Transcripts For CNBC Mad Money 20170426

The new tax plan, is that something thats going to benefit us as investors. I think a lot of people are confusing the places on our screen with what happens in washington. And i can tell you that is one giganda mistake, they know nothing. Even after todays Late Afternoon pull back, the true driving force behind this market remains earnings, the profits of companies, were in earnings season. Just like the Strategic Bombing campaign from world war ii, were being carpet bombed with news. Far too many people in this business believe that what these individual Companies Say is just noise compared to what the president of the United States is. Too many investors are all about listening to lawmakers and debating polity positions rather than the merits of actual stocks, some lucrative, the others gaseous. Even though this is one of the single biggest earnings day of the year, we need to consider the effects of president trumps tax cuts. The president introduced some sweeping tax kuwacuts. We have to think of what those policies meaning for investors, this is cramerica. But we have to ask ourselves if any of these changes can actually get through congress. This plan will be very tough to pass, keep that in mind, we dont want to shadow box with something that might not happen. Corporate tax cuts affect companies. The main feature of trumps tax cut involves cutting the Corporate Tax down from 36 to 15 , in order to bolster the economy. Assuming congress can actually pass the darn thing, and that is a huge assumption. You should know that the average effect of the Corporate Tax rate is only 19 , however plenty of Companies Like the retailers and restaurant chains do like the rates, and it matters big to them. Lets talk about disney, and im going to walk you through it. So we actually talk about a real company. Disney for example is a top tier taxpayer and it would instantly become much more profitable if the tax rates goes down to 15 . Using disney as an example, what would they do with the extra money . Disney like a lot of companies are awash in capital. More likely disney would increase its buy back. This company has shrunk its share count rather amazingly by 200,000 shares in the last three years. We purchased 25 billion in stock this fiscal year alone. Disney could even double the size of its payout, or maybe it could open more theme parks or make more movies. The truth is we dont know what it would do. Now theres a perception if the company used the money to buy back stock or boost their dividends that money is essentially wasted because it doesnt create jobs, but it certainly would create more wealth for you the shareholders, because thats what cramerica is. Maybe having a larger portfolio causes people to start more businesses, i also think a 15 Corporate Tax rate would encourage companies in other country to do business here. And there are a lot of people on the sidelines waiting for this market to come down to a more reasonable price. What if companies are making more money because they have a lower tax rate, i think it would force money out of the sidelines, disney stock would go from being expensive to being cheap. But heres the rub, cutting the Corporate Tax rate in half would explode the deficit. Repatriation of offshore capital would offset some of that because right now our taxes are so high that Many Companies choose to leave their money overseas. But thats a one up solution, its 2 trillion, maybe. But then it happens, lets be clear, i dont really care all that much on this show about the deficit. Its just that none of the speculation about the tax plan matters if it doesnt get passed. They would let the republican majority by pass a democratic filibuster, but there are rules about when lawmakers can use it, you cant use reconciliation to increase the tax rate. George w. Bush used this tool to cut personal income taxes, by making them temporary. But Corporate Tax rates are just more complicated. The only way the gop could twoyear tax cut, thats kind of like a tax holiday, maybe get some one off special dividends like the one costco just gave you, the Republican Leadership would have to offset it with major tax increases or draconian spending cuts from somewhere else. Thats why a hot political issue, those issues are so toxic that i doubt speaker ryan or anybody else in the senate could muster up the votes. Thats why this thing is kind of, well, lets say, its not palpable enough to make Investment Decisions about. What about the individual tax side. Trumps plan would certainly make things more attractive by putting Capital Gains taxes to 20 . Other elements like reducing the number of tax brackets to three, doubling the standard deduction, while getting rid of other deductions would have less of an impact on the stock market, although they would certainly work wonders for our bank accounts. Now this would indeed be a massive tax cut. But while gary cohen, and chief mine chun is by watering it doubt so much that it expires after a few years. The republicans in the house and senate, all have their competing tax plans that they have been needing on for decades. Lets cut to the chase, should you buy stocks in anticipation of the huge tax cut . The answer is point blank, no. The truth is we have no idea what will pass and i seriously doubt this current plan can make it through congress, which tells me they have to revert to fundamental principles here. We have to act as if none of them will, because its difficult to tell how i say carry on, stay the course and recognize that while these tax k cuts can be terrific for your portfolio, they may end up going nowhere. Lets go to anthony in illinois. Caller i know the price to earnings and valuation is outrageous, but given it just broke its alltime highs, which i would assume rates the low resistance level to got 290 to 300 per share, also giving the cult involving of elan musk, as a Young Investor with a high risk tolerance, in your opinion could this be the next amazon or alphabet . If you love tesla cars, you might like the stock and thats really whats driving this thing. Caller i got a question about pfizer, p ooirpfe, seems stuck at 30 for a new years now, whats your opinion on future investment, either short or long on the stocks . It doesnt have the kind of growth they like, and its more of a fixed income equivalent, its not enough to do the job. Lets go to tim in north carolina. Tim. Caller long time listener, firsttime caller. Thank you. Caller i have a loaded question for you, are you ready . Year, sure. Caller my question is, what is your position on unitedhealth stock. I love unitedhealth stock, no matter what health plan that comes out, they seem to be the winner because theyre smarter than anyone else. The driving force in this market is earnings not tagses, so i just want you to stay the course regardless of personal and Corporate Income taxes. Its the year for a select group of stocks. And were still on the lookout for trump stocks, although the task isnt as simple as it once was, im pointing to the new stock. And is it a trash day already . Waste management has been cleaning up for decades, but are you wasting a buying opportunity . Stick with cramer. To err is human. To anticipate is lexus. Experience the lexus rx with advanced safety standard. Experience amazing. Whats the matter with pepsico . How could they have screwed up so badly . What the heck happened to boeing . I thought they had terrific numbers . How can proctor and gamble end up so badly . The answer is that nothing is really wrong with any of these companies, except their stocks simply got ahead of themselves. Investors got so excited that they bid them up to unsustainable levels, but dont confuse the stocks with fundamentals are as good as ever. While i want you to own high quality companies, i would like you to pick them off at Bargain Basement prices. Theyre having a selloff and theyre doing so for technical reasons only. What kind of quarter did pepsico report . A dependable set of numbers, great execution and a lot more organic growth than cocacola. Why did it rally . It already went from 113 in february to 115 during the quarter. And pep just cant going to be rewarded for doing its usual great stuff. So you get this kind of pull back that lasts a couple of days and then you buy. Its been a core holding. As for boeing, the last type it reported, the company delivered much better cash flow, a phenomenal set of order wins, while trying to reap the harder set gains from the problematic 787 dream liner. But this stock had been traveling nonstop. The first leg coming from trumps unexpected victory, and the Second Quarter being better than expected. Even though the numbers were terrific, it wasnt terrific enough. I dont know if anything, though, could have been enough to move the stock higher after that move. I wasnt enamored of proctors number, the company only reported 1 or beganic growth. Proctor stock has been languishing in the 80s until we heard from nelson pelts, that news sent the stock above 90 where it held until this quarter. Now that proctor stock has pulled back, nelson pelts is the only large engaged investor who likes to announce his position. This is your chance to piggy back on in yet unannounced planned. I think its a gift to get it down at 87. What did Texas Instruments do in its quarter . It gave you a magnificent number, nothing more, nothing less, but it had to do far more than magnificently, if it was going to do what the stocks of dupont did. The stocks seemed insanely better if the stock was going to keep powering higher. Its consistent, consistency means no surprises, solid numbers, we all want our portfolios filled with mickey ds and duponts, but we also need consistent performers that allow us to sleep at night. And we need to buy these at a discount when their rarely give them to us. We cant ask wow, whats wrong, we have to say, this is our chance, and thats exactly why i think pepsico, proctor and gamble and Texas Instruments is a buy. Theres one Canadian Based Company that could clean up off the new administration, ill reveal it just ahead. And my exclusive with the biggest trash collection and recycling company in the country. Ive got the ceo. And do your stocks have what it takes to survive the unknowns in this market . Ill be the judge of that when we play am i diversified . She cant become a guitar legend just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Nearly six months, ever since the election, we have been on the lookout here for socalled trump stock. The names that will benefit the most from our new president and his republican allies, the republican congress. This of course has turned out to be more complicated than it was in november. It became clear that congress, at least as it currently stands would have a very hard time passing any kind of meaningful legislation, including to be sure the package proposed today for cutting taxes, both corporate and individual. But after paul ryans repeal and replace health caretheres still some value to be captured from identifying the companies that really benefitted from the more doable elements of the president s pro business agenda. Thats why tonight, i want to tell you about what could be the ultimate donald trump stocks, even if congress does nothing on tax reform and repatriation, and remember, im a skeptic, im talking about enbridge, the huge mip line operator, that just became a power house, a Canadian Company that may be the ultimate trump stock. The president may have run on an America First platform and he started out getting really tough on trade with canada, but that doesnt change the fact that one of my favorite trump stocks is the Canadian Company because its where the jobs are and theyre putting them here. Thats one of the reasons why im a fan of enbridge. For decades enbridge has been making acquisitions to the point where its become a gigantic energy play, it operates the Largest Crude Oil companies on earth. As you probably know, canada ships a lot of oil to the u. S. And enbridges pipes carry 68 of that south canadian crude. And enbridge also is involved in the storage of natural gas, with nearly 4,000 miles of gas pipelines, enbridge moves 20 of all the gas consumed in the United States. On top of that, the company also has a small sideline with a growing portfolio of wind, power, and solar Power Generation assets. The pipeline space should be the biggest benefit enormous discretion when it comes to enforcing regulations, yes, executive decisions, and trumps using that authority to effectively deregulate all sorts of industries, especially energy and banking, at the same time, unlike his predecessor, trump has made it clear that hes in favor of building lots of new pipelines and given all the oil and gas that we have found in the country in recent years, Companies Like enbridge are poised to lay a lot of new pipe. Plus politics aside with oil only 36 a barrel, the availability of pipeline space, were short pipeline space in this country. Meanwhile enbridge can probably build for years before saturating the market. Think of it a way as exploding the Oil Production without worrying so much about where the oils going. Enbridge gets paid on the amount of oil it transports. What makes this politically attractive, back in september we learned that enbridge was combining with spectra, a company that we have always liked to become the Largest Energy Infrastructure Company in north america and following the zeal was approved by the ftc, then enbridge concluded their stock for stock transaction, enbridge getting 55 of the combined company, spectra 43 . It connects is mar sail las shale, to the gulf coast to the east coast. Plus natural gas pipeline into new york city. Not only does this give enbridge some additional best in class assets, but it also gives the company 10 million in growth assets. That allows the company to keep growing its dividend by 10 over the next 10 years. T the payoff could really explode. Before the deal, it was the fourth largest Pipeline Company in north america, now its number one by a pretty significant margin. If you believe in the north American Energy industry, enbridge is a terrific stop. They have the largest amount of growth projects and a strong balance sleet with plenty of access to capital to lay all this new pipe and rest assured, they have a great management team. But with the president making it easier to build pipelines, enbridge has become trump stock. Of course theres a candid issue. Youre probably a little skeptical. We know the president campaigned aggressively on the idea that our trading partners dont trade fair. In addition to slapping a 20 tariff on canadian soft wood lumber, trump went on to tweet some insend area comments about china. Its a little weird that canada ended up in the crosshairs. Backs in the 90s, the lategreat john candy made a movie called canadian bacon. Even if we end up in a large trade deal with canadaenvironmentalists who dont really have much of a voice in the new administration, they dont seem to be all that well represented. Well just end up buying from hostile companies in the middle east. Plus, its the largest pipeline player out there, enbridge has the potential for being a huge job creator in the United States and thats what the president seems to value more than anything. There are few Infrastructure Projects that prodeu produce mo unfilled jobs. So dont worry about this trade spout with canada, the president has embraced companies with every nationality, as long as they want to create jobs here in the u. S. I think enbridge may be the biggest of them all. The bottom line is the Trump Administration has ushered in a new era for the north american pipeline industry, and thanks to its recent merger, spectra has some of the best assets and the best growth in the industry, with tens of millions of dollars worth of deals in the pine line. The company pays you to wait with that bountiful 4 yield. Thats an ultimate donald trump fray trade. Larry in massachusetts. Caller jim, thank you for your detailed and carefully considered fire side chat this morning. Thank you for attending, larry. Thats the action investors club. Caller look, i have been trying to find an industrial that hasnt gotten away from us, i nevered that uri is down from a march high, given the decisive earnings week last week, and caps blowout quarter, did you see anything in the uri quarter to cause concern . This is a football stock, there were bears all over this thing, i went over it with a fine toothed comb, i felt very good about it. But there were people who were saying in this rental market, i trust knee land, i think you got horse sense about this, im good with it. Lets go to srinath in michigan. Caller great to talk to you, jim. I think it was midmarch that your had the ceo of u. S. Concrete on the show, i was very excited to hear about the growth in the United States and without the trump, you know, the trump bump that you call it. Sure. Caller and subsequently there was a problem, you know, there was a problem with the filings or whatever. Yeah. Caller down from 70 to 60. Now its going back again to 63. Do i buy some more . It crossed over. It became a company that has an accounting irregularity, and when they have accounting irregularities that equals sell, and the only time ive violated that is with caterpillar and thats only because i have a question as to whether the irs is right or not. But this is something that has to be resolved before they will get my blessing again. Im going to go to bill in florida. Bill . Caller boo yabooyah, jim. Im calling from siesta key, florida. So, jim, Kinder Morgan, i got in a couple of years ago, ive written down here, 7 bucks or so a share. Your thoughts on hold . You know, look, kinder and morgan is a problem stock because it really did a lot of stuff that i believe in and then it kind of pulled your heart out. So im not going to say that Kinder Morgan because i got the transcanada, i go so many others, i dont need to mess with that lack of success. Sure, there are plenty of donald trump stocks out there. But theres still some value t p be captured from the new era. Best assets best growth in the industry. Waste management has slowed its pace in 2016, im talking trash with its ceo, find out if it could be a good buying opportunity. And do your stocks have a chance to thrive in this market . Whoa thats amazing. Hey, im the internet i know a bunch of people who would love that. The internet loves what youre doing. So build a better website in under an hour with. Gocentral from godaddy. Type in your idea. Select from designs tailored just for you and publish your site with just a few clickseven from your. Mobile phone. The internet is waiting start for free today at godaddy. There goes my sensitive bladder. Sound familiar . Then youll love this. Always discreet. Incredible protection. In a pad this thin. I didnt think it would work. But the super absorbent core turns liquid to gel for incredible protection. So i know im wearing it. 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Okay, the Company Posted inline earnings with stronger than expected numbers, thats good, Waste Management also won some major new customers in new york city and los angeles, but investors seem to get a little spooked after management talked about increased volatility in recycling commodity prices, so is this a buying opportunity in a high quality stock or is there something negative im missing here . Lets talk to jim fish, ceo of west management. I thought the standout was huge cash flow and 8 growth. Tell me if i should be worried about recycling . Im glad im not a day trader, because i would have picked it wrong. 8 revenue growth, 18 ebita growth, and really the best recycling quarter we think we have ever had, hard to say why it was down, but thats why im not a day trader. Just want people to understand, you do collect newspapers and what you said on the conference call, the chinese have been buying newspapers and suddenly they stopped, so the price you get for recycling has dropped dramatically. They are our biggest customer, they buy 100 of our newspapers, about 50 of our cardboard and when they stop buying newspapers, the price really dropped off, it dropped 40 in one week, but were feeling optimistic about recycling. Lets talk about something that does have great visibility, if the president does get a Corporate Tax cut to 15 , what does that do to Waste Managements earnings . We think 15 to 20 could be realistic, theres going to be some kind of give back, we dont know whether that will be interest deductible for fuel tax credits, we think between 15 and 20 , will be a 150 million benefit for us. So were all for it. So you can do a number of things, you can make some acquisitions, youve got a great dividend, a buy back, or you could actually buy more trucks . More Capital Equipment . Its any one of that menu, right . Were probably buying 150 more trucks this year than last year, so were certainly investing back into the business. If we dont find a good strategic acquisition, and after a dividend, we think theres one or two acquisitions out there, and were looking at them, but if we dont find those, well look at whether we put money on the balance sheet. Youve got to be one of the largest users of natural gas, i just want tell people how thats working because i think its a considerable savings and i think its one of your Technology Issues . Yes, about 50 of our fleet now is natural gas, so we are you know, i take that back, i think its more like 40 , but still, its a big percentage of our fleet. And it works well for us for a couple of reasons, customers like it, it obviously is a fuel savings for us versus diesel. And the diesel trucks are easier to maintain and their payload is a little bit lower. I dont like stinky trucks down the highway and you dont either and it seems like you have figured out a way to make it work perfectly . I think youre seeing quite a few Companies Move to natural gas, were probably ahead of most with 40 of our fleet and that continues to grow every year, but i think youll see other industries and you already are, moving into natural gas, i think the question is, you know, can you get the infrastructure built to accommodate it. You talked a lot about commercial and people asked you about oil and gas, which i didnt realize how big, really, how important that is, but its making a come back for you guys right . It still is a small piece of our business overall, it had been as big as about 52 million in revenue, its been down as low as 100 milli 100 million in but march is the first month we saw a year over year pickup. And we could get to a year over year pickup on a quarterly basis in year number two. I didnt realizea business Hazardous Waste. Were one of the big guys when it comes to Hazardous Waste, and we think the industrial economy is going to grow faster than the overall economy so its good to be in Hazardous Waste part of the business. I saw that youre hiring a chief Technology Officer as part of your strategic pillar, im nye naive, what does technology have to do with it . Technology is important in every business. Were starting to use big data and when you think about predictive maintenance, a lot of companies have talked about it. But if you have a truck thats going down the road that blows a hydraulic hose, youve got a diver service interruption, you probably have to pay to have it towed back into the shop. So use big data to predict in advance when that hose might go and to replace it plow actively. I always learn a lot when i speak to you and i think the discount seems to be an opportunity. Recycling is not the chief driver here, its the 8plus percent revenue growth. Stick with cramer. It is time for the lightning round. [ buzzer ] and then the lightning round is over. Are you ready, skeedaddy. Lets start with dan in my home state of new jersey. Caller this is superdan from the garden state. I heard there aint no thing but a chicken wing. What do you think of the stock wing . I think its doing a better job than buffalo and wild wings, anything i would want to have a franchise for, i would buy the stock. Lets go to amy in georgia. Amy . Caller i need to know what your opinion is on fny . I like that stock, i got to tell you, mostly what i like is they got that acquisition with regeneron. I like it. Caller the reason im calling the micron technology, mu, i bought it when it had a spike, now its in the 26 area, should i hold the stock . The price has spiked so much that they believe they may have ruined the demand curve and sea gate regard it it has not being as strong as today like. I think micron is fine, its just not in the explosive phase anymore. One day people are going to think there are too many drams. Lets go to august in new york. Caller good afternoon, jim, thanks for taking my call. Congratulations on your 13th season, buddy. Thank you. Caller i want to know about apollo global, apo, i know they have been beaten in the last two months. Its leon black, i happen to like black stone more, i happen to think thats a good company, because theyre able to sell a stake, they can do ipos, they can liquefy. Caller this harley in ohio, and a big booyah to you. I have on your recommendations, bought nikon way back about eight years ago when you first came out with it. What should i do with it . Buy more, i really, really like it. Its got a graert yieeat yield great growth characteristic. Caller booyah, jim, how about Energy Transfer partners. That guys all about making deals and deals and deals. I just like safe deals. And that is the conclusion of the lightning round. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. A used car, higher tax rates, lower tax rates, higher Capital Gains, dividend taxes, lower Capital Gains, it makes no difference if you have the a diversified portfolio, it doesnt matter. Thats why we play am i diversified . Im seeing too many people choi cloister in technology too much. Allergen, sysco, target, canadafan, thanks for teaching me the right way to invest. Okay, this is kind of what i mean right here. We have a problem, we have two technology companies, these two will trade together, were going to keep cisco, so we have a little balance. Allergen health care, etsy, im going to call retailer, uhoh, thats going to conflict with target, we have to get rid of etsy, we have a drug company, a retailer, what we need is United Technologies because that had a monster quarter and we put in mcdonalds. That will be the best of what we have seen so far. Remember, we go back to what worked, rather than hazard a guess on what may work. Paul in ohio, paul . Caller how are you doing, jim . I just wanted to know if im diversified. Sure. Caller okay, i have cat and i have de for deere, and i have prospect capital. And o reality. Right. Caller and also i have cim, im not sure what the name of the company is. You have a very high yielding portfolio, it wouldnt do badly if Interest Rates suddenly went up. But the Real Estate Investment trust, its high quality, pl prospect capital, im not sure what they invest in. Call this mid level investment, mezzanine, and this is actually a play on, they tend to be a play on yield. Im going to get rid of one of these, im going to get rid of prospect, because i dont know what theyre in, because its similar and they trade together. Lets put in united health. United health has been one of the best ones thats reported so far and well put that in the mix. Lets go to tracey in texas. Caller good afternoon, jim. My five stocks, goldman sachs, gs, eog, tesla, tsla, facebook, celgene. I like this. Lets go over this. Eog, one of the faster growing oil companies, tesla, we know that as the future is now car company. Celgene, the chief executive was on earlier this morning, technology, biotech, auto, oil, finance, thats exactly what we want. Bingo stick with cramer. Im dr. Kelsey mcneely and some day you might be calling me an energy farmer. Energy lives here. Thithis is the new new york. E . Think again. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov over hereno ver here dog barking whoever threw it has to go get it. Not me somebody will get it. dog barking anyone can dream. Making it a reality is the hard part. From the b2 to the upcoming b21, Northrop Grumman stealth bombers give america an advantage in a turbulent world. And were looking for a few dreamers to join us. A couple of interesting quarters, paypal, really fabulous with a gigantic buy back, that stock is going higher, am kben, a little stronger, and Buffalo Wild Wings are in a fight for their lives, they did not report a good quarter. And wing stops model looks a little better. You got to tune in tomorrow on power lunch, because im going to be with mel kiper. Who was that adam scheckter, that will be interesting. That starts at 2 00 p. M. Tomorrow, so i need you to be there and watch it because its going to be great. Im jim cramer, ill see you tomorrow. Okay, lets go. Find your awesome with the xfinity x1 voice remote. Thats amazing where entrepreneurs seeking an investment will face these sharks. If they hear a great idea, theyll invest their own money or fight each other for a deal. This is shark tank. cattle lowing my name is dan holtz. And im liz holtz, and we live in warren, vermont. And were the founders of liz lovely cookies. dan liz lovely cookies are allnatural, gourmet, vegan, glutenfree cookies. Theyre the best youre ever gonna taste. Dan and i are high school sweethearts. Weve been together almost 20 years. You wouldnt believe the hardships weve overcome to stay in business