Transcripts For CNBC Mad Money 20130205

Tomorrow. Dan . I hate this market here. I think the risk reward how do you really feel . Horrible right here. Bearish positions. Im long the sds and spy february puts. Booekers . We are at the end of the day, but also the end of thes thing here. I dont think that europe is fixed at all. So, you Short Deutsche Bank here, db. A lot of drunk people out there right now. Im melissa lee, thank you for watching. See you tomorrow at 5 00 for more fast money. Got the ceo of yelp tomorrow. I am jim kramer, welcome to my world. They are nut, they know nothing i like to say, there is a bull market somewhere. Mad money. You cant afford to miss it. My job is not to entertain you but educate you. Yesterdays hideous, awful, terrible market. Where, we got hammered for more than a percent. Bringing out the nasayers. House of pain. House of pleasure. It climbed 99 points. The nasdaq. 1. 29 . I understand the importance of answering that question. When we get a pull back, i tell you, buy buy buy. Buy this one. Pull back on a pullback, when we get one like yesterday, i dont see people buying the pullback. I see people selling the pullback. People want to ring the register. People dont want to be greedy. Nevertheless, i feel strongly that you dont back away when they throw a sale here. You dont back away on the pullback like yesterday. You have to be in there pulling the trigger. I know what you need. I have been thinking about it. Try to convince people to buy. You need verification of my thinking. Yes. You need to have others who came n took advantage of the declines, make you feel more confident. It is little me, telling you to get n half a dozen analysts, many knuckleheads, half my age, saying, sell, sell, sell. Stocks have gone up a lot. It was they are up too high. They have been in the business for seven minutes. Tonight, i will give you not one, not two, but three people who you can trust, more than you trust me. The only money i have on the line is my charitable trust. These guys are trading billions, they are buyers, not sellers. Tonight, i am making the case that john malone, Larry Ellison know bargains and they are seeing them in the stock macket. Larry ellison. One of those hawaiian islands. Oracle. Built on the best technology to be invented or acquired. The business that this brilliant industrialist created, paid millions for acme packet. Down on his financial luck, like acme dynamite. Ellison is taking advantage of the pullback. Oracle is paying 29. 25 a share. The stock is down from 83, only down because of a few shortfalls, that dont matter at all, when it gives them a soup to nuts software it is brilliant. Ellison is a buyer. This dell fellow. Purchase the company for 35 of where the stock stood not long ago. It is down, 25, five years ago. Michael del, taking advantage of the pullback. I heard michael del talk about how the company doesnt get credit for all the things he has. He has add Customer Software solutions, data skills, and the stock trades like, dude, you just bought a dell. They have an amazing business, schools, charities, these are different customers, then the ones not being catered to like it should. Dell, the next generation, coming public. Reconfiguring the entity of higher margin of proprietary business. Dell has to borrow a ton of montow get this done. He has microsoft loaning him a couple of bill. And Companies Close to 15 billion. What an in your face sign that the personal computer portion has a few innings left in the game. Are they being bought . Are these evaluations stretched as the younger analysts have told us . Take virgin media, look at the chart, that is a gigantic european cable company. Closed at 38 and change yesterday. Too much of a run . Isnt that a stock worth selling, fleeing . Not if you are john malone. The a man so renowned for his deal savvy, my college, david faber on squawk on the street call him the smartest man he ever met. After i had taken a minute of umbridge b i found myself concurring. He is paying mid 40, nts waiting for the dip. Mid 40s, possibly 47, 48. David didnt know the exact price. In a total aforemation, europe, it is a european cable company. How do i know about his snbs he doesnt care there is no pullback, he is ready to shell out 12 billion to get it done. The three titans say, they are not walking away from the weakness. They are taking the plunge. Here is the bottom line. When the richest men in the world are buying everyone a drink, buy, buy, buy. Should we sit back and pass on the weakness that market periodically gives you . Take the plunge when they plunge. Virgin media said, dont bother waiting before you pull the trigger. Martin in california. Caller i thought the run was over, it hit where most analysts predicted it would reach. Right now, a favorable debt restructuring, and mar cato management, a fund that owns 5 , is urging them to offer dividends this year. I dont know why they have to agitate against those guys, c p chip chipolte, i think the stock goes higher. Mark. Caller thanks for taking my call. In light of the numbers that adm put up, the whole food egg sector seems to be on the move up. Is now a good time to get into Diamond Foods . I think if you want to go buy their almonds, the green, i will bless that the emerald almonds, i like their peanuts, and mixed nuts very good. I would have had them if i was home. The stock, who knows anything about the stock. It is a black box. Stick with the green box. Buy the nuts. Dell, ellison, malone. Dont let pullbacks pass you by. Mad money will be right back. The market hasnt been kind to most of tech in 2013, is a shift in store . Tonight, crammer is taking on the trends in social, entertainment and retail to, find out which companies could be primed to power higher. In tonights edition of off the charts. And full power, Eaton Corporation is trading their twoweek highs, after reporting quarterly results. The industrial giant, find out if it is trudging ahead or running low on juice. Dont miss the exclusive with their coe. Healthcare cosmettic companies as botox smooths out wrinkles. Could new uses for the medication many the shares are heading higher. Cramer talks to the ceo, all coming up on mad money. Dont miss a second of mad money follow on twitter. Email or give us a call. Miss something . Head to madmoney. Cnbc. Com. [ indistinct conversations ] [ male announcer ] when you wear dentures you may not know it, but your mouth is under attack. Food particles infiltrate and bacteria proliferate. Protect your mouth, with fixodent. The adhesive helps create a food seal defense for a clean mouth and kills bacteria for fresh breath. Fixodent, and forget it. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Makes it easy for anne to manage her finances when shes on the go. Even when shes not going anywhere. Citibank for ipad. Easier banking. Standard at citibank. Okay. [ male announcer ] with citibanks popmoney, dan can easily send money by email right from his citibank account. Nice job ben. [ male announcer ] next up, the gutters. Citibank popmoney. Easier banking. Standard at citibank. On the day we found out dell is going private, it is worth remembering, 15 years ago, dell was one of the hottest tech stocks out there. These days you dont want to hear about dell. If it goes public again, it will be more styling with the times. When it comes to tech, you want to hear about the companies about the future not the past. St momentum. Tonight, we are going off the charts with the help of bob lyon, doing well for us. The strategist and my colleague at the street. Com. He works with me on the real money. Com tech sight. Fang. Fang for short. These are the stock that is seem to be moving higher of late. What is fang . Facebooks, amazon net36 and google. They all take major bites out of t the as we approach one of the most important days of the were for the stock market, my birthday. If you want to date me, i was partial to white fang. Back to the fang of tech. What makes bob a fan . They have been powering recently. First off, check out facebook, letter f for fang. A lot of noise and volivity, there is an important support for facebook at twaempt less than a point below where it is right now. Ceiling of resistance at 32. It will be ripe for a pullback, do buying, get to the 23 level. The bullish picture for facebook is the weekly chart. Pre pre pressto. The stock trade is down in a tight range that looks like a handle. This cup and handle, i know it sounds silly. Inviting facebook over for tea time. This is one of the bullish patterns out there. Once it breaks out from the handle, facebook did a month ago, you get a sustained move higher. I have to tell you, lang believes this long term move is infancy. 32. And facebook, there is little standing in the way of technical perspective. I think that facebook is no i like the quarter facebook. There was a lot of selling on the news. Next up, the amazing amazon. It looks stalled out. Yes, after roaring 10 from the neck and shoulders formation, this is an oddly named pattern. To make things worse, when you go to the bottom of the chart and look at the moving average convergence line, we call it the macd. Lyon said it is showing a sell signal. Where the red line cross says over the black line. See that well, you know what, if we do get a selloff in amazon, lyon thinks that it will be a brief pullback up from 220 in n like facebook, lyon believes that weekly chart changes the picture. Changing the time frame. The line is signalling that amazon is a buy. Black line on top. More important, he knows that amazon is a support here at 250 bucs. 215 below where it is right now. It is no where near being broken. Pumback to 250. A entry point. There it is, people. Start buying. Now, netflix. Look the at this thing. This is like, i got in the stock market, holy cow it is behaving of the netflix of old. A bullish peninant pattern. It is when after a huge move higher, stocks zigzag, triangle that looks like a pennant. Why is this so beautiful, it is what is known as continuation pers patterns. Pennant, move higher. You got it. Over the next six weeks, the stock rallied. That is before netflix reported blowout numbers weeks ago. Take a gander at the weekly chart. Again, he wants to go back in time a little. The weekly tells us, when netflix reported, the sellers were no where to be found. The williams percentage roscillator. At the bottom of the chart. It has been so right for us. Larry williams, smart guy. The idea being that it helps to measure if the stock is overbought, may be due for a pullback. It could be due for a bounce. Wait a second. It is looking similar to where it was in 2011s overbought period. During netflix powerful rally. Nine months, kept rallying, rallying. This time it has been overbought for just three months, lyon sees it as a ton of strength. He believes we can see squeezes down the road as we did in 2010 and 2011. Net36 had a gigantic run. Move sideways and digest it. And google. Take a look at the daily chart here. Google made a new alltime high. Remember when we were in ohio, and the thing fell apart. Look at this. It is amazing. Lyon points out, we see an additional 10 move after the historical high. And look at that, google like netflix, the stock stayed longer than any other imagined. Overbought, yes. If you want to get a feel for tech, forget dell, i want you to think fang. Facebook, amazon, netflix and google. You shouldnt bet against them there. Is a good chance that you might get bitten coming up, full power. Eaton corporation is trading their 52week highs after reporting quarterly results. Cramer plugs you into the future of this industrial giant to find out if it is charging ahead or running on juice. Interview with the ceo. And allergan catapulted in 2013, botox smoothed out the wrinkles. Find out when cramer talks to the ceo, just ahead. Coming up on mad money at 1 45, the aflac duck was brought in with multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. One of my favorite themes of 2013, dont just stand there, do something. Companies across the board seem to be recognizing, if they want to out perform a stellar market, take aggressive action. Action like break ups or acquisitions. It is not like i pull it out of thin air. When you look at the companies that did something dramatic last year, the market is rewarding them. E. T. N. , to truck transition andary space components, follow it along, one of the main reasons, last year, eaton acquired cooper industries, another company i liked for 13 billion in a gamechanging deal. It gives the company more expose tower the fastgrowing electric business. The electric biz was solid. Superb, even. 96 sents a share, the revenues, rising 7. 4 . Eaton had good things to say about the strength of the end markets, hydraulics are in worse shape. The big kick here, is that acquisition would add to their earnings, the integration of coop sergoing better than planned. It shot up 4. 93 . To a new high. Eaton has been rewarded because it is not just stand tlg, it did something. This stock has had a fantastic run. Eaton, up 14 , spectacular gains, a high yielder in june. 230 return since 2008. And the bankable chairman, mr. Cutler, welcome back to mad money. Thank you, jim, good evening. Congratulations, this was an amazing quarter. You said it would be messy, and an accounting lesson. When the smoke cleared, it was terrific. I need people to understand what you said in the conference call, how a deal could come about so bountiful. Half of the sales came from increasing our scope of our solutions, in key verticals, what does it mean for the average person watching the show . It is an important area in terms of the sale sineringies, oil and gas, eaton and cooper have had strong positions with different products and services. Our ability to bring them together in oil and gas and in mining and commercial construction, data centers, we become a much more capable supplier for our many, many customers, facing tough Power Management problems, wrapping it up with the service capabilities, and cooper has not had, gives us a powerful package to help customers be more competitive. You are taking share from one person who cannot offer a onestop solution. That is what lies ahead. So many are looking for suppliers, for a turnkey clusion. That is what we are prepared to do. That sales sineringy lays out ahead of us. We just completed that deal on the 30th. We paid off the financing, 1. 6 billion. Ahead on cash. We look to be up this year, versus what we originally thought, getting the cost lower cost financing package. And took in the fourth quarter, 50 million of restructuring to allow us to lower cost positions, where markets were running slower than we thought a year ago. We are wellpositioned to start this year. Excited built cooper acquisition. It is true, you highlighted, you do, you are a straight shooter, that is weaker. You use this term, better tone, when it came to china. What is better tone, in terms of where we could be six months from now. Look back to the spring of 2011. We saw the Construction Equipment market drop by 50 . Since then, we have not seen good demand in china that is a market we sell a lot of electrical equipment. January, positive orders, one month does not make a trend. It is hard to start a trend without a month. What we are encouraged about in january, this is a weaker time period, posta chinese new year, that is when you see the economy pick up. We are starting to see a heart beat, one of the markets for the last couple of years. You talk about a new way to view the company. You have fast growing products and systems, you have a vehicle suggest. Analysts did start that you may spin out truck and auto . Is that an idea or something that makes it easier to understand eaton . Really aiming at helping it to be easier to understand eaton. We would be using different segments the electrical and cooper products, one called electrical products, one called electrical system and services. And the vehicle business. We will still be reporting five segments. The significant news about eaton, 60 of our business is electrical. 80 , a proud, strong vehicle businesses, the vast heart of the business is hydraulics and aerospace. Without pointing fingers at the super bowl, we had hurricane sandy, are we seeing a wholesale reevaluation on what utilities have to spend, to keep up with mother nature, and equipment not able to withstand certain power surges . A couple of questions in there. Clearly, whenever you have natural tragedies. Wind and weather and electric dont work well together. Like in a big oil and gas refinery. Yes, we do have an aging infrastructure in the united states, it is one of the reasons we like the cooper acsig. And the Overall Concept at eaton, we want balance across end markets, geographies, and we knowledge that brings value to investors. You have a meeting coming up. You continue to be the great growth, chairman and ceo of Eaton Corporation. Good to talk to you tonight. Seemingly forever, this is a Great American company that should be in your portfolio. E. T. N. , andy cutler, chairman and coe. Ceo. It is time for the lightning round are you ready . Time for the lightning round. Go to j. J. In maryland. Caller wondering about dupont, ticker, dd. I have to give you a major booyah for the ravens. They should be doing better. I prefer eaton. Dave in new york. Dave. Caller i would like your opinion on mckesson, i like t the i like the numbers. Caller philip 66. Buy, buy, buy. I like to buy them on weakness. James in new york. Caller life. It is good on the fundamentals, too. Buy half. And then the other half, 60, so you get an average. Sonny in illinois. Caller a big booyah, from the windy city. Long time fan. I appreciate it. Caller h u. N. Buy, buy, buy. Go to john in florida. Caller jim, i would like your latest take on arena pharmaceutical. At jim cramer on twitter, because i didnt fall in love with this sto, a lot of people despise me. I know people are in love with it. I am not in love with it. Carl in arkansas. Caller greetings from arkansas. I am thinking of picking up a bank stock, your thoughts of new York Community bank. It is so much higher than all the others, i will send you to keen. I dont know, it is a nice gain. I prefer key. I like the safety. That, ladies and gentlemen, is the conclusion of the lightning round coming up, allergra catapulted in 2013. Botox smoothed out wrinkles for their results. Are shares heading high sner cramer talks to the ceo, just ahead. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. Its a challenge to balance work and family. Thats why i love adt. I can see whats happening at my business from anywhere. [ male announcer ] now manage and help protect your Small Business remotely with adt. Arm and disarm your alarm, watch secure video in real time, and even adjust your lights and thermostat wherever you are. With adt, you get 24 7 protection through our exclusive fastresponse monitoring. You can be confident that adt is always there for you. Hey, lisa. Is that the delivery weve been waiting for . [ male announcer ] and now you can get adt Monthly Service for your business starting at less than 2 a day. [ woman ] i love the convenience of adt. I can finally be in two places at once. [ male announcer ] call today and get adt for less than 2 a day. Helping protect your business is our business. Adt. Always there. All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Sgr in a bull market, it is easier to pick stock that is go higher. This is what a bull market looks like. What is more lucrative is picking stocks that go higher. Like allergan is the it makes real medicine, a leading player in the eye, edema. It is porveyer of breast implapts, and botox, what is not to like . Here is where it gets interesting. It is coming up with more ways to use botox, now it is migraine treatment. Fda approved it for over active bladder, to the point where botox sales could double by 2020. It is a pipe line that could power the company for years to come. It announced it will acquire map farm a the fda could decide to approve or not by the 15th of april. The Company Reported this morning, an excellent set of numbers, the forecast for 2013 was better than analysts were expected. This is a very conservative company, when it comes to guidance. Hence, the stock rally today. This company has given you a 20 gain since the last time we spoke to the ceo in september. The stock is up 160 since i recommended it four years ago to the day. You better hope it comes down, i dont think you will get this kind of pullback. Lets talk to the chairman, president and c ompt eo of allergan. Welcome back to mad money. Nice to talk to you again, jim. I am used to having to defend the fact they think why there are so much cooking. It seems like this time, there is so much in the pipeline, the over active bladder, just approved. That is entirely possible could be a huge breakout year for 2013 for allergan. On the 15 years i have been coe, somebody asked me, what is the best time, i said right now. The future looks better than the last five or ten years. Do you want to start with botox, where would you like to go . We should go map farma, migraine. The reason we acquired map farma, in the process of completing that, is because our corporation gave us deep insight into this product it is inhaled migraine product. It is applicable to ten times more patients, 30 million people. It is a puffer device. When you have the pain coming on, you puff. Within the hour, you start getting real significant relief. For us, it is the perfect overlap, in terms of the doctors who use or prescribe migraine medications, on top of each other. We forecast in the future the Distribution Channel we are setting up for migraine. You told me that fda is not quick to do something that is new, if there are existing products on the market. It doesnt sound like there is anything like this map farma drug . What is interesting, as we have done in the past with other drugs, a lot is known about this mole kul that came from mofrped into the down y. Side causes tremendous nausea that is why it is primarily used in the hospital setting and administered intravenously. Now, it can be blown into the lugs, in an effective way, you turn hospitalbased drug or relief treatment into a homecare treatment. We both know enough about health care that is the way it has to be to control cost and for the patient. I was reading, you have doctors who are trained for different indications this is much bigger, right . Absolutely. The number of patients obviously, with severe incontinence is so much larger than the patients with neurogenic or spaftic bladder. Those people with parkinsons and conditions, the launch of botox for chronic migraine, where we have to train thousands of neurologists, that havent used a needle in a while. Because of the approval that we got a year and a half ago for the first indication, spaftic bladder or neurogenic, it is a minor adjustment now to inject into the bladder, instead of 200 units, now, for severe incontinence, 100. It will be faster than is the form for botox therapeutic. We have had regen on, they have a terrific drug, you have something in phase two, should we be excited or too early for ma Macular Degeneration . It sold 800 million, some of the reports i have read, reports in 2013, 1. 5 billion. Quickly took market share, due to many frequent, less frequent injection cycles, our product is in phase two, one has to be cautious. If it pans out, what we have seen in limited studies, our drug maybe lasts three to four months, what an advantage it would be for the patients to go, from say, ten injections per year, with lucentis to, say, seven or six for ilea, to potentially, three, four, if our technology, we have on license from switzerland all works out. That is injections into the the eye. Well discontinue, thank you very much for coming on the show. You know that we have been behind allergan, the one who does r. D. What others spend on sale, they spend it in the lab. That is why they come up with what to do with botox and other drugs. Agn, i think it goes higher. I am sure if you look at it, you know exactly what i mean. Great, everybody made it. We all work remotely so this is a big deal, our first full Team Gathering i wanted to call on a few people. Ashley, ashley marshall. Here. Since were often all on the move, ashley suggested we use fedex office to hold packages for us. Great job. [ applause ] thank you. And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. Offed record, they give it up, knowing i am not going to betray them. Washington didnt screw it up so badly that businesses hurt. We can thrive again. We talk about confidence, what creates confidence on this show. I think i should talk about more of what makes confidence. There is a mistrust of both Political Parties off and on the record. Head scratches, the republicans tend to work at Big Companies with different ethnicities and thrown off by the agenda, i kept hearing it called all the time in new orleans. They dont get personal, they dont understand the personal, they understand they may not have a sympathetic ear of the president , didnt expect to be blown off by the gop because of the agenda they want to do business with business men and business women. Now, i heard no grousing whatever about the new higher taxes for the wealthy. Both parties have gotten out of touch. The housing cycle, retail. Speak positively about the state of the american consumer. Despite head winds from washington. Asia, not china, but asia is good, the section of the economy s oil and gas. The renaissance in production f we can harness the fuel of the future, natural gas. They are all waiting and watching, they dont want to switch, the lng, they know the epa hates, because it will not succeed. Natural gas to blend with diesel, save money. They know the complexity engine is great, the need for the infrastructure. They are jealous how well Waste Management is doing with the fuel it is a 2016 proposition for them. It the the Energy Situation is tempered by one thing, the white house, so many of the key stone pipeline, there is the president s true colors, there shows there may be no fossil future blessing for everything. I dont want to detract from the optimism all over the place. The hope that is Republican Party starts talking business. Then there is a chance, they dont feel postfiscal cliff, they dont feel washington is the enemy anywhere. [ male announcer ] when we built the cadillac ats from the ground up to be the worlds best sport sedan. People noticed. The allnew cadillac ats 2013 north american car of the year. For a limited time, take advantage of this exceptional offer on the allnew cadillac ats