Transcripts For CNBC Mad Money 20140819 : vimarsana.com

CNBC Mad Money August 19, 2014

42. 50 a share. It was a terrific day and the dow gained, and the advance 4. 3 . Google has had a remarkable run and one thats far exceeded the performance of the overall stock market, and i think its fair to say that this rally has been consistently and remarkably underestimated by so many people including thousands of investment professionals pretty much the entire way up. Its just a shame. From the very beginning theres been an amazing failure of imagination when it comes to visualizing what google can do and how much money it can make both for its company and for you. Theres failure of imagination is unusual when it comes to technology. The renaissance is caused by American Drilling technology. Its been under estimated since it got started with the production volumes and the profits available to these companies far greater than most people thought three years ago. Google is unique and just how many people didnt trust it from the get go . I did a perusal of the research at the time of the ipo, it shows a mixture of weak buys and holds, a couple of sells and thats because the analysts showed a level of skepticism of google that was in retrospect, both ridiculous and yes, be obt. They almost believed that it was much smaller than it turned out to be. They placed heavy bets and in favor of yahoo and microsoft dramatically overstating the power of the competition. Almost universally they fretted about the lockup and the number of shares that would be unleashed on the market after sixmonths time. Many of you think the market is immature and because the company is so young and it was done without themajor brokers in an auction, of all things. Google lacked wall street backing because of the rebellious streak which continues to this very day. I kind of like it, though. The valuation seems too high to many when it came public. They were looking at the nearterm numbers, but most important, the analysts looked at the world as a relatively static place. A place where google could be competing for a small portion of the Advertising Market that might come from television that might come from the print world and land right on your desktop largely via ineffective banner ads and augmented by some sort of rebate payment that advertisers might be willing to pay in order to get key words that would kick back to their own publications. They were dead wrong from the beginning on every one of these points. Google crushed yahoo and microsoft in search. Who even remembers the lockup . Google navigated to the cell phone better than any company ive ever seen. The earnings estimates turned out to be absurdly low. The darn thing was selling six times future earnings. Six times. Thats insane. Now i remember whenning gooel came public and i was interviewed soon after it was trading about a hundred and i said pretty matter of factually on air, it could double, double rather quickly. The opportunity was so great. Not long after i made those projections i found myself being questioned from many in the business including those in positions of authority how i could be so outrageously positive withing gooel. Wed just come when trillions were lost if tech stocks and no one wanted to hear about how an unknown tech stock could double rapidly. I in a matter of fact way told everyone who questioned my analysis that i envisioned a world where google would get a percent of the ad market because it was superior to any other company on the web and a tremendous way to reach viewers and reach prospective targets. I told questioners if they had kids they would knowing gooel had become more pervasive that many a homework assignment said no googling allowed. Google wasnt just a verb. It was a forbiddener haveb. Finally, i said i was lucky. Lucky enough to have started my own web company, eight years before google came public. I could see the only way you could survive if not thrive as a publisher on the web was to fork over money toing gooel in order to get key words that individuals might hit up about the stock market. If you didnt pay them you didnt get the traffic you needed to support your own ads and when it comes to those ads it was increasingly clear that banners were the way of the past and all of this dispassionately explained that google would triple quickly. But i didnt want to say the word triple. I wasnt going to say triple because no one would believe me so i was staying conservative only calling fair double. Needless to say google managed to triple and i was way, way too conservative. While ive certainly made many mistakes in my time and you can see them endlessly mentioned on the twitter by the trolls, this began a love affair on the stock that ive been right on pretty much say, the whole way and since that interview. Ive always approached it the same positive way. Take a look. The hottest ipo of the year. Taking the internet by storm. All of the attention. Markets are buzzing about google. Welcome to the world of google will. I think google goes to 250. I like google i think it goes im raising my price target from 500 to 560. Hallelujah im taking my old 600 target tonight to 750. Lets get it from the chairman and ceo of google. Google is growing and were growing globally and we have a lot of products y woo have to introduce all of these other technologies and content into it. I want you to keep in mind that the price targets were presplit. The stock advanced well beyond every one of those, well beyond. Thanks to the acquisition of youtube and the smartphone, its been tough for me to keep my price targets far enough ahead of the stocks actual move, but of those Game Changers and the Widespread Adoption of faster and faster internet speeds, theyve announced google to capture 10 of the ad market and they just did it. After hearing Conference Calls like todays home depot where the company is shifting 36 of the ad budget online, i know that this percentage will only grow, and it will have to be shared with the likes of facebook and twitter. Its beginning to monetize youtube and so many other weapons while at the same time laying to waste all of its competitors as it it dominates search as i said it would. Its even now come up for a way to advertisers to reach their targets that eviscerates the markets of any publisher in the web while bringing huge dollars to googles bottom line. Thats why after ten years i remain steadfast in my support of google the company and the stock and why it remains a large position in my charitable trust. Even after this run the stock is still cheap versus the estimates out a few years. Thats how you have to look at it. Remember, thats what happened in 2004. I think its too low versus what it can do with its business. In the end what makes mow most bullish onning gooel right now as it always has, why it put off so many people ten years ago and thats the executives and the people who work at google. Its run by the best and brightest and has always attracted the best and the brightest and with the possible exception of facebook it can pick the smartest graduates from any school it wants. Listen, this is what we know about google. Its the nfl of brains and every young person i know believes that. So let me give you the bottom line here. As long as thats the case, and i think it will be for many years to come, the contest will be to keep the price targets for google current and not have them be overrun by the stock of this Amazing Company that we celebrate today for having come public ten years ago. Eric in texas. Eric . Hey, mr. Cramer. A big san antonio booyah to you, sir. Nice listen, my company is auto home, chinese auto home, Ticker Symbol is athm, and i was wondering what your opinion is . I took your advice on the peg ratio and the pe ratio on your education show and i would like to see what your opinion is. I cannot bless it. Ive blessed baidu and vipshot. When you get involved in the Chinese Companies you have should be sure that youre sure about the fundamentals and plus the accounting and i have not done the work on auto home. I do know it is fastgrowing. Ive got more work to do. Lets go to matt in california. Matt . Booyah, jim. How are you doing . Good. How are you . Pretty good. I picked up rite aid at 750 and it took a dip at 15 and made a few shekells back today and whats going on with them . They had a change in cfo. That has not been a good company. I doublecheckid and think the person is good. The stock did miss a quarter. It has more than doubled from the bottom. It went too far too fast in retrospect. I stand behind rite aid. I know people on twitter ask me about it every day. Heres how i feel about rite aid. I like it. I havent changed. Happy ipo anniversary, google. The stock has had a terrific decade and i dont think its reign is coming to knowa end any time soon. More mad money tonight, more money in consumers pockets . I think it means more spending. Find out which retailers can feel the boost and then the airlines have had quite the ride. I have the one that you can take to new heights no frequent flier miles needed. Stay tuned. Youve never seen American Energy like this. All week im taking you behind the boom in domestic oil and gas and tonight we have one stock defying gravity with a 20 move this year. Stay with cramer. Dont miss a second of mad money. Follow jimcramer 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. Over 20 million kids everyday in our country lack access to healthy food. For the first time American Kids are slated to live a shorter life span than their parents. Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy, affordable, kidinspired, chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. Holy cow. It looks like the rotating correction that crushed retail suddenly is a thing of the past. Thanks to some spectacular moves among some very highprofile retailers including Urban Outfitters, home depot and tjx up an incredible 4. 5 , 5. 5 and 8. 7 respectively in a single session. [ cheers and applause ] it was quite simply a monster day for a group that had been left for dead just a week ago each of these winners is a different kind of success story. Oh, i was plenty worried about home depot ahead of the quarter. Why not . The dow stock had been had started to feel like a highprofile disappointment that we saw in macys because analyst his been recommending it and recommending it and it had been pushed and pushed ahead of the report, but unlike macys home depot delivered such a good, clean, quarterly beatdown of the estimates that the bullish analystses turn itted out to be conservative. Buy, buy, buy the stock swerved 4. 64. Come on, thats an amazing move for a 120 billion market cap stock given that it was a late spring because of the weather, ceo frank blake and his team did a remarkable job coming from behind to create a superb quarter with tremendous intraquarter momentum. Theyre winning the hard war goods if are certain although sales were so bountiful that its hard to remember them doing a good job, Urban Outfitters thats where the numbers were so bad for so long that the underperforming division and thats the flagship urban was fantastic news and thats how people are viewing the quarter, hence todays rally and anthropology with the same fabulous williamssonomalike self and free people with were spectacular and not because i gave my daughter a huge Gift Certificate from there, and the Urban Outfitters came into the next quarter with better Sales Numbers was enough to inspire the faithful to reiterate their buys or put extra table pounders in for the oeshgz and it worked how about tjx. There was a time when i wouldnt be satisfied at all with what they delivered this morning, but when a highquality global retailer sees its stock sink from 52 to 62, its got real room to run back up even on a 2 increase of samestore sales. Tjx was the most consistent retailer i followed which is why the inconsistency from the last quarter now seems like an aberrati aberration, hence the 4. 60 rally in the retailer run by the incredible nonpromotional, and i dont think tjx is done going higher. These numbers plus the takeover battle for Family Dollar reminds us that we focus way too much on the weakness in walmart and target. Two hurting goliaths that i think are losing customers to everyone else in the business. I have been adamant that both companies have lost their way in the wilderness and they neither seemed clever or more intriguing to shop and theyre obviously cheaper than anyone else. I dont know how walmart or target can turn around. Consider the jam that these two companies are in. Neither target nor walmart in the Dollar Stores can compete with those price cutters. Geez, this stuffs for a dollar. At least a dollar tree and Dollar General. I know Dollar General has higher stuff. Tjx, i dont know, its known for clearance sales. Clearance of other Peoples Properties and thats another niche that protects them from walmart and target. Competitors delivered terrific numbers and didnt get credit for them when it reported. I got too negative on costco. Even decks and the down and out Sporting Goods company no doubt taking customers from these two fair do wells. And lets not forget amazon prime for what walmart and target formerly provided to you. Free appliances, clothing, Sporting Goods, electronic goods and geez, it is it is difficult to see where target and walmart can make a comeback. The disappointing outliers besides walmart and target is macys and nord vstronordstrom. The technological spending and macys is all about the revitalization of jc penney where there were as much as 5 billion in lost sales that were up for grabs and some of that is finding the way back from macys to penney where it was before the disaster of ceo ron johnson. Overall, after today, though, it looks like consumers by good housing numbers and lower Interest Rates and dramatically reduced gasoline and electric bills may be spending at retail again so let me give you the bottom line. Amazingly the decline in retail seems over and just one more sector that looked like it was dead meat and part of a horrible rotation that was saved by the bell of very good quarters when, i dont know about you, but i least expected them. Sam in nevada. Sam . Hey, jim. Thanks for helping out the little guy. Of course, sam. I sure do try. Whats up . Im curious about al brands. Its had a good run lately . They reported a good quarter and no reason for me to stop now. I think theyre on a major turn here. Congratulations to them because they, too, like many other retailers looked like they were down for the count and now theyre back. Saved by the bell [ bell ringing ] sure there are outliars and the correction of retail is incredible. Now it seems over. Investors may be spending again. Theres still more mad money ahead. If cheaper gas is putting extra cash in your pocket imagine what its doing for the airlines. Who is best to soar in the dip and fuel. You know what im doing, im behind the boom. Thats right. Im drimg the Domestic Energy revolution with one of the biggest players in the gulf of mexico and plus a rising shale star thats up and can go much higher. American energy is alive and well. I want you to stay with camer. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase. Like 50,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards, even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. Is this rebound in the Airline Stocks that just started for real . For over a year the airlines were on fire and you know we were backing them and they just kept ral sxeg rallying like nothing could stop the the group. The airlines seemed to peak for the next couple of months the stocks got slammed. Up until a week ago when the airline names finally began to bounce, should you trust the recent pullback or are we really looking at a viable rally in the group thats once again taking leadership of the Broader Market as part of a larger transport move. Tonight were going off the the charts to answer that question with the help of bob line. Hes the brilliant technician, the founder and being the technical star in the threeman team in the trifecta stocks newsletter who has had some amazing calls in biotech and several momentum stocks this summer on the show including one in person now believes that the Airline Stocks are ready to take off here. And on the fundamental side i can tell you these companies do benefit dramatically from declining oil. 93 a barrel. We know from the recent earnings reports that low factors continue to rise and Business Travel is increasing versus previous quarter and the downing of the aircraft, but you know what . Right now i think these are poised to go higher. In this seesaw market, the technicals could be incredibly important which is why we need to take a closer look at the charts of several airlines. Lets check out one of the big boys and one of your favorites and i know from your emails and tweets, the daily chart of delta air lines, d. A. L. Delta rallied from april to early june and that was the rally that was amazing and quickly repealed much of the gains as the group began to sel

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