Up 0. 08 . Any explanation for the underlying strength is pure supposition. We should be going down hard right now. Right here. As we did right about now, for every single federal level imbroglio since weve had so far. In other words this was the day they started versus the event. The october 1st date for when a Government Shutdown is supposed to be begin, it looms so large. There isnt a single sign that there will be a deal. None. We could be in for a prolonged period of rancor and indecision, both of which are bad for business. So how can we think this time will be different . Why arent we down, 4 , 5 , 6 , instead of a measly couple of down days . Let me give it a try. First, maybe the market is saying, there wont be a showdown. Maybe there are forces at work that we dont know about which will make the whole episode more benign than skeptics including me realize. Hard to believe anythings happened behind the scenes. But we never know with washington. Put that in. I dont know, 20 chance. Second, even if there isnt a deal immediately, well, people are expecting there will be one down the road. As much as we hate our political system, we do end up paying the bills. Thats been the lesson from the other times when they were done, we caught a big rally. Perhaps the market going to the troubled moment Portfolio Managers are using whatever weakness they can get including intraday including the last three days to put money to work. Maybe thats whats going on. Third the fed has managed to keep rates down. See them today really, really low. So maybe we shouldnt worry if we get a Government Shutdown because low waits buttress the valuations of so many stocks. Particularly the bond market equivalent stocks we talk about all the time on the show. 3 plus yielders weve got a positive onetwo punch from the fed no larry summers. Rightly or wrongly to be antiaccommodating as well as the surprise nontaper. Interest rates have been going down ever since then. The market gave up these instant gains since the selloff. Everything we got that wednesday is now gone. But todays reversal seems to me signal kind of a, i dont know, pretty benign close. I mean ugly but it did say to me that youre not, that you can pick. You should never, ever fight the fed even when you think its out of bullets. Fourth reason our stocks arent getting annihilated, the market sees lower Interest Rates reinvigorating the housing business. One element of the earnings released was a clear miss more on that later but you know obviously people looking through the valley. The markets willingness to overlook this key orders number for lennar and have the stock go up anyway shows you that perhaps we dont have nearly as much to fear from the weakness in housing as we might have thought. When housing goes higher, it takes a large swath of related stocks, furniture, clients, names, retailers associated with Home Building. Fifth the foreign markets are not taking their cue from washington. No, they are incredibly robust. The baltic drive freight index which i always say to keep your eye on is getting stronger and stronger almost doubled. From the low it has doubled signaling that chinas starting to order Raw Materials again. Part and parcel of that is turnaround in europe. Spain just declared end to its hideous recession yesterday. Greece tells us now budget surplus. Remember when we were worried about italian bonds . Should have bought them. Meanwhile the European Central bankers are saying theyll remain accommodative because the market is so fragile. Sixth reason, Merger Acquisition and breakup pressures continue. It makes it an environment for short sellers. You never know when lightning could strike. Greenway medical technologies fairly recent ipo launches a 9 billion takeover for crossborder rival tokyo electron. A 5 stake in Bob Evans Farms wants to break the company in two and another value move. This stuff happens every day. It acts like a trampoline under the market. Were up these activist related moves later. Oil is coming down given that iran is acting nice with the united nations. I dont trust iran. You dont trust iran. Im sure you dont but regardless of trust, any suspension of tensions, prices lower. Gasoline of course. Retail possible weakness in the economy, going to the holidays could get a boost from lower gas prices. Remember were just trying to come up with some suppositions why this market isnt down five, eight, ten percent, eight possible reason, autos. Car max, gigantic used car retailer, reported outstanding sales and earnings today. Auto market has been a huge engine in the economy. Car max, fantastic news. I dont know. I kind of hoping for a chrysler ipo. Ninth explanation, president obama was forced well this is a political statement but he was forced to make a Foreign Policy speech today. The market likes resolve and dislikes indecision. There was nothing indecisive about obama at the n. U. N. Tenth reason, Growth Stocks are thriving in a lower growth environment and that is incredibly bullish. Facebook is leading the parade going to an alltime high on one more upgrade. The high growth rally across the board. Weve got a cluster note from jpmorgan about starbucks. Stock rallied up 1. 19. Thats strength. Chipotles been a strength. Netflix back on track, amazon yelp, tesla, lincoln roared. 6. 24. For the long only momentum managers nothing gets the juices flowing like these kinds of rallies. They always change the tone of the tape and make short selling downright dangerous. Eleventh explanation for why we havent been hammered, hedge funds are negative. So many funds are betting a shutdown will be terrible that they keep shorting the market endlessly. You can feel their brooding ommy presence. The short Washington Play has been terrific during the manufacturing crises i have to believe many hedge funds are reading from the same playbook that worked when we were going to the debt ceiling debacle, the fiscal cliff debacle and the sequester. Each time short sellers got Good Opportunity to cover positions. Perhaps the short side has become too crowded. Short sellers tend not to make money when everyone is expecting the same bad circumstances. Were only a few days away from a good quarter. The hedge funds have to show they werent totally out of it. The longs might be bidding up stocks to boost their performance underneath. Dow has now components, a little more wild. Finally, remarkable run in the transports which has been the lovey blanket of the market. They finished up today. You cant have them advance without believing that commerce is picking up. If you have commerce picking up and rates going down we should be in good shape. When the transports rally, it lists boeing and all suppliers and airbus things are looking better than ever they got a 20 year plan, too. Im sticking with the gal that brought us here. Heres the bottom line we cant be sure why the markets holding its own against pending washington meltdown of epic proportions. Maybe the markets dead wrong and its just a matter of time before the stocks collapse. Maybe the last 20 minutes of trading were not so hot. But given that the cataclysmic washington event is only five sessions away, youve got to believe some of these positives are playing out making sailing a lot smoother than youd expect. Except for the short sellers. Mike in illinois. Mike. Caller booyah from chicago. Home of the 30 Chicago Bears the monsters of the midway. Rub it in. You think were all from chicago here or something . Is that what you think . Caller yes, i do. All right. Caller my, my, my company is gse capital corporation, symbol gsec it was up 6. 25 today and hit a 52week high is this the best way to play the upcoming twitter ipo . When i saw that, i said geez this is the way. Im going to tell you that i dont know Everything Else that it owns. But i think the twitter ipo is going to be gigantic. I hear numbers and theyre way too low. Ive been sticking by my prediction that youre going to get 18 to 20 billion in value, which should send up gsc capital to a higher level. Ive always been a bears fan. We dont play them that often. We being the eagles. Kurt in colorado with peyton manning, with the winning winning orange kurt. Caller booyah, jim, how are you . All right. Glad to go to denver next week. Caller good, good, just calling in regards to wendys and how do you see longterm growth and also how do you see it competing against the larger fortune 500 Food Companies like mcdonalds, chipotle and burger king . We talk about moving the needle. Believe it or not this bacon pretzel roll cheeseburger is actually working. Although my friend last week didnt like it. Now heres what you need to know. Wendys is on a major roll. Management is terrific. That stock can go to 10 without hurting mcdonalds, without hurting burger king. I like the fries at burger king but its not enough to move the needle. Jimmy in california. Caller booyah, cramer, how are you . Real good. How about you, jimmy . Caller good thanks. I want to talk to you about a company that youve been behind for for a good reason for the last six months. It just hit a 52week high, 14 days ago before reported earnings. Since then, its gone through 78 down to 61. Today the stock went from 61 back up to 64. 5, and i want to know whats youre position on Restoration Hardware holdings. Okay. I went through this quarter with a fine tooth comb but it happened to come when Interest Rates are going higher. Now, Interest Rates are coming back down. The stock is recovering. Reminds me the way coors recovered. Even fossil reported. This is not in that league. It is better than those. Im sticking with Restoration Hardware. I think its a buy. Against all odds the market is hanging tough. Yes we had an ugly close. The fact is there was no cataclysmic selling yet. Your Survival Guide which says i have your back is telling me maybe we wont have that monster selloff before the shutdown. Coming up, Stable Foundation . This mornings headlines show home prices are continuing to rise across the country. But steadily rising Interest Rates have made wall street worried about the future of the mortgage market. Cramer gets an inside look in his earnings exclusive when home builder lennar. And later cash connection . When verizons 130 billion buy to sprints acquisition of clearwire. Wireless deals are aplenty. Is it time to make a connection of your own . Cramer speaks with ceo dan hesse for the First Time Since the deal to find out what it means for the future. Plus, berry good . Pack it, wrap it, contain it and cap it. Theres one company that does it all. Berry plastics is the household name youve never heard of. But you might not want to forget it. Is it time to fill up your cup . All coming up on mad money. Dont miss a second of mad money follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney. Cnbc. Com. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Are you sure we should take this billboard down . People find out state farm does car loans as well as they do insurance, our bank is through. Good point. Grab an edge. Look theres two guys on the state farm borrow Better Banking sign. Nope for real theres two dudes on the state farm borrow Better Banking sign. [ reporter ] breaking news from the state farm borrow Better Banking sign. Were seeing two men that have climbed the borrow Better Banking sign gentlemen please get down from the state farm borrow Better Banking sign. Phil get the hose. Okay hes getting the hose. Alright, lets go. [ male announcer ] talk to a state farm agent about car loans that can save you hundreds. Thats borrowing better. Ever since Interest Rates sky rocketed over the summer everybodys been wondering what kind of damage it would do to the Home Building business. We know home build being stocks were hurting but was it warranted based on whats happening to the underlying companies. Today we heard from two Home Builders who said it is more like hitting a speed bump than crashing full force into a retaining wall. Kb homes. Jumped 4. 9 . And lennar had a terrific quarter and nine cent earnings beat off of 45 cent basis with higher than expected revenues that rose 45. 7 year over year. This wasnt a perfect quarter. Lennars new orders were up expectations. And ever since the fed announced it wasnt going to taper the Bond Buying ProgramInterest Rates have been crawling back down. Something that could make the next quarter even better than this one. No wonder the stock was up today. Housing is a very important for economies. Lets take a closer look with the ceo of lennar. Welcome to mad money. Good afternoon, jim. Happy to be here. Stewart, congratulations, first of all. This was one of the best quarters ive ever seen lennar have. While everyones worried about the granularity august was actually the strongest month. Whatever anybody was thinking it didnt play a role with you. Well, listen, i think that were particularly well positioned, but as we noted on our call today, june was a pretty strong month. July tapered way back. And then august was a strong month again. So we saw some strength out in the field. We saw some strength both in our customers and in traffic. So it was a its been an interesting ride. And maybe you sent some great charts over that some of this what people are missing, is the limited amount of inventory, because of the actual incredible, almost depressionlike lack of building of homes during the last part of the cycle. Thats exactly right. And i think the dominant theme for housing over the next few years is filling the hole of production that has not been filled over the past years. If you look at the average during the downturn, we were delivering about 7,000 homes 700,000 homes. Per year. Both multifamily and single family. The need in the country just by population and household formation alone is a million two to a million five. That underproduction is going to is going to define where we go over the next few years. There will be speed bumps, as you noted before. That derive from Interest Rates, public policy, international events. But the trajectory in our view over the next three to five years is generally positive. One of the things i dont like about your group is because of the power of the real of the actual etfs, the good and the bad are amalgamated and homogenized. You were doing a huge number of things away from just Home Building including rialto, including apartment literally renting that perhaps youre not getting enough credit. What can you do and you hint upon it in your Conference Call to bring up that value because youre not just another home builder. Well, happy that youre noting that. Look, we think that the primary driver of our shortterm earnings quarterly performance is going to be driver be in the near term by our housing and Financial Services businesses, which are our core. And we think were extremely well positioned in those two areas. Our ancillary businesses of rialto, our multifamily Communities Division, and our fivepoint largescale Communities Division are longerterm shareholder Value Creation machines that are going to realize their maturity over the next few years. We keep the investor focused on our core business, but we keep them apprised of what were doing to create longterm shareholder value, and i think weve got a great balance. I follow the Apartment Real Estate Investment trust. None of them has the growth of your apartment unit. Why not give that to the public so that i can push it really hard because its got growth and would have great yield . Over time. Right now we are maturing a a brandnew business. As youve noted, our pipeline has been growing steadily. We have built a national franchise, and weve left ourselves by segmenting this business, giving it complete visibility to the street, as we grow it, weve left ourselves maximum flexibility, and over time, we think that the optionality embedded in that business is going to give us a lot of opportunity to create value, depending on where the market is at a given moment in time. The ability to build, produce, and stabilize brand new Apartment Units in this environment where we have a shortage of inventory, both on the apartment side and the for sale side we think gives us a great position. Fed last week takes basically literally takes rates people think theyre going to ten year going to three, maybe three and a quarter right down, right down in the face of the short takes them to what now is 2. 6. Is that meaningful for september traffic to your homes . Well, listen, Interest Rates are fluctuating and im not even sure that we can tell whats driving the fed decisions. Is it really derived from a question as to whats going to happen relative to the debt ceiling discussions . Or are there some other factors involved that relate to the Macro Economy . I think that as things stand right now, lower Interest Rates are bringing customers and traffic back to the field. Well see how this plays out over the short term. But, again, our focus is not so much on whats happening with shortterm fluctuations. Over the longterm, we think that were in for a steady rebound in housing, over years. And thats going to define where we go. One last question, Gross Margins. Can they stay as high as they are, given the labor cost that you mention on the Conference Call . Yes, weve noted that we think that Gross Margins in the industry, and particularly in our company, can exceed prior highs. Even at the peak. And we think in part it derives from Pricing Power in the product, due to the shortage of inventory, and what weve seen to date and are likely to see as we go forward is that Pricing Power and revenue increases have outstripped the increases in cost. We noted this morning that our cost year over year were up about 8. 4 . But you saw that our revenues were up some 13 , and our revenues in the sales that weve made in the past quarter were up 16 year over year. This gives us the ability to maintain and even grow margins. Well, thank you so much, Stuart Miller. Make your dad proud. This was just a terrific quarter. Fantastic job for shareholders. Good to talk to you. Thank you, jim. Nice to be you. Thats Stuart Miller ceo of lennar corp. You havent missed anything. Yet longerterm this is the winner. Theyve got the land, the housing, the Gross Margins, and theyve got the magic. Stay with cramer. Coming up, cash connection . From verizons 130 billion buy to sprints acquisition of clearwire, wireless deals are aplenty. Is it time to make a connection of your own . Cramer speaks with ceo dan hesse since the First Time Since the deal to find out what it means for the future. Huh. Fifteen minutes could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Seasonal. Doesnt begin to describe it. Running a bike shop has its ups and downs. My cashflow can literally change with the weather. Anything that gives me some breathing room makes a big difference. The plum card from American Express gives your business flexibility. Get 1. 5 discount for paying early, or up to 60 days to pay without interest, or both each month. Im Nelson Gutierrez and im a member of the smarter money. This is what membership is. This is what membership does. Just days after the launch of the latest iphone iterations. It is time to talk about one of my favorite wireless stocks, sprint. Sprint consummated a deal selling the company for 21. 6 billion in cash. Sprint got to keep 5 billion. The rest going to you, shareholders. Sprint turned around and bought clear wire for 7 billion. Giving the company control over tremendous, highquality, electromagnetic spectrum to provide, better, faster service. The deep pockets needed to finish building out its ultrafast 4g network. The sprint of today is very different from the company of three months ago. For a long time, i liked the stock, a speculative turn around. Shutting down the nextel network. To cut costs. Sprint is no longer the third wheel of the wireless world. Does sprint have that staying power . Will too many customers dessert in the interim. Lets talk to dan hesse. Welcome back to mad money. When i saw you, the biggest worry i had was that you might be leaving now that you had new owners. But you are sticking around. I am. They signed me up to a new fiveyear deal. In that situation, they own 78 . Is it they or your new owners got a 300 year perspective . Last i looked, 300, 207 years from now, you may not be still at the helm. We have eight board members. They have two. We have five independent members and there is me. We see the board as being ten plus me. It is run as an independent company. Very good governs. We make the decisions at sprint management. We get together at least once and share best practices. Weve learned lots from them and them from us. A lot of people who watch this show bought sprint. They are confused. They think they are down on the position if they bought if in the last six months. That structural not correct. We are up 28 year to date and up 11 since the transaction with soft bank. A lot of people get confused because the stocks changed with the transaction. We closed at 567 on a pro forma basis but the close yesterday was about 726. We are up 11 since the transaction, about 28 . You have already been very honest about the near term and the longer term. September 20th, iphone launch, the 5 s5 c. How is the demand from this strong . Very sfrontrong. We are beginning to run out of inventory, specially the 5s. The inventory is stuck at the telecommunications level. Thats not true if you tell me you are short inventory 1234. We are short inventory, specially t specially the s. We have some ss but they are multiple colors and multiple memory sizes. Thats a great fact. Thank you for sharing that with us. When i look at what youre trying to do, you gave an interview, youve talked to some analysts, you are saying, be careful. This is a difficult transition. You are talking about cutting back some advertising. 2013 is kind of a transitional year for us. A lot of people know we shut down the nextel network at the beginning of this quarter. It is also a complete rip and replace of the entire 3 g network which really has never been done. Its the most Massive Network change any companys ever, you know, ever gone through. So its not only expensive but if you take a city like chicago, would be a great example, it was good. And then we had to rip out all the 3g networks we got, not so good. Now were largely done, its great. So what we want to do is keep our powder dry, until the networks are great. So were bringing on a lot of new lte around the end of the Third Quarter and in the fourth quarter. Well have about 200 million pots covered by the end of this. Thats when were going to put a little more pedal to the medal in terms of offers in marketing when the Network Transition is mainly behind us. Verizon and sprint verizon and at t arent slowing down their spending. How can you stay up in that arms race . From a capital perspective, were staying up. As far as the network is concerned, were spending 8 billion on capex this year and we told analysts to expect a similar amount of spending, just to put it in perspective in 2008 and 2009, we were spending 2 billion a year on capital. So were spending a lot of money on capital to make sure our network is great. Our goal is to build the best network of any carrier in the world. And we think we have that when were done. How is clearwire . Hugely important. It was. It was and turns out you got in there and everythings what you thought. Yeah. I mean of course we were a 50 owner for a long time. So we had our eyes wide open. But tremendous spectrum position which allows us to offer it wasnt coincidental that we announced unlimited for life right after that acquisition closed. And it will also give us the opportunity to really provide unheard of speeds on the network. Because you have 120 megahertz of contiguous spectrum. Its a huge slice of spectrum. So when people talk about lte they talk about 10 megahertz channels, im trying not to be too technical. Ten. So think of that as one highway. We have 120. Think of that as 12 highways. Tremendous amount of capacity. Thats a good stat. You always told us you couldnt necessarily convert all the nextel people and i have to believe that at a certain place where youre not where you dont have where you have the spotty network youre not gaining what are you doing in terms of gaining from verizon and at t net . Well, you that will that we hope will happen in 14. You know, 2013 not happening now though, right . Because of a couple of things. Number one, when we put in this new network, i talked about chicago, we call it pardon our dust, the transitional issues. The Network Performance went down in markets as we were building out and putting the new gear in. The good news, its all brandnew. Its the best. The 3g and 4g will be the best. The other thing is with respect to our business accounts. Most of our business accounts had what we call mixed accounts. They had sprint subscribers and nextel subscribers, so we put so much focus on winning back the nextel subs, that was important and they had to leave by the end of the second quarter. The sprint customers, if we lost that business account, they tend to come off in the second half so were still going to lose a lot of cdma or sprint brand customers in q3 and q4 because of the accounts we lost because we shut off the network. For those 60 of the business accounts that we didnt retain, we won 40 which is a lot more than anybody expected us to win. Much better. Much better. But if you will the nextel customers came off in the first half. The sprint customers come off in the second half. So that so those customers leaving this is not going to be a great subscriber year. Right. But you got to take the longterm view. Take the longterm view. Do you most fear facebook . Do you fear google . Do you fear Microsofts Skype . Do you fear your own owners who have such a longterm perspective that they may not want the shareholders to win right now . All the companies you named we look at as partners. Partners . Partners and people that we can work with. The other thing about softbank is they own a piece of over 1,000 internetbased companies. The kinds of companies that youve described. Thats their world. And i think theres more opportunity for us embracing over the top players applications companies, software companies, social Networking Companies than there are threats. Dan hesse youve been talking straight the whole way. You made people a huge amount of money particularly when we were talking best 2 and you told people not to give up the ship. Ceo of sprint corporation. Look, what can i say . Its been a great win. Maybe it stays that way. Stay with cramer. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. Nascar is about excitement. And our priority is you. But tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. Thats why we partnered with hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into realtime Business Insights that help nascar win with our fans. You may not know it yet but mad money is better than ever. Im talking about zee box. What is it . Think of it as a tv side kick that makes watching your favorite shows even better. You can download the free app or go to zeebox. Com madmoney. You get exclusive content and chat with crammericans across the country. Plus youll see me in there, so download the free app today or head to zeebox. Com madmoney. Now its time for the lightning round. What is that about . And then the lightning round is over. Are you ready skeedaddy . Time for the lightning round. Going to start with bill in maryland. Bill. Caller bill, maryland. Motorola solutions and lionsgate. You know, one at a time here. Motorola solutions, i dont know. I mean its another its got government services, no. No. You know what . I like cisco. Cisco is down and out but shouldnt be. Lets go to chris in south carolina. Caller love you show, jim. My question is pacific coastal oil trust, royt. Yeah, you know, these have been such declining asset stocks. This is a californiabased stock im not going to go with it. I dont like these anymore because theyre depleted assets. When i can recommend a stock like eog. Eog. Now i want to go to dave in florida. Caller big booyah to you from sunny tampa, florida. Go bucs i think. I dont know. Caller i was happy with the result of the patriots game to be honest with you. Whats up . Caller go go. I took my first position this was a mistake that i didnt recommend this thing when it came public. Its a good situation. Its got real momentum. Buy buy buy. Now morgan in california. Caller doctor cramer big booyah from walnut creek, california. How are you . Caller im doing great. Ive been doing my homework with all these record truck sales in august every 45 seconds, ive been thinking Everyone Wants to tow a boat with that truck and ive been getting bullish on a boat manufacturer ticker bc. Brunswick is the best. I personally have a boston whaler, its a 17 footer. But brunswick is the boat company. Now be careful. The stock has had a monster run. If i recommend it up here im violating all my discipline because i do think while its good i think it can come down a bit. Lets go to gary in illinois. Caller mr. Cramer, i want to tell you that you and your staff are excellent. Keep up the good work. I got a great staff. They make me look good every single day, particularly regina my executive producer. My stock today is home depot supply, hds. Home depot supply. No you cant come out and disappoint from day one, and have me on the team. I am not on the team hd supply. As far as im concerned three nfl teams. Vince in pennsylvania. Caller jim this is vince from philadelphia booyah im giving you a sean mccoy comes to play booyah. Caller my question is regarding unxl, unipixel, im playing as a short play seems like 44 of the stock is being shorted. Well, it is short but did you see the touchscreen day today . Im going to agree i dont want to be there but i dont want it to be short. I dont recommend shorts for the show. Abdul in texas. Caller yes, cramer. Thank you for taking my call. Last quarter for amd. Last quarter was nasty. But you know they do have some gaming revenues coming in. I think under 4 you want to buy the stock. I can tell you that was such a miserable quarter that a lot of people lost heart. But i havent. I think its a buy right here. And that ladies and gentlemen is closing out the lightning round. The lightning round is sponsored by td ameritrade. Coming up, berry good . Pack it, wrap it, contain it and cap it. Theres one company that does it all berry plastics is the household name youve never heard of. But you might not want to forget it. Is it time to fill up your cup . [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. [ engine revs, tires squeal ] [ male announcer ] since we began, mercedesbenz has pioneered many breakthroughs. Breakthroughs in design. Breakthroughs in safety. In engineering. And technology. And now our latest creation breaks one more barrier. Introducing the cla. Starting at 29,900. Where would you go . Woman greece. woman 2 i want to go to bora bora. man id always like to go to china. anncr download the expedia app and your next trip could be on us. Expedia, find yours. help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, where experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. But at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real business. You all know that sometimes the stock market overreacts. Take berry plastics, bery, maker of value added Consumer Packaging and Engineering Materials came public a little less than a year ago. Very much a tech company as it is a plastics play. They use proprietary technology to create innovative products. Just yesterday they announced 100 recyclable material to make togo cups to maintain hot and cold beverages. This is the only recyclable company that can be used for hot and cold applications. According to management, 4 of the American Market could bring in more than 500 million in sales but heres the rub. A little over a week ago, berry gave an analyst presentation where management lowered the boom. The company came from predicting a mild increase to a 10 decline. Not good news. In response, the stock got poleaxed from 25 to 20 in a matter of days. To me feels like an overreaction. Especially selling 16. 5 times next years earnings estimates. Stock is giving 19 gains since i recommended it in january. I think we can go higher from here. Dont take it from me. Lets talk to jonathan rich, chairman and ceo of berry plastics. Find out what companies next for his company. Welcome to mad money. Thanks, jim. Have a seat. Great to be here. Look you had a huge Analyst Meeting with lots of great slides. Lots of great information. There was one line you just said this one line which, you know, September Quarter will be lower by approximately 10 versus the prior year. Thats all anybody heard, wasnt it . Yeah, jim. We got impacted by two things in the quarter. First of all demand remains muted. And thats because the consumer is still cautious. You know, berry plastics we sell to more than 13,000 customers in consumer staples, nondurable goods, products like food, health care and so forth and weve seen the consumer be soft all year long. We do sell some products in to durables like duct tapes that go into automobiles and housing, those have been better. The second thing that happened to us in the quarter, frankly, is that our raw material costs went up significantly. Our plastics resins costs are linked to oil prices. And in the Third Quarter we saw oil prices go up significantly, due to the geopolitical events in the middle east. But that could be shortterm in your Conference Call you say today the discoveries of shale are being led by United States will change the global landscape, including yours. Is it shortterm to think of you as a play on the price of oil . Shortterm, it is, jim. But longterm, we are incredibly excited about the discoveries here with north american shale gas. Its going to change the manufacturing landscape here in north america. Its going to be an incredible boon to berry plastics. How quickly can you make that transformation . Any way you can lock those prices in . I think those investments are coming online now in the next three to five years and theyre going to be incredibly significant for us. Okay. Now, we often talk about moving the needle. For instance weve been talking about the apple. New phones. And i said on this show that they would move the needle. Theyre important. Youve got a new invention. Its an invention. Can it really move the needle because you said how many products you have . You have to deal with a sluggish consumer. Can it really accelerate earnings . Well, this is a completely new greenfield space for us. Berry plastics today does not participate in the insulated packaging segments, which go in to things that have to be kept hot or cold. We have a Breakthrough Technology here with our new versalight product which includes new inventions in materials, manufacturing processes, and Product Design. You know today, jim, theres over 130 billion disposable cups used by americans every year. And the paper coffee cup has been around since almost 1900, and, frankly, it doesnt satisfy Consumer Needs for keeping the coffee hot, keeping your hand cool, and preventing the 80 billion cups that go into landfills today from continuing to do that. Theres a lot of people who say listen plastic thats the last thing we want. But this isnt really plastic, right . No, this is from a recyclability and sustainability standpoint, this is going to be the most readily recyclable disposable cup in the market. Because its made 100 of number 5 polypropolene. Today were working with municipalities, waste handlers, recyclers like preserve and their gimme 5 polypropolene recycling program from a sustainability standpoint, lower energy use, lower carbon footprint. So, this really is a breakthrough in Product Design for thermal management. If were looking for what to be able to model for next year and say that people overreacted do we care about the sluggish consumer and whether consumer packaged goods go up . Do we watch the price of oil . Do we look at the innovation . What can put you back on that growth path that you had until you mentioned it in this quarter . Well, obviously, the economy, and the cost of oil are some things that are out of our control. But we try to focus on the things every day that are in our control. Relentlessly deliver on productivity and efficiency. Continue to generate substantial amounts of positive free cash where were generating more than 200 million a year and deliver exciting and Innovative New products like versalite and you already talked about the fact that it could be 500 million in new revenues or more. Youre not deserting it obviously the stock took a big hit from where it was, still up nicely from where we said to buy. Jon rich chairman ceo of berry plastics. Innovation. Consumer package good component. Oil is coming down that doesnt hurt either. Stay with cramer. Mad about mad money . Immerse yourself in the cramers world while you watch the show with zeebox. On your phone, tablet or on the web, get sneak peeks, go behind the scenes. And join the conversation. Download the free app today for the ultimate cramerican adventure. The status quo, it just wont cut it. Management and Share Holders both wont take it. They wont accept underperformance. They are taking action. Look at today. They are not happy with their stock price. Makes a huge bid for tokyo electron. Japan. A 1 billion deal that would give the combined company tremendous buying company. This would give this Semiconductor Company with intel and samsung to put them at a tremendous disadvantage over pricing. This could raise the price of all sorts of Consumer Electronics made by these customers. Doubt it gets approved by the regulators. We dont think it will go through. It is incredible that the company would make the attempt. Still one more deal where they acquired stock. Up 9 because the merger would be so good for the combined entity. How about greenwood, Health Care Records company. Then, it lost its way. Preannouncing a hideous miss with a transition to a cloudbased system. They say, what the heck, well sell ourselves to a Company Called matera. The stock soars. Management took action. How about tom san dell he took a 5. 1 stake in bobe, bob evans forms. Hoping that management will unlock the food business and a restaurant chain. This one amazes me. The stock is up 43 for the year. What more could you ask of a company. 21 times earnings, total winner at least this year. Theres some years that it lied. But i could see Bob Evans Farms trading up to 20 points from the current 57 level if it does split up because i think hillshire brands, remember sara lee, could easily make a bid for bob evans terrific pork sausage business. Manage if they buy back the rest of the stock. When i bought this stock 34 years ago, i expected this breakup to happen. Bring back a ton of value. Better late than never i guess. What else. You got to be impressed national oil is not standing still. Its buried within larger Oil Rig Manufacturing enterprise. It shows you just how friendly ceo pete miller is to shareholders. Hes one of our favorites come on pete and explain this deal. Finally, sothebys simple bid just today the stock got recommended by citigroup and i bet sothebys is going higher because dan loeb would like management to bring out more value. I think it makes sense. Lobe is doing the right thing. I know 2018 has been a bust for m a. Talk about that with anybody, david faber on squawk on the street. They started strong but petered out rather dramatic. However this kind of relentless drum beat of companies spinning off properties and activists bushing to unlock value has swept wall street by storm i think it is still in its infancy. Consider this a huge behindthescenes pop to the stock market and given all the money being raised by activists as well as cheap money available for acquirers were going to see many more of these kinds of deals. Whats really amazing . The companies in question were all doing pretty well on their own. But pretty well just doesnt seem to cut it anymore. Stay with cramer. Tomorrow, kick off the trading day with squawk on the street live from post nine at the nyse. And i watch it on my device. We all watch it on a device. It all starts at 9 00 a. M. Eastern. Nascar is about excitement. But tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. 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Just shoot your Business Card receipts and theyre automatically matched up with the charges on your online statement. Im john kaplan, and im a member of a synchronized world. This is what membership is. This is what membership does. I think sprint is a cautionary buy. Im jim cramer. Ill see you tomorrow detectives. Jacques plantes prototype goalie mask a true piece of sporting history. If this items real, it could be worth 50,000 or more. It looks like something out of one of those horror movies. Its got, written, plantes name. This could have been written on there last week. If his nose was broken, the silicone is gonna copy that. Not an easy one. And. A 40foot mural that could be worth a fortune. Has anyone seen anything like it before . Not seen anything like this at all. What do you see now . Yeah, yeah, i can see it. Yes even we, the team, were shocked