Transcripts For CNBC Mad Money 20130312

Money. My job is not just to entertain you but to try to teach and coach you. So call me at 1800743cnbc. Somewhere along the line, the psychology shifted. Somewhere along the line, it stopped feeling good to sell and started feeling loathsome and stupid. Somewhere we developed sellers remorse after a stock transaction. And we see it now every day, including today where the market opened down, right . People sold. And then it rebounded. The dow closing up 50 points, the nasdaq 9, s p 5. We typically associate buyers or sellers remorse with real estate. There is a ton of second guessing about the homes bought in the 20062008 time frame, justifiably so. You know the litany of should have, would have, could have. Did i pay too much . And then what was i thinking music, finally now what do i do . Anger, denial, acceptance trilogy. Isnt that what its been like to buy a stock for most of the last decade, often because of how whippy the markets been . You would buy a stock, and by the time you bought the report you might have been down badly on it. Its why i suggest you use limit orders because of the prospect of being down a buck by the time you get a report on 3m or a caterpillar was so great that you had to defend yourself against the swift selling that undermined this market for ages. But now with the multiyear highs that the dow hits seemingly day after day, now doesnt it seem like the world has changed . Now we get sellers remorse almost daily. Now we feel palpable pain whenever we let stocks go . How do i know this . You see, i run a trust, a Charitable Trust where all the proceeds are donated to charity, and there are a ton of stocks frankly i cant even look at anymore. I took off my cell phone app, the one you press where it has all the ones, i had to eliminate them. Try to shield my eyes from. Im not kidding, shield my eyes from. Even when i watch the tape underneath our host, i cant stop, darn it all, darn it all, because they went up huge after i sold them. Ive got bad sellers remorse. Let me give you a few examples of just how raw i feel. A real chafing. Gold bond doesnt help. Hydrocortisone doesnt work. Even neosporin is not working for me. This morning boeing, how the company insists yet again its about to get approval for the newfangled battery solution for the dreamliner, like a duracell . No. My Charitable Trust bought boeing beautifully, paying in the 60s at one of the previous set of worries about the dreamliner that were not realized. It caused the stock to run 75 and people realized it was okay. At that time the japanese pulled the dreamliner from service, what seemed like a totally intractable problem. Mind you, this was just when we realized when the republicans werent as concerned about the sequester as we thought, were willing to let the cutback of the military spending happen. But i still felt wow, this ones got to go lower. With the stock hanging in the mid70s, i figure what a break, i can get out of boeing. Get into Something Else less risky, which by the way i did. That doesnt really matter right now. Sure enough, the trust, which is comanaged by stephanie link, who is also a contributor to cnbc and which you can follow along at actionalertsplus. Com, a website devoted to show you where we are doing and what were going to do before we do it, the trust got a great price on the boeing. And soon after the stock dropped a dollar, whoopie typical pattern, right . No sellers remorse on our part. Just victory ever since then, whats happened, first the airliners, they found more smoking batteries. Oh, man, thats bad, right . Second, the Transportation Department downgraded them. Third, the sequester is going into effect and this is a very tough thing for the defense contractors. And the stock . Its rallied to 82. I feel like i should wear a kick me sign on myself because im so angry what has happened. [ buzzer ] were taking thoughts. How smart did we feel that we had bought mickey ds for this trust . Right into a major firms downgrade at 85 bucks. This is one of the highest quality stocks around. Peaked at 101 and change on a couple of missed quarters. Rarely do you get an entry point that is as good as one created by that kind of downgrade, but believe me, it took a lot of patience, and we definitely had buyers remorse initially. Sure enough, it levitates every couple of months in the 90s. I think wait a second, prices could roar. Competition is getting tough. Management is new. Dollar getting stronger. The numbers havent turned. So kaching, kaching, kaching. We take the darn thing off the table. Sell, sell, sell, sell, sell, sell. Genius, right . I look like a genius, because immediately the stock traded down to 90 after the sale. And for all we know, that sucker was headed all the way down. We got that downgrade. Have you seen mcdonalds now . The golden arches has galloped to 98 and change. I got egg mcmuffin all over my face. And what exactly has happened . Nothing. It keeps posting negative numbers. Theyre just not negative enough. How about wells fargo . Trust had a nice sized position and missed a couple of quarters and failed. Technical speak for couldnt break the 36. Finally, what do we do . We got tired of it and we blew out of the darn thing. A couple weeks ago, bought some other financials. Just in case you think were a complete bunch of idiots, have done amazingly well. Still, i cant look at wells fargo because it broke out above 36 since then. I get furious any time i read or see anything about the stock. Dont mention the stock to me if im walking down the street and you see me. What happened . Nothing at all. The stress test, i figured we would break down to 34. Uhuh. I got angry when i saw the exceo on our air this evening, a total argh moment. [ booing ] finally, worse for less, southwestern energy. We put up with this one for ages, for ages in the trust. Just thinking that natural gas this is all natural gas play. How long can this thing stay down . How long . The answer, as long as we owned it. And then when the trust sold it at a loss, it then ramped three bucks. Final indignity. Someone on this panel last week, because the dow breaking out, i was on with my friend john najarian, and he said southwestern was starting to roar. Let me just tell you something, if you werent so big, i would have tried to take him down and give him the business. But then again, i never pick a fight unless i got a big enough guy right behind me to step in the moment i cause trouble. And the only big guy around was johns brother pete. So i didnt like the odds. You need to know this stuff, because the sellers remorse is what is driving the tape right now. Fear of not having enough stock. Fear of looking at a stock that just zoomed after we sold it. Fear of the various cliffs and payroll taxes and sequesters in italian french and spanish and greek and cyprus that turn out to not have any real impact on the stocks you own and you sold them because of it. After a while you just dont feel like selling anything. Thats how stocks do end up going higher, lack of natural supply, supply that has been there for more than a decade. These buyers keep waiting for the pullback, right . But it gets harder to wait. I have no doubt that sellers remorse wont last forever. Hey, look, there will come a moment where once again youll be furious you held on. Heck, it could be tomorrow. Im sure the sell it man, go away crowd are not planning on having any sellers remorse. I know people who bought dicks on friday before it fell 5. 49. Today, they got a bad case of buyers remorse. But the bottom line, its real clear. Its a new development when you sell a stock and see it move up immediately. Not just a little. We havent felt sellers remorse since the 90s. It sure is here now, though. Now its infected the mind of all the investors who are so sick of seeing the stocks they dumped go higher that they just dont feel like selling anything anymore. Dan in florida, please. Dan . Caller booyah to dr. Cramer. Booyah. Whats up . Caller regards to ge, i know jeff immelt had a News Conference today in records to returning 18 billion to his investors with regards to dividends. Uhhuh. Caller and i want to know is now the time to get in or out . I had bought ge when it was 16, you know. I bought a thousand shares. Should i hold on . Well, yeah. Stephanie link and i, she is codirector of action alerts plus, we scaled out a little when we read that. We thought jeff immelt was a little downbeat about the political situation. If the stock came in, we would buy it back. I got to tell you something, i think it is an opportunity. When these stocks go down and theyre high quality like this with big dividends and dividends coming bigger . You know what . You got to step up to the plate when they give you a little opportunity. Hey, it might not last, but sellers remorse is back and its bigger than ever with a vengeance. Investors are tired of watching their stocks go higher after they sell them. What its saying is shoot me. Im not selling them anymore. Stay with cramer. Coming up, financial faceoff. The kings of capital are clashing as big Money Managers jockey over finding the best returns for investors. While private equity deals accelerate, you could benefit. Cramers got his eye on the potential best of the bunch that could give you a boost. And later, good dog . Petsmart has been playing dead since hitting highs late last year. Is this pullback an opportunity to throw the stock a bone, or could it continue to roll over . Sit, stay cramer is taking this one off the leash to see if it could run. Plus, hot and cold . Shares of chart industries have been off the charts as of late as the natural Gas Infrastructure play continues to ride the Domestic Energy development trend. Could this stock fill up your tank, or it is ready to cool off . Dont miss cramers exclusive with its ceo, all coming up on mad money. Dont miss a second of mad money. Follow jimcramerer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Doesnt take a genius to figure out weve got an absolute roaring bull market in publicly traded stocks. The s p is not many points away from record levels. The dow seems to enter a new high every day. But what if i told you there was an even hotter bull market out there right now. Im talking about private equity, pe, which is totally en fuego right now. Private equity firms buying Companies Using borrowed money. Then they typically fire a bunch of people, streamline the business, and then years later they take profits by bringing the Company Public via an ipo. [ applause ] virtuous circle. Central banks around the world are keeping Interest Rates low. So there is lots of cheap money they can use to finance their leveraged buyouts. At the same time the stock market is in terrific shape and ipos have been doing very well. Which means private equity funds can realize enormous gains when they sell in the Public Market and there is every sign with the Housing Market improving the overall economy will keep getting stronger, so things are likely to get even better from here. Thats my view. I know its a minority. I got shouted down even today whenever i talk about this. I dont care. Its my view. But there is a problem. The vast majority of you cannot invest in private equity funds because just like the hedge funds, it only allows people who are already wealthy to put their money in these highrisk vehicles. If youre rich enough, your money would be locked up for years. No way to get it out. You can buy the stocks of Asset Management companies that have some stake or presence in private equity. Stocks like blackstone, black rock, apollo group or global management. They make their money from fees related to the size of the assets they manage and the performance of the assets. Given that more money is flowing in and the value of the assets has been rising, these private Equity Stocks and some of their brethren have been on fire. And i think the move is early. So the question we need to ask is which of these Asset Managers is the best buy right here . In a healthy stock market, like we have right now, i think its one that doesnt have a lot of private equity, but has a tremendous amount of assets under management, and thats blackrock, blk. I think its the best of the whole bunch because its diversified. Hence its why my Charitable Trust owns it. You can follow along at actionalertsplus. Com. Why blackrock . Because its the largest asset manager in the world, okay, not just private equity, but assets. 3. 8 trillion in assets. Weve seen larry fink on tv. He runs the company. He is terrific. Only 30 in fixed income, which is wall street speak for bonds. The equity funds have developed the track record of somewhat underperforming. But blackrock has managed to turn this part of the business around by replacing four of their five managers. They have seen strong inflow in the domestic and international funds. Nice switch. 47 billion worth, up 8 yearoveryear. But you know what the thing is that really sets blackrock apart . This is not a pure private equity thesis at all. What it is, they have a huge exchangetraded business, the etf business. Blackrock runs ishares, which is the largest family of etfs in existence. The Company Acquired Credit Suisse and with that deal, blackrock now controls over 40 of the etf market, more than double the market share of their next closest competitor. Now that people are getting excited about the stock market again, i think etfs are going to roar throughout 2013. I may not have much use for the funds except for gld, but investors cant get enough of this stuff. They like financial innovation, and blackrock is making a killing off of it. In december, capital flows into Blackrocks Etfs showed a 30 gain. In january up 23 . And within the etf business, blackrocks high fee emerging markets funds are really hot. 3. 4 billion in january flowed into the funds. The company boosted dividends. Got a yield at 2. 7 , the stock hasnt really done anything in the last five years. Its a lower yield but its a very safe one. And as the business improves, blackstones ability to raise should dramatically clear. So you get a high Quality Management asset with the market leading etf business and a strong position in risk management. I think that makes for a fabulous longterm investment for most individuals out there. The one problem with blackrock is that of all the money they manage, and they manage a huge amount, only 5 in some private equity funds, and i want that bang for the buck of private equity. If youre like me and you want something with more private equity exposure, im giving you kkr, carlyle, apollo, and blackstone. These are more risky than blackrock, but lets go over them. Carlyle has a beautiful base yield of 6. 8 , but the actual yields are often higher as they return lots of excess capital to shareholders at the end of the year. Carlyle doesnt have enough feebased income for me to be as comfortable with, but it certainly should be looked at. Kkr sports a 6. 7 yield. And while its a stable, well run business, i dont know how much upside there, but its still very good. My bias is to like these stocks. Apollo gives you a 7. 9 yield. If you believe the economy is going to get much worse, this would be the one to buy. Apollo is an expert at finding distressed assets. I talked to people who think the economy is about to get much worse because of the sequester. But for me, if youre looking for a winner in the private equity sector, the winner is the blackstone group. Its got a lower yield because the stock has appreciated. A 5. 5 base yield, just made a new high today. I think it can break out here. Back on december 21st when everyone was freaking out about whether we were going to fall off the cliff no, no, agh and go splat, i told you to buy blackstone as a speculative bet, where things would work out better. We bridged the cliff and blackstone has rallied some 30 since then. And now i think blackstone works as a nonspeculative investment based on the strength of its fundamentals in 2013, long runway. See, the Company Reported at the end of january, and the Conference Call was extremely bullish with ceo Steven Schwartzman saying theyre at an inflection point, meaning blackstone is going to get aggressive about exiting its position in order to take profits in this bullish environment. Blackstone gets roughly 24 of its revenues from private equity, about 24 from real estate, which we know is getting better, and 27 from its credit division, the companys Fastest Growing segment. Along with 16 from hedge funds, and the rest are advisory fees. Management said they see substantially higher realizations over the next two years. Thats wall street speak meaning that they intend to sell a lot more properties because they think they can get good prices. I agree with them. And as for the private equity side, in the last two years, blackstone has brought eight of the private companies in its portfolio public. Remember, thats how these private equity firms ring the register. In just the next 12 months, they plan on doing another eight ipos. So boy, is this a good business. And i think its accelerating, and accelerating dramatically. House of pleasure and blackstone is paying you a nice yield while you wait. Here is the bottom line. Right now we are witnessing an Asset Management renaissance driven by the strength of the stock market and of private equity. How to play it . Just remember that in finance, as in fashion, black never goes out of style. Blackrock is my favorite in part because of their huge etf business, but if you want more private equity exposure, blackstone is the way to go. Although this is such a fabulous moment for all of these companies, you know what . I would be happy to see any of them, literally any one of them in your portfolio. After the break, ill try to make you more money. Coming up, good dog . Petsmart has been playing dead since hitting alltime highs late last year. Is this pullback an opportunity to throw the stock a bone, or could it continue to roll over . Sit, stay cramer is taking this one off the leash to see if it could run. Eight years around here, and were still in that never ending hunt for value. And in this uber bullish market, where so many stocks are at or near their highs, genuine bargains are hard to spot. How do we find stocks that represent true value still after this run with averages . We look for names that have pulled well back off their highs, even as we think the underlying fundamentals have remained strong. We have to search through the broken stocks, not companies, to find new opportunities. Take petsmart, petm. The retailer of all things petrelated that has been on the decline ever since middecember to the point where its down more than nine points from its highs. Now even though petsmart has been in the doghouse lately, [ barking ] this company has been a longtime cramer fave, and the stock has a fabulous longterm track record, having run up from 13. 50, to a gain of 365 over the last four years. Not bad. Now petsmart has stumbled, but im betting the company can get some of that longterm mojo back, because no matter how the stock might look right now, including that chart which is hideous, petsmart is a winner, just like banana joe, the kind of weird looking winner of this years westminster dog show. Why do i think it can bounce back . This company has been hit with a series of woes in recent months. First, there is a big management shakeup. You know i dont like that. In november the cfo announced he would be stepping down. In midjanuary, petsmart announced a series of planned management changes, including bob moran, the current chairman and ceo stepping down, from the ceo post, leaving the current chief operating officer to take his job. Nobody likes uncertainty at the top, and that is spooking shareholders. The thing that really caused petsmart to get hammered was the disappointing quarter. The stock dropped four points in a nanosecond after trading. Petsmart delivered a three cent earnings beat, wait a second, rising just 14. 7 yearoveryear. And the actual earnings beat was driven by a combination of lower taxes and equity income, not from the strength of the underlying business, and that freaked people out. Meanwhile, the companys same store sales rose 4. 6 , a bit shy of wall streets expectations and petsmart gave disappointing guidance. The stock fell from 66. 55, vicious decline. When Something Like that happens, we need to ask what the heck went wrong . In petsmarts case, there were two major factors behind the disappointment. First of all, the company was up against very strong comparisons. That makes it difficult to put up numbers that impress. Secondly, more important, i actually want to blame the Analyst Community for not seeing this coming, and that caused a big dropoff. The consensus estimates of petsmart have been very rigid, despite all the things that went wrong in the Fourth Quarter, and many predictable, including Hurricane Sandy shutting down a big swath of the northeast for a week or more in some places. Even though petsmart disappointed, these numbers shouldnt have been that much of a surprise. But the analysts didnt take the numbers down ahead of it. Still, the company just reported what many consider a lousy quarter. That makes me think why am i out here recommending the stock . Am i simply banking on the fact that this has been an incredibly forgiving market where lots of companies have missed numbers like target or walmart, only to see their stocks ultimately surge higher . Okay, that is a part of it. Target has had an amazing year. The real reason is petsmart has come down to a point where i think it represents some value versus its growth rate. The 2013 guidance that everyon is poohpoohing is actually not that bad, maybe even darn good, up nine, the stock was too expensive. Down nine its cheap. Many people in america treat their cats and dogs better than they treat their kids. Now, wait a second, thats understandable given that dogs are generally obedient, cats rarely give you back talk, they dont sneak off to drink vodka, they dont smoke between classes, their music is my music. Pet adoption has just increased for the Fourth Quarter in the United States. Thats important, because the first year of owning a cat or dog is usually the most lucrative time for petsmart, as owners go nuts. Theyre so excited. They go nuts. Its like a first baby. They invest lots of money upfront buying all kinds of pet paraphernalia. As i know from the time i was caring for ishkabibble, my all white cat. I bought everything petsmart had to offer, including a Martha Stewart cat bed that he could have cared less about. Then again, there is no accounting for taste. I also think that maybe the fact that he was formerly named don julio, which is not my favorite tequila, may have affected his psyche. I should have just called him el jimador. Petsmart remains the Market Leader in this business. They got almost 1300 stores around the country. Management believes they can get the store count up to 1800, which means they still have a lot more room to grow. And the plan is to open another 40 to 55 Big Box Stores this year, along with microsized stores. The next one in brooklyn, i may add. What about the guidance . It calls for 15 growth. Thats a little slower than the 20 growth, mid 20 growth weve seen over the past few years. But petsmart has a habit of giving conservative guidance. The Conference Call management admitted its being incredibly conservative this time around. Even if that number turns out to be right, petsmart is only trading 14 times earnings. I think 2013 is going to be a good year for petsmart. They told us sales have improved each week. Thats very bullish. Its something we are not yet hearing from other retailers. You can also think of petsmart as a play on the housing recovery. Okay, were billion a million new homes this year. I think thats conservative. Lets just leave it as that. As people move into their own home, then theyre more likely to buy a pet. Plus, petsmart is always coming up with Innovative New products. They even have a partnership with disney. They got the disney thing going. They sell branded pet apparel. I have often wondered if pets like alice in wonderland or peter pan or donald duck. I guess they do or they wouldnt make, this right . This is what they want. Theyre selling more and more expensive Super Premium pet food, novel protein like bison meat and venison. I like venison broil. Like london broil. The humanization, they used this throughout the Conference Call. The humanization of pet trends. Humans are feeding human food. I had dog food early on in the series of the shows and i did throw up. Anyway, even though the quarter wasnt so hot, petsmart still posted doubledigit comps in their higher margin categories, which means this trend of people spending a fortune on their pets, its not going away. Its very much intact. And petsmart isnt just a retailer. They also provide all sorts of petrelated services. Do you know the company has a kennel business with 196 pets hotels, many of which would be considered at least four stars in a canine tripadvisor. As well as a vet business, 791 vet hospitals. But its Services Like these that keep people coming back to the stores because they cant be duplicated online. You have a pethotel. Com . No over the past five years they have been optimizing their assets via better merchandisers. A lot of the moves weve seen from home depot. And i think these moves will keep paying off. Here is the bottom line. Petsmart, no doubt they stumbled, but down here at 62 bucks and change, i think the stock represents terrific value. The pet theme is very much alive. This is no pet cemetery. This is not a stephen king story. Petsmart is still the best way to play it. The companys conservative guidance for 2013 means theyll be able to beat the numbers going forward, in my opinion. Thats why i think this stock is going higher, possibly much higher, as people realize that humanization of pets is a trend that is here to stay. And petsmart, its a habitat for animal humanity. Gary in new jersey. Gary . Caller hey, jim. How you doing . Couldnt be better, gar. How about you . Caller booyah to you. Back at you. Caller footlocker. Earnings were good, the company made tons of money. The stock keeps falling. Is it a buy, sell or hold . Stay away from that right now. Too many people saying its a buying opportunity. I need to see capitulation. When i see capitulation, im all over it. Until then, id rather stay away. By the way, nike wasnt that bad on the after the dicks Conference Call. Lets take a look at that one. All right, the dogs are out. Pet care is a theme that is here to stay. Petsmart i think is the best way to play it. And im regarding this pullback of a broken stock, not a broken company, as an opportunity. Now let me have some tuna. Ill see you later. Lightning round coming up next. Before we get to the lightning round, were coming up on a big milestone here in cramerica. Friday marks our eighth anniversary. Yep, eight years of mad money. Can you believe it . To celebrate, were looking back at some of our favorite moments, like this one, for example. After the wild market weve been having, im prescribing some family therapy. I do have a question for you, for the future, ive been thinking about this for a while. And i was [ applause ] will you marry me . Yes my god. Congratulations i saw that one coming. Maybe ill have to do it some day myself. Remember, it all happens friday. But before the show, we need to hear from you. I want to hear your favorite moment. We have a few choices for you to pick from. So i want you to do this. I want you to head to madmoney. Cnbc. Com. Ill remind you jimcramer on twitter. Well let you know. Well reveal your favorite this friday during our eighth Anniversary Show. And now it is time, it is time for the lightning round where you say the stock buy, buy, buy. Sell, sell, sell. Play this sound [ buzzer ] and then the lightning round is over. Are you ready, skeedaddy . Its time for the lightning round. Start with fred in florida. Fred . Caller booyah, mr. Cramer. Booyah caller first off, i want to thank you and your staff for everything you do for us. All right. Youre welcome. Caller id like to have your take on isrg. This is too much of a battleground for me. I know my friend Herb Greenberg is working a lot on this thing. I like to back away when i hear that nomans land. Lets go to john in florida. John . Caller jim, good to hear from you. And thank you for your show. Ive learned a lot by watching you and your books. Thank you very much. Youre a gent. Whats up . Caller i have pbi, a lot of it. Im worried about that stock. Now, look, the last quarter was good. I love to see the company come back on because the yield is outsized, and weve done so much work. When you have a real outsized yield, it does worry me. Im going to say no comment until they come on the show. Dino in california, please. Dino . Caller jimmy yo, yo. Caller can i get a bang on the drum cymbal . [ drums ] right on. Now you give a stock, and were equal. Caller all right. Had an oldtimer call me last week about a grain and seed agriculture play. I was wondering what you think about adm. I like adm. Hey, listen, this oldtimer was doing mojies today. Im doing stuff like you can be an oldtimer. Im sending stuff to everyone, telling me knock it off by the end of the day. Cliff in florida, please. Cliff . Caller booyah, jim. Booyah. Caller how you doing . Im all right. How about you . Caller very good. Ive been watching your show for the last five years. I think you do a great job for the average investor. Thank you. Caller youre welcome. The one im calling on, i have this in my i. R. A. Recently, but its western asset Mortgage Capital corp. Oh man, this is cmbs play. I hate to punt. I have to do more work on this one. Each one of these is an individual. You know i like annaly. Run by the great mike farrell, set that company up in terrific state. Agnc. We will do work on yours. Robert in tennessee. Robert . Caller booyah, jim, from tennessee. How you doing . Really good. How about you . Caller im excellent. Thanks for asking. Got a question about groupon, grpn. Yeah, groupon. I see zynga moving up. Why should i go with a company that probably has a business . Lets take one more. Lets go to where i think is going to be number one in basketball. Lets go to joe in indiana. Joe . Caller booyah, jim. How about two harbors investment, Ticker Symbol two . Very high yielding stock. Oh, man, another Mortgage Real Estate Investment trust. Were going to compare the two harbors and the western asset. That i promise you, and well have that by monday probably. Its going to take a little time. Its our eighth Anniversary Show coming up. But that, ladies and gentlemen, is the conclusion of the lightning round [ buzzer ] the lightning round is sponsored by td ameritrade. Coming up, hot and cold . Shares of chart industries have been off the charts as of late. As the natural Gas Infrastructure play continues to ride the Domestic Energy development trend. Could this stock fill up your tank, or it is ready to cool off . Dont miss cramers exclusive with its ceo. 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Right now were in the middle of an Energy Renaissance here in north america. Its one of the biggest themes guiding this market. And the tragedy is that even though we have all the plentiful natural gas we could ever want, our leaders in washington just dont have the vision or the will to take advantage of it as a cheaper, cleaner replacement fuel for surface vehicles that would promote domestic security. But while our politicians may be clueless, our corporations seem to know a good thing when they see it. Just last week we got two piece of very good news on the nat gas front. Particularly for vehicles. First, shell announced its building two plants to supply Liquified Natural Gas or lng for use for fuel in ships. And these plants will double our lng Gas Production in north america. Second, we learned the Burlington Northern Santa Fe Railroad is running tests. We dont know how many, but running tests of natural fuel. Best way to play . Its still chart industries, the company that makes the cryogenic equipment that is needed to transform natural gas into a liquid. Chart sells storage tanks for transporting Liquified Natural Gas, tanks for heavy trucks. Industrial gas division and a biomedical biz. So it has railroad vehicles, railroad opportunity alone could represent an 8 billion market for them. But they also profit from building the equipment for Liquified Natural Gas. All sorts of facilities like the kind that shell is building, and maybe some of the export places where we either use the natural gas or lose it. I think they make money. I first recommended the stock back in february 2011. Now its at 81. Its a 113 gain. Chart reported a fabulous quarter. The stock jumped 5 bucks on the news and it hasnt looked back since. Lets check in with sam thomas, the chairman, president and ceo of chart industries to find out more about the quarter and its prospects going forward. Welcome back to mad money. Thank you so much for coming in. I read through the quarter and i see natural gas is exploding, but to me its more of a china story than a United States story. Well, its a global story, jim. Its just where its taking off the fastest. We talked previously about how china was several years ahead of the u. S. Because of their commitment to use natural gas and particularly lng for transportation. In addition to the energy cost driver for them, theyve got a tremendous driver from improving the environment. Right. And thats becoming a critical issue for the government of china. So thats really helping to drive it. Were going to see the same things here in the u. S. Driving us in the u. S. Is the cost savings. Right. And our ability to be Energy Independent by using natural gas. But the environmental benefits are also going to be a significant part of our driver. It confuses me. The chinese have the will power. They dont have the shale nat gas. Weve got the nat gas. We dont seem to have the will power, at least in washington. Not in washington, but that can be a blessing. We dont want help like we got help with ethanol. Right. Okay. Fair enough. This is being driven on economics. And yes, its taking time. I believe were well beyond the Tipping Point. You do . Even though im reading like fed ex said last week, its coming, the Tipping Point. Dave demers from westport says its coming. You think were beyond the Tipping Point . Well, in terms of actual sales, actual consumption of natural gas and transportation, the Tipping Point is coming. But in terms of key people making the commitment and putting the investment in to make it happen, thats happening. This announcement with shell is big. This was the big one. Everyone missed it. Dont you think its interesting that it got about three inches in the papers . Wasnt this the big one . Well, i think weve had a few false starts with a couple of the natural gas companies. Right. Saying that they were going to get in and support it strongly. And natural gas pricing collapse led to them having to pull back. They didnt have the depth of the Balance Sheet. What we need is the depth of the Balance Sheet of an energy major like shell to come along and say were going to make this commitment. Its going to take five years, six years, seven years for us to build out these liquefiers, but theyre not going to turn back. Is there anybody else that does this besides you . There are a number of other competitors both in the u. S. And in china. None of them are as committed to it as we are. We built most of this equipment, designed most of it, adapted it from the Industrial Gas industry, and were now at the point where lots of people are sniffing around. Right. Offering their products. Big companies with big Balance Sheets are getting involved and taking a position. Were having a number of people in china, both looking at china and also looking at the u. S. Market, but we feel with our commitment to it and our continued investment in development of this process, well remain a Strong Player in it. Okay. So now i want to go over if i am in washington. I hear about a possibility that the chinese are worried about air quality. Theyre supposed to not be that caring about it. Were supposed to care a great deal. This has it in air quality. Domestic security. We know the Defense Budget is being cut back. What a great way to make it so that were actually increasing some of our domestic security. And then jobs. I read about your factory. Youre expanding. Youre putting people to work. Yes. If you have a jobs crisis, isnt chart one of the answers . Absolutely. Were hiring both in the u. S. And in china. Now, its not always a straight line. Right. There are plateaus, leveling off, and then another up leg. But its a tremendous opportunity. And natural gas is just a wonderful opportunity for the north american and particularly the u. S. Economy. Its going to be a tremendous growth and jobs driver, whether its used for natural gas transportation, exported. That creates jobs, or its used for petrochemicals to help give us lowcost feed stocks to make us a world class manufacturer of a whole range of petrochemical downstream products like plastics. Im going to leave it on that positive note, because i hear too much negativity all the time. Thats about as good a story there is. Thats sam thomas, chairman, president and ceo of chart industries. Hey, sometimes you can do well, do good and make money. Gtls. Stay with cramer. You waited and you wanted a dip. Today you got it bigtime on dicks. A real shortfall, crummy outlook. Ross stores last week. A 10 hammering. A good opportunity, or are you just scared to buy . Are you worried that the selling isnt over . I have to tell you that i think both companies have now one fell swoop lowered the bar to make it so you should feel comfortable buying them, even as nobody i know seems to agree with me. This market has a real bias right now against discounters, the way it has a bias against the highend like tiffany last year. Pretty much every industry gets hurt these days. Last week petsmart got dinged. We had seen ascena get pounded not that long ago. And of course bed, bath beyond and best buy got crushed at the end of last year. But take a look at the latter two players. Bed bath a possible private equity takeout. I believe it could happen if the nearterm fundamentals arent that strong. No matter what i say people believe amazon can crush bby. Isnt that what people said about best buy, that amazon is killing the hard goods retailer . Its become the last man standing in a business that has some sort of housing tailwind now. Stocks at 20. I think it never should have gotten down to where it was. I thought that was wrong. Best buy always had a decent Balance Sheet and decent cash flow, its a place you can go to buy hard goods and have them set up for you, which is not easy these days for some of these complicated tvs. My takeaway is theyre viable once they settle. The stocks come back and come back with a vengeance. I think dicks and ross will be the same. The weather gets better, theyll do fine. The company is being punished unnecessarily. It was too warm to sell the winter gear. They had to do serious discounting. Thats why the numbers are no good. Right now ross has been hated. It has much more room to grow. Its still a good discounter that has had a couple of off months. Credit that was virtually deserved with a good quarter they reported. Of course, everyone comes on tv and says they want to buy on a pullback, but when you get the actual dip, nobody wants it. The stocks are hated. Potential buyers hem and haw and walk away. Wait until you see yum tomorrow. Thats what happened with yum. Remember, they gave up on it. China is okay. The stock stays broken for a while. Enough time passes and people forget why they sold it. Then these stocks rally back to where they were before they got crushed. It seems that only then, only then do people start doing some buying. Dicks and ross, two broken stocks, not broken companies. Just what you should be looking for in this steaming hot market that some say never seems to take a break. Stick with cramer