Something to ponder. This morning usa today led its money section with a stunning story about how onethird of the cash is that the Balance Sheets of american businesses is held by just five companies. Five companies. Thats incredible. What i think is even more amazing is that the stocks of those five companies are doing quite poorly. Down almost 3 on average. Not only that but the quoims the ten largest arent beating on average either. Why is this . First generally speaking, for the most part, the cash heavy company are beating the slower value place. Second, it cant be repatriated without paying big federal taxes. There is good news believing they would final it. Third. There are companies specific issues with each of these stocks so we have to address them one by one. Let me name the five kings of cash explaining the sub optimal performance. First is apple. Down 8 year to date. Despite having more than 233 billion in cash. Apple used to be a great growth stock but the market has decided that its growth is a thing of the past. Even without backing out the cash, it has 11 times earnings. The average stock on the s p is 19 times. Thats an incredible comedown for the Largest Company on earth. It tells you exactly how Little People think of its cash position. Let me say from the outset i think the market is valuing the company incorrectly. Market doesnt care that spam a Service Business growing by leaps and bounds. Ill bet the Service Revenue stream which includes the place you store your pictures could take on a much more pronounced role if the company used its money to boost the service. Right now, it seems like an affirmation of the judgment that apple is a no growth company. That doesnt endear itself to the big growth companies. More important, there is a commonly held belief the forth coming iphone 7 will be dead on arrival. Thats what were hearing. No one has even seen it. The reason is the impressive reports the company is gearing up to make between 72 and 78 million iphone 7s. That could be the largest in the two years. If the stories are true i think this is one more reason to own it. Not trade it. Thats been my posture for ages. Next up is microsoft. It is a company in transition moving toward Cloud Based Software away from personal computer software. It is a gigantic challenge that happened quickly. In the last quarter, it hit a wall. With both the cloud revenue going more slowly than wall street was expecting, it devastated the stock. While it sells for 17 times earnings, it is stuck in the 50 range wefl no idea whether the Cloud Business is accelerated or not. Microsoft is neither a value stock florinor a growth stock u we final out if it is on board. The Company Formerly known as goolg. It is down almost 8 . Alphabet missed the quarter. I believe it has more control of its own destiny. I think alphabet should put its money to work. They should preemptively bid for nfls international rights. Number four. Cisco. Up 3 for the year. It showed an acceleration in revenue. It sells at 3. 7 yield. That tells never market had no growth. My travel trust owns cisco because i think it is underestimating the growth. What it can do with its cash as well as continue to purchase unicorns. It is putting its cash to good use. Buy this stock aggressively. Finally, 50 billion in cash. Up 7 for 2016. Not bad, right . But its down 12 from where it was. It is becoming less of an on premises i. T. Plan. I think so many company are competing against them in this space. Especially the much beloved sales force which is better growth and reported huge upsides. Oracle is cheap. Lots of catalysts. This market is making a severe judgment. Companies with lots of cash dont have much growth and the cash is being held against them. Thes company have few opportunities to grow. I think thats nonsense of i think the markets judgment is too severe but were stuck with it until these guilty cash heavy Tech Companies are otherwise proven innocent. Rick . I heard potential buyout rumors. It was around 17. 5 . What kind of company would want to buy them when theyre traded we dont recommend companies on a takeover basis when the kroim in decline. Curtis. Caller thanks for taking my call. Of course. Kroger, doing the things they need to do to stay competitive. Do you think they will continue to be competitive in this sector . I am concerned about walmarts cush side. I think theyre going to do perishables at a much lower price and i think whole foods is being reinvigorated. I think kroeger is a hold. Lets to go stewart in my home state of new jersey. How are you . Caller im doing great. Youre much better looking and a better dancer than george clooney. You know, i can say the same thing. I didnt tell my wife that but we went to see captain america any way. Caller my question is about expedia. You recommended it. I think it is a great stock. It popped one the earnings that came out. Over the last three, four months, its been sfwag 105, 115. A buyout, to 180. I like that. I would have stikd with it. I think the business looked a lot like air b b which is a Fabulous Business and i think is doing fabulous. Whoever said cash is king must have missed usa today. The market is making its judgment. I think it is nonsense. Right now, it is a reality you have to invest in. Im going to give you five companies bucking the bear. Then biotech has to stay healthy but unsexy place. Ill reveal the stocks in vogue. And mcdonalds has been eating up pepsi. Should you be concerned . Ill let you know. You can judge. Stay with cramer. When someone who isnt all that fond of the market come up with five names in the s p that he actually likes, you have to sit up and take notice. Thats why when the cracker jack technician, my colleague, produced five stocks with fabulous charts. Five stocks he likes. I would investigate. What drives these charts . What lets them buck the trend . Is it something we can detect from the homework . Or is it a mystery . Maybe a potential takeout. Some selfhelp on the way. Or an improvement in the macro environment. Yep, hes been right. So when hes bullish on, right these down. Flow surf, fmc. Frank, mary, charlie. Franklin resources, energy, energy, i had to dig deeper. Fascinating to me. A mystery. Put our Sherlock Holmes hat on. Wheres my my findings. Lets start with flow surf. Mostly for oil, gas, refining kept markets. This industrial seems like a total loser because its been going down from pretty much everything. Nothing to like here. However when you dig deeper you get another view. Things are stabilizing. Not getting worse. Which while at the same time, no serve is selling 13 plants, reducing its global work force 15 to 20 . Meanwhile, their bookings in march at the end of the last quarter were Getting Better and better. Theres been a time deferred maintenance. And the destocking of valve inventory, there is no more excess inventory. It has become a tail wind. Sometimes you can tell when a story is bottomed by the tone of the questioners on the conference call. Thats the way i felt about flow service call. When nathan jones asked, wpd, he saidtion and i quote, this is about as bullish as ive heard you in a couple of years. End quote. Voila flow serve is a buy. Next. Fmc. Holy cow the old Food Machinery corporation. When i did my homework, i was stunned by how compelling this is and was remiss that i didnt brought i to you earlier. It is a company transformed. It has gotten out of its business. It has become the eighth largest crop company. The service pretty much paid for the 1. 8 acquisition. It gets better. Fmc has always been a major producer of lithium which is used to make batteries. But is just now coming into its own with the advent of the electric car. A tesla needs more than 100 pounds of this stuff. Now fmc makes lithium for panasonic which makes cars better for tesla. We learned today that it mans to triple its capacity. Plus the growing has health and wellness business. A big player in omega 3 vitamin production. Now, given the incredible grab in agriculture, the buyer trying to buy monsanto. The eighth Largest Company in the space, fmc, maybe worth speculating on. Particularly isnt it has a market cap of just 6 billion. Psych the new ag company spun out of dupont. I can see them picking it up in a heartbeat. It could dove tail. Lithium business, a home run. Call me a fan. Fmc. Its a buy the next pick, frankly, resources. Ben. Ben franklin. Odd duck. Totally odd duck. Why is franklins chart turned up . The business has. It is another of these situations where business turned up intraquarter. Theyre Getting Better and better as it goes along as opposed to vice versa. Those, these Companies Like Franklin Resources that saw it improve while the quarter went on. In these cases, they improved from the 500 basis points. Theyve seen the stocks go continually higher. Those that deteriorated ended up getting slammed. After being in the dog house for ages, these caught fire and that got the stock moving. With about half in cash and a monster buyback could be the time financial that someone who believes in emerlinging markets can get behind. I prefer the index creator. It may have in some of these emerging markets really hurt people. If youre more bullish, it is for you with a tendency to takeovers. Franklin resources, kind of a buy. The fourth pick is a tough one. This is painful this is house of pain. And this is the most drilling company. Get this. 347 rigs. Right . 263 of them are bad. Day rates are dropping. Somehow they beat the estimates. Thats amazing. I think oil can trade at 50 but not much beyond that. And sure, it has a bount i yield. I would rather see you in. I think it is a takeover for halliburton after it was nixed by antitrust. I think it is safe to say it is in decline. The oil has to go to 60 to 70 for this to prosper. Pass. Like bridge. Pass. Finally, energy. First, it was a traditional utility. One of the most diverse assets in the country. The ceo david crane, former ceo, Old Law School classmate of mine, tried to have the Solar Wind Energy company. He also created a company. He came on this show many times. He always positioned it as the leader in solar, wind, like alternative power. The efforts didnt resonate with the shareholders. Fell from 37. Down to just below 9 at the lowest in february. Guess what happened . Right here. Crane resigned. What happened ever since . The stock on fire. It climbed to 15. In other words, cranes resignation caused the bottom. He had lefvered it up. The energy has become a plain old utility again with a decent set of assets. I think it can work higher now that crane is no longer in charge. Bye of the five stocks, bruce from real money likes, i like four of them. Homework in pain . Sorry. Cant pull the trigger. It is still a nonstarter where these oil prices could be with us for some time. Pretty interesting. I would say stay away from it. While this up and down market puts hearts through the ringer, medical device players have been pumping out steady gains. Im giving them a checkup. Then its homework time. And one stock must be avoided at all time. Make sure this stock isnt harbor in the your portfolio. And while the market doesnt want to join it. Ill tell you what is behind this action of pepsico and mcdonalds. This market has been pretty darn bearish with the pharmaceutical sectorsful pretty much since Hillary Clinton was mere inches away from becoming the democratic nominee started attacking Grow Companies for what she called price gouging. Skraunld the same time the failed hedge manager turned disgraced ceo, bragged about jacking up prices by ludicrous amounts. And valeant without any improvement became pharma public enemy number one. These stocks have indeed been in the dog house. Another one has been getting a huge amount of love. Im talking about the medical Device Companies which are in bull market mode. That begs the question. How is it possible that this market adores the medical device place even as it loathes more biotech names . The answer may seem counter intuitive. Money managers are pouring cash into the medical device segment because pharma and biotech have gone out of style on the wall street fashion. What do i mean by . Okay. Most Portfolio Managers feel the need to own some kind of stock. They will mirror the s p 500. That way if a given sector takes off, and they didnt see it coming, theyll still participate in the upside. If a sector breaks down, the bench mark will go down too which means it wont be blamed for the weaknes not. Right now the s p is 15 health care which means a huge number of funds are desperate to have some health care exposure. But remember, Everybody Knows that pharmaand biotech. So these managers dont have a lot of options. They need to invest in health care. They want to put that money in safer Health Care Stocks that are not in the cross hairs of the federal government. Thats one big reason theyve been buying the stocks hand over fist. Hower, to catheters that reduce the ifks are infections ask ports that deliver chemotherapy drugs without the need for frequent injections. They blew the numbers away. Delivering a big top line. Theyre also launching lots of new products including a hightech selfcatheterization platform. Eight products in the biopsy business and a new extent graft. And while it is only 2 points off its highs, it is not pricey. About the same as any stock in the s p. Next up is another one thats red hot. Boston scientific. 21 since the start of 2016. It is the leading maker of cardiovascular products. They shot the lights out. Juicy top guidance. Thats how it shot up 11 . Boston scientific has been rolling out a bunch of new products. Including advance pacemaker leads. The part that delivers the electric jolt to your heart. Not to mention a pacemaker that is safe to use inside an mri. When youre on the outside, it says dont use if you have a pacemaker . A bunch of enhancements. Plus they have an implantable stroke prevention device. And it trays 18 times. Much more movement. This is up an stounling 27 year to date. Weve been championing this one forever. A company that makes the worlds most comfortable heart valve as well as less invasive products meaning they dont have to open the chest cave. The quarter at the end of april. See a pattern here . Last summer they approved the companys catheter based aortic heart valve. They can insert without open heart surgery. And we got some very positive date. A it soared almost 17 . It isnt cheap. Theyre all going to have to use this. Youre in the hospital a long time if they crack that chest cavity. If you can get in and out, theyll love that. Zimmer biomed and striker. Up 16 per and 19 . This is such a bull market. It reported a little less than a month ago. A more natural feeling. Great for babyboomers. A nice beat quarter. It is expanding into the robotic arm assisted service. Stryker with the 2017 story and they plan to launch their total knee system. The Company Acquired mako. Surgical a few years ago. Still, even though these two stocks have run, both are darn cheap. We know the medical device name have been roaring. In search for a safe place to invest in health care. But i bet this group can continue climbing. Based on the strength of the fundamentals and all the consolidation. The abbott takeover. When it document medical devices, i say take your pick. Josh, i got my voice back. Open wounds here. Well get them next year. Aid quick question for you. I bought it before christmas. I bought my first third in the mid 50s. January happened and it is coming back. I picked up a second third. And the First Quarter happened. It has been a house of pain for me. I thought they had a decent pipe line. I know they had one on pinnacle hold. Okay. Caller my question is, since it is underperforming the better part of year, do i hang on . Heres the problem. This morning, i saw they had a pack. I got excited. Dont get too excited about this. This is part of a cohort. This used to be isis, that is strictly out of favor. The bioteches. It doesnt which one you name. Thats why we like the medical device stocks. Theyre more exciting to the wall street fashion show. Medical device stocks should continue to rally. Do your homework. See which of these Fabulous Companies could be right for your portfolio. What does janet yellen have to do with burgers and soft drinks . You stumped me but im back from doing my homework. Tonights edition of the lightning round. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Whenever you call about a stock, i try to an your questions. Every now and then i dont know a stock. Why . There are thousands of publicly traded Company Including many new once in the last few years. If i tried to keep them all in my head, id be even crazier than i am already. Whenever i cant give you an answer immediately i make a point of getting back to you. Mad money is the most interactive show on television so lets get down to business on. I am a 25th, we let the homework accumulate. Jesse in california called in about handler armstrong sustainable casual. Hasi. A Real Estate Investment trust. It has a very straightforward thesis. Given that Climate Change is a serious longterm problem they believe they can make a killing in investing in company is that project thats are part of solutio solution. In short a specialty financial play on the growth of Energy Efficiency and renewables. Since 2013, Hannon Armstrong has passed over 400 since then. The stock gives a juicy 6 yield. The fed raises Interest Rates two or three time, that will increase the capital. Still, i think it is a good story. They might be worth buying. Maybe into the next market wide, maybe somebody says something, some governor makes a comment and they pull the trigger. I suggest maybe wait until the next fed meeting or at least listen to what janet yellen says. But i like it. Next up. Gabe asked me about slm. A stunt loan company. I had to brush up on this because there is so much changing. It is the largest purveyor of student loans. The ones that are not blocked. The colonel was kree wlatd the old sallie mae spun off. They kept the Private Banking business called slm. Theres no doubt student loan business is booming. Theres more Student Loan Debt than credit card debt. 70 gs. A the love places are 70 gs. I dont know. It doesnt seem like a bargain to me. That doesnt mean the stock isnt worth buying here. Or it is. Let me give you the problems ask the opportunities. First the competition. More and more company are trying to get a piece of the student loan pie. The second is politics. Hillary clinton the democratic nominee is all but in name. She has a 350 billion plan to provide more needed, more needsbased government loans for higher education. Also helping people with existing Student Loan Debt to refinance at lower rates. If that happens, thats bad news for slm. It is already down 40 because people are worried about it. Personally i think a lot of these Election Year worries may be overblown. The most likely will be more grid lock. Given that the stock has become a political football, unless you believe that donald trump is going to win. He hand been addressing this head on. So lets call this a trump stock. If you think trump will win, i think this is a winner. What next . A Company Called md. It is a nationwide medical group of more than 3,200 affiliated doctors. A focus on bheebs are born prematurely. The idea is that med nax works with these physicians to provide costly effective care with better patient outcome. It also helps ease the burden with billing. They could the same for hospitals. This is an incredibly inquisitive company. I dont know. They have a healthy balance sheet. They can do more. Where do i come down md . The stock has been hammered. Down 7 year to date despite the reason quarter was pretty compelling. This is a story where politics could be a problem. Next up. Tim in north carolina. He asked about ship finance international. Sfi. It owns all kinds of vessels. Container shipments, car carriers, drilling rigs. This stock may seem attractive because it is 6 times earnings. When i see that . Do you know what i do . I throw the red flag. Oh that was bad. You probably couldnt see it. Because it was camera man that i hit in the head. No dividend yield gets that high unless people were worried the payout will be cut. And look, thats way too. Oil exposure for comfort. Especially since i dont see crude rallying past 50. At the same time, 17 of the sale. You know, i look it a all the time. Very low levels. Off the bottom for a few months. At the end of the day, it is the global economy. If things keep improving, they can pay the dividend. If it flat lines and gets worse, ill pass. We got a call from wisconsin about la jolla pharmaceutical. Ljpc. This is a tiny speculative biotech that treats with orphan drugs. It is a life threatening condition where your Blood Pressure drops to dangerously low levels. It is enrolling patients in a phase iii trial. Everything else is phase 1 or pre clinical. The whole biotech cohort has been crushed but la jolla has been anile 80. Down 65 . With the stocks under 16. Barely more than 3 above the lows. However, while i dont see it going that much lower, i dont see much in the way of catalyst thats make me want to buy it. I told you to avoid this last august. You side stepped a 40 decline. Even here it seems too risky. Especially since i see no improvement. Once again, a big theme. An Election Year. That does it for my homework. More proof i have the smartest audience around. You are really smart. Stick with cramer. It is time time for the lightning round are you ready, skeedaddy chris caller recently riteaid has had a bit of a sellout. By the way, i think it is more of a problem. Im a buyer of walgreen and i dont want the riteaid. Lets go to jeff in new york. Caller booya, jim of i thank you from ten years ago. I would do the same again today. Beacon moving supplies. A irnl with he lowes or home depot people are buying roofing supplies. That one i like very much. Lets to go jack in texas. Caller booya, jim good growth. Whats not to like. It is good to go. Nick in ohio. Caller hey, how do we feel about the long term buy . I dont know. The stock is coming back. We dont need them of lets go to steve in new york. Steve. Caller booya. I would look for a square long term investment. I dont know. They have that credit risk problem so i want nothing to do with it. No how no way. Caller hi, jim. How are you . I am very. My voice is back and i am ready for action. Caller very good. 15 down from the high. What do you think . China, india and italy . The research director. We both think it is right to pull the trigger right in here. Starbucks has been hated for too long. Weve been waiting for 54. Maybe were too greedy. You like starbucks. How about jerry . Caller good evening, mr. Cramer. I have a question on cvs stock. It has been tregd down. Do you have a reason for it. Walgreens has been going down too. I think cvs is a buy. Hes doing a fabulous job but retail has been weak. Joyce in new york. Caller so great to talk to you. Same. Caller i was wondering if you could give me your opinion on the apple reach . Hotel. No. Were not that group has been too hard. Im going to have to say no to that. Thats the conclusion of the lightning round the line round. Sponsored by td ameritrade. Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. No, youre not yogonna watch it tch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. You may be bored with hearing about the fed. You may we did notion and have to factor their actions into the stockton view. Something happened around may 10 in terms of the markets collectiveness. The dollar has steadily gotten stronger again virtually all other currencies. The result, underperformance from the stocks of u. S. Based International Companies that benefit from a weaker dollar and are doing quite well on a fundamental basis. Two obvious ones. Mcdonalds has since plummeted back to earth. And pepsico which had pulled back from 106 over 100. Let me start by saying both these stocks are buy buy buy mcdonalds is doing the best its done in years. I know many of the critics saying the all Day Breakfast is a one trick pony that has run its course. I disagree. This has been discounted again and again by people but it still has legs. Secondly, it barely started kooching and they are beginning to staff the stores as they accept theres Something Big in the air. And they are buying into it. Go do some homework. Oh. But the fact is, mcdonalds in the end, it is a gigantic international presence. The stock has been pummeled since the narrative changed. How about pepsico . While the company has been dinged for the 3 central soda. At a in the city of brotherly love, 45 of sale are from overseas. And it had such a great quarter. It doesnt matter. Both have battled for dividends and it is worth pointing out the weaker dollar is crucial and critical to going higher in the second half of the year. Who else has been hurt for the need for higher rates . How about 3m. Fantastic quarter. The stock took off. We heard about the june and then it fell to 166. At one point it was even lower. It makes sense. It gets more than 30 of sale from overseas. And it is not just that. Kimberly clark, 129 to 106. Este lauder. It has gone from 95 to 81. The parent of google. Nothing new except the strong dollar. Now we know that a rate hike would be good for the banks. In fact they need multiple rate hikes. But it hand budged at all. So in other words, the stocks of the International Company are getting hurt even as the supposed beneficiaries from the rate likes get nog lift. Thats why this market has become so darn hard. It inspired a stronger dollar. Even the natural winners seem to gauge nothing. Thats why these fed officials with the endless talks, they matter how. Theyre driving the dollar higher. Exactly the opposite of what our International Companies need to see the stocks rally in the second half of the year. Stick with cramer. Smart devices are up. Cloud is up. Analytics is up. 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These are press reports that said the apple iphone 7 could be bigger than people realize but theyre only press reports. You wont get any confirmation out of apple. If you want to own the stock of apple, just trade it. Ill see you tomorrow. Male announcer america is struggling to shake off the recession. Public distrust of wealthy ceos remains high. But more and more bosses are looking for radical ways to reconnect with their workforce in order to find out whats really going on in their companies. Each week, we follow the boss of a Major Corporation going undercover in their own company. This week, the president and ceo of choice hotels, one of americas Largest Hotel chains, poses as a trainee competing for a job. Hi. Im jack parker. Announcer the boss will trade in his luxury sedan and Country Club Membership for a housekeepers cart and a plunger
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