Transcripts For CNBC Mad Money 20150915

Weakerthanexpected manufacturing data and the brutal 3. 6 decline in the chinese stock market last night. How can this clearly bad Economic News produce such a remarkable run . Dow climbing 229 points, s p jumping, nasdaq gaining 1. 14 . Is this opposite day . Perhaps the market lost its mind . No, its like weve entered bizarreo world with bad news is good news. Why . The uglier the backdrop, the more likely the Federal Reserve stands pat and refuses to raise rates when it concludes its deliberation this is thursday. This fed meeting, like it or not and you know i dont like it is the most important event of 2015 for two reasons i dont recall a more opaque fed. Its driving me crazy its about to render a momentous decision that will surprise people. Second, the consequences of a rate hike, listen, youre not going to get that plus and minus stuff for america its plain negative for stocks but the upside from the no hike while positive as we saw in todays action perhaps stolen by from a benign announcement thursday is not positive enough to outweighing the potential down side from fed tightening. As i keep saying, i dont like risk reward here. I dont like it because negative Economic News might keep the fed on hold but it will cause earnings estimates which are the mothers milk of stock prices, to get slashed. Better Economic News causes the fed to raise rates which is even worse for the average. You know what . To me it almost feels like a loselose possibility for most stocks, creating a treacherous market. And i have to tell you, sometimes thats all too easily forgotten on bullish days like today. So going to this meeting i think its imperative to give you a feed cheat sheet on what can happen to your stocks depending on the feds decision. First the upside, if the fed says were on hold until we get more clarity about global weakness, especially in china and the emerging markets, then i think we rally dramatically simply out of muchneeded relief from the uncertainty, a decision not to raise rates with a statement saying we can hold off on night ng for the rest of the year will give us more more days like this one. Its a genuine bear buster. No rate hike with a statement of waitandsee will give us a few more days like this one, but the earnings estimates are very much at risk if the worlds economies dont improve. Okay, how about the down side that comes from a rate increase . I see six possible negatives for the stock market that you need to be ready for if the fed takes action and leaves the door open for even more increases in short order. [ boos ] first, higher Interest Rates per se weaken housing and auto sales. Some say housing has begun to cool. I think auto sales could be at a peak here and they can only get worse, not better. A rate hike causes earnings to come down for these two industries not to mention the ancillary companies that service them, and theyre big. Second, if the fed tighten, the dollar should reverse its recent weaker trend versus the euro which i like and move up sharply which i dont like because that causes earnings estimates for all u. S. Based International Stocks to be cut and cut immediately. Were at a crucial moment in the earnings calendar where the analysts are sharpening their 2016 numbers. Thats what happened in september and they will ruthlessly slash their forecasts on a rate hike because a stronger dollar makes it harder for our exporters to compete against Foreign Companies while cutting into their international profits from the translation from weaker currency to strong. Many companies will be if the final month of the quarter so they wont be able to support their shares with buybacks, that could exacerbate the postrate hike decline. Third, emerging markets are pegged to the dollar amount higher dollar inspired by a rate hike could cause these already weak markets to collapse. It happened in 98 and 97. Those markets do bring us down here. For example, i dont think that brazil as currently configured can survive a big rate hike. Yes, its that much on precipice. You know what, our main trading partners canada and most importantly mexico could get slammed too. Dont forget the economic advantage gives Foreign Companies the disincentive a strong dollar creates to travel here. See the hotel numbers today . They were awful. Make no mistake, the dollar hangs on the balance in this decision and a sharp spike up could be deadly. Well come back to this issue when we go off the charts later in the show. Fourth negative . Shanghai. The shanghai composite will accelerate its crash from the 3,000 level its been hanging on to by its fingernails to 5200 in june but up 800 from last year. I expect the Chinese Market to plummet another 33 if the fed tightens. Were way too linked to chinas markets even if were not that linked to its economy. Fifth, once we get our first rate increase, were going to be doing whats known as fighting the fed. Money managers know that rate hikes change. A hike takes a tail wind, turns it into a head wind. It wouldnt matter if the Global Situation were stable but its not. Owning stocks will be more difficult in this new environment. Period. I can show you a chart that says stocks rally this, stocks rally that. Trust me. Ive been through a lot of rate cycles. The only positive could be a statement that accompanies the feds action. A one and done comment that the fed will wait and see if its hike inflicts real damage could actually limited the down side, mute the reverberations. Remember, the market wants serbty and clarity, not herkineher k herkiness. A statement that sounds that will call for more rate hikes could work wonders in terms of damage control. The insane cacophony of Federal Reserve officials has created a level of uncertainty that makes no sense. Its nothing like the bernanke fed, at least not once bernanke got his act together. These jokers and i dont use that term lightly have caused a tremendous amount of selling and losses in your portfolio. Idealen should tell these various president s and governors that she doesnt want them to talk about rates and instead they should confine their comments to issues involving the Financial Health of their respective regions giving the fed chief herself the input she needs to make the right decisions. Still im not about to stamp some smiley face on any rate hike, thats because of the sixth negative and maybe the worst, the needless fedinduced surprise factor. There are always plenty of hapless hedge funds that bet the wrong way with borrowed money and some of them might have to liquidate if they roll snake eyes. At times the stress is your fellow shareholders or at least the highly margined renters who hurt you with their flailing, not the actions of the companies themselves. That said we meaning you and i can navigate anything the fed throws at us. If the market goes down big we can find stocks, we can get the right back into the stocks that keep winning because earnings wont be impacted by higher rate or a stronger dollar. Well figure it out together, thats what we do. Havent we done it for years now . Never forget, though, this is a market of stocks and markets are about supply and demand. Theres going to be too much stock supply, there is already with a tremendous amount waiting in the ridiculous unicorn wings and less and less money coming into equities everyday. Its unimaginable to me that well see more money coming in if the fed raises its rate. Most importantly we have to face important facts going into this meeting. We have had a terrific multiyear run in stocks. Theyre not cheap. At the same time, economies worldwide are turning down just when the fed wants to raise rates. Thats an unholy combination if there were one. If you didnt know better, ex employment growth you would think a fed needs to cut rates not raise them. So let me give you the bottom line as i see it going into the big meeting. The rewards real positive for stocks if the fed does nothing, but the down side risk remains enormous that the fed does the wrong thing and raises rates without commentary, its finished for both the foreseeable and i think perhaps more important the unforeseeable future. I need to go to jim in connecticut. Jim . Caller hi, jim. Im calling about United Technologies, symbol utx. Theyre down about 25 from its high. I know theyre planning on buying about a billion dollars back after the sale of sikorsky. What i dont know is what the future holds for United Technologies. I hope you can help me with that. United technologies is a Great American company and has a long tradition of doing the right thing. But i have to tell you, a lot isnt United Technologies fault. Its viewed with china. Otis sells a lot of elevators. But no matter who is in that group, theyre all being hurt, including utx. Bill in florida, bill . Caller yes. Youre up, bill. Caller yes, this is bill from st. Augustine. Its 450 booyahs to you, jim, because were celebrating our 450 years in st. Augustine this week. Oldest city and i love it. Ive been there. Id like to say i played golf but i went to the beach. Whats going on . Caller not too much, not too much. The king and queen of spain should be here but theyre keeping it secret. In any case, ive got a question about marathon oil but before that id like to precede it with the statement that goldman made that they may see oil at a 20 a gallon price and also i think Morgan Stanley came out with something talking about a projection of 50. Now marathon oil has been in a lull of 14 and its starting to climb up. I dont know, bill, let me tell you something, i talk about the travel trust marathons and why . Because marathon pays good dividends but it has to take actions and i think mro in the end is the toughest one right now of the majors to own. That said, i am not as bearish about oil as goldman sachs. 20 bucks . No, not going there. The uglier the backdrop, the more likely the fed stands pat which is good news for stocks but if the fed does the wrong thing and raises rates, im trying to prepare you for trouble on an up day. Thats what i like to do on mad money. Hey, on mad money tonight, the Federal Reserve meeting is only a day away. Does it have you sweating . I dont know. Sometimes i am. Im tackling the technicals to tell if its worth the worry. Then time of the year again, football season is under way and im revealing my dream stock draft for you and your portfolio and, yes, indeed, i won this weekend. Plus, its a stock up 30 this year and you may not even have heard of it. Ill reveal it. It could go higher just ahead. Stick with cramer [phone recording] thank you for calling. Well be with you shortly. Yeah right. Xerox Predictive Analytics help companies provide a better and faster customer experience. Hello mr. Kent. Can i rebook your flight . Im here Customer Care can work better. With xerox. Wait im here mr. Kent . gasp shark diving xerox personalized employee portals help Companies Make benefits simple and accessible. From anywhere. Hula dancing . Cliff jumping Human Resources can work better. With xerox. In this market, more than most, you really have to Pay Attention to whats happening with foreign currencies. I know, kind of boring but stick with me. You have to worry about their Exchange Rates for the u. S. Dollar. Remember last month when china announced that big surprise ewan yuan devaluation . That led to a monster selloff in the u. S. Since then the averages have barely recovered but they seem to have stabilized. Plus we know super freaking strong greenback has been the bane of all u. S. Based International Companies. The stocks are down 15 , 20 , 25 because they have to translate their overseas sales in weak foreign currencies to fewer strong dollars and many exporters are losing out to foreign competitors. If youre not paying attention these issues can come out of nowhere and body slam your portfolio. They and the fed are the principal causes of uncertainty in what many describe as a bear market. So on the eve this thursdays decision by the Federal Reserve to hike or not to hike, something that could have a major impact on currencies around the globe, you know what . Its time to get a better sense of the markets, given my endless emphasis on their power to create havoc for your portfolio. Thats why were going off the charts with the help of bob lang, a brilliant technician and the founder and senior strategist at explosiveoptions. Net as well as being the two man start of by the hindthestreets. Com. Lets deal with the fed meeting. If you listen to some people, i think it will be momentous. I even think that. I like to look at individual companies that you can make money off of by owning the stocks but, of course, as i said at the top, whether or not we get a rate hike or not is a gigantic deal for the rest of 2015 and it will matter to the trajectory of the dollar which i know unless you go overskaes you dont feel like it. Not to mention host of foreign currencies, especially the ones from smaller emerging market countries. Langes view is that if the fed tightens theyll do in the a responsible way. Theyll try hard not to spook the markets. You can argue this either way. On the one hand, china is still collapsing. Witness last nights 3. 5 plus decline in the hang shy composite and if were looking at a global slowdown that would make a rate hike not just unnecessary but irresponsible. On the other hand, lange thinks the combination of lower unemployment rate, the emergence of newfound wage inflation, last months Producer Price index on an annualized basis when you strip out food and energy costs they make it more likely that they will tighten. If that happens the allpowerful dollar gets stronger putting pressure on foreign currencies at the same time, translation, still more pain for the big u. S. Multinationals that do business overseas that im so worried about night after night, dont like the setup. But and this is a big but based on the technical metrics that lange is looking at, the market doesnt seem to be preparing for any kind of major fedinduced dislocation of currencies. What gives lange that impression . First of all the volatility index measures the level of implied volatility. Its wildly used as a proxy for fear in the market. Its dropped sharply the past couple weeks, it spiked because people were focused on it. Last friday it closed below its 20day moving average. That tells lange investors have been getting less not more affr afraid as we approach the fed meeting. So that suggest there is wont be a rate hike or it wont cause much disruption. Then there are the feds fund futures. These are contracts designed to let traders bid directly on whether the fed will take shortterm rates up or down. Based on the difference between the september fed fund futures and october ones, langes arithmetic says this futures market is signal ago 12 probability of a rate hike this week. Thats lower than the 5050 numbers you hear commentators throwing around. Lange also thinks weve seen telling options in the skew index. Another index that measures the tail risk in the, s p 500. Basically its disaster insurance although i think its just another instrument in the casino and it rallies when investors are worried things could take a turn for the worse. Lange mentioned this because on september 4 the skew index soared up to its eighthhighest level ever. People started gearing up for the end of the world. But ever since labor day this index has fallen off a cliff. That tells lange that regardless of what happens, sophisticated players are not worried about a selloff after the fed meeting. You know i am. Finally we come back to the currency markets which is really what i want to get to here. The euro has been gaining ground versus the dollar over the last couple weeks. The yen seems to have found its footing and even the pam recovered late last week. If the fed is on hold though as the fed funds futures and the vick seems to suggest, then lange could make a bullish case for the euro. Not the dollar but the euro right here and a strong euro is what the industrials need. Our Drug Companies need it, consumer package Good Companies needs it to name a few groups if the darn dollar were to come down. Take a look at this weekly chart of ifxe, the etf that measures the strength of the euro versus the dollar. All we hear about is a strong dollar but this isnt saying that remember higher on the fxe means the dollar is weaker. Lower means stronger. When you zoom out to this weekly view of the euro ux see that the european currency seemed to have bottomed. In other words, fxe, euro getting stroenger. Euro getting stronger and its been climbing slowly but steadily ever since this bottom. Some that have is because europes been improving with good auto registration numbers this week and if the fed doesnt tighten this week or puts the idea of a rate hike on hold you can expect to see the fxe fly. Lange likes the relative strength index, or the rsi, which is is up here. Its been working its way higher plus the moving average convergence divergence line, another indicator technicians use to predict changes has been flashing b inin ining buy buy b. Very bullish. At these numbers its a couple weeks away from its 50 week moving average. If it can break to 113, lange says smooth sailing to 120, that represents a tremendous rally in the euro versus dollars that will cause investors to buy stocks of the same things that keep getting thrown away, u. S. Based International Companies have been buying them hand over fist because they benefit from a weaker greenback. But very few of the big boys believe the euro moves. They think this is about to be erased by the fed. He can, lan heck, lange even thinks the japanese yen could be looking good. Theyve debased the yen forever. The fyy just made a higher low last week as it held above its floor supported 80. The yen has been in a long term down trend, no kidding, right . But just like with the euro its now within striking distance of its 50week moving average. 81. 53. If it can rally and hold above that level for a couple of weeks lange says this chart will turnbullish. Can you imagine trying to turn this battleship around. No matter what you think of the fundamentals the charts as interpreted by bob lange suggests you shouldnt sweat the upcoming meeting and if we get a stay of execution, the euro and yen could roar giving a boost to stocks of u. S. Companies that do business overseas. I think this is a huge call and i remind you if the dollar gets weaker than 2016 earnings estimate for all but the pure roe test i can companies will be going higher which is something that could knock this bearish phase for so many International Stocks right off its tracks. Much more mad ahead. Its the most wonderful time of the year, thats right, football is back. But instead of setting up your fantasy squad or talking to espn on the phone to get my 2013 results, why not draft up dollars . Im putting together a dream team of stocks that could lead you to victory. Then its one of the bestperforming plays in biotech. Ive got the exclusive with the ceo. Plus, could this company turn its stock around . Im getting to the meat of the story with the ceo, stick with cramer. Heres a brutally revealing segment. In any given year you know i make a bunch of mistakes. Last year i made not one but two big ones. My Charitable Trust sold home depot i said i would never mention this on air i cut tom brady from my fantasy football team. Both before home depot and brady made monstrous super bowl and super bowllike runs. Now, i recognize its fashionable in fantasy circles to not draft a top quarterback early just like its not fashionable in the stock game to stick with the retailer linked to the cyclical home business. Its especially questionable to pick brady because he always seemed tapped out the guy is so old. Cant be enough gas in that tank. Same thing is often said about home depot. It has to be the most mature retailer around opening only a handful of stores in the last few years because theyre already everywhere. But thats not the point at all. What both tom brady and home depot do is make the most out of what they have which is why brady wins super bowls and home depot rises above the rest of retail year after year after year. Ive long championed home depot both when the understated frank blake i loved that guy ran the show and now under newly minted ceo craig minnier. But ive said if the fed raises rates this goes down the hardist. Thats consistently been the mistake and a lot of us make it. Just like i cut brady from my fantasy Team Last Year way too soon as if you should ever cut him you should be on the lookout to buy not sell hem depot if the Federal Reserve tightens. I couldnt get brady back on the squad but you can always get home depot. Theres no rate hike, this rallies more than anyone in the sector. While house willing be increase by an increase in Mortgage Rates and im not changing that view, i dont think home depots numbers will come down therefore the stock is a buy. I think its the kind of quarterback your portfolio needs. Why . How can it maintain this level of performance . First, statistically home depot grinds it out in the trenches, consistently delivering betterthanexpected quarters and boosting its earnings forecast. Its generated more beaten forecasts than any other retailer ive followed while many retailers struggled even this quarter, home depot posted a 4. 2 increase in same store sales much better than what the analysts were expecting, no mean feat when you remember that two of its largest markets, texas and california, were crunch bid too much and too little rain respectively. Second like brady who even during deflategate, never lost his allure, home despoe fan friendly. It brought back a quart every of its shares in the open market. Third, home depot is perhaps theening is l greatest embracer of all sorts of Customer Relations management techniques, many of them sent everything around programs put in place with the help of salesforce. Com which well hear more about when we go to dream force, the salesforce. Com conference. Its all about using the companys tools to connect with the customer and generate more business which is what home depot does. The despot has the best omni channel going where you can buy on line and pick up in store or bopus, as its now known. No one can touch them in store productivity or gaining from doityourselfers and professionals alive. You wouldnt think much about the patriots without tom brady. Sometimes i feel that way about home depot. This group wouldnt seem as investable without the existence of hd. It did better than most when housing was terrible and now that its booming it rises further. Its the best in class and like housing in general it always plays over its head. The bottom line in fantasy football when you need a quarter back its brady as he showed over the steelers squad, okay, so he had gronk. And you fwleed home depot, the most reliable retailer in the land to tackle the toughest of foes, a looming Interest Rate hike that will hurt all but the true hall of famers that can be claimed thursday no matter where you stand on the waiver wire. Michael in maryland. Michael . Caller booyah, jim . Booyah caller as a Young Investor i appreciate your advice. I bought wall part in consideration of china devaluing its currency leading to cheaper imports and a strong u. S. Dollar going into the holidays. It also pays a generous dividend and is near a 52week low. With that in mind, do you like walmart . This is really important. Michael raises a great question. What do you do with a fantastic retailer thats down 250 with 3 yield. . Show patience, patience, patience. It wont be this quarter that mcmillan will turn it around. The terrific new ceo. Its a battleship but hell get there. Bide your time, though, and i dont think it will turn in the next quarter or even two. Ray in pennsylvania. Ray . Caller hi, jim. Ray, whats up . Caller not much, thank you so much for sharing your knowledge everyday. Thank you for saying that, man, thank you. Caller my question is about one of my longterm investment, general electric. Ive read your books and applied the metrics on what makes a stock move but ge seems to defy that for better or worse. The stock just likes to stay in that 25 to 30 range and im curious about what you think needs to happen for it to move. Id kill for the 30 side of that range. Heres the issue with ge. It doesnt seem like whatever they do is working. But you know what . I care about what its doing which is getting out of the toughtounderstand financial business. It shows the best organic growth in the show, it has great yield. I say hold on. Its a bear market in industrials but what ges doing is right. Greg in new york. Greg . Hit me, greg. Caller hello . Good evening, jim. I have a question on cmi. Before earnings came out they increased the dividend by 25 . They beat the street by five to six cents after that and they cashed. They got a pd of 9. 5. Whats holding the stock back . Greg raises another point thats interesting. We are in a bear market for the industrials. He just detailed everything you want to hear about a company and still down what . 20 this year . Its kind of down 16 . Its insane. But you know what . Its related to china. Cummins has a big business in china and what what that means is people are saying stay away. Now if you only spend half as much time on your stock portfolio as you do your fantasy team, you need a quarterback. Every portfolio needs a reliable player. Home depot, the most reliable retailer in the land. Much more ahead. Success in biotech hangs in balance of the all powerful drug approval process. But is the way to play it with the guys who are doing the testing maybe not the ones who will go binary, good, bad . Im putting it under the microscope. When it comes to investing in brazil, the countrys markets may not look appealing at all but could a brazilian steak house thats american based tell a different story. I have the interview with the ceo. Todays edition of lightning round. Stick with cramer at t and directv are now one. Which means you can watch movies while youre on the move. Sitcoms, while you sit on those. And even fargo, in fargo binge, while you lose weight and enjoy a good cliffhanger while you hang from a. Why am i yelling . The revolution will not only be televised. The revolution will be mobilized. Introducing the all in one plan. Only from directv and at t. Sure we had a terrific rally today but this market is loaded with uncertainty. Sometimes it feels like were uncertain about everything the fed, china, you name it. However, even when the big picture macroeconomic situation is this murky you can find high quality stocks that should work regardless of how things play out for the global economy. Take quintiles transnational holdings, thats q for you home gamers. That helps Drug Companies manager their Clinical Trials, especially late stage trial that biotech players lavish most of their money on. I like to think of them as an arms dealer to the biotech industries. Theyre the ones to go to if you want to get through the fda. Theyve been an incredible performer, its up 30 since we spoke to the ceo. I think it could have more upside going from it. The Company Reported an earnings and sent stocks soaring and then stocks peak there had. Then august rolled along and kwen ti quintiles got taken down with the rest of the market. Now its back. That stock could be a terrific buy. But dont just take it from me. Lets check in with tom pike, the ceo of quintiles transnational holdings. Hear more about his company and where its headed. Mr. Pikes, welcome back to mad money. Thanks for having us back. Tom up 30 by your own terms may be one of the best kept secrets in the fortune 500 yet this is a renaissance time for biotech and drugs in general, why is the company relatively unknown versus the best performance of kind of the whole secretary generalment . Its funny saying were a simple story in a complex industry. Weve been growing the last five years, almost 8 in revenues, almost 14 in evada and our backdrop has gotten better. The bio pharmaceutical industry has been better for a long time and we service that industry and we continue to be able to grow. Now youve mentioned directly in your Conference Calls and notes immunotherapy. We have lots of these companies on. I cant imagine how difficult it is to run a trial and how sophisticated quintiles has to be to get it right. We are a sophisticated logistics operation in a way and if you think about it we have great docs, 950 medical docs, a thousand ph. D. S, size of a teaching hospital, really, who design the right trials with our customers and figure out how to run them around the world. An immunotherapy trial may be a small trial with difficulttofind patients or later in its life that its larger around the world. But our job is to find those patients and find the investigators who can deal with the complex therapies. I think it might help our viewers because i know look you dont have you have 14 customers that are 100 million but no customers more than 10 but you talk directly, and i thought it was helpful, about what youve biogen. Biogen is a terrific company. Were very proud of our relationship with them. We have a sole source arrangement because of the breadth of our capabilities, 14 therapeutic areas over 100 countries were able to service their needs across their organization from a Clinical Development standpoint. What it lets us do do is Work Together on innovative designs and great execution so they can have high quality Clinical Trials. I felt from the materials, weve seen companies that frankly they have one or two shots on goal and they have to get it right. The smaller companies. Youre almost their partner versus just Contract Research organization. Thats right. Its our fastestgrowing segment right now. What weve found is that small bioteches do want to use quintiles, theyre just worried about whether were too big for them so weve created a couple Service Offerings focused on smaller biotech. We have a Higher Service model. Interestingly often im involved in them as well. You directly . Its important to get the toptotop relationships with them and make sure they get the focus they need. Then the key with them is they use all of our capabilities. They use docs and ph. D. We design the statistical approach, help them design the trial, go to the Regulatory Agency so we can be a great partner. Weve even helped some go all the way into commercialization and essentially reach a higher valuation because theyre able to exit later. I think its great you mentioned the valuation issue because one of the things we always talk about with our viewers is the pipeline. You have to look at the pipeline. Pipeline gives valuation quintiles gets the pipeline going. Well, thats right. Essentially what we do is as soon as the drug goes into humans thats when we start getting involved. So it will be whats involved in the safety and efficacy in the early stages and well really help bring it through to regulatory approval. Interestingly, our fastestgrowing business what we call realworld evidence where we post approval, collect information that helps provide Market Access information and understand how the drug is doing in the real world. Health care professional, this is an interesting point, they say theres a nearly catastrophic failure rate in Clinical Trial of new cancer drugs. How does quintile solve the quality versus quantity problem in selecting patients for new trials . The key is to be as targeted as we can in terms of the patient. So what we do is we create relationships in advance with hospitals or other caregivers, essentially top quality investigators in the area. We make sure we get the right therapies to the right patients. We find them as quickly as we can. Interestingly, increasingly, not only do we have these kind of relationships but were helping develop social networks and using tools like that to try to make sure that we attract the right patients earl will toy these trials. Wellness question. I remember the old quintiles because when i was a Hedge Fund Manager we used to go long or short quintiles, this is the old quintiles, because it was so episodic. Your company is opposite of episodic upanddown earnings. What changed while you were private . Were a great privatetopublic story, really. We were able to restructure the business. What it led us do was sell pieces off, make investments that work as a Public Company and now what were trying to do is just focus on the customer because we believe if we satisfy the customer, if were top quality, we deliver with speed and effective costs then we will grow as a company. And weve got a structure that lets bus a little more predictable than we were in the past and that helps drive results for sure. I think youre being too humble. Its about predictable as any company ive ever seen. Tom pike, ceo of quintiles, letter q. I like it. Mad money is back after the break. The 306 horsepower lexus gs. Experience the next level of performance, and theres no going back. Lease the 2015 gs 350 with complimentary Navigation System for these terms. See your lexus dealer. vo wit runs on optimism. Un on . Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. I could get used to this. Now you can, with the luxuriously transformed 2016 lexus es and es hybrid. With before we get started i have to tell you that tomorrow ill be coming to you from the heart of american innovation, san francisco. We are informsing in america the new way with the ceos defining the future. Tomorrow youll see sales force ceo mark benioff and ciscos Ceo Chuck Robbins just to name a couple. This is a powerful week for mad money, you dont want to miss it. And now its time for the lightning round. Are you ready . Time for the lightning round. Lets start with herb in kansas. Herb . Caller hello, jim. Thanks for taking my call. Quite welcome. Caller my question is about vox incorporated. I have to tell you something, box is i guess people want to make money now. They wanted to grow the business but where are the big insider sellers everyone was so worried about . I didnt see them. I like it. Don in florida. Don . Caller booyah, mr. Cramer. My stock is alexis, buy, sell, or hold. Exel. Im a big shareholder, blah blah blah, excel is one of my favorite biotechs even up here in six. Lets go to dustin in california. Dustin . Caller whats your opinion on taser internation all . A Young Investor might be the key because its speculative. Its down a lot but i like the core business. Ed in new york. Ed . Caller jim, public storage, buy, sell, or hold. Interesting. Boy, that group has been so you have to. This one has moved up 10 . I cannot endorse it, even though i like it. Theres other fish to fry. And its time for jim in illinois. Jim. Caller jim, my question is on bristolmyers, should i add to my position, sell it or hold it . Bristolmyers . Youre thinking about selling bristol miers. That would be wrong. Im a buyer of bmy and that is the conclusion of the lightning round even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Without the internet i would probably be like a c student. Internet essentials from comcast has brought lowcost high Speed Internet into the homes of hundreds of thousands of lowincome families. It lets students do homework and study at home. So far more than two Million People across america have benefitted. Internet essentials is going to transform the lives of families. I see myself as maybe an entrepreneur. Internet essentials from comcast. Helping to bridge the digital divide. This sumpter market was flooded with ipos. In june we were averaging more than one deal a day. Many of these newly minted Public Companies are not so hot to be diplomatic. When you dig deeper you might find theres undervalued gold buried. I want you to consider fogo de chao, thats fogo, the small cap brazilian steak house chain, unique concept. Gaucho chefs rotate through the restaurant bringing you new cuts of meat. Fogo de chao became public in june, rocketed up to 25. 75 on its first day of trading then peaked. Since then the stock is falling about 30 from its highs but down here with the stock under 20 and below i think this could be an inkritriguinintriguing. Part of the reason theyve been punished is because they only have 36 in the u. S. Ing by the brazil exposure has been annihilated because of the weak real. But the story is the u. S. The Company Believes they can add another 100 plus locations in the u. S. Which makes fogo de chao a major runway for growth as it continues to expand, plus when fogo reported its First Quarter as a Public Company it beat on the top and bottom lines. I think this is a stock thats been overly penalized for its exposure to brazil, not given enough credit for its expansion potential in the u. S. I recognize this is a steak house chain but lets take a closer look with larry johnson, the ceo of fogo de chao. Well learn more about his company and prospects. Welcome to mad money. Pleasure to be here. When i studied the company what i realized is that its not a steak house, its an experience that serves steaks, fair . Right on the money. And, in fact, its even more exciting than that because what were offering is an opportunity to its things that are familiar. Its great steak, great fruit, great vegetables, great salad, great wine selection, great caipirinhas so the people that go to fogo are in for a treat and we have the opportunity look, weve define there had category. We lead it. But the beautiful thing is someone wants to have churrasco, were at the top of the list. But when somebody goes to a steak house, what happens . They consider fogo. When youre a fogo its a dining experience. What happens . Youve got the opportunity not just to have that filet, not just to have a rib, youve got the full experience of maybe one night its lamb chops and rib eye, maybe another night its a different kind of filet. Youre in charge, youre customizing it. We know beef has been expensive, we know labor costs are going higher. Yours, though, do not your inputs dont seem to be hurting your bottom line. Correct. And its a Real Advantage of our operating system. Our labor costs are about 20 which is unheard of. Where it starts are gaucho chefs. Each of our restaurants have 12 or 15 chefs. They do the butchering, they grill they serve you at table side. They carve your meat. So youve knocked out a couple layers of labor. Id like to say were geniuses but its inthoernt the system. Same thing on the food side. Were not tied into a tight speck on filet or rib eye. We often 20 cut, beef, lamb, pork, chicken, a fish entree. So we dont have those tight specks that box us in on meat costs. Youre still early but youve been around. Its not like you just appeared. Jim, fogo started in brazil 35 years ago, came toll the u. S. In 96, quickly at the time the company had three stores in sao pau paulo, came to the u. S. Today were at 26 stores. Weve got five under construction. We know that theres an an Incredible Opportunity in the u. S. We can do another hundred plus stores and think about it. Auv, eight million dollars. Average unit. The margin at the restaurant level, 32 . Extraordinary. Cashoncash return in excess of 50 on our stores. The average fogo we run through our store 137,000 guests a year. This is incredible. Do the math. Oh, i know because i see where you guys come out and we follow a lot of restaurants. Youre just above almost everybody we follow and yet the stock is too low. Feels like ruth kriss before the big move. I want to thank the leo of fogo de chao. Its been overlooked because so many ipos came at the same time. Stick with cramer. Good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Yes, Investment Opportunities can be anywhere. Or not. But you know the difference. E trades bar code scanner. Shorten the distance between intuition and action. E trade opportunity is everywhere. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Add new Business Services with at t and get up to 500 in total savings. Were going to invest in america. Were going out to dream force, sales forces hub in san francisco, its going to be an amazing couple days. You dont want to miss it. Theres always a bull market somewhere. I promise you ill find it just for you right here on mad money. Im jim cramer and i will see you tomorrow male narrator tonight on the west texas investors club. Im here to present to you pie and cobbler fillings. I am asking for 150,000 for a 40 investment into the company. We put these entrepreneurs through some hellacious tests, but this is the test to beat all. Do you mind helping my mom put on this party . Shes a real sweet lady. Look whos here the [bleep]head. This is a hot mess. I can show you guys an amazing time in your hometown. Using your app. Using this app. Bring it on, jen. [yells indistinctly] oh, [bleep]. Narrator deep in the heart of texas two men carved a fortune from a harsh and unforgiving land Butch Gilliam and rooster mcconaughey