you can't always have it go up immediately. i don't know when cvs is going to turn, i know it's a great company. owning stocking of companies when they're down, never a bad idea. much more "mad money" ahead. 8.9 million households in the u.s. own an rv. i'm talking to one of the major players. with the medical device players showing signs of life, i'm talking about an orthopedic maker, and tonight's edition of the lightning round, so stick
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what are we supposed to make of the run in thor industries. i recommended thor a little more
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and they made a new all-time high today. some of this strength has to do with the fact that thor is a player on discretionary spending space. on top of that, at the beginning of july, we learned that thor is buying jayco for $576 million. the market's been lapping it up, which is why the stock's been on fire. when you have this massive move in such a short period of time, you have to wonder, is there more upside? maybe ring the register. today thor's management was in town to ring the closing bell at the nyse. i got a chance to catch up with their team, including ceo robert
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>> we're one of the most iconic machines in the world. tell us about how this has become something that lasts. >> the air stream is. when people think about rvs, they think of an air stream. it's known for quality, the towability, unique shape. they're drawn to that. for us, it's one of our into the next century with younger buyers, we're watching younger buyers come in, even to the air stream price point. maybe there's some that don't think we build them anymore, but we're at record production for air stream travel trailer. >> you talk about the notion of thor as a collection of brands, a de-centralized collection, so we may not know who thor is, but we foe a -- know a lot of your
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indiana, it is brands like air stream, we just picked up another iconic brand, jayco, but it's the way we manage these companies. we buy companies with strong fundamentals, strong management, and we let them run and be unique. we embrace the fact that they're unique. >> we have seen change in america post recession. america's been more frugal. they represent good value for what they get. >> they're an $80,000 to $100,000 trailer, but the bulk of what we're selling, they're trailers that you can buy for $10,000. motor homes that retail in the
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it's a value. we have re-branded some of our motor homes, rather than rvs, they're ruvs, recreational utility vehicle. it resonates with a lot of people. they're using it in different ways as well. they're not just camping. they're going to football games, nascar races. i was at a race a month ago. there were 9,000 campers there. >> millennials and diversity. i think a lot of us thought, it's an older cohort, but there's a growth to this business that many people don't know. i need you to talk about it. >> that's where there's definitely an upside. people thought it was baby boomers and when baby boomers were done if was over. we still have five years of boomers, about five years before
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demographic is coming down. camping is universal. it's about family, the outdoors, just about getting away, whether you drive 15 miles away to a campground or whether you drive 2,000 miles to the west coast, it's all about family, and it really is. it speaks to every different area, that's where, as a company and industry we'll do a better job reaching that customer to diversify m >> your disclosure is phenomenal. you asked yourself questions that most analysts would say is too tough. you are, you relate to consumer confidence. you talk about optimism. these do drive sales. i thought when i read your numbers, america's doing a little better than we think. >> you know, we think so. as we look at the industry right now, a lot of ours is driven by
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there are some positive signs that are headed the right direction that give our customers the confidence to go buy an rv. unemployment, many of the different drivers are helping us, and we think there are brighter days ahead. for many years, everybody wants to know, it's a cyclical industry. we've got a long run because we're reaching more people and the signs are very positive. >> why say decentralized? i thought your company must be small. you've got tremendous market share but it's under different brand names. >> decentralized helps everything be unique. our brands compete with each other. >> they do. the dealer network competes. >> they do. and that's what drives innovation. and for us, every year we have a big open house in september. 500 units. everybody's competing with each other to see if they can beat, not just our company but our
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many times our best competitors are within the thor companies, and they fiercely compete. >> could you talk about the actual growth of units. because both motor and tow have different growth, but they're both rather extraordinary, as if they're just pure growth stocks. >> definitely. the growth in travel trailer and fifth wheel has been primarily in travel trailers. it's price point, driven by the less-expensive units which points to newer, less-experienc b for me is great long-term for the industry. if i can get someone into the rv industry at a younger age, i can keep them for 10, 20 years, and there's a buying cycle. if we start younger, we have a longer growth span. >> this particular company, air stream, i have seen people have them 20, 30 years. what's the average duration of
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>> people can hold them for a lifetime. if they decide to change it, there are companies that rebuild the insides and bring them up to a modern standard, but the shell has stayed very true to itself for many years, and it is the iconic riveted part of it that people love, they're just drawn to it. as you see out here on wall street, everybody wants to see the air stream. >> in terms of loving, we lo american companies on "mad money." are you distinctly american. >> thank you, we are. we're based out of northern indiana. most of all rv production is northern indiana. we have plants in ohio, idaho, pendleton, oregon. we are made in america. most of the products that go in these are made in northern indiana. so our suppliers are made in america. we're very proud of that piece. and our business is northern
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and that's why we see so much strength in that market. it gives us the confidence to make some great moves throughout the year. >> bob martin, president and ceo of thor industries. a great company. >> thank you. ?? ah, my poor mouth breather. allergies? stuffy nose? can't sleep? enough. take that. a breathe right nasal strip of course. imagine just put one on and pow! it instantly opens your nose up to 38% more than allergy medicine alone. so you can breathe, and sleep. better than a catnap. shut your mouth and say goodnight, mouthbreathers.
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it is time! it is time for the lightning
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and then the lightning round is over. are you ready, ski daddy. time for the lightning round. >> caller: good evening. i'm calling regarding -- >> which one? opko health? a lot of people are saying pfizer's going to buy them. i remain committed. let's go to scott in ohio. scott. >> caller: hey, jim, cigna seems awful cheap. they get these $1.76 a share. if the anthem doesn't go through, what do you think? >> on cigna? if it doesn't go through? i think the stock goes higher. walgreen, rite aid, enough, enough.
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about impax laboratories. >> yeah, i don't know, generic drug delivery. i have never had any luck buying any of those, so i'm putting it in a don't buy, don't buy. let's go to tony. >> caller: hey, thanks for taking my call. is solar city the one to go? >> it's right up there with tesla, too hard for me. and that is the conclusion of the lightning round. the lightning round is sponsored by td ameritrade. ow y megared omega-3s... but did you know your eyes, your brain, and your joints really love them too? introducing megared advanced 4in1... just one softgel delivers the omega-3 power of two regular fish oil pills... so give your body
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generally, when a stock has had an epic run, you want to ring the register. at least on a portion of your position, because anything else would be greed, and according to gordon gecko, it's bad behavior, it's hog-like behavior, and hogs have a tendency to get slaughtered. however, sometimes you'll find a winner who has what it takes. in those instances, you should be prepared to let some of your
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take zimmer. that's the orthopedic company that makes knee and hip replacements. zimmer's had a phenomenal run, it is up it 27% to date. one that has bucked the rotation out of health care. i think this move is far from finished. cross, along with the companies that were hit with the federal excise tax which has been suspended. zimmer's been making an incredible come back. you look at the timeline of the merger with biomet. it's easy to understand why it could have a lot more upside. it goes back nearly two and a half years ago to april 2014 when the old zimmer holding the announced it would be acquiring
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they were expanding their product line pretty dramatically, creating many more cross-selling opportunities and giving the company more leverage when it comes to negotiating prices with the hospitals. in fact, zimmer's own stock rallied 11% the day of the announcement. you know it's going to get a good deal. that's why from april 2014 to february 2015, zimmer's shares peaking at roughly 121. then the company started running into speed bumps. at this point, they briefed that the biomed deal would close in the first part of 2015. however, it took longer than expected to get approval from the ftc, and the merger didn't close until june of 2015. that meant those that people were excited about got ended up pushing back from last year to
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they would have to push back their buyback program until they were finished with the integration of biomed. the zimmer story hadn't changed. it had been postponed. however, investors can be an impatient breed. once the biomed acquisition was completed, it sent the stocks soaring. this is when medical stocks really became into their own. it felt part of the cohort that felt safe. and zimmer's cohort got a boost in december when obama extended the medical device tax for two years. but zimmer stumbled when it reported at the end of january. while the numbers were better
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was acting as a drag on sales. nevertheless, the stock got pummeled in february as part of that broader market selloff, down big from the 21 peak in 2015. the story never really changed. zimmer made a transformation. and stocks have been on a seesaw. getting slammed when investors start to worry that something about the merger might be going off the rails. but, as this year progressed it became very clear that zimmer's finally got everything under control. they announced a buyback, equal to 5% of zimmer's market cap at the time. that suggested that the management was confident. and when they reported in april, the results, they were
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were silenced a month ago when zimmer reported another top and bottom robust beat.beat the merger with biomed is going fabulously, end of story. you know how much we love arg. up to 4.5% range. it's no wonder the stock surged 7% in the next two days. while the stock is up 50% from the february lows, i think it's worth remembering that zimmer's current price of $130 and change is only $9 higher than where it was trading last year, before the biomed deal got delayed. now that it's delivered on all of its promises, it makes sense that stocks would be substantially higher. but it isn't. it's experiencing accelerating organic growth, hard to find,
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salivating over this. this is much better than its competitors. zimmer remains quite cheap in a vacuum relevant to its competitors. zimmer could rally another 20 to 30%! just by playing catchup to stryker and smith and nephew. lesser companies. a couple weeks ago, two of zimmer's major holders, the private equity firms sold 7.4ple -- 7.4 million shares. i think the secondary reason is the reason you can buy it at 130
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waiting to be snapped up by you. this selling is nothing to do with zimmer itself. kkr seemed to have a desperate need to raise capital. so here's the bottom line. sure zimmer's had a huge run, but a lot of the move reflects that the company has gotten back on track after its biomed acquisition got delayed. it is improving, it is the only part of health care that remains in favor. i say, what's not to like! stick with cramer. someone's hacked all our technology. technology... say, have you seen all the amazing technology in geico's mobile app? mobile app? look. electronic id cards, emergency roadside service,
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i'm really excited to let you know about something i've been working on. it's a documentary called "ground zero rising." it premieres september 1st on cnbc. i hope you tune in.
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for you right here on "mad money." i'm jim cramer, and i'll see you tomorrow! just moments ago apple was hit with over $14 billion in taxes owed following a you pea yan commission investigation. new details surrounding anthony weiner. a pastor backtracks on a defensive tweet about hillary clinton and we'll get a preview of donald trump's immigration speech. >> i'm looking forward to joining donald trump in arizona on wednesday. he'll lay out his commitment to ending illegal immigration in this country.

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