Transcripts For CNBC Mad Money 20150122 : vimarsana.com

Rally here dow surging 260 points s p rising 1. 5 and the nasdaq gaining 1. 78 . Because mario draghi recognizes the low to no level of Economic Growth was just unacceptable. So hes throwing a trillion euros at the problem to stimulate the more abundant economies, even if it means taking down a lot of debt so more products can be sold overseas. Will it work . Oh for heavens sake who knows. The fact is six years after our central bank decided its not acceptable to have high unemployment, the europeans, maybe even the germans, theyre getting the message. Hey, worked for us. Stop debating that. It did. Could work for them. Its occurring not a moment too soon, though. You will hear a lot of whining from people who clearly dont own any stocks this is all bad. Where will it lead to interest lates are too low. Theyre too low already and this is papering over the problem. I could care less. Im here to help you make money. Im no professor. Let me explain something. We are so lucky in this country. Things go wrong with the current guys, we throw them out and put the other guys in. When things go wrong in europe some new party comes in that represents some unholy political extreme and civil unrest occurs. Thats certainly better than china, where they execute people for missing the quarter and face a possible overthrow. It is a reminder that europe has a big political and economic issue over there, and draghi will stop at nothing. He will indeed invoke the dictum of malcolm x by any means necessary to get some job growth and head off the extremists that work on the sidelines on any country in the continent. Thats the issue. Enough in europe. You know how i always say in big selloff a lot of stuff goes down that shouldnt be with bath water kind of thing. The bristolmyers theorem. Where i ask if the more onic market know what its doing. The proximate cause of the selloff has nothing to do with the price earnings ratio of bristolmyers. Its the same deal with rallies. Two sides of the same coin. The proximate cause of this rally is the central banker who wants to throw trillions of euros to get some growth going. Anyone who owns stock wants growth. But the Collateral Damage here is the weak euro. And i have to tell you, that weak euro along with a lot of weaker currencies, is really starting to kill a lot of our companies. Today because of the lockstep nature of stocks they all go up with stock futures like today. A lot of stocks actually went higher that shouldnt have gone higher including many that will go gown perhaps precipitously when they report their earnings. In fact all you have been hearing, if you are on these quarterly Conference Calls, is the moaning and groaning of how hard it is to do business overseas, because of the weak euro and how the translation back into dollars is crushing profitability. They keep talking about currency headwinds. I heard the word ive been doing textual analysis seeing four or five times in a Conference Call this word headwinds. I say youve got to take heed to bob dylan. You dont need a weatherman to know which way the wind blows. I think its become obvious who is going to make the quarter and who isnt. You dont need an analyst to tell you where the number cuts are coming from. The answer, my friend is blowing in the currency headwinds. Caused by the relentlessly strong dollar today being a prime example. We all want to visit europe. We dont want our companies doing business there. We are seeing this dollar issue creeping up everywhere and its become a gale force headwind for Many International Companies Based here. The strong dollar American Express last night sure didnt help themselves by having a slow december and blaming the consumer. The strong dollar annihilated Johnson Johnsons quarter. Although, again, i was surprised by the slowing growth there. I was surprised by that quarter. We know the strong dollar blasted ibms earnings. But then again, they have become an excuse machine and a serial misser of their targets. A waste of a whole set of Technology Companies that are reporting youre in the teeth of it. You can barely tell today, because every stock went higher. Thats the opportunity to lighten up on the ones that shouldnt. And then after hearing all this whining about the headwind the headwind, the headwind you get on the almost entirely domestic United Health Conference Call. Unh. This is like house of cards to me. This is like breaking bad. These kinds of Conference Calls, theyre dramas theyre dramas. And theyre not tragic dramas. Theyre comic dramas. You dont hear about headwinds. You hear about secular tail winds like managing cost controls. Thats how a stock goes up without a takeover bid. Listen to gary kelly, ceo southwest air and sellstells the story of the dramatic drop in fuel cost. Double whammy. Thats how you get the number one performing stock in 2014 up another 8 today. You hear no apologies oral buys or explanations or foul weather forecasts from these kinds of companies. You hear how it was a great quarter and the next will be even better. How about what we heard from Northern Trust . Key bag, wow they understand bob dylan. They dont have the subterranean hope sick blues. They live here. Their businesses as you will hear shortly are strong because they have nothing to do with europe or the euro. They arent trading foreign currencies. I dont know if theyll take them. They arent even being hurt that badly by anymore by that low Interest Rate environment they make in deposits and they make it up in all sorts of forms of growth that are spurred by higher stock prices and, of course, cheap energy. And, and glory be. How great, how fabulous. How wonderful was Union Pacific . And how lucky are shareholders they cant build railroads overseas . That company is on fire with so many cargos going into high single digits. How about wendys . I know mcdonalds supports tomorrow, and i think the Charitable Trust actually owns it for the yield. And a chance for direction maybe at the top there. Change. But its wendys that hit a new high today. Congratulations. You know, lets see. Wendys, mcdonalds. What do they do . They both make burgers. One makes burgers here the other guy makes them over there, too. Put aside that wendys taste better. Lets say you want to sell burgers domestically now, you dont want to sell billions and billions overseas. Give me an american first burger. Hold the biggy fries. Oh, and heres some truth. If you are in a real growth business, if youre in something that isnt competitive with others, and is necessary to living like netflix, up big again, you dont have the currency head winds either even if youre overseas. You dont have comparisons that make the winds relevant. You dont need to baton down the hatches. And if you dont have winds at all if youre in biotech like two small Biotech Companies we talked on the show yesterday, they serve unmet needs of people around the globe and arent bound by currency issues. Here we are a few weeks into currency season and i have had enough. Dont outthink it. They go up again tomorrow. Everything else better just hope they dont mention the Weather Report when they report. Maybe what we need to do is put together an investing cocktail using a combination of bob dylans meteorological prowess and George Washingtons admonitions from his farewell address, where he asked, plaintively and no doubt rhetorically why in heck should we en tangle our peace and prosperity in the toils of european ambition . Makes sense to me. That guy had game. Its becoming too hard at least from what now seems like lofty levels to feel at all confident about these International Bow home as. The head winds have hufd and puffed. If you dont want to get hurt stay indoors or at least indoors in america. Let me give you the bottom line. The market gave a reprieve. You need to ask yourself after today are you too internationally oriented. We will be stuck with a vicious headwinds from overseas in the same domestic tranquillity earnings by lower oil and believe me there is plenty to choose from. Ted in michigan. Ted caller yeah. Youre up ted. Caller oh, im sorry. Thank you for taking my call jim. Im currently on a fixed income. And although i have a little extra cash i am extremely worried about growing inflation and interest costs. Okay. Caller i was wondering, im thinking about gold or silver. I would go with gold except its kind of high price. What is your thought about protection against inflation . I always think that every portfolio now, periods like now, gold is like insurance. Youre not its not being used. Fortunately, you dont have to use it. But the gld is at 125, and i like that. I like when people say jim is there any gold stock you like. I like rand gold because dr. Mark bristow, hes no sissy, he knows where to drill. Yes, lets go to john in new york. John caller booyah, jim. Booyah, jim. Caller i have read all your books and treated them like textbooks. And i have a problem. Rich kinder ceo of Kinder Morgan is stepping down. Yeah i know bum arooney. Caller he will remain as chairman and be involved with mergers and acquisitions. He believes in kmi enough that he has never sold a single share of stock. Can we violate your sell when a ceo steps down rule . It is rich kinder after all. I found myself pondering the same exact question john. And then i realized that when he said that he understands texas and he intends to die with his boots on i knew that rich kinder is going to be in there every step of the way, kmi and i wanted to redouble. I wanted to double the position the Charitable Trust has in kmi. Rich kinder we trust you. We know youre not going anywhere. But you like to give the other guy a break too. And thats okay with us. How about dave in florida . Dave caller booyah booyah, dave. Caller Family Dollar stock. Ive had it for quite some time. And theyre merging well dollar tree is taking over. Its supposed to be a merger. I would like to know what you think of that. Should i hold my stock . Dollar tree is going to be a huge winner under this. I happen to like dollar jen too, owned by the Charitable Trust. Dollar tree we had a great dollar tree in south philadelphia. Great candy. I put them on twitter. I think this combination is going to be amazing. Family dollar is not that good an operator and dollar tree, you can eat candy off the floor. Not that you should do that but in my dollar tree clean as a whistle. On the shore is good too. I go there july 4th and memorial day. The market gave a break today. But still too hard to love the international. I suggest getting indoors in the great us of a. Mad tonight, ceo of United Rentals. Crushed the quarter, but the stockstill dropped. And the Regional Bank is flying high on monster results. Plus could your car be taken over by cyber terrorists . Ive been thinking about that and you should too. And thats why we have the ceo of harmon on and the future of audio. Stick with cramer. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer hash tag madtweets. Send an email to cnbc. Com or give us a call 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Listen up. Okay . Sometimes i get steamed here. Sometimes the market doesnt know anything. It doesnt seem to care about a companys sales, even if theyre great or their earnings if their fabulous, because its so fixated on just one little thing and gets it wrong all of the time. I want you to think about United Rentals, uri, largest in the world, makes its money renting out equipment and machinery to various construction firms industrials, utilities manufacturers, Home Builders government entities. Unfortunately, though, United Rentals also has a business Small Business where they rent equipment to oil companies. And because of that limited oil exposure with actual exploration and production customers accounting for just 6 of their sales, this stock has been eris advice rated from highs of 119 late november to 86 as of today. United rentals reported last night the company delivered a 12 cent earnings beat off a 2. 07 basis, rental rates up and management reiterated its guidance for 2015 at a moment when many thought the numbers would be cut because of the 6 what happens . After opening up strong stock got slammed, closing down 1. 75 . As management talked about the possible impact of Lower Oil Prices on their Conference Call this morning. Of course they addressed it. Their honest guys. Even though they think the damage should be manageable and being outweighed by the strength of the rest of the business especially nonresidential construction. Even though they have a 150 million buyback, all wall street seems to care about is the limited division. Has the time to take action appeared . Is this the right entry point . Lets take a closer look with michael neely, president and ceo, a straight shooter. Welcome back to mad money. Good seeing you. First of all, thank you for coming on. Thanks for having me. You have told our viewers straight the whole way. So im going to look at you and im going to say, is it possible that the decline in the price of oil is going to stimulate so much more business including nonresidential construction, that we may never even know you had this 6 nonsolution in oil and gas . Absolutely. We do believe that low price of oil, going into the consumer our economy is 70 consumerdriven. Its a positive effect. Its going to be a positive effect with housing and thats going to trickle down to multiple Industries Including chemicals, which really benefit hugely on the fact that oil prices are low. Do you think if you had not bought that division your stock would have been at 150 today . You know thats a great question. You know when i sat here before and i told you about the pump business, if you recall, 6 of their business overlapped into our core business. It was something you had to do for your core customers. It was not some brandnew initiative. No, but the opportunity was enormous and it was the biggest rerental item we had. So the idea was to crosssell that product line through our broad operations, and thats our goal. As it is you broke it down with a finetooth comb and said 15 is Collateral Damage and took it lower, and said the potential negative impact is just 36 million earnings before interest taxes, depressionation. How much is 36 million in the vast scheme . If you think about it we said our estimate for next year is 3 billion, eebda. So a little over 1 . All right. So theres two ways we can approach it. We can talk about how whoa is me, or you have i saw your debt ratios i saw how strong they are. I know you have that buyback. Why dont you finish the buyback in the next three months or maybe even three weeks and come right back into the market because youve got the fire power, unlimited fire power. Its always a consideration. Keep in mind we are going to spend money, about 1. 7 billion, because we do see the economy working in our favor. Right, right. Thats important. Hey, you know what we ought to do . We ought to talk about the other 94 of the business. I see nonresidential construction and Architectural Buildings off the charts and speaking of Regional Bankers, first time theyre seeing high single digit loan demand. When someone wants to put up the project, they can go buy the equipment or go to you and rent it. Absolutely. Which is cheaper . Rent absolutely. And how about the maintenance . Not only maintain it, insure it haul it around and the efficiency is not there. And when you look at all these bumps in the road plays well into our industry. Lets be psychological about it. Are we in a situation where if oil jumps 10 people buy your stock . Thats what i was thinking before i came out here. You know its an ongoing debate. I have no clue. Were trying to figure out, you know only 6 exposure. Why is it driving it . Whats why isnt this buckled . We dont know. I think there is more of a fear factor out there as related to oil, whether its demand or whether its supply. Whats driving the price down . Right. And thats up to debate. One of the things im trying to think is where is our country at this moment . I think our country is getting stronger by the day, because of this lower energy price. Lets talk about that chemical side. There are lots of companies that want to do business here. I keep hearing it. Why . Because our natural resources. Are you getting orders from say, Foreign Companies who want to build things here . Are you getting orders in the southeast from companies you never did business with before . Absolutely. We said that before. That were seeing an investment offshore investment, coming back to the u. S. Not only in chemicals, but also in auto motive in a big way. And so we see that continuing to play out. Would you ever double down on oil and just say, forget you, market you dont understand . Im going to take advantage of the bankrupt guys. Because there are going to be guys who are going to go bankrupt. I saw rich kinder buy 3 million asset. He stole it because he doesnt care what the nitpickers think. Is this a chance to do that . Its always were always you know veryin i didnt say active about opportunities. Because you get a lot of companies. Yes, our cash flow is there. Well look at the opportunities. If it makes logical sense, well be players in that market. Did the market know how to handle your stock today . Obviously, i dont think so. All right. Thats what i care about. Because youve been right every time ive talked to you. Thats mike kneeland. If you have a 48minute horizon, you might want to buy the stock. After the break, ill try to make you more money. Still to come. Your commute may be about to change lanes in the future. Cramer speaks with Economic Growth<\/a> was just unacceptable. So hes throwing a trillion euros at the problem to stimulate the more abundant economies, even if it means taking down a lot of debt so more products can be sold overseas. Will it work . Oh for heavens sake who knows. The fact is six years after our central bank decided its not acceptable to have high unemployment, the europeans, maybe even the germans, theyre getting the message. Hey, worked for us. Stop debating that. It did. Could work for them. Its occurring not a moment too soon, though. You will hear a lot of whining from people who clearly dont own any stocks this is all bad. Where will it lead to interest lates are too low. Theyre too low already and this is papering over the problem. I could care less. Im here to help you make money. Im no professor. Let me explain something. We are so lucky in this country. Things go wrong with the current guys, we throw them out and put the other guys in. When things go wrong in europe some new party comes in that represents some unholy political extreme and civil unrest occurs. Thats certainly better than china, where they execute people for missing the quarter and face a possible overthrow. It is a reminder that europe has a big political and economic issue over there, and draghi will stop at nothing. He will indeed invoke the dictum of malcolm x by any means necessary to get some job growth and head off the extremists that work on the sidelines on any country in the continent. Thats the issue. Enough in europe. You know how i always say in big selloff a lot of stuff goes down that shouldnt be with bath water kind of thing. The bristolmyers theorem. Where i ask if the more onic market know what its doing. The proximate cause of the selloff has nothing to do with the price earnings ratio of bristolmyers. Its the same deal with rallies. Two sides of the same coin. The proximate cause of this rally is the central banker who wants to throw trillions of euros to get some growth going. Anyone who owns stock wants growth. But the Collateral Damage<\/a> here is the weak euro. And i have to tell you, that weak euro along with a lot of weaker currencies, is really starting to kill a lot of our companies. Today because of the lockstep nature of stocks they all go up with stock futures like today. A lot of stocks actually went higher that shouldnt have gone higher including many that will go gown perhaps precipitously when they report their earnings. In fact all you have been hearing, if you are on these quarterly Conference Call<\/a>s, is the moaning and groaning of how hard it is to do business overseas, because of the weak euro and how the translation back into dollars is crushing profitability. They keep talking about currency headwinds. I heard the word ive been doing textual analysis seeing four or five times in a Conference Call<\/a> this word headwinds. I say youve got to take heed to bob dylan. You dont need a weatherman to know which way the wind blows. I think its become obvious who is going to make the quarter and who isnt. You dont need an analyst to tell you where the number cuts are coming from. The answer, my friend is blowing in the currency headwinds. Caused by the relentlessly strong dollar today being a prime example. We all want to visit europe. We dont want our companies doing business there. We are seeing this dollar issue creeping up everywhere and its become a gale force headwind for Many International<\/a> Companies Based<\/a> here. The strong dollar American Express<\/a> last night sure didnt help themselves by having a slow december and blaming the consumer. The strong dollar annihilated Johnson Johnsons<\/a> quarter. Although, again, i was surprised by the slowing growth there. I was surprised by that quarter. We know the strong dollar blasted ibms earnings. But then again, they have become an excuse machine and a serial misser of their targets. A waste of a whole set of Technology Companies<\/a> that are reporting youre in the teeth of it. You can barely tell today, because every stock went higher. Thats the opportunity to lighten up on the ones that shouldnt. And then after hearing all this whining about the headwind the headwind, the headwind you get on the almost entirely domestic United Health<\/a> Conference Call<\/a>. Unh. This is like house of cards to me. This is like breaking bad. These kinds of Conference Call<\/a>s, theyre dramas theyre dramas. And theyre not tragic dramas. Theyre comic dramas. You dont hear about headwinds. You hear about secular tail winds like managing cost controls. Thats how a stock goes up without a takeover bid. Listen to gary kelly, ceo southwest air and sellstells the story of the dramatic drop in fuel cost. Double whammy. Thats how you get the number one performing stock in 2014 up another 8 today. You hear no apologies oral buys or explanations or foul weather forecasts from these kinds of companies. You hear how it was a great quarter and the next will be even better. How about what we heard from Northern Trust<\/a> . Key bag, wow they understand bob dylan. They dont have the subterranean hope sick blues. They live here. Their businesses as you will hear shortly are strong because they have nothing to do with europe or the euro. They arent trading foreign currencies. I dont know if theyll take them. They arent even being hurt that badly by anymore by that low Interest Rate<\/a> environment they make in deposits and they make it up in all sorts of forms of growth that are spurred by higher stock prices and, of course, cheap energy. And, and glory be. How great, how fabulous. How wonderful was Union Pacific<\/a> . And how lucky are shareholders they cant build railroads overseas . That company is on fire with so many cargos going into high single digits. How about wendys . I know mcdonalds supports tomorrow, and i think the Charitable Trust<\/a> actually owns it for the yield. And a chance for direction maybe at the top there. Change. But its wendys that hit a new high today. Congratulations. You know, lets see. Wendys, mcdonalds. What do they do . They both make burgers. One makes burgers here the other guy makes them over there, too. Put aside that wendys taste better. Lets say you want to sell burgers domestically now, you dont want to sell billions and billions overseas. Give me an american first burger. Hold the biggy fries. Oh, and heres some truth. If you are in a real growth business, if youre in something that isnt competitive with others, and is necessary to living like netflix, up big again, you dont have the currency head winds either even if youre overseas. You dont have comparisons that make the winds relevant. You dont need to baton down the hatches. And if you dont have winds at all if youre in biotech like two small Biotech Companies<\/a> we talked on the show yesterday, they serve unmet needs of people around the globe and arent bound by currency issues. Here we are a few weeks into currency season and i have had enough. Dont outthink it. They go up again tomorrow. Everything else better just hope they dont mention the Weather Report<\/a> when they report. Maybe what we need to do is put together an investing cocktail using a combination of bob dylans meteorological prowess and George Washingtons<\/a> admonitions from his farewell address, where he asked, plaintively and no doubt rhetorically why in heck should we en tangle our peace and prosperity in the toils of european ambition . Makes sense to me. That guy had game. Its becoming too hard at least from what now seems like lofty levels to feel at all confident about these International Bow<\/a> home as. The head winds have hufd and puffed. If you dont want to get hurt stay indoors or at least indoors in america. Let me give you the bottom line. The market gave a reprieve. You need to ask yourself after today are you too internationally oriented. We will be stuck with a vicious headwinds from overseas in the same domestic tranquillity earnings by lower oil and believe me there is plenty to choose from. Ted in michigan. Ted caller yeah. Youre up ted. Caller oh, im sorry. Thank you for taking my call jim. Im currently on a fixed income. And although i have a little extra cash i am extremely worried about growing inflation and interest costs. Okay. Caller i was wondering, im thinking about gold or silver. I would go with gold except its kind of high price. What is your thought about protection against inflation . I always think that every portfolio now, periods like now, gold is like insurance. Youre not its not being used. Fortunately, you dont have to use it. But the gld is at 125, and i like that. I like when people say jim is there any gold stock you like. I like rand gold because dr. Mark bristow, hes no sissy, he knows where to drill. Yes, lets go to john in new york. John caller booyah, jim. Booyah, jim. Caller i have read all your books and treated them like textbooks. And i have a problem. Rich kinder ceo of Kinder Morgan<\/a> is stepping down. Yeah i know bum arooney. Caller he will remain as chairman and be involved with mergers and acquisitions. He believes in kmi enough that he has never sold a single share of stock. Can we violate your sell when a ceo steps down rule . It is rich kinder after all. I found myself pondering the same exact question john. And then i realized that when he said that he understands texas and he intends to die with his boots on i knew that rich kinder is going to be in there every step of the way, kmi and i wanted to redouble. I wanted to double the position the Charitable Trust<\/a> has in kmi. Rich kinder we trust you. We know youre not going anywhere. But you like to give the other guy a break too. And thats okay with us. How about dave in florida . Dave caller booyah booyah, dave. Caller Family Dollar<\/a> stock. Ive had it for quite some time. And theyre merging well dollar tree is taking over. Its supposed to be a merger. I would like to know what you think of that. Should i hold my stock . Dollar tree is going to be a huge winner under this. I happen to like dollar jen too, owned by the Charitable Trust<\/a>. Dollar tree we had a great dollar tree in south philadelphia. Great candy. I put them on twitter. I think this combination is going to be amazing. Family dollar is not that good an operator and dollar tree, you can eat candy off the floor. Not that you should do that but in my dollar tree clean as a whistle. On the shore is good too. I go there july 4th and memorial day. The market gave a break today. But still too hard to love the international. I suggest getting indoors in the great us of a. Mad tonight, ceo of United Rentals<\/a>. Crushed the quarter, but the stockstill dropped. And the Regional Bank<\/a> is flying high on monster results. Plus could your car be taken over by cyber terrorists . Ive been thinking about that and you should too. And thats why we have the ceo of harmon on and the future of audio. Stick with cramer. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer hash tag madtweets. Send an email to cnbc. Com or give us a call 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Listen up. Okay . Sometimes i get steamed here. Sometimes the market doesnt know anything. It doesnt seem to care about a companys sales, even if theyre great or their earnings if their fabulous, because its so fixated on just one little thing and gets it wrong all of the time. I want you to think about United Rentals<\/a>, uri, largest in the world, makes its money renting out equipment and machinery to various construction firms industrials, utilities manufacturers, Home Builders<\/a> government entities. Unfortunately, though, United Rentals<\/a> also has a business Small Business<\/a> where they rent equipment to oil companies. And because of that limited oil exposure with actual exploration and production customers accounting for just 6 of their sales, this stock has been eris advice rated from highs of 119 late november to 86 as of today. United rentals reported last night the company delivered a 12 cent earnings beat off a 2. 07 basis, rental rates up and management reiterated its guidance for 2015 at a moment when many thought the numbers would be cut because of the 6 what happens . After opening up strong stock got slammed, closing down 1. 75 . As management talked about the possible impact of Lower Oil Prices<\/a> on their Conference Call<\/a> this morning. Of course they addressed it. Their honest guys. Even though they think the damage should be manageable and being outweighed by the strength of the rest of the business especially nonresidential construction. Even though they have a 150 million buyback, all wall street seems to care about is the limited division. Has the time to take action appeared . Is this the right entry point . Lets take a closer look with michael neely, president and ceo, a straight shooter. Welcome back to mad money. Good seeing you. First of all, thank you for coming on. Thanks for having me. You have told our viewers straight the whole way. So im going to look at you and im going to say, is it possible that the decline in the price of oil is going to stimulate so much more business including nonresidential construction, that we may never even know you had this 6 nonsolution in oil and gas . Absolutely. We do believe that low price of oil, going into the consumer our economy is 70 consumerdriven. Its a positive effect. Its going to be a positive effect with housing and thats going to trickle down to multiple Industries Including<\/a> chemicals, which really benefit hugely on the fact that oil prices are low. Do you think if you had not bought that division your stock would have been at 150 today . You know thats a great question. You know when i sat here before and i told you about the pump business, if you recall, 6 of their business overlapped into our core business. It was something you had to do for your core customers. It was not some brandnew initiative. No, but the opportunity was enormous and it was the biggest rerental item we had. So the idea was to crosssell that product line through our broad operations, and thats our goal. As it is you broke it down with a finetooth comb and said 15 is Collateral Damage<\/a> and took it lower, and said the potential negative impact is just 36 million earnings before interest taxes, depressionation. How much is 36 million in the vast scheme . If you think about it we said our estimate for next year is 3 billion, eebda. So a little over 1 . All right. So theres two ways we can approach it. We can talk about how whoa is me, or you have i saw your debt ratios i saw how strong they are. I know you have that buyback. Why dont you finish the buyback in the next three months or maybe even three weeks and come right back into the market because youve got the fire power, unlimited fire power. Its always a consideration. Keep in mind we are going to spend money, about 1. 7 billion, because we do see the economy working in our favor. Right, right. Thats important. Hey, you know what we ought to do . We ought to talk about the other 94 of the business. I see nonresidential construction and Architectural Buildings<\/a> off the charts and speaking of Regional Bank<\/a>ers, first time theyre seeing high single digit loan demand. When someone wants to put up the project, they can go buy the equipment or go to you and rent it. Absolutely. Which is cheaper . Rent absolutely. And how about the maintenance . Not only maintain it, insure it haul it around and the efficiency is not there. And when you look at all these bumps in the road plays well into our industry. Lets be psychological about it. Are we in a situation where if oil jumps 10 people buy your stock . Thats what i was thinking before i came out here. You know its an ongoing debate. I have no clue. Were trying to figure out, you know only 6 exposure. Why is it driving it . Whats why isnt this buckled . We dont know. I think there is more of a fear factor out there as related to oil, whether its demand or whether its supply. Whats driving the price down . Right. And thats up to debate. One of the things im trying to think is where is our country at this moment . I think our country is getting stronger by the day, because of this lower energy price. Lets talk about that chemical side. There are lots of companies that want to do business here. I keep hearing it. Why . Because our natural resources. Are you getting orders from say, Foreign Companies<\/a> who want to build things here . Are you getting orders in the southeast from companies you never did business with before . Absolutely. We said that before. That were seeing an investment offshore investment, coming back to the u. S. Not only in chemicals, but also in auto motive in a big way. And so we see that continuing to play out. Would you ever double down on oil and just say, forget you, market you dont understand . Im going to take advantage of the bankrupt guys. Because there are going to be guys who are going to go bankrupt. I saw rich kinder buy 3 million asset. He stole it because he doesnt care what the nitpickers think. Is this a chance to do that . Its always were always you know veryin i didnt say active about opportunities. Because you get a lot of companies. Yes, our cash flow is there. Well look at the opportunities. If it makes logical sense, well be players in that market. Did the market know how to handle your stock today . Obviously, i dont think so. All right. Thats what i care about. Because youve been right every time ive talked to you. Thats mike kneeland. If you have a 48minute horizon, you might want to buy the stock. After the break, ill try to make you more money. Still to come. Your commute may be about to change lanes in the future. Cramer speaks with Industry Leader<\/a> harmon to hear how new technologies could impact its bottom line and your drive home. Just ahead. Could this be the moment to circle back to one of my favorite stocks, Harman International<\/a>, maker of highend auto speakers car stereos and topnotch professional grade equipment, as well as being a key member of info containment systems that integrate everything smartphone. Its the number one business where they compete. Truly proprietary. The stock has been slammed ten points over the last two months. I dont know people worry about weakness in europe or something. Harman reports a week from today, and this company has a long history of delivering up side surprises. The reason i want to highlight today, harman announced two breakthrough acquisitions symphony teleca 7 to 80 million, and provider of Software Management<\/a> technology. 170 million. With these two details, harman is trying to take control of its destiny. Lets take a closer look with the chairman and ceo of Harman International<\/a> industries to hear more about what these two acquisitions means for the companys prospects. Welcome back to mad money. Thank you. Tremendous presentation tremendous Conference Call<\/a>. I know red bend is not as big as symphony. I worry if i get a driverless car, the car of the future im going to be hacked. My computer has been hacked my credit card has been hacked. This has got anti hacking car software. This is so big for us this is so big for the industry. Cars were never designed typical, mid end, high end car, has 70 to 80 computers inside and the programs the firmware were never designed to be connected to the cloud. These days we all hear connected car, connected car, which means connected to the big pipe. Now you are starting to bring in good data good wellintentioned media, but bad guys are also into that and they want to have a pileup. This is like a terrorist attack. Yes. Waiting to happen. Unless we do something. So right now, a lot of quest to find a Technology Solution<\/a> and red bend has two problems solved. One, it actually updates the software and firmware and apps in the car on a need basis. And secondly it is actually doing Cyber Security<\/a> Software Based<\/a> on Proven Technology<\/a> we used in banks and computers. I thought this was a Palo Alto Networks<\/a> for autos. Were excited about that. You should be. Lets talk about symphony. I look at you Diverse Customer<\/a> base. And i get it. Land rover, jaguar terrific. But comcast, google xbox. What are you doing with them . So its very interesting. The symphony teleca what they do they actually specialize in the mobile devices and big data and mobility and cloud. So they are actually doing a lot of prod product conversions work for microsoft, adobe and google particularly for google a very big example to describe. So google has an droid operating system almost 300 projects to take Google Android<\/a> and network, to take it into the projects work for the telecommunications the handset providers and also the carriers. And also they are becoming the scaling partners. So take google and android, scale it for multiple other companies. Same thing they do for the cloud, scaling for microsoft. Thats for xbox and other devices. Scaling on the back end. Okay. If thats the case that is a much bigger total Addressable Market<\/a> than harman plays in currently. Potentially, very big, but we would like to allow them to focus where they have been good so far. And i hope that with this merger of these two companies, they will be able to use all of the resources harman has, and big role detection and also large access to the Companies Like<\/a> bmws and toyotas, what have you, where independently, they might not have that access. So we see a message here once we integrate the company. Totally. I also want people to know how forward thinking you are. I mentioned to you last time you were on i had gotten this neil young sound system and some people say the sound system isnt great what my ears are lying . Its fantastic. Because i wanted the equivalent of highdef sound in cars. You were making it so that that can be an offering in the not too distant future. Neil and i, two companies that actually had a number of meetings. And i love his passion, because its pretty much goes along with what we have been advocating. You are a passionate man. When you have a new speaker, you tell me to hear because you know its going to sound better than what the other guys have. So neil and i, were trying to bring in first of all, download capability of High Definition<\/a> music. What we are doing as the largest car audio company, we are providing High Definition<\/a> audio playback capability in the car, which never existed. We provide that in highend home system, but you need to come up with 20 30,000 for highend amps and what have you. So cars want to have these. In addition, you might have heard from neil when he was here or coming here first time in the industry coming out with independent sound zones. So in the car, you could be making phone calls in the back seat i would be doing something else. So four people can do four Different Things<\/a> without disrupting anybody, and maintaining confidentiality. So this is again, the technology, the digital signal processing. So with neil we have a common goal, bring and democratize this highdefinition audio. Because televisions mean nothing if you have a lousy sound coming from them. Totally. So they have to be brought together so thats why we have a goal and were going to get there. Everyone is talking about currency. You are really the brains for a lot of these great german and japanese cars. As their currency goes down i mean i have to believe theyre going to sell more cars because a benz gets cheaper, beamer gets cheaper and that means more harman systems. We sure like to think that way, and so we have translationally people translate, and transactionally do hedging. But youre right. Oil price is dropping and euro dropping against the dollar is a good thing for germans to sell and particularly oil going down more people can afford the cars with the feature function national that harman brings. You can afford the additional option package. Thats what i like. Thank you. Thats what ive got in my car. Chairman and president of ceo of harman, im glad you and neil got together because i want one in my car. I want one, as well. Its dynamite stay with cramer. Still to come. Watches, phones cars computers. The touch screen is being tapped for nearly all your devices now. Coming up, the company with the magic touch in this business and where its headed next. You want to know my favorite Semiconductor Stock<\/a> for 2015 . Easy. Thats cyprus. Cy for your home gamers. This Company Makes<\/a> the touch screen chips for nearly nonapple smartphone and tablet out there. They sell programmable systems on a chip. These are small semiconductors used in all kinds of devices. They make controller chips for everything from usb devices to applications. They are the maker of static random access memory chips. At the beginning of december, they announced a 4 billion merger of equal sesspangs and they have been huge winners. I want you to stick with cyprus while we wait for the transaction to close and its run by the great tj rogers who will go on to become the ceo of the combined company. Cyprus reported its revenues came in higher than expected and the company said the merger which has been cleared by authorities in the u. S. And germany, would be additive to earnings within the first year. Its going to close sooner than i thought. Therefore, the stock climbed 4. 66 today and its up 40 since he told us hey, you ought to load the boat up. He was more up side. Lets check in with dr. Tj rogers founder and president and ceo of cyprus Semi Conductor<\/a> to find out more about the expansion deal. Dr. Rogers welcome back to mad money. Thank you. First tj i want to congratulate you. When we saw you last the stock was between 9 and 10. You said its been the best performer of any Semi Conductor<\/a> stock i follow and maybe best of all the companies i follow. I want to know when you look at the merger the analysts talk about synergy of dollars. I think you were hinting there was a intellectual merger that is going to make your company and them much stronger. Its not just the synergy numbers. Thats true. You know the synergy numbers from a cost point of view if you can ring 135 million bucks out of a company over thee three years, thats puts a few numbers on the bottom line caching caching. In the longer haul the next couple years, the real winners will be if the one plus three is three, to use the old phrase. And i believe thats going to be the case. For example, were the world leader in static random access memories. Srams are the memories that computers talk to and Exchange Data<\/a> back and forth. When you add two numbers together in a computer, you put them in sram, add them in the computer and put the answer back into sram. And they make flash memories the things below a computer that put instructions in a computer. So the code that runs the computer comes from their memories. Theyre number one in the world in nor flash. Combined, we will be able to go to people that need these memories for computers and sell both memories. And thats one example of synergy. Automotive is another example, where they acquired Fujitsu Semiconductor<\/a> a couple years ago, and this will get us with our Automotive Products<\/a> into japanese companies, where it typically takes five years to penetrate. So there are a bunch of things that are going to happen on the one plus one equals three side that are above and beyond the cost reductions which are significant. Well, and another thing that happened in this Conference Call<\/a>. We talked about psock. I kind of actually stopped talking about it because i thought it was too prosaic. You were calling it the hot chip, which i thought was great. But because of the internet it seems to be central to the next generation internet. Yeah. Programmable be system on chip. Maybe we overreached a little we didnt overreach. We said something, but it was too arcane. This allows you to put everything on a chip and the printed Circuit Board<\/a> is the size of a postage stamp and put a battery on the back. And for the internet to have sensors around you need that with a radio on it to put data to a central internet node and put data on the internet. And psock is designed to do that. And were starting to see that take off right now. And wearables is another example. Youve got something on your handled, it measures something about your body your heart rate, whatever and then it talks to the bluetooth in your cell phone and puts the data on the internet through the cell phone. And were starting to see that turn on for us as well. So the internet of things kind of seems to have been made for psock. Now another thing that a lot of people are looking at these headlines saying disappointing quarter, missed a number all nonsense. I was blown away. Your Free Cash Flow<\/a> increase was remarkable. Is that not just because of your op ex coming down but youre generating more cash than you used to. Were generating more cash than we used to and the big reason is were not taking the cash and plowing it back into buying fab equipment. We are we make about 40 of our chips in a fab that is highly efficient. And we now buy our chips. And by the way, our revenue numbers, dead in the center of the estimates. Oh, yeah i know the headlines are stupid. You did break out and say, listen if you x out emerging tech, to me it sounded like expansion deal you spend the money, break that out, a whole new company, and youre not going to get two youre not going to get just expansion and cyprus but is that possible . Thats true. If you emerging tech are startups and investors bring Breakthrough Technology<\/a> to market. The fact is, the company at 55 gross margin on its chip business 95plus percent of our business, and the startups cost us a couple pennies per share and cost us a couple points on gross margin. But underneath, the chip business, which is the bulk of who we are now, is very healthy. And the startups are going to be a big deal in the future. So we reported good results with upside for the future. Well look i want to congratulate you. You made it clear to all our viewers, you were all in. And you were all in at 9 and 10. This a very big gain. T tj rogers president and ceo of cyprus semiconductors, thank you for coming on mad money. Thank you. This merger is not done. Its going to get finished earlier. Its going to be auto. Its going to be touch. Its going to be everything having to do with the wearables we talk about. Its just a Breakout Semiconductor<\/a> situation and i want you in it. Mad money is back after the break. Tomorrow quick off the trading day with squawk on the street. I plan to die with my boots on. In other words, hes not going anywhere. So stop fretting and start buying. It all starts at 9 00 a. M. Eastern. Lightning round is sponsored by td ameritrade. It is time it is time for the lightning round on cramers mad money. I play this sound and then lightning round is over. Are you ready skedaddy . Start with nick in florida for the lightning round. Nick caller yes, jim what do you think about budweiser . I like bud, because i like beer. But ive got to tell you, im a constellation man. Because i see the way the modelo nigro blow out. Constellation coming to get you. Keith caller hi, jim. I want your take on blackstone. The only private Equity Company<\/a> i recommend is blackstone. Theyve got real smart guys and a lot of horse sense there. Lets go to bob in new york. Bob. Caller booyah, jim. Ive got a substantial position in csx longterm. Its okay. I prefer Union Pacific<\/a>. Why . I like the better mix of cargo. The cargo in Union Pacific<\/a> has it all over csx. Its that coal factor. Lets go to dennis in florida. Dennis caller altera. Is there a place i should sell or can i hold that longterm . Altera the Semiconductor Company<\/a> . No altria yeah tobacco. Unfortunately, people still smoke. The other day i asked, how much is a pack of cigarettes. The guy said 10. 26. With tax, 11. 90. How much do you have to pay to kill yourself . I can do that for nothing. But anyway the stock is good. Lets go to mark in wisconsin. Mark caller jim, i was wondering what your thoughts were on flex electronics. The stock should be higher. Enough already. The company is buying the stock, in every single different part of technology. They are the internet of all things lets go to court in kansas. Caller my wife and i watch your show every night and were both really, really big fans. Thank you caller my question is about mankind corporation. Yeah. I dont know. Weve got stocks like bristolmyers. Why do we have to go with mankind. We do not. No, im not going to recommend that stock. Pankiss in north carolina. Caller booyah, jim. Thanks for taking my call. Youre welcome. Caller my question is about gen tech . This is a process company i have liked for ages and will continue to like. No reason to sell. I want you to buy, buy, buy and that, ladies is the conclusion of the lightning round round the lightning round is sponsored by td ameritrade. All right. We all know that the Big International<\/a> banks rollout overseas exposure of trading stuff. But the Regional Bank<\/a>s is another story. Look at k keycorp, up 7. 6 . Its a cleveland based Regional Bank<\/a> with roughly 1,000 branches across the pacific northwest, midwest and northeast. And this morning the Company Reported<\/a> a Strong Quarter<\/a> that allowed them to rally. Key delivered a 2 cent earnings with higher than expected revenues. The companys Net Interest Income<\/a> increased by 1 in spite of the low Interest Rate<\/a> environment thanks to higher loan fees. And much of the strength coming at the end of the quarter. No wonder the stock went through the roof. It was almost like it got a takeover bid. Lets dig deeper with beth mooney, the ceo of keycorp to hear about the companys prospects. Ms. Mooney welcome back to mad money. Thank you, jim. Glad to be back. Congratulations on having the best quarter so far of all of the regionals. I wanted to know are we going back to 2013 when you led the whole pack . You know we had a strong finish to what was a good year. We were pleased with our absolute performance and absolutely, as you said we had some relative outperformance in this quarter. So i think it bodes well as we go into 2015. Yes. Are we out of the tyranny where we decide whether someone is good and going back to growth . Because your growth was exceptional . Net interest margin really does reflect a lot about the Interest Rate<\/a> environment liquidity, where youre getting your asset growth. So i do think a focus on are you growing revenues is probably a better indicator than margins. All right. How about efficiency . I know you have been very strong in efficiency. Can that keep up . At a certain point, youre running an efficient bank. How do you get even more efficient than where you are . Is. Weve talked a lot about over and above efficiency as a positive operating leverage. Are you keeping your revenues faster than allowing your expenses to increase. And our beat was on a revenue beat on wellcontrolled expenses so that operating leverage is really critical to how you drive efficiency more than just the ratio. I thought it was interesting you highlighted 12 increase in commercial, financial, and agricultural loans. Who are the commercial financial and agricultural loan kind of customers youre dealing with . You know broadly, thats a technical term on our balance sheet. It really is a proxy for our commercial customers across our community and Corporate Bank<\/a> which was a 12 growth 13 consecutive quarters in that area where we have been growing. And it really helped contribute to our level of Investment Banking<\/a> and placement fees. The virtue of the model of being a commercially oriented bank. A lot of people during the great down turn said perhaps its time for keycorp to break up, maybe its too big. Im thinking this is time for the offensive. I saw Russell Goldsmith<\/a> selling out. Im involved with two separate banks, one in new jersey and one in pennsylvania. Both got bids within the last two weeks. Is it time to start buying . It has been a slow m a environment as you noticed in the down turn of the financial crises. There is not a broad base of swell of m a activity going on. They tend to be single purpose or idiosyncratic sorts of deals. I dont know that were seeing a return to m a, but i think youre starting to see banks get themselves positioned for not only good organic growth but being in position for inorganic at some point. I would think, because you point out several times in the Conference Call<\/a>, the midwest remains a competitive area. There are other areas of this country now relatively unbanked or only banked by the big guys two or three banks. Isnt that where keycorp could come in and be a Community Bank<\/a> for these areas . Our geographic diversity, which people have debated is whether or not is a strength or not, i look at as absolutely a strength. To be across a variety of markets and in different competitive environments. Its true we can come up against the big guys and be the Community Bank<\/a> in an area and grow and expand clients. I actually say we could have opportunities over time across multiple markets. One last question beth. I know we went out to do a show from the utica shale. We couldnt get it to a hotel room, and there was all the planes booked. And i just know that utica is part of your bailiwick. How much do we really have to be worried about the oil and gas down turn at keycorp . You know the oil and gas down turn wont affect keycorp. Only 2 are in oil and gas loans and we talked about that today in our call. We monitor it its wellsecured, wellreserved. We dont consider it an issue. I see across both oil, as well as the gas industry clearly Capital Spending<\/a> is slowing down. I think its a net positive to our broader economy. But i see more a slow down in investment than i see in production at this point in time. So i think the big issue is how low for how long and that will be what well have to watch over time. Well, youre always a straight shooter once again. Congratulations on almost 8 gain in one day. Beth mooney thank you for coming on mad money. Thank you, jim, and thanks for your support. Of course. Stephanie link and i, action alerts plus are frozen. This is the one to buy. I think this the one with the most up side of the Regional Bank<\/a>s. Stick with cramer. They challenge us. They take us to worlds full of heroes and titans. For respawn, building the best teractive entertainment begins with the cloud. This is titanfall, the first multiplayer game built and run on microsoft azure. Empowering gamers around the world to interact in ways they never thought possible. This cloud turns data into excitement. This is the microsoft cloud. Heard a lot of good stuff tonight from a lot of different companies. Cypress semi i think is the cheapest Semiconductor Stock<\/a> out there. If key pulls back that could be an opportunity to own with actual growth. United rentals, uri, way too low. Harman reports next week. Take a listen. Huge day tomorrow on squawk on the street. All eyes on starbucks. Dont miss Howard Schultz<\/a> at 10 00. And then the ipo everyone is talk about is box. Drops tomorrow. Were going to be talking to ceo aaron levie. I want you to hear what he has to say so you can know this story. What am i doing later, you ask . Of course im watching an all new breed hes got 70 new models. All new american greed. Im jim cramer. See you tomorrow narrator in this episode of american greed. The romano brothers of long island are working the phones, selling 75 million worth of coins to eager and naive investors. The salesmen knew who they could trick and confuse, and they kept going back to the well. Narrator but when the familys arrested for mail and wire fraud, Joseph Romano<\/a> wants payback from the ones who put him away. A total of 40,000 would be paid for the killing of the judge and the prosecutor. Narrator prison cameras catch romano plotting with a hired killer","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801606.us.archive.org\/4\/items\/CNBC_20150122_230000_Mad_Money\/CNBC_20150122_230000_Mad_Money.thumbs\/CNBC_20150122_230000_Mad_Money_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240621T12:35:10+00:00"}