Transcripts For WAVY Mad Money 20160227

To it. Thats why this market started so strong today and then petered out when oil reversed. Closing down 57 points. S p backsliding. 19 . Nasdaq. 18 . Oil was strong. This oil makes everything very difficult to figure out. Because if a Company Reports an amazing quarter on a day when oil goes down, the stock will get hit regardless. But if oil is flying buy, buy, buy you can bet that even a mediocre quarter will be rewarded with applause and a rally. Hallelujah now, i for one think that oil is going to stay lower longer. We ran up to that 34 level as we did earlier today. We start getting some real resistance because there are so many strapped Oil Companies out there that need to dump crude on the market or sell futures to hedge and bring in cash. Its almost impossible to get over that 34, 35 hump. Thats why i urge you to understand the rhythm we have and recognize that occasionally well get selloffs in the stocks of companies that deliver fantastic quarters but have the misfortune of reporting on a day when oil goes down. That could be where the opportunity comes in. What do i mean . Lets take salesforce. Com which reported the best quarter of any Technology Company in 2016. You know i dont like to chase. The stock missed almost 10 after the quarter. I said you have to be careful because there could be some turbulence that could bring it down. Turbulence unrelated to salesforce itself which obviously did a great job. Lower oil gives you that kind of chance. I suspect if oil opens lower monday and i think it will you salesforce. As long as you understand oils totally in charge regardless of whether or not you believe that makes any sense, which is moments to buy highquality stocks may be when oil sends them lower. With that in mind lets take a look at next weeks game plan. This one actually starts not on monday but tomorrow. When Warren Buffett releases the Berkshire Hathaway annual report. Lately buffetts stock portfolio has had a tough time of things. Some highprofile im thinking American Express will address those holdings. Well be reading the letter this weekend and then be listening to the fabulous becky quick interview the oracle of omaha to see if hes sticking with the management of these companies when he comes on air from 6 00 to 9 00 a. M. Eastern. We also care about some of his positions in the oil and gas industry where all of us are grasping at straws. What does buffett think of oil and Gas Pipelines . Do you know he has a monster position in them. How about the down and out railroads which ship crude . He owns the king, burlington northern. I cant wait to hear what he says when becky asks him about these investments. Maybe he will comment on todays big win that he has. Kraft heinz. Also monday morning valeant reports. Vrx. This stocks been put through the ringer. I want to hear how they defend their accounting recognition problems. But theres another reason why i care about valeant. This stock is a gigantic holding of bill ackman and his Pershing Square hedge fund. Ackmans been having a tough time of late. Just today when herbalife, a company hes been short for a long time because he thinks its a pyramid scheme, reported a with the ftc. This stock shot up 9 points or 20 on that news. You can bet that in this rapacious world if valeant gets hit on earnings, driving ackmans position down, youre going to hear chatter that back his short on herbalife. Thats right. Bad news for valeant may be more good news for herbalife. How twisted is that . Weve been fixated on the stocks of companies that offer value because its been such a good recipe for success so far in 2016. And we get results from not one but two fabulous plays on value on tuesday. Dollar tree and ross stores. Last summer dollar tree bought family dollar. Frankly at first it was a little rocky. That merger, i wasnt so sure. But not anymore. I think now this is a totally winning combination and i expect a very good quarter. That will be another one where if you got a chance to be able to buy it, say, on the stock buy some. Now, ive got to tell you, ross buys all that closeout merchandise from hurting department stores. And while dont like it as much as tjx i bet it does quite well given again how much value figures into the calculus of young consumers since the giant terrible great recession. They just dont splurge. Wednesday im focused on three analyst meetings, not earnings but analyst meetings. The first is from target, which reported a fantastic quarter this week and gave you a clear path for online growth. Something that we had been concerned about because it was weak in the previous quarter. If target goes down ahead of this meeting, again, perhaps because of oil selling off, i would buy the stock, my Charitable Trust actionalertsplus. Com has a big position in target. Speaking of oil the best oil of all is exxonmobil. Thats right. And theyve husbanded their capital and theyve got the best Balance Sheet of any Energy Company in the world. So im going to listen rapt for any clues about what exxon thinks will happen both short and long term for crude. They do have a long term. Exxon has a 50year business proposal. While their record isnt perfect, theyre not blow hazardous to talk about how oils going right back up to 80s like so many of the more rosy oil folks that you have to listen to. Then theres honeywell. Hon. Ceo david cuddy delivered an amazing quarter last month but since then hes been frying to acquire United Technologies, first in a friendly way after United Technologies Ceo Greg Hayes suggested they talk and then in a hostile way after hayes had second thoughts on the combination. I personally think that as brilliant as the combination might be it likely wont pass muster with all the big regulatory bodies out there, especially the european union, which are l. Do anything to protect one of its own. Airbus, which is obviously a customer of these two companies if they merge. As long as cuddy keeps trying to do this deal i think honeywells stock will stay under pressure. Thats where the opportunity comes in. If it werent for this prospective deal blasted again this afternoon by hayes, i bet honeywells stock would be up. Perhaps up considerably now that the cyclical stocks are back in favor. Heres another oilrelated play that intrigues me. Kroger. In other words, if oil goes down, this stocks going to go down because it takes the whole market with it. Before it reports because i think the stocks done resting. Its kind of just trading sideways for a while, and i think its about to take off. Krogers such a terrific operator that its very rare for it to ever be off its 52week high. I dont want you to miss the opportunity. This may be your chance. Will the cell phone and internet of things i. O. T. Internet of Companies Ever regain their luster . Well find out when broadcom, thats the merged entity of avago and broadcom, reports. This companys a Communications Tech powerhouse, Semiconductor Company but its been overly linked to apple. I say overly because there are so many other businesses besides apple. I dont want to guess how the stock will behave because of that apple connection thats in everyones mind. Its more perception than reality. But i bet the quarter will be a strong one. Finally, on friday we get the labor departments nonfarm employment report and ive got to tell you that this may be the only number out there that can possibly supersede or be more influential than the price of oil. I think the stock market wants weaker side because there will be too much talk of a march rate hike otherwise. Many came into the year betting the fed would give us a march rate hike but a weaker employment number on friday could put an end to all that speculation. If so and we get a friday rally in oil, well, look out above. However, if the number comes in hot and oil goes down, lets just say the bottom line is that youll be glad to have some cash around to buy the compelling stories that you stayed away from because of the inane but incredibly powerful oil to stock market linkage that clouds the mind and creates so much chaos in the real world of earnings and then the fanciful earnings of the s p 500. Lets go to ted in texas. Ted caller bababooyah from the longhorn state. Nice. Caller jim, thanks for taking my call. Im looking at investing in Starwood Hotels and resorts. Theyre merging with marriott international. And based on the agreement it looks like the starwood of stock per share, 2 in cash, and an additional 7 or 8 from a timeshare spinoff. So i would appreciate any thoughts on sure. First i should disclose that in fairness actionalerts sold some stock when it was high and then sold some stock when it was really low. I feel bad about starwood because i didnt stay with the combination. That said, im not crazy about the hotel group right now. So im going to tell you i think after hot has just run from its bottom let it pull back to 64, 65. It just went up eight straight points. Not that i wasnt kicking myself Charitable Trust sold very close to the bottom. Thank goodness we sold some at the top. Lets go to joey in florida. Joey. Booyah. Caller so you talked quite a bit about liking amazonproof but i came another thats amazonproof and thats Signet Jewelers who operates brands like i like the signet but theres a credit issue with signet. Pulled back from expensive items. It just happened. Its a new thing thats happened in 2016. That makes me like signet less. We were shocked at how it ran up but i think you want to be careful of two that had run up, signet and mattress firm. Both concerned me. Shirley in minnesota minute. Shirley. Caller hello. Shirley. Caller im in kansas. Oh, my. Shirley, you jest. Okay. [ rimshot ] sorry. Caller thats all right. May i speak . Yeah. Sure. Go right ahead. Caller wonderful. I would love your opinion on weight watchers. Wow, you know, i was kind of astonished. I mean, there was so much hype in the stock because of oprah. Market. That kind of stuff. Its very yesteryear. In this environment. That stock ran up. Was the quarter that bad . No. But the expectation his gotten i want to stay away from wtw. Oils in charge, people. And once you realize that, youre going to find plenty of buying opportunities. On mad money tonight, are some Companies Taking a cue from the mad hatter . Im heading down the rabbit hole and telling you which management teams are living in a fantasy land. Then all week long ive focused on stocks that have lost their mojo and what they can do to get it back. Tonight i am eyeing a financial player that could actually be worth banking on. And you know i dont like the banks. And the brains behind the breakup of tyco has set its sights on dow du pont. Ill tell you whats next. I suggest you stick with cramer announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer. Hashtag madtweets. Send jim an email to madmoney cnbc. Com. Or give us a call at head to madmoney. Cnbc. Com. Madmoney. Cnbc. Com. Can a toothpaste do everything well . 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The worlds first antiperspirant with unique microcapsules activated by movement, that release bursts of freshness all day. Motionsense. Protection to keep you moving. Degree. It wont let you down. Working on my feet all day gave me pain here. In my lower back but now, i step on this machine and get my number which matches my dr. Scholls custom fit orthotic inserts. Now i get immediate relief from my foot pain. My lower back pain. Find a machine at drscholls. Com pet moments are beautiful, unless you have allergies. Then your eyes may see it differently. Only flonase is approved to relieve both your itchy, watery eyes no other nasal allergy spray can say that. Complete allergy relief or incomplete. Let your eyes decide. Flonase changes everything. Have we fallen down the rabbit hole . Are we suddenly in a fantasy land of talking flowers, where executives have such amazingly positive things to say on their Conference Calls and yet their stocks plummet anyway . Lately a number of companies have given me kind of an alice in wonderland vibe. But fortunately, were not through the Looking Glass yet. Even though some days it might because the market is typically smart enough to see through this kind of wonderlandtype commentary. But heres the thing. I tell you to listen to the and i dont want you getting misled by this kind of sensation, lets say sensational offkey Conference Calls. So tonight im going to present my nominees alice and wonderland awards for statements that are bizarrely out of step with reality. How fitting it comes with the oscars because theres some mighty fine acting going on here. Our first down the rabbit hole nominee, Trinity Industries the maker of railroad cars, which reported a mixed quarter with significantly weaker than week. And when i say the guidance was weak, i mean they forecast 2 to 2. 40 of earnings per share for 2016. The analysts were looking for 3. 64. In short, things are clearly a lot worse than they thought. However, youd hardly know it if you listened to management reiterating their comments about a record quarter over and over again. Ceo told us that trinity is, and i quote, for the Third Straight year we established records for revenues, net income and earnings per share. Our businesses created value by leveraging their combined expertise, competencies, manufacturing capacity to produce highquality products for a broad range of industrial markets. The most recent quarter completes an impressive fiveyear period in which our company has demonstrated a solid track record of growth. Then another exec. Talks about how their barge team is, and i quote, doing an outstanding job, end quote. And the railroad car business is breaking records. Fortunately, this was pretty obvious. And when you got to the call, thats near the end, the people running trinity admitted that their outlook included, and we quote, no material improvement. In the companys economic circumstances. And talking about smaller production footprint, lower demand, weaker market prices for their main rail cars. But until the q a session started trinitys management seemed to be living in another universe for most of the call. One way they didnt deliver just brutally disappointing guidance that ultimately caused the stock to plunge from plunge 22 in a single session the next day off that call. Yeah, they were way too rosy. Wholesale has been listening to a little too much Jefferson Airplane . How about jack in the box . You want to understand what makes this fast food story so fantastical, you need to understand when jack reported last november the company gave us a very positive outlook despite missing on both the top and bottom lines. The stock went up on it. On the Conference Call back then ceo lenny comma crowed about their two big brands, jack in level of confidence in our ability to compete over the long term was bolstered by the fact that both brands drove these results by successfully introducing more craveable food and without relying on aggressive discounting. Fast forward to about a week ago and jack once again missed numbers dramatically. With some truly heinous samestore sales and some very conservative guidance. In a release the company cited aggressive promotions and value offers from its competitors, read mcdonalds, as the main obstacles for completely blowing their sales targets. But remember, the last time they reported jack said they could compete and that discounting wouldnt be a problem. It was more than a problem. But ill give jack in the box this much credit. At least when they reported this time they acknowledged that theyre struggling on the Conference Call and seemed to return to reality, which is good because the companys getting crushed out there. Oh, yeah, the stock was halted when they came out with this news, and it fell 13 points from in the interim they obviously dont know jack. [ rimshot ] next up, how about linkedin . We already know that linkedins latest quarter was a massive disaster which caused the stock to plunge 44 in a single day and helped drag down the rest of the social mobile cloud, you know, cohort as the companys guidance for 2016 was downright abysmal. The problem for the First Time Ever linkedin planned international weaknesses a cause of for concern. It was also international concern. Saying a slowdown in europe and asia middle east and africa was hurting their business. What the heck . For years linkedin presented itself as a secular growth story. They never mentioned anything about having some cyclicality. Right up to the moment it slapped you in the face on this most recent Conference Call. Its hard to be that sublimely oh, and lets not forget maybe best of all or worst of all, depending upon what kind of ostrich youre giving, tableau software. The Analytics Firm that blew up on the same day as linkedin. If anything, its a worse offender. Tableaus guidance was nothing short of disastrous. But if you listened to the Conference Call you might have thought things have never been better. The ceo kicked off the call by saying, and i quote, tableaus mission is to help people see and understand data. And last year we made exceptional progress advancing that cause. We released Innovative New products, expanded a customer base, grew our business. Then they threw out a bunch of facts about strong renewal rates, new customer wins, and a growing international business. There was no acknowledgment whatsoever that tableaus business seemed to be headed into a hideous downward spiral. How about the deceleration in license references . Why wasnt that up top . What about the slowdown in u. S. Canadian growth . What about the Sales Productivity issues that management mentioned but provided zero color on . They had barely one sentence in guidance. As if maybe they thought we wouldnt notice . I think that was it, right . It was like these tableau data guys were living in an alternate universe. I mean, this one was straight up orwellian. Sure, oceana has always been at war with east asia. The tableau call was incredibly confident yet the stock lost nearly half its value that same day, possibly in part because people assumed management had lost touch with reality. It took down the stocks of a whole bunch of companies along with it, including salesforce. Com and adobe because people were so distressed about what had to be a broad slowdown. But alas, the fault was in themselves, not the stars. Or maybe in this case the cloud. Finally, if were talking about companies that have gone down the rabbit hole, Kinder Morgan unfortunately, because weve endorsed them for a long time, it does take the cake. Ever since the new Kinder Morgan was created by merging all the old Kinder Morgan entities into insisted the company was on track to continue growing its monster dividend in 2016. And even as the environment got more difficult and the company continued to report disappointing numbers kinder reported that dividend. Of course even at the time the market didnt buy it as Kinder Morgan had serious funding issues and investors were very skeptical about the companys ability to maintain the dividend despite the assurances. Fast forward to early december and the board decided they need to use their cash flow to fund the companys growth not its dividend. So we got a brutal 75 dividend cut. This was so widely predicted the stock actually rallied 7 on the news. Well, of course thats just the stock that plummeted. But what drives me crazy is the fact Kinder Morgan refuses to acknowledge the reality its dividend was in danger until the moment that it had to slash it. In fact, we thought everything was coming up roses in Kinder Morgan. And even when the company crushed that payout, it still said things were pretty darn rosy. Come on. We respected you. Dont disrespect us. So heres the bottom line. When a Company Reports bad numbers, dont be sucked down the rabbit hole by incredibly positive commentary from management on a Conference Call. Just because the executives talk like theyre doing well, that doesnt mean its true. As you can see from all these stocks that were obliterated even as their ceos had tried to paint incredibly positive pictures. Dreamy ceos, listen to me. Next time just paint by the darn numbers. And apologize to shareholders when you screw up. Much more mad money ahead. Can the mastermind behind one of the streets greatest breakups concoct another winner in dow du pont . Ill reveal. Then ill tell you why this markets nonsensical moves have more to do with peer pressure than fundamentals. But first, is it time to start buying beatendown names poised for rebound . Im revealing a company thats down. But maybe it shouldnt be out. Stick with cramer. But theres a difference between the omega3s in fish oil and those in megared krill oil. Unlike fish oil, megared is easily absorbed by your body. Which makes your heart, well, megahappy. Happier still, megared is proven to increase omega3 levels in 30 days. Megared. The difference is easy to absorb. I take pictures of sunrises, but with my back pain i couldnt sleep and get up in time. Then i found aleve pm. Aleve pm is the only one to combine a safe sleep aid plus the 12 hour pain relieving strength of aleve. Im back. Aleve pm for a better am. Degree motionsense is the worlds first deodorant activated by movement. As you move, fragrance capsules burst to release extra freshness all day. Motionsense. Protection to keep you moving. Weve got trouble in tummy town. Peptocopter when cold cuts give your belly thunder, pink relief is the first responder, so you can be a business boy wonder fix stomach trouble fast with pepto. Your heart loves omega3s. But the omega3s in fish oil differ from megared krill oil. Unlike fish oil, megared is easily absorbed by your body. Megared. All week ive been trying to teach you about how once hot stocks sometimes lose their mojo and what they can do to get it back. Now that the market has started to recover from the brutal selloff we experienced earlier this year you might think this is a good time to start buying beatendown names that could be poised to rebound. But youve got to be discerning because not everything that again. Sadly the Drug Companies havent invented viagra yet for the stock market. Although im sure someones working on it. And given the vast carnage out there, this would be no orphan drug. [ rimshot ] our next rise and fall story, b of i holdings. Bofi for all you home gamers. The nationwide bank that happens to be the oldest internetbased bank in the country. Thats what b of i stands for, bank of the internet. Now, heres a stock thats had a really good run, roaring 71 higher in 2012, then vaulting another 182 in 2013. And while b of i tapered off a bit in 2014, down 1 for most of last year, this stock was on fire, rallying from 19. 45 to the beginning of 2015 to a peak of nearly 36 last october. However, in the months since then b of i has been absolutely annihilated tumbling nearly 48 from its highs. And that is a staggering for years back in b of i it had been a red hot stock because this company was one of the few Success Stories in the realm of Internet Banking. A space thats littered can with casualties. B of i, however, was able to steadily grow their deposit base, their total loans and Interest Income what they make of your deposits. With the rise of the smartphone banking purely over the internet became a lot more convenient and b of i was perfectly positioned to snatch up a ton of this new business. Who wants to go to a bank branch when you can do everything directly from your phone or in the worst case from any atm under the sun. And because it doesnt have any branches it is t. Has a huge advantage over traditional brick and mortar banks in terms of costs. They dont need to rent a bunch of real estate and hire a bunch of tellers if they want to expand into a new region. Theyre already everywhere in the country on the internet. And thats the Business Model that allowed b of i to become a lean, mean growth story. Then back in april 2014 the company made its next move. R blocks banking business, which the tax preparers, you know if youre watching the show, was desperate to get rid of in order to avoid all the onerous regulations that fall on any company in the banking post the great recession. Now, at the time H R Block Bank was the Third Largest issuers of prepaid debit cards in the country as well as providing Financial Services to h r block tax preparation customers. Its a good business. And thats why b of is stock jumped 8 in one day on the news. Now, everybody on wall street wanted this deal to happen but it got remember we had the ceo on for literally for h r block whos saying these regulatory issues, who knows when theyre going to get ironed out. Thats why b of is stock underperformed in 2014. Still the company continued putting up strong results. Finally last august the regulators approved the h r bank transaction, offering it to b of i. But soon as that happened the analysts started getting more cautious on bofi, saying it had gotten a little too hot. Its group back. It rallied 32 from then through its peak in mid october. And thats when everything started to go awry. On the night of october 13th the New York Times deal book that one of b of is former company alleging hed been fired after revealing what he believed to be wrongdoing including failing to provide full and timely information to regulators and not being forthcoming with the s. E. C. Basically, his complaint was that b of i was cutting corners and violating federal laws that protect whistleblowers when they fired him after he pointed out what was going on. Of course b of i was quick to go on the offensive saying this former employee had already made all of these allegations to federal regulators who reviewed them in depth and have found them to be wholly without still, the rebuttal didnt do much. The Stock Plunged 30 . From 35 to 25 the very next day. And shares pretty much continued to go lower right up until two weeks ago when they bottomed finally at 1350. And b of is been rebounding ever since. Today. So where do we go from here now that the stock is on the mend . After being more than cut in half from its october highs. B of i has continued to post incredibly strong results. Including twocent earnings beat at the end of january. This will continue to be a solid growth company. Especially with h r blocks banking business really clicking in this tax season. Theyve got superior loan growth versus the rest of the banking cohort and they dont need the fed to keep raising Interest Rates in order to do well although it certainly wouldnt hurt them. Problem is the lawsuit. Typically i dont like to get involved in stories that are heavily dependent on litigation. But because unless you have some real Legal Expertise on the subject at hand and are following the issue very closely you might as well just be betting on a coin toss. However, i did go to law school. Done some work. Does seem to me that b of i is right. Its right on this lawsuit. Even if its not with the stock trading at 8. 5 times next years earnings estimates i think it represents real value here, which is why its been rebounding so hard over the past couple of weeks. Heres the bottom line. Blessing to bet on a comeback in b of is Holding Stock price, and thats bofi. Bofi. But only if you recognize this is a longterm investment and the stock could be a real wild trader in the short term because of this lawsuit. If you wait for them to get a favorable outcome in court you could probably miss a lot of the up side but if youre going to own it you have to be willing to take some pain before the king of Internet Banking regains its momentum as i think it will when the smoke of the litigation clears and the earnings from the bold H R Block Banking business start flowing in. Lets go to dominick in california. Dominick. Caller hey, jim. Thanks for taking my call. Of course. Caller as a Young Investor im wondering if visas a good longterm investment. I think its a fabulous one. I think charlie sharp does a great job. The stock is off nicely from 81 down to 72. Its very rarely that far off its 52week high. I would like it if you started with an investment in letter v because i think visas an stock. You know what, speaking of Excellent Companies with terrific stocks i think b of i could make a comeback but only if youre willing to take some pain to catch the upside. Much more mad money ahead. Kanye west once said youre supposed to buy your shorty tyco with your money. Well, guess who did. Ed breen. Ill tell you what he can do whether he can do the same thing with dow du pont. Then coppers been moving higher this month. So is it time to sound the b word . Dont you dare call a bottom until you hear what i think is behind the move. And a thank god its friday edition of the lightning round. So stick with cramer cell phone rings where are you . Well the squirrels are back in the attic. Mom . Your dad wont call an exterminator. Can i call you back, mom . He says its personal this time. If youre a mom, you call at the worst time. Its what you do. If you want to save fifteen percent or more on car insurance, its what you do. Where are you . Its very loud there. Are you taking a zumba class . Seems like weve hit a road block. That reminds me. Anyone have occasional constipation, diarrhea. Gas, bloating . Yes one Phillips Colon Health probiotic cap each day helps defend against occasional digestive issues. With three types of good bacteria. Live the regular life. Phillips. Get ready to show your roots with roots touchup from nicen easy. Seamlessly blends with leading shades, even salon shades in just 10 minutes. For natural looking color as real as you are. Show the world your roots with root touchup. In our house, imagination runs wild. Buat my table, i keep the food real. Like country crocks recipe made with real simple ingredients. Real Country Fresh taste from real ingredients. Welcome to crock country. Choose to move freely. Move free ultra has tripleaction support for your joints, cartilage and bones in one tiny pill. Move free ultra. Get your move on. And now try move free night. The first and only 2in1 joint and sleep supplement. I take pictures of sunrises, but with my back pain i couldnt sleep and get up in time. Then i found aleve pm. Aleve pm is the only one to combine a safe sleep aid plus the 12 hour pain relieving strength of aleve. Im back. If you remember back in early december before this markets hideous january selloff, we got some huge news. The chemical giants dow and du pont were planning to merge and then subsequently break up the combined entity into three separate publicly traded companies. Both stocks are now well below where they when the news came out. Perfect time to stress just how hence why we own dow chemical for my Charitable Trust which bulletins in actionalertsplus. Com. We just did the big weekly so what makes me like this merger and then breakup plan . Why am i so confident its going value for shareholders . Simple. While du ponts ceo ed breen only took over that role in mid october, hes going to become and this man is a master of breaking up businesses in order to unlock value. The ideas been met with some skepticism on wall street. Ponts ceo a few months ago, very little experience in the chemical space. Expected to run the combined dow and du pont . Mm. To which i say this is not all about chemicals. Its about breaking up the merged entity into three separate companies that together will be worth more than the whole. And theres nobody id rather have overseeing this split than ed breen. The reason . Just look at how much value he created through the same strategy as the ceo of tyco. Breen took over tyco in july of 2002. He left in september 2012. Hes still the chairman, though. Before breen stepped in, tyco literally spent decades growing its business via a seemingly endless series of acquisitions. The company was the quintessential rollout. But by early 2002 cracks were beginning to emerge in this Business Model and of course the unbelievable dennis kozlowski. Poster child for corporate excess who among many other scandals basically raided tycos bank account for 82 million in unauthorized bonuses and was ultimately convicted of looting the company in 2005. He only got out of prison last year. Needless to say when koz resigned in june of 2002 tyco was in pretty dire straits. The stock was in freefall. When breen stepped in he first righted the leaky ship bringing it back from the brink of bankruptcy and he oversaw the most successful set of breakup. Set of breakups in stock market history. Hallelujah in 2004 he sold off 21 different businesses for roughly 500 million but it was in 2006 when breen made his biggest move breaking tyco up into three separate publicly traded business. Sound familiar . Tyco health care, tyco electronics, now known as t. E. Connectivity and Tyco International where breen remained at the helm. Separate businesses yet again. He spun off the Flood Control business. Sold it to pan air. He split off the security business as att worldwide. You know, adt. Adt symbol. And he kept the fire and safety business under the Tyco International banner. This guys a master at breakups. If you want to understand why i believe he can work miracles at dow dupont, which before breen stepped in were healthy companies, you want to look at how much value his multistage breakup at tyco has created. How much exactly . We went through it with the staff and i have to tell you, i was just shocked at how much value there was. Lets go over the numbers. When breen took over tyco was trading 13. 51. In 2006 he spun off tyco health care. That became covidien which was bought by medtronic. He also spun off which became the t. E. Connectivity. Right now trading at but if you take out the intervening stock splits anyone who owned stock when breen took the helm would now have two shares so lets call it 71 from tyco itself. Then theres the covidien 29. 43 per share if you held it until it was acquired by medtronic. Covidien was acquired it spun off its drug business as mallinckrodt giving you one share of the new business for every eight shares you owned in covidien. With mallinckrodt now at 69 that translates into 8. 66. Clear. Connectivity spinoff. You would have gotten one quarter of a share in 2006. Its parent at 57. That works out at 14. 42. Now you add those three up and that was just the first round of spinoffs in 2012. Breen broke up tyco again, yet again in 2012. So there are two more components to account for. Theres that security business breen split off as adt and that was recently sold to apollo. Now trading at 40 and change. You would have gotten half. So call it 20 bucks. And with the spinoff of tycos flow control business followed by its merger with pan air you less than 24 of one share in the new pan air, 11. 65. You now lets add them all up. A little arithmetic put them together and if you owned tyco from the moment ed breen took over to today thanks to all these breakups youd now have Holdings Worth roughly 146 a share. Remember, thats up from 13. 51 when breen took over. Throw in all of the value of all the dividends paid by tyco and its various spinoffs and then you have something worth 179 a share. Do you know what this translates into by this guy breen . A 1,228 percent gain since this man took the helm at tyco in 2002 and steered onto a new path. With that perspective lets say you invested 10,000 with breen in the summer of 2002 and all you did was hold tyco and all of its spunoff bits and pieces, youd now have a set of investments worth over 120,000. The stock markets amazing, isnt it . I mean, thats 14 years. So heres the bottom line. Ed breen created a tremendous amount of value by breaking up the colossus that was tyco into increasingly smaller and easier to understand pieces. And we just quantified how much it was worth to you. I believe he can do the exact same thing by breaking up the planned dowdu pont behemoth. Thats why id be a buyer of dow chemicals here, especially since its down 11 since the deal was announced and had a really good quarter and youll be participating in what i regard to be the son of tyco merger. While being paid to wait with thaterrific yield dow offers. With ed breen taking charge of the combined entity i think its a steal. Mad moneys back after the break. Technology. Say, have you seen all the Amazing Technology in geicos mobile app . Mobile app . Look. Electronic id cards, emergency roadside svice, i can even submit a claim. Wow. Yep, geicos mobile app works like a charm. Geico. Seems like weve hit a road block. That reminds me. Anyone have occasional constipation, diarrhea. Gas, bloang . Yes one Phillips Colon Health probiotic cap each day helps defend against occasional digestive issues. With three types of good bactia. Live the regular life. Phillips. Enough preure in here for ya . Im gonna take mucinex sinusmax. Too late, were about to take off. These dissolve fast. And youre coming with me. You realize i have gold status . Mucinex sinusmax liquid gels. Dissolves fast to unleash max strength medicine. It is time it is time for the lightning cramers mad money. Calls one after the sell, sell, sell and then the lightning round is over. Are you ready, skeedaddy . Start with tom in massachusetts. Tom caller big booyah to you from west springfield. Nice. Oh, man, i know just where that is. Whats happening . Caller is it too late to get into altria . You know, i have mixed emotions. Im not recommending any more tobacco stocks on this show, but no, it is not too late even though its hit a high because its going to go higher but i dont want to recommend it. Lets go to mike in west virginia. Mike. Caller jim, how are you doing . Im doing well. How are you . Caller just drinking cold beer here. Got a question about the retail group. I know theyre a great company. Tell me theyre going to 20 bucks after earnings. I think the stock should be higher at 8. Seems like its cheap to me. But you know what people like . They like cheap value. They like tjx. Caller babababababooyah. Whats happening . Caller endridge enterprise were not recommending any fossil fuels once particularly ones that have gigantic yields like that which we regard as red flags. Joe in indiana. Joe. Caller hi, jim. Thanks to you and your staff my stock is chubb, cb. Oh, man, is that a great stock . Evan greenberg, so much lowhanging fruit to pick from that merger. That is a terrific situation. Im a buyer of chubb. You should be there. Lets go to linda in delaware. Linda. Caller jim, hi. Im wondering you what you think the prospects of bb t are. What do you think for the future . I dont really like the banks here. You have to have strong feelings about the banks to really like them here. And i dont. I think that that one is just okay and will not outperform the stock market. The rest of the market. Lets go to aaron in hawaii. Aaron. Caller aloha, jim. Market, wfm. Mahalo. And it was sprouts that took the cake today. But i am going out on a limb and saying that i think whole foods did bottom at the 30 level and i like it. Id like to see the new whole foods, the smaller Format Stores and i hope they invite us to one so we can do a show from there. Lets go to chris in connecticut. Chris. Caller jim, booyah. Booyah. Caller cosmetics. Buy hold or cell. We had a very big upgrade by wolf today. Thats a big Brokerage House that had disliked it. The fact they upgraded it at the same time theres a short house coming out saying things are bad im taking the long side of the trade. Alta. Could be wrong but i like wolfs research. Lets go to john in new york. Caller 67, retired and bought conoco at 62 when oil was at 52. We donate care where stocks come from. We care where its going to. I want you to sell that stock on any lift. You might be able to get 35, 38, and that, ladies and gentlemen, is the conclusion of the lightning round announcer the lightning round is sponsored by td ameritrade. Columbia sportswear and vf corp. Ooh what did you do, cut it in half . Yeah. Well, then we cant return it. Maybe north face has peaked. Although that isnt the reason why we have half a north face jersey. Ooh youre a great zipper. Last year shares of the gap plummeted 41 from 42 down to 24 and change. Ouch well cut well fix this in postproduction. Earlier today in true candor on squawk on the street i said that my wife was cheap. Home goods is on fire. And home goods is where i like to go because my wife is cheap as all get out. Cheap as all get out is what i said. I meant frugal. Ill straighten it out. Its all good now. Its all good now. I really meant to say frugal. And i regret the error. Because her boss watched and told her what i said. Anyway. You made us a lot of money. I dont know what we would do without you. Wow. Will you tell the wife . Shes mad at me about making some comment about how shes frugal this morning. Okay . I didnt use the word frugal. I cleared that thing up with my wife. Right . Mad money, bro. Without the need for fillers. Your concert tee might show your age. Your skin never will. Olay regenerist. Olay. Ageless. And try regenerist microsculpting eyeswirl. It instantly hydrates to plump and lift. Lets get these dayquil liquid gels and go. But these liquid gels are new. Mucinex fastmax. Its the same difference. This one is max strength and fights mucus. Mucinex fastmax. The only branded cold and flu liquid gel that is maxstrength and fights mucus. Lets end this. Working on my feet all day gave me pain here. In my knees. But now, i step on this machine and get my number which matches my dr. Scholls custom fit orthotic inserts. Now i get immediate relief from my foot pain. My knee pain. Degree motionsense is the worlds first deodorant activated by movement. As you move, fragrance capsules burst to release extra freshness all day. Motionsense. Protection to keep you moving. Coppers up. So lets go buy a copper stock. Buy, buy, buy. Oils flying. Give me an oil. Buy, buy, buy yet every day it seems were in some sort of frenzy to buy or sell whatevers working at that moment and its producing decisions that are so split second and so nonsensical that sometimes you just have to sit back and laugh. Lets take copper. The red metals been going down literally for five years. Theres just too much of it. The chinese are buying less and less. Companies are substituting possible. Its cheaper. But for the last month coppers been doing something it hasnt done in ages. Its been going higher. How high . Well, if you chart copper, which you can do by monitoring the jjc, thats the symbol for the bloomberg copper index, you can see it actually bottomed at 22 in the middle of january and got back to where it was at the end of last year. Whats happened that could possibly cause a bottom in copper . We know the baltic freight index which measures the cost of shipping big bulk goods including copper has been trading up ever so slightly, off an incredibly low base. We know there have been cutbacks in production because the Copper Companies have been doing so badly. Lets see. Demand up, supply down. Voila. A possible bottom. So if youre in the stock market, you think okay, give me a copper producer, it just so happens that freeport mcmoran, fcx, sells copper. In fact, it just sold a slice of one of its copper mines for a billion bucks to try to fix its Balance Sheet. Why does it have to fix its Balance Sheet . Because freeport has 20 million in debt from buying a couple Oil Companies right around the time oil peaked. But look oils up, having rallied up to 32 bucks from 26 not that long ago. Right . I wish life were so easy. In truth freeports still in big trouble and it needs to raise cash any way you can. Why let the facts get in the way of a good story . Next thing you know traders are piling into the stock and at one point today it was up 7 before pulling back a bit to close up 4. 35 . Now, when we see oil rallying like its been doing for days until the reversal this morning, what do traders want to do . They want to buy the Oil Companies that need the price of crude to really fly. Like the big drillers. Or even the heavily indebted producers that have been total dogs. Thats how ensco, which is a big drilling platform company, reported a decent quarter last night but cut its dividend by 93 and yet still went up 6. 73 today. Thats how transocean stocks, symbol rig, can jump 5. 2 no matter that its nowhere even near as good as ensco, which isnt that good itself. Whats wrong with this game . Why shouldnt you play . Because if coppers a head fake, you just bought the worst of if oils just a short squeeze as its seen by the weakness at the end of the day, youve purchased the companies with the least hope of advancement that could get back their gains in a nanosecond. Worst of breed. Heres my advice. You want to play you want the best way to play a rotation . Quit your job and day trade. Because these are so ephemeral to the point theyre often over by the time you see them. Theyre almost surefire ways to lose money because youre buying the worst, most leveraged junk and betting someone else even dumber than you are will take it off your hands. Its a fools game. Enjoy watching it but let someone else play it with their money, not yours. Stick with cramer. And those who do should switch to geico because you could save hundreds on car insurance. Ah, perfect. Valet parking. Heres the keys. And, uh, go easy on my ride, mate. Hm, wouldnt mind some of that beef wellington. Go to geico. Com. Ah car alarm sounds its ok ugh heartburn no one burns on my watch try alkaseltzer heartburn reliefchews. They work fast and dont taste chalky. Mmm. Amazing. I have heartburn. Alkaseltzer heartburn reliefchews. Enjoy the relief. Happy anniversary dinner, darlin can this much love be cleaned by a little bit of dawn ultra . Oh yeah. One bottle has the grease cleaning power of two bottles of this bargain brand. So i read some commentary today about how Warren Buffett may have lost his touch. May we all lose as much touch as report tomorrow. And i cannot wait until becky quick interviews him for three hours. Ill probably be mailing in some questions too. I like to say theres always a bull market somewhere, i promise to try to find it for you right here on mad money. Im jim cramer, and i will see you monday [music playing] ashley voiceover on our show, we love bringing you the hits. [grunting] ashley voiceover narrator so get ready to throw down. Yeah, all right. He was pretty good. Ashley voiceover because its an all out balls to the wall battle royale. Tonight on 1st look. [opening music] ashley voiceover these days life is full of battles, competitions, and war zones. And if you want to survive in this world, you need to get tough. Now, ive always considered myself more of a lover than a fighter, but today this lady is looking