Transcripts For CNBC Mad Money 20170710 : vimarsana.com

They think this is unsustainable and were in a dangerous position sell sell sell. The house of pain the dow dipped six points the nasdaq advanced 0. 38 . I want to address this reluctance to believe in the bull head on by going over the top ten reasons why investors always seem to have one foot out the door, despite the fact that weve had one heck of a run, from the lows way back in march of 2009. So lets go right to it. The first one, weve been hearing it for years the bull has run for too long. Its now on its last legs. Put aside the fact that bull markets dont die from old age, but die from recessions, rate hikes or new ipos. Weve had three serious corrections. One in 2011, when the s p 500 downgraded the Credit Rating of the united states. And in 2015, fears of a chinese collapse and one in february of 2016, related to the collapse of oil so this stocks entered bear market mode that its almost like weve had three bull mar t markets. Thats why i cant buy into this senile bull feces. Plenty of things could kill this market, but time suspect one of them second, many contend were back in the year 2000, right . That scenario of the nasdaq collapse that were going to get crushed when the earnings come through. This is not the dotcom era in 2000, we had a numberof secondary offerings as the smart money headed for the hills ahead of the collapse. Can you recall any secondaries i cant. We also had negative preannouncements near the top. Other than oreilly automotive, we havent had any of these nasty things lately. And we saw a big jump in bankruptcies in 2000 again, something thats not happening now. In other words, we didnt just have an earnings shortfall at the end of the dot com era plus, the price range to multiples of many of the tech stocks right now are about 1 10th of what they were back then 0. 1 the third objection, lots of people still believe, the majority believe that the markets only rallied this far because the fed put us here and its going to crush us when it tightens in earnest. But the truth is, as ive said over and over, were in a rare moment where we benefit from higher rates if you care about the banks lending money, they need to make more of a profit, which is what rate hikes give them thats why the financials have reasserted themselves as leaders. No bear market has ever begun with the financials as the leaders. Many started with the banks as slaggards, though. Trump hasnt delivered on tax reform and theres gridlock in washington but lets remember, gridlock has never stopped us from rallying in the past. We just had six years of divided government and the bull kept running. Maybe well get some tax reform next year, but still, it should have been obvious that the president s agenda would be put on hold when congress decided to make health care the most divisive issue in america its top priority however, at the end of the day, a government that does nothing under a republican president is still more market friendly than one that does nothing under a democrat im not trying to be political here its just that the republicans are known as the party of capital, the democrats the party of labor both equally valid, but the stock market is capital. The perception is stocks have gotten expensive you think if stocks were truly expensive, then value stocks would hold their value however, value stocks are the principled source of pain in this market. Plus, ive been examining hundreds of stocks that are not on most peoples radar screen. They simply cant be considered pricey this isnt just anecdotal. So much of the movement in this market has been broad based. The sixth reason people distrust this bull, theres a tremendous fear of tech knockstocks why . Much of the advance is in enterprise tech stocks, not the consumer oriented tech stocks. I could go on and on most just simply dont know what to do, so they presume these stocks are expensive theres a whole cohort of Tech Companies related to storage that are beyond most investors so of course, what they dont know, they react with fear to. If you dont work with the stuff professionally or you dont know the ceos, you dont understand the stories, then you dont know how great this Tech Revolution is, and you assume its overvalued you assume its 2000 when there was Tech Revolution talk and it never materialized seventh, there are a lot of Health Care Stocks similar to tech that just arent understood, because theyre part of this Medicare Medicaid business thats had the run of the joint for ages the truth is, again, not political, but a single payer system, without one, health care will always be run inefficiently and the taxpayer will keep getting ripped off single payer is probably the only way to save money longterm and theres no way were getting a single payer system any time soon, so the Health Care Stocks will continue to run no one is checking how much they make ut eighth objection, theres been a lot of Energy Companies created. Theres been almost no consolidation, and all these stocks are high profile, daily disappointments that carry a lot of psychological weight. Theyre like a steamer trunk on the back of the market ninth, speaking of the ultimate disappointers, the area in the market we can see best, the one that is so easy to talk about and right in our faces, retail its a disaster, because of amazon i say there have been some retail bankruptcies, but know major ones the fear of amazon has become so all encompassing, though i say stay tuned im more interested in buying than selling more on this later in the show the final objection, and this is another segment, a lot of these are psychological, i know. This is deep psychology. Since advent of youtube, expert and socalled experts feel the need to be muted whenever they wax bullish. Nobody wants to Say Something really positive, because if the market gets crushed, your words will be preplayed endlessly and used against you and you know what . You look like a moron. Most people take the more e quich la equivalent of the fifth amendment when they come on tv these days theres a lot more accountability for the bulls than the bears so the bulls always sound tepid compared to the pessimist, bigtime Hedge Fund Managers that means the bears always control the dialogue even if theyve been wrong for the last 15,000 points look at fang run the bottom line, i dont think any of these objections will change any time soon theyre just going to be with us so we need to acknowledge these ten reasons why the bull is so widely mistrusted. That way you dont have to have one foot out the stock door every single session lets go to joseph in alabama. Joseph caller hey, mr. Cramer, thanks for taking my call. Of course caller so i bought into target at 57 a share. Its trading down lately and i want your opinion about a longterm investment i think target is in the cross hairs of amazon and walmart. Thats an uncomfortable place to be the fact is, its in crisis right now. It doesnt know how to make it, because its so different that we all go there. Do i think it represents longterm value . If it changes and finds a way to get it so im in the store, yes. But its got to do that. Okay, dan in virginia. Dan . Caller hey, jim, how are you . I am good, dan, how about you . Caller doing great just wanted to say appreciate all you do, all you teach us im a schoolteacher and i continue to learn from you each day. Thank you very much thats what ive been telling some people this weekend if i can make the show 100 educational, thats where im going. Caller you can come to my school and visit im calling about pandora. About a month ago, siri announced a substantial investment in the company. Since then, the stock price declined 12 , but since then has rallied 20 from that low. They announced a big change in Senior Management and speculation about a potential merger or partnership with companies such as tesla or amazon the question i have is, being the first player in Gold Standard of streaming music, wouldnt pandora make an outstanding mid or longterm investment that whole deal they made was to give them more capital to give more of a runway. But i think theres a lot of hot money in the stock so your fellow shareholders are your enemy, not your friend. So i would say that its fairly valued at that price i have no real interest in being it but thank you for those kind comments sure, there are justified gaps against the bull, no one is denying there. But theres no reason to jump ship you should be able to spot opportunity. When it comes to young and young china, see which offers a bigger piece of the pie and with amazon prime day, are brig and Mortar Retailers preparing for the worst . But first, Warren Buffett just made a 9 billion for encore will he get it ive got the exclusive, coming up next. So stick with cramer dont miss a second of mad money. Follow jimcramer at twitter tweet cramer at madtweets send an email at llt 80 a cnbc. Com or give us ca a10743cnbc miss something head to madmoney. Cnbc. Com. [vo] progress is seizing the moment. Your summer moment awaits you now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Or a little internet machine . [ phone ringing ] hi mom. It makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Call or go to xfinitymobile. Com introducing Xfinity Mobile. A new kind of network designed to save you money. Tree months ago i told you how they were trying to buy Encore Electric, the largest utility in texas whi since then the deal was bought by the texas Public Utility Commission, but encore is too attractive of a target to pass up last friday, Warren Buffett offered 9 billion in cash for encore now were hearing that elliott management, encores largest unsecured creditor, might been to pay 300 million more than buffet for this business still, weve reached the third attempted acquisition of encore in two years lets check in with the ceo of Encore Electric delivery and find out more why he thinks Berkshire Hathaway is the right home for it. Good to see you. Bob, ive got to tell you, people at home are going to be confused, because when they hear ba bankrupt, they think worthless youve got to start with the lbo in 2007. 2007 this company was taken private in a 45 billion lbo the state of texas wisely said were not going to subject oncore to that rest, so its become the debate in this process. By the way, that turned out to be quite insightful because whats happened is you talked about her chant generators a lot is what happened to Natural Gas Prices essentially they were making a leverage buy from natural gas, natural gas does from 10 to 2. Your business is for you viewers, we have con ed on regularly, its that pure business that can be a great business its really robust growth and with deregulation, weve transformed the generation theme in texas the most renewables in the country, transformed by gas fleets, and the investment to enable that largely Companies Like ours, building out the transition grid, building out the technology, so weve invested billions of dollars, to help drive bills down. Electric bills in texas today are 25 lower than 15 years ago. Thats amazing. Everybody else is going up the way the market has worked in texas, well have continued Investment Opportunities to help enable all of that, in addition to the growth. So in the eyes of Berkshire Hathaway, strong business, strong cash flows, real good reinvestment opportunity makes up a great fit here youve got elliott, a very smart group of people they own a lot of the debt why shouldnt there have beend at 9. 3 billion be superior to Warren Buffett theyve been very supportive of our Investment Strategy what they did, they were given conditions conditions that they didnt want what berkshire did, they went to austin, said we think youve got it right well accept it and expand it and they worked out a deal with the staff, the industrial coalition, the municipal coalition, and they cut a deal so they said well take this, because theyre not afraid of an independent board. But so will elliott we know elliott will. Theyre our largest creditor at this point, its just a conceptual theyre fine people. But all i know is what is in front of us is buffet. So the Berkshire Hathaway deal would be great for this company. I just dont know enough about elliott. This could be a needle mover. I know Berkshire Hathaway is only 10 of this business. But oncore, what are your Growth Prospects . Youve got superior Growth Profile. We do were going to invest 1. 5 billion in cap x at a minute the beauty is, were not doing that to drive customer yield up, but down so we have a good Growth Profile that drives costs down you mentioned the administration, that deregulation could help you. What does that mean . I tell people that maybe thats the most important thing thats happening under president trump, is he favors deregulation. Thats a different environment entirely from the previous president. It is the deregulation we put in place years ago in texas we have deregulated theal if. Thats good for the rate payer. Youre telling me the customer does better in texas because of this they have absolutely done better it seems like the Public Utility Commission if elliotts bid comes in and wants to help the senior creditors and the junior creditors, unless they commit, which i think they will, making it so the customer doesnt get hurt, its not going to get approved. Absolutely. You have to come in and do what berkshire did. So well accept the conditions you have to go to texas first, then the debtor, then the Bankruptcy Court this bank rupt si has been so long and expensive elliott was negotiating and berkshire is came in out of nowhere and elliott was caught unaware. Youre in the cat birds seat, but is there a way to resolve it so Everybody Wins . I think there is. Elliott is happy to work with Berkshire Hathaway they want to make sure they get the best value they can from Berkshire Hathaway you also have a Bankruptcy Court that wouldnt want to hurt senior or junior creditors thats right. We can work this out one last question, why couldnt we buy a share of oncore it would have been my favorite public utility it would have been the best. Its a great story. The complexity of this debt structure in bankruptcy, too hard thats the ceo of oncore electric, and if Berkshire Hathaway i love Berkshire Hathaways stock anywhere. Stick with cramer. But is the appetite for fast food in china big enough its local versus global in a battle between pies, thighs, and tacos. Which yum can fatten your wallet last november, yum brands, the parent of pizza hut, taco belland kfc, broke itself into two separate Companies Young china, which got their fast growing chinese business, and the remaining yum brands now that its been put to bed for eight months, you know what . I think its time to give both stocks another look and figure out which is the right one to own, which is better, yum or yum china . You need to understand the gene genesis. Chinas company had slowed considerably in 2014 and 2015, and the companys once fabulous numbers had gotten hammered. Yum was doing just type everywhere else, but china had gone from being the jewel in the companys crown to something that scared investors away, but still held up tremendous promise of growth, as it had been the driver the way to play china for years, frankly. After a long period of frustration among investors, yum decided to break itself up into a high risk but also high reward play on china. And a steady, consistent play on the rest of the world. Look, so far this is great if you owned the old yum through the breakup, youre now up 27 but that begs the question, which should you own, the original or the chinese . Before the breakup, management gave us longterm targets for both businesses. For yum china they forecasted longterm earnings of 15 , powered by mid Single Digits samestores sales growth and the chance for the company to triple its store count, because the Chinese Market represents such a gigantic, really kind of i would say opportunity even after all these years. So they forecasted 13 earnings per share, bolstered by a 2 dividend as the Company Moves to franchise the vast majority of the stores, creating more of a steady business model. So you have the reliable versus the superior growth, if it happens. So how have yum and yum china done since the separation . Lets start with yum china by the time the split up came, yum chinese same store sales had already begun to stabilize but then the numbers seemed to stall again, before improving yet again. However, when yum china reported last week, the stock got hammered because the company delivered a minor disappointment it lost 13 of its value in a single session it initially looked like yum china was doing really well. In the first quarter, the Company Posted sales kfc was in good chain, and even the ailing chinese pizza hut business was doing okay. But then we got yum chinas Credit Rating<\/a> of the united states. And in 2015, fears of a chinese collapse and one in february of 2016, related to the collapse of oil so this stocks entered bear market mode that its almost like weve had three bull mar t markets. Thats why i cant buy into this senile bull feces. Plenty of things could kill this market, but time suspect one of them second, many contend were back in the year 2000, right . That scenario of the nasdaq collapse that were going to get crushed when the earnings come through. This is not the dotcom era in 2000, we had a numberof secondary offerings as the smart money headed for the hills ahead of the collapse. Can you recall any secondaries i cant. We also had negative preannouncements near the top. Other than oreilly automotive, we havent had any of these nasty things lately. And we saw a big jump in bankruptcies in 2000 again, something thats not happening now. In other words, we didnt just have an earnings shortfall at the end of the dot com era plus, the price range to multiples of many of the tech stocks right now are about 1 10th of what they were back then 0. 1 the third objection, lots of people still believe, the majority believe that the markets only rallied this far because the fed put us here and its going to crush us when it tightens in earnest. But the truth is, as ive said over and over, were in a rare moment where we benefit from higher rates if you care about the banks lending money, they need to make more of a profit, which is what rate hikes give them thats why the financials have reasserted themselves as leaders. No bear market has ever begun with the financials as the leaders. Many started with the banks as slaggards, though. Trump hasnt delivered on tax reform and theres gridlock in washington but lets remember, gridlock has never stopped us from rallying in the past. We just had six years of divided government and the bull kept running. Maybe well get some tax reform next year, but still, it should have been obvious that the president s agenda would be put on hold when congress decided to make health care the most divisive issue in america its top priority however, at the end of the day, a government that does nothing under a republican president is still more market friendly than one that does nothing under a democrat im not trying to be political here its just that the republicans are known as the party of capital, the democrats the party of labor both equally valid, but the stock market is capital. The perception is stocks have gotten expensive you think if stocks were truly expensive, then value stocks would hold their value however, value stocks are the principled source of pain in this market. Plus, ive been examining hundreds of stocks that are not on most peoples radar screen. They simply cant be considered pricey this isnt just anecdotal. So much of the movement in this market has been broad based. The sixth reason people distrust this bull, theres a tremendous fear of tech knockstocks why . Much of the advance is in enterprise tech stocks, not the consumer oriented tech stocks. I could go on and on most just simply dont know what to do, so they presume these stocks are expensive theres a whole cohort of Tech Companies<\/a> related to storage that are beyond most investors so of course, what they dont know, they react with fear to. If you dont work with the stuff professionally or you dont know the ceos, you dont understand the stories, then you dont know how great this Tech Revolution<\/a> is, and you assume its overvalued you assume its 2000 when there was Tech Revolution<\/a> talk and it never materialized seventh, there are a lot of Health Care Stocks<\/a> similar to tech that just arent understood, because theyre part of this Medicare Medicaid<\/a> business thats had the run of the joint for ages the truth is, again, not political, but a single payer system, without one, health care will always be run inefficiently and the taxpayer will keep getting ripped off single payer is probably the only way to save money longterm and theres no way were getting a single payer system any time soon, so the Health Care Stocks<\/a> will continue to run no one is checking how much they make ut eighth objection, theres been a lot of Energy Companies<\/a> created. Theres been almost no consolidation, and all these stocks are high profile, daily disappointments that carry a lot of psychological weight. Theyre like a steamer trunk on the back of the market ninth, speaking of the ultimate disappointers, the area in the market we can see best, the one that is so easy to talk about and right in our faces, retail its a disaster, because of amazon i say there have been some retail bankruptcies, but know major ones the fear of amazon has become so all encompassing, though i say stay tuned im more interested in buying than selling more on this later in the show the final objection, and this is another segment, a lot of these are psychological, i know. This is deep psychology. Since advent of youtube, expert and socalled experts feel the need to be muted whenever they wax bullish. Nobody wants to Say Something<\/a> really positive, because if the market gets crushed, your words will be preplayed endlessly and used against you and you know what . You look like a moron. Most people take the more e quich la equivalent of the fifth amendment when they come on tv these days theres a lot more accountability for the bulls than the bears so the bulls always sound tepid compared to the pessimist, bigtime Hedge Fund Managers<\/a> that means the bears always control the dialogue even if theyve been wrong for the last 15,000 points look at fang run the bottom line, i dont think any of these objections will change any time soon theyre just going to be with us so we need to acknowledge these ten reasons why the bull is so widely mistrusted. That way you dont have to have one foot out the stock door every single session lets go to joseph in alabama. Joseph caller hey, mr. Cramer, thanks for taking my call. Of course caller so i bought into target at 57 a share. Its trading down lately and i want your opinion about a longterm investment i think target is in the cross hairs of amazon and walmart. Thats an uncomfortable place to be the fact is, its in crisis right now. It doesnt know how to make it, because its so different that we all go there. Do i think it represents longterm value . If it changes and finds a way to get it so im in the store, yes. But its got to do that. Okay, dan in virginia. Dan . Caller hey, jim, how are you . I am good, dan, how about you . Caller doing great just wanted to say appreciate all you do, all you teach us im a schoolteacher and i continue to learn from you each day. Thank you very much thats what ive been telling some people this weekend if i can make the show 100 educational, thats where im going. Caller you can come to my school and visit im calling about pandora. About a month ago, siri announced a substantial investment in the company. Since then, the stock price declined 12 , but since then has rallied 20 from that low. They announced a big change in Senior Management<\/a> and speculation about a potential merger or partnership with companies such as tesla or amazon the question i have is, being the first player in Gold Standard<\/a> of streaming music, wouldnt pandora make an outstanding mid or longterm investment that whole deal they made was to give them more capital to give more of a runway. But i think theres a lot of hot money in the stock so your fellow shareholders are your enemy, not your friend. So i would say that its fairly valued at that price i have no real interest in being it but thank you for those kind comments sure, there are justified gaps against the bull, no one is denying there. But theres no reason to jump ship you should be able to spot opportunity. When it comes to young and young china, see which offers a bigger piece of the pie and with amazon prime day, are brig and Mortar Retail<\/a>ers preparing for the worst . But first, Warren Buffett<\/a> just made a 9 billion for encore will he get it ive got the exclusive, coming up next. So stick with cramer dont miss a second of mad money. Follow jimcramer at twitter tweet cramer at madtweets send an email at llt 80 a cnbc. Com or give us ca a10743cnbc miss something head to madmoney. Cnbc. Com. [vo] progress is seizing the moment. Your summer moment awaits you now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Or a little internet machine . [ phone ringing ] hi mom. It makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile<\/a> comes with your internet. You get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Call or go to xfinitymobile. Com introducing Xfinity Mobile<\/a>. A new kind of network designed to save you money. Tree months ago i told you how they were trying to buy Encore Electric<\/a>, the largest utility in texas whi since then the deal was bought by the texas Public Utility Commission<\/a>, but encore is too attractive of a target to pass up last friday, Warren Buffett<\/a> offered 9 billion in cash for encore now were hearing that elliott management, encores largest unsecured creditor, might been to pay 300 million more than buffet for this business still, weve reached the third attempted acquisition of encore in two years lets check in with the ceo of Encore Electric<\/a> delivery and find out more why he thinks Berkshire Hathaway<\/a> is the right home for it. Good to see you. Bob, ive got to tell you, people at home are going to be confused, because when they hear ba bankrupt, they think worthless youve got to start with the lbo in 2007. 2007 this company was taken private in a 45 billion lbo the state of texas wisely said were not going to subject oncore to that rest, so its become the debate in this process. By the way, that turned out to be quite insightful because whats happened is you talked about her chant generators a lot is what happened to Natural Gas Prices<\/a> essentially they were making a leverage buy from natural gas, natural gas does from 10 to 2. Your business is for you viewers, we have con ed on regularly, its that pure business that can be a great business its really robust growth and with deregulation, weve transformed the generation theme in texas the most renewables in the country, transformed by gas fleets, and the investment to enable that largely Companies Like<\/a> ours, building out the transition grid, building out the technology, so weve invested billions of dollars, to help drive bills down. Electric bills in texas today are 25 lower than 15 years ago. Thats amazing. Everybody else is going up the way the market has worked in texas, well have continued Investment Opportunities<\/a> to help enable all of that, in addition to the growth. So in the eyes of Berkshire Hathaway<\/a>, strong business, strong cash flows, real good reinvestment opportunity makes up a great fit here youve got elliott, a very smart group of people they own a lot of the debt why shouldnt there have beend at 9. 3 billion be superior to Warren Buffett<\/a> theyve been very supportive of our Investment Strategy<\/a> what they did, they were given conditions conditions that they didnt want what berkshire did, they went to austin, said we think youve got it right well accept it and expand it and they worked out a deal with the staff, the industrial coalition, the municipal coalition, and they cut a deal so they said well take this, because theyre not afraid of an independent board. But so will elliott we know elliott will. Theyre our largest creditor at this point, its just a conceptual theyre fine people. But all i know is what is in front of us is buffet. So the Berkshire Hathaway<\/a> deal would be great for this company. I just dont know enough about elliott. This could be a needle mover. I know Berkshire Hathaway<\/a> is only 10 of this business. But oncore, what are your Growth Prospects<\/a> . Youve got superior Growth Profile<\/a>. We do were going to invest 1. 5 billion in cap x at a minute the beauty is, were not doing that to drive customer yield up, but down so we have a good Growth Profile<\/a> that drives costs down you mentioned the administration, that deregulation could help you. What does that mean . I tell people that maybe thats the most important thing thats happening under president trump, is he favors deregulation. Thats a different environment entirely from the previous president. It is the deregulation we put in place years ago in texas we have deregulated theal if. Thats good for the rate payer. Youre telling me the customer does better in texas because of this they have absolutely done better it seems like the Public Utility Commission<\/a> if elliotts bid comes in and wants to help the senior creditors and the junior creditors, unless they commit, which i think they will, making it so the customer doesnt get hurt, its not going to get approved. Absolutely. You have to come in and do what berkshire did. So well accept the conditions you have to go to texas first, then the debtor, then the Bankruptcy Court<\/a> this bank rupt si has been so long and expensive elliott was negotiating and berkshire is came in out of nowhere and elliott was caught unaware. Youre in the cat birds seat, but is there a way to resolve it so Everybody Wins<\/a> . I think there is. Elliott is happy to work with Berkshire Hathaway<\/a> they want to make sure they get the best value they can from Berkshire Hathaway<\/a> you also have a Bankruptcy Court<\/a> that wouldnt want to hurt senior or junior creditors thats right. We can work this out one last question, why couldnt we buy a share of oncore it would have been my favorite public utility it would have been the best. Its a great story. The complexity of this debt structure in bankruptcy, too hard thats the ceo of oncore electric, and if Berkshire Hathaway<\/a> i love Berkshire Hathaway<\/a>s stock anywhere. Stick with cramer. But is the appetite for fast food in china big enough its local versus global in a battle between pies, thighs, and tacos. Which yum can fatten your wallet last november, yum brands, the parent of pizza hut, taco belland kfc, broke itself into two separate Companies Young<\/a> china, which got their fast growing chinese business, and the remaining yum brands now that its been put to bed for eight months, you know what . I think its time to give both stocks another look and figure out which is the right one to own, which is better, yum or yum china . You need to understand the gene genesis. Chinas company had slowed considerably in 2014 and 2015, and the companys once fabulous numbers had gotten hammered. Yum was doing just type everywhere else, but china had gone from being the jewel in the companys crown to something that scared investors away, but still held up tremendous promise of growth, as it had been the driver the way to play china for years, frankly. After a long period of frustration among investors, yum decided to break itself up into a high risk but also high reward play on china. And a steady, consistent play on the rest of the world. Look, so far this is great if you owned the old yum through the breakup, youre now up 27 but that begs the question, which should you own, the original or the chinese . Before the breakup, management gave us longterm targets for both businesses. For yum china they forecasted longterm earnings of 15 , powered by mid Single Digits<\/a> samestores sales growth and the chance for the company to triple its store count, because the Chinese Market<\/a> represents such a gigantic, really kind of i would say opportunity even after all these years. So they forecasted 13 earnings per share, bolstered by a 2 dividend as the Company Moves<\/a> to franchise the vast majority of the stores, creating more of a steady business model. So you have the reliable versus the superior growth, if it happens. So how have yum and yum china done since the separation . Lets start with yum china by the time the split up came, yum chinese same store sales had already begun to stabilize but then the numbers seemed to stall again, before improving yet again. However, when yum china reported last week, the stock got hammered because the company delivered a minor disappointment it lost 13 of its value in a single session it initially looked like yum china was doing really well. In the first quarter, the Company Posted<\/a> sales kfc was in good chain, and even the ailing chinese pizza hut business was doing okay. But then we got yum chinas Second Quarter<\/a> results last week, the one that caused the stock to get obliterateoblitera. The problem was two things pizza huts turn around hit a snag two, there was some confusion surrounding yum chinas restaurant margin guidance i think the number for 2017 would be better than 17 , but this is what hammered the stock. Y you can understand how it would get hurt so badly, it was basically okay but not a perfect quarter. Many realized that they had overreacted to the stock and it rebounded 7 the next day. But you know what . Not enough so things are not perfect with yum china. But theyre not as bad as you might expect xwimpb tgiven the decline last week. But how about yum everywhere else theres some really positive changes. Taco bell has been very strong sales up 8 in the first quarter. Kfc, solid, 2 pizza hit down 3 . Lately, yums management has been talking about doing Something Big<\/a> to turn things around yum is going to invest 130 million to upgrade their equipment and improve operations kfc and taco bell are in terrific chase, here in the u. S. And everywhere else that yum does business, except for china because thats a different company. So which is a better stock for you, yum brands or yum china lets start with the stocks them the selves ev when you look at other quick serve restaurant names that are growing, both numbers seem reasonable dominos sells for 33 times earnings even mcdonalds is trading just about 11 but lets see. Lets put it together. I think its crazy to yum and yum china are trading at the same price earnings to multiple. Now with taco bell so strong, i think yum brands is the true growth vehicle here. And yum china had some real problems with growth that needed to be worked out before it deserves to trade at the same a the Parent Company<\/a> it simply is superior to the chinese spinoff. Until that changes, im sticking with the original yum worth owning ive been recommending yum brands since long before the breakup, and you have a nice gain here. Stick wit, because its outperforming yum china becaus taco bell is on a roll, and yum china turned out to have less growth than the parent, at least for now. Lets go to jimmy in california. Jimmy . Caller hi, jim, i love the show youre awesome, your staff is great. I have a great staff. They make me look good every day. Whats up . Caller my stock reports in two weeks after blowing away the numbers last quarter its pulled back 20 since its 52week high in may. Should i buy more chipolte yes, i think you should theyre spending more than i would want, but theyre doing that to rebuild the franchise. December 7, 2015 is when they had the last incident. Were starting to figure out where we are december 7, 2015 was the neuro virus at boston college. Now we analyze, and youre at 18 months thats been historically where you want to get long, right here, right now. I would buy some under 400 if it gets there. Sally in florida, sally. Caller hey, jim. Whats up caller i have a question today for you about mcdonalds sure. Caller okay. So given the declining revenues every year over the last four years, and taking a really hard look at the balance sheet, declining assets, the looming debt, i think its over 27 billion now, negative equity, 2 billion in negative equity i see trouble. What am i mising you have a real turn in the samestore sales which control things all what you say is right, absolutely and you say its crazy is the stock has moved so much, but its reinvigorated company with a reinvigorated stock and people are willing to pay this amount i think its overdone to the upside and ive loved it for a long time. I want it to pull back, but its a very Real Movement<\/a> thank you. Yum brands breakup is one of the most anticipated in recent memory i say you stick with yum brand the parent much more mad money ahead, including a little known Biotech Company<\/a> with a new way to treat cancer, and its up over 100 year to date ill talk with the chairman, next then hearing the fallout from amazon prime day, ill tell you what to watch for come the brick and mortar, lets just say implosi implosion. And toovenlts edition of the lightning round. So stick with cramer your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Lets talk about a Small Cap Stock<\/a> thats been on fire lately the stock of nvcr, an anticancer play we have championed thats rallied 130 year to date thats right, 130 for those of you that dont remember, theyve pioneered a new way to fight cancer with tumor treating fields. They use low intensity electric fields that disrupt moll cues within cancer cells. Compared to surgery or radiation, this is a gentle and nobody invasive method to go after solid tumors, with far fewer side effects this is not some Experimental Technology<\/a> the platform has been approved to treat gbm, a nasty form of brain cancer its on the market, selling very well this could be just the tip of the iceberg, as they study this technology as a treatment for all sorts of solid tumors for lung cancer to breast cancer, cervical cancer, and pancreatic cancer you name it. So could this stock have even more room to run lets take a closer look with the chairman of the board. Welcome back to mad money. Good to see you, sir good to see you have a seat, bill the sales have been remarkable in the time since we have seen you last i want people to understand, this is a totally new but actually much less dangerous therapy than when used in conjunction with other drugs and produced phenomenal results. When we think of cancer therapies, we think of surgery, radiation and drug therapies these are the big three. This therapy was invested by a professor in israel whose expertise was the Electrical Properties<\/a> he was able to use these low intensity electric fields to disrupt cancer cells as they divide theres noic toxicity associated this has got some very good momentum and are governments and Insurance Companies<\/a> willing to pay . First of all, its been a tremendous i would say 18 months of building for the Company Since<\/a> we went public we received the fda approval for gbm right after we went public since then, weve expanded our sales force, the number of centers that are trained to administer the therapy we published our data in one of the top medical journals we received something called the nccn National Comprehensive<\/a> Cancer Network<\/a> rating as a standard therapy we introduced a new, smaller device and i think most important i, in april, we presented fiveyear data theres something magical in oncology about thefiveyear data and before the approval of a drug called timidar, there was zero fiveyear survival for gbm. With this drug, maybe up to 5 with timitar, plus our therapy, we almost triple that. We still have a way to go, and were doing a lot of work in that area, but whats happened as well is, and this is the answer to your second question, weve seen nine quarters of sequential growth with patients on therapy and the way we charge its a therapy, so payers pay per month of therapy, as the number of patients on therapy go up, so does the revenue so 20,000, whats the current per month . So the list price, and its global price, u. S. , europe, and japan, is 21,000 per month. The second question you asked is about payers this is a classic disease thats appropriate for insurance. What i mean by that, its a crisis, catastrophe that happens to a small group of people in the u. S. Today, approximately 200 million, essentially all privately insured patients have access to the therapy. We still dont have coverage from medicare. That typically takes a little longer right as a company, weve made the decision to provide it to all medicare patients while we pawat for the government so everybody in the u. S. Has access this is not the kind of end of life, where some people, many people come on and say thats the most expensive thing this is very much you can have a vibrant life with this. These are people who can walk and talk and go out and do things that would otherwise be a death sentence absolutely. The median age for gbm diagnosis is in the 50s. So this is not a jer yak rick cancer the quality of life on our therapy is much better for patients than for patients who dont have the therapy i lost my mom to cancer, and there was no quality of life so its just ridiculous to continue like this what youre doing is creating a quality of life with a device that used to be the size of a car battery and now . 2. 7 pounds. And they carey it with them. And the way you go through and create with other drugs, a much greater way of lets say arresting the cancer no, they actually beat, in patients who respond, the tumors shrink over time and theyll have extremely good prognosis for a longterm solution i want everyone to know about this i said this from the day i met you. Thats really important. And one thing ill emphasize, they are bringing it to the other soild tumor type so we have phase three trials under way in lung cancer and by the end of the year well have a phase three trial under way for pancreatic cancer and we just received a humanitarian device designation for mesothelioma youve done a great job thats bill doyle, chairman of novacure mad money is back after this it is time its time for the lightning round. [ indiscernible buy buy buy, sell sell sell sell sell. And then the lightning round is over. Time for the lightning round tom in california. Tom. Caller hey, jim, this is tom, longtime listener. Ive been listening to you since i retired in 2010. Thank you caller so a lot of my stocks are cramer picks thankfully but any way, back on the end of december, i thought you suggested mattel as a buy, mat has bro hasbro, the ceo has been on the show many times. And i still like hasbro, even up here more than mattel. Mattel could have been a spec. But hasbro is the real deal. Lee in maryland, lee caller cramer, yo. I want to buy some raid odeon no, its got a multiyear run on it. I think youre okay. How about michael in new york. Caller hey, jim, huge fan of yours. Thank you caller i recently invested in a small cap Surgery Company<\/a> mazor. They had a good quarter they shipped a lot of product. My understanding is, that last quarter made it. I would love to say, buy buy buy, but i would like to know what happened with the israeli s. E. C. Alex in pennsylvania, alex caller hey, jim, yourfathe was truly blessed. My fathers birthday was on sunday, yesterday. Thank you. Caller very nice, yes. What are your boughts about goose right now . I still like it at 19 i think its a good story and i know that retail is challenged but this is a story domestic going international. I like it. Josh in texas, josh. Caller greetings from texas, jim. How are you doing caller doing well today. A lot better than the stock, i know you mentioned how possibly a good chance to jump in [ inaudible im going to get the ceo back on i thought it was going fine. I know theres another drug doing well but the shorts have been all over this. We need the ceo to come on and talk about how the trials are going. And that, ladies and gentlemen, is the conclusion of the lightning round the lightning round is sponsored by amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Tonight, at 9 00 p. M. , stop everything go to amazon and buy everything they have for sale, because its going to be amazing. It will be so great, they dont even need to pay me for this endorsement. That was easy there, i did it, what amazon wanted me to do, i promoted their made up event, amazon prime day, that will drive sales. The consensus is it will produce gains up to 20 year over year, new benchmark, making it a day that will live forever in brick and Mortar Retail<\/a> infamy today, we heard reports that amazon is coming after best buy with a geek squad of its own thats why the rare retailer that people thought couldnt beat amazon, because the stuff you buy there requires help. But amazon is putting together a unit we learned that is said to do what best buy does. And pop, there goes the stock of what we thought to be a winner now its a loser down 6 how bad is the fear of amazon . Get this, we got a downgrade today of costcos stock. It was titled, if 6 comps are not enough, what is . Downgrading to market perform. I totally understand the downgrade. Last week costco posted the great numbers and it went down because nobody cared costco was well loved until amazons Game Changing<\/a> bid for whole foods. Costcos stock lost 2 again since the deal, we heard that amazon might buy any brick and Mortar Company<\/a> that can help them dominate. Amazon knocks down a stock with its own power and gobbles up the stock underneath when it suits them however, as i always counsel, never buy a stock on a takeover basis, until we see a turn in macys numbers, i wouldnt count on them buying it. Macys stock dropped to a new low of 21 , part of this flight out of retail. Lets step back for a second and ponder the big question. Are we now giving amazon too much credit for destroying everything its true that the more prime customers amazon has the worse off the brick and mortar competitors will be. We stock up on soft goods that we might otherwise buy at the supermarket or costco. The threat is real at what point are the worries overdone at what point do the stocks take this pain into account and there is the problem many of the Retail Stocks<\/a> being hit turn out to be might any expensive, even after the decline. And still dont represent value yet. So lets take the stock at costco, which has been hammered since the amazon whole food tieup, going from 180 to 151. Even after the decline, costcos stock still sells at over 23 times earnings and many bulls that remain chaer leadin cheer r the company. Macys makes a lot of money, does have options. But it has 15 billion in debt, and that scares the heck out of people macys filed for bankruptcy in 1991 after levering up that still leaves a nasty taste with bond holders. So let the Retail Stocks<\/a> come down, let amazon blow up the numbers for prime day and cut estimates from all the others. But remember, not all retailers are created equal. Some are better than others. And not all can beat amazon as easily as you think, while the stocks of others reflect the brutal amazoning that may never occur. Stay with cramer because we dont like surprises. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get 4 rooms with hd, dvr, and every box included for 25 a month. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual<\/a> wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you\u2122 Liberty Mutual<\/a> insurance. You wouldnt want to be trading places here. It began when Eddie Murphys<\/a> wife cost friends 343 million i like to say theres always a bull market somewhere, and i promise to find it for you right here on mad money. Im jim cramer, and i will see you monday welcome to the shark tank, 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. First into the tank are erika welsh and keeley tillotson, College Students<\/a> with a business they created in their dorm room. Hi, im keeley. And im erika. We founded our company, wild squirrel nut butter, this january as sophomores at the university of oregon. 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