Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 8/14/24
This episode is brought to you by Merrill. With a dedicated Merrill Advisor, you get a personalized plan for your financial goals. And when plans change, Merrill's with you every step of the way. Go to email.com/ bullish to learn more. Merrill, a bank of America company. What would you like the power to do? Investing involves risk, Merrill Lynch, Pierce, Finner, and Smith Incorporated registered broker dealer, registered investment advisor, member SIPC. Take your business further with the Smart and Flexible American Express Business Gold Card. It's packed with benefits to help unlock more value from your business purchases. That's the powerful backing of American Express. Learn more at americanexpress.com/businessgoldcard. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a more market somewhere, and I promise to help you find it. May I have money starts now. Hey, I'm Kramer. Welcome to May I have money. Welcome to the Kramer arc. I'll be able to make friends. I'm just trying to make you a little money. My job is not to stay entertained, but put it all in context. So call me, 100, 7-3, 7-3, 7-3. Tweet me at your Kramer. Maybe there's nothing can be done. Maybe it's a hopeless situation. Or it's a situation where someone can figure things out. Fix them. But they have to come out of retirement, or have experience that they don't need to be taught. They just happen to have another job elsewhere. Sure, the average had a good rundown, gaining 243 points. That's to be advanced in 0.38%. And I stack up just 0.03%. But so many big-name companies are struggling here, and I found myself wondering, which ones can be saved and have their stocks go higher, and which ones can't? Look at what happened with Starbucks. Really is, this is an amazing business story. I've got to tell you. Here's a stock that had been in free fall, but all it took was bringing in one person, a talented food executive, a CEO, and then it's source. The new guy, Brian Knuckle, is a genius of what he does. He turned around Chipotle, which it's hard to believe it was ever struggling now. But it's not like his predecessor, Loxman in R7, Loxman was beloved at McKinsey, beloved at PepsiCo, and beloved at Rick and Ben Keyser, where he was the CEO. When he took over to Starbucks, all I heard was that he'd worked in snacks and beverages and packaged goods, and he really understood the process. He was supposed to be the logical considered choice. Now, I don't know what the heck happened between then and now, but all it became clear that Starbucks was a great company with oil customers and not so hot management. Knuckle, the new CEO, might have to take a page from Ron Shank, the former CEO of Panera Bread, who had to develop a whole new model for stores because the old locations were slow, unappealing, expensive, couldn't handle mobile ordering. Hey, you know what, that's the exact problems that Starbucks is dealing with. It worked for Shank with Panera 2.0. Maybe it could work for Starbucks with the novel 2.0 with tested and ready to roll. Maybe I'd be able to roll it out in another city. I don't know, but it could happen. But of course, the old CEO, Luxman, he didn't want to do that. He thought he had all the answers. Behind the scenes, now many are blaming founder and former CEO Howard Schultz for lording over his successor. I think Howard was more appalled by the lack of contrition than he was by the horrendous execution, which he did not like. But if you're blaming Schultz for firing Luxman, maybe you should thank him because he just created $20 billion in value when we learned that they post a brilliant CEO from Chipotle. $20 billion in wealth creation one day. Hey, I'd like to take credit for that. We all take credit for it. If we're looking for what can be saved, you need a big change at the top. Starbucks is going to become the model. So now let's talk about love. No, not love. Love, though, UV Southwest Airlines. Today we saw the slate of 10 potential directors from the activist investor, Elliot Magman. They want to bring in these 10 to replace 10 on the board. Well, of course, everything would change if they did that. Every one of Elliot's nominees excels in the fields of Southwest needs, technology, revenue management, safety, government. On the other hand, if left to its own devices, I bet Southwest would keep going lower. There's still time for the board to accept their lack of diligence and move on with their heads high. But I'm definitely betting on Elliot here because his people are better and they will get a better CEO. Starbucks. Let me give you another one, Disney. Now this one's eligible. We know Nelson Pels, another famous activist and shareholder. Wanted to join the board. Magman spent a fortune keeping him off because apparently they obviously couldn't stand the guy. Disney stock went from the '80s to 123 on Pels' involvement but ever since he was. Yeah, I mean, what do I need to tell you? Fell back to '86. What does that say? Yet this is a company that dozens of brilliant execs would like to have a shot at running. To me, Disney's worth holding because it's simply got so much valuable. Valuable franchise, like Starbucks. It's hard to destroy no matter how hard Magman tries. You just need the right team and it's a winner. You need a change agent as CEO, not just as director. And in the case of Southwest, maybe you do need to change up the whole darn board. Now, let's take a look at another while we're going over this things. Let's talk about Nike. I think it's time we have to come to terms with the idea that something may be very wrong with Nike. Otherwise, how do you explain the stocks plunge from one hour and 22 to 78? Now we've seen a resurgence in New Balance and uptick in Hoka. Some startling positive numbers from on holdings. Adidas has made a real comeback. Nike, not so much. And I'm being very polite. Maybe there's nothing that can be done. But CEO, John John O. Consoled in background, by the way, just like Lucksman R. Simms. He got booted from Starbucks. Then he went to work at PayPal and run service now before going to Nike. I mean, these two management consultants have something else in common. They always have said and agreed that they're doing a great job. Even when the stocks say the opposite. Look, if you've read Shudor by Nike founder, Phil Knight, which is fantastic, I can tell you that Donner is no Shudor. The stocks stood at 100 mom when he stars CEO in January 2020. It's now at 78. That does not seem like value creation to me. People would take their Nike's off and walk on hot coals to get that CEO job. Maybe there is someone who can do something better. A Brian Nicholas shoes? Don't you think there has to be one? Now after the close, we learned that Bill Ackman's Persian Square took a stake in Nike according to the 13F. We have no idea of his intentions, maybe just recognized a salvage situation and wants to make money. Maybe he has already sold it. Who knows? But we do know that Ackman has been an activist and this stock sorely needs one. Someone has to say the truth. All right, how about a former Dow stock? Walgreens, this is a totally different story. Right now it's being run by Tim Wentworth and it's being run into the ground. But you know what, I can't blame him. Walgreens have been a slow motion train wreck for ages. I thought this chain was doomed from the day Amazon put same day delivery into motion for thousands of things you used to get at the drug store. But unlike Nike or even Southwest, the damage of Walgreens may be so great that a turnaround is impossible. I do believe in Tim Wentworth, if there is a possibility of a turnaround, he will do it. I just don't know. How about Intel? Picking all these big stocks, the chip maker is overextended and losing share in this major product lines. It just sold one of its best assets, which happened to be 1.18 million shares of arm holdings. Yeah, really, that's what it comes to add to. Intel's building plants all over the place and it's CO Pat Gelsier seems to believe that he too, like John Donneau, like Gluxman Arson, doing a great job. Yeah, it is reminiscent of the CEOs of Starbucks and Nike. Intel did do something true though. It brought in two savvy firms, Brookfield and Apollo, as construction partners. My advice, the people who run Brookfield and Apollo, you people should take a crash course in how to actually make and sell semiconductors 'cause looking at Intel's current trajectory, you're gonna be doing a lot of that. Finally, it can Boeing be saved. If there were five aircraft makers in this world, then I would think Boeing would have been done for and out. But there are only two. Two companies that make large commercial aircraft, which means these guys can afford to make endless mistakes and they've taken advantage of that. I think Boeing's like the old GE right now, a company that can make it, but it'll take a lot of excellent, really good work and great execution. For what I can tell this new CEO, Kelly Orberg, may actually be up to the task. I was gonna suggest that he move the headquarters to Washington where he make the planes. The fact that the previous CEO hadn't done it was a sim, but of course, he's already done this. It's going to take a lot of time to turn around Boeing. I think it's probably too soon to buy the stock given the balance sheet, it's so hideous. But Orberg has horse sense. He was considered an excellent executive, Rockwell Collins, a maker of aerospace components. Given this is duopoly where America needs Boeing to do well, I bet he does pull it off. It's just not the punt, time to buy it. Look, we can bemoan companies that can't shoot straight. Or we can look at, let's say what Larry Cope did when he came in and saved GE from collapse. We can see the immediate faith in marketplaces and Brian Nickel to turn around Starbucks. This can be done. The companies have to stop fighting it though. Here's the bottom line. Right now, it looks like other than Boeing, the board seemed pretty happy with how things are going at these companies. Maybe a staffer put the stock chart page upside down in the board pack and the directors are pleasantly surprised, or maybe the CEOs and many board members simply don't know much stock and they just don't feel the pain. Otherwise, I can't imagine how they can just sit there and accept the status quo. Because frankly, in each case, you and I both know it is simply unacceptable. Let's go to Jason and Connecticut, Jason. - Mr. Kramer, a big bull, yeah, from Jason and Connecticut. How are you, sir? - Good to hear from you, Jason and Connecticut. What's happening? - Hey, I'm a long time follower and club member here. Thanks for all you do for the investing you meet again. - I hope you like to call today. We're doing, I graded some of those guys pretty hard. You know that, graded some hard. - Yeah. We appreciate it. - We appreciate it too. Hey, Jason, my question's on Chevron. I'm a long time shareholder. The stock's been good to me and it pays an excellent dividend. Should I pick up some more shares at this level? Thanks, Jim. - I think that Chevron is a buy. I think they do a great job. I think that Mike Worth is terrific. And I think that you should pick some up. This is a nice level. If 4.5% yield and buy them back a lot of stock, I think it's terrific. It's got an Alfred in Virginia, please. Alfred. - Hi, Jim. Thanks for taking my call. I'm down 30% on my position on Etsy. Should I buy more, sell or hold? Thanks again. - Oh my. Okay, this is such a hard one. 'Cause I think Etsy is such a great. I mean, it's one of those companies where I buy so much stuff from them. Many other people do, but that doesn't cut it. I think you're going to have to understand that if you're willing to buy time for a while, that's what you're going to have to do with Etsy, 'cause it's not going to go right back up. It's just not. Let's go to Peter in Maryland, Peter. - Jim, yeah, Peter calling from Baltimore. Yeah, I got my mom all over me on this Occidental Patrol. - What? - The stock. She's done that. - She shouldn't let up. The Oracle of Omaha is all in on it also. So I'd love to get your two cents. - Well, it's good. I mean, Oxy's good. It's not my favorites. Come down a lot, but that's 'cause it's an oil company. I don't like the yield. I don't like the balance sheet. I like chevron much more. I like diamond back much more. And of course, I like cotero much more. It's just a given that I think every one of those is superior to this company. At the same time, if Warren Buffett owns it, even if it's like Ulta, if he buys Ulta, the stock goes up 10%. I mean, one day this stuff is not going to be like this, but right now you're dealing with Buffett versus Chevron. I want to take Chevron, but the world wants to take Buffett. Look, maybe these CEOs and board members don't own much of their own stock. Otherwise, I can't imagine how they can just sit there and take this kind of pain. Oh my money tonight, take two shares of one to perform so far this year. It's in game on or game over when it comes to an investment in the company. I'm talking with a CEO. And a show over took chilly, caring, drinkers international today. Yeah, eat. Stock tumbled 10% at various. What's behind the drop? And is it chilly's fault? I'm going to see you. But first Home Depot just offered a clear sign of what's to come with housing and the Fed. I'll reveal it and what it means for your money. So just stay with me. [MUSIC PLAYING] Don't miss a second of Mad Money. Follow @chimcramer on X. Have a question? Tweet Kramer. #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. And miss something, head to madmoney.cnbc.com. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. 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Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their US oil and gas production. And they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations, helping supply energy that's affordable, reliable, and ever cleaner. That's energy in progress. Learn more at chevron.com/meetingdemand. Breaking news. The peanut butter group and chocolatey corp have merged to create PVC ink. And the byproduct of the merger is the new delicious GIF peanut butter and chocolate flavored spread. I got the press release and get this. Critics tried to say it creates a monopoly on cravability. But obviously, it's not illegal to be irresistible. Calling it now, this will revolutionize the snack industry and the contents of my pantry. Visit pbcincorporated.com to try the flavor merger of the century, GIF, PBNC. Eureka, I found it. Bury within the Home Depot conference call yesterday was the most perfect analysis of what can happen to housing if the Fed decides to be our friend and starts cutting rates. Let me share it with you, because right now this is incredibly important. Looks like the magic number is 6.5%. That's the mortgage rate where it all seems to come together. That's where, according to Home Depot's CEO Ted Decker, quote, "You saw an immediate increase in housing activity, mortgage applications, mortgage refill applications. And then, unfortunately, the rate spiked back up to, I think, almost to 7%," end quote. You could read much of Home Depot's conference call as a plea for lower rates, punctuated by the positive acquisition of SRS last March for $18.25 billion. SRS's professional building supply office specializes in pools, landscaping, especially roofing. I think Home Depot bought SRS to try to get off the star mortgage rate treadmill, and I do not blame them. It seems like so much spending on new homes or modeling or innovation is controlled by that rate, either through mortgages or home equity loans. Plus, SRS is taking share, which is what you need when your core market doesn't grow much. Home Depot paid a great deal for it, but I think it's worth the price given how much it can expand their total addressable market. The connection between mortgage rates and Home Depot's business has, I think, honestly, and I follow this coming for years, I don't know what's ever been this tight. As CFO Richard MacPhail told us, quote, "Components of the large project kitchen, bath, flooring, and lighting are all under pressure." And our customers tell us it's because that large project is being deferred, end quote. That's huge, it's being deferred because of the rates. That's what I want the Fed to pay attention to. As MacPhail explains, quote, "There is certainly a direct relationship between decreases in mortgage rates and the amount of activity that you at least seem picking up in turnover," end quote. All right, that seems natural to me, but some analysts argue that even with the Fed cuts rates, it simply won't matter. Because we have such a severe housing shortage in this country and the homebuilders haven't been too eager to add new capacity. Meanwhile, existing homeowners are reluctant to sell because they don't want to lose that cheap mortgage rate that they got during the age of near zero interest rates. It seems like it's a box you can't get out of. However, if mortgage rates were to come down close to that 6.5% number for the 30-year fix, I say we'd see way more remodeling and restoration work bolstered by home equity loans. These are all areas that got caught in supply chain disasters during COVID and never really boomed in post-COVID world because the Fed rapidly raised rates in 2022. Lower rates would really help this R&R business. Don't take it from me. Again, Ted Duckett says point blank, quote, " Consumers have seen their home values go up 50% in the last four years. Their home equity has increased almost 70% since right before the pandemic, but there's been pressure on larger products tied to construction," end quote. That's in part because housing turnovers down some 40%. Deckard goes on to quote, saying quote, "Everyone's expecting rates are going to fall, so we're deferring those projects," end quote. So in other words, we all believe the Fed's gonna cut, let's not do a thing until the Fed cuts. That's why we have this downturn. On top of that, Deckard notes a quote, "There's just a lot of noise with political and geopolitical environment. Unemployment ticked up, inflation keeps eating all at disposable income." And I think people just took a pause as we progressed through the quarter end quote. That's exactly what Amazon said, but nobody seemed to in mind when we heard the same story from Home Depot, because we all think that the customers will come right back the moment the Fed starts cutting rates. That's not just from people taking out home equity limits to remodel. Management also talked about the so-called golden handcuffs, where people got mortgages at three to 5% when rates were much lower, and now they refuse to sell their homes. And perhaps the most really the smartest moment of the whole call, and it's a great call. Deckard explained that what he called golden handcuffs problem will only last one or two years thanks to, and then here's some good news, quote, "Family size increases, household formation moves for employment and retirement," end quote. In other words, much of the housing chain is simply stalled by a lack of turnover, but the golden handcuffs cannot last forever. Those people will move with lower rates. Consumers will take out more home equity ones with lower rates. We did have some left, refi-certs, 35% in one week, because rates hit the lowest level in over a year. Again, it demonstrates what happens when rates come down, but it's too ephemeral to base things in one week of rate declines. The Federal Reserve is making things too tough right now by not cutting rates to keep that momentum going. I think they've now done enough to slay inflation, even as the cost of shelter still high as we saw from the components of the CPI this morning. In the end though, Home Depot call gave me hope. Give me hope that we can avoid a hard landing for housing, but only if the Fed unlocks those golden handcuffs that it created by taking rates of super low levels a few years ago. I bet that's what happens, and clearly Home Depot agrees, or else they wouldn't have shelled out 18 billion for a professional roof and pool supplier. Two areas that desperately need lower rates. So here's the bottom line. Right now, housing is waiting for the cavalry to come to the rescue, by which I mean, it's waiting for the Fed to cut rates. While that's not something we desperately need, at least for the moment, it could be a major positive catalyst for a huge part of the economy. Yes, lower rates will work, but alas, not until the Fed gets off the bench. And gives them to us. Let's go to Charles and Arizona, Charles. - Greetings to CNBC's finest there. - Oh, thank you, Charles. How can I help you? - Oh, I just wanna mention a couple of weeks ago, a collar from Florida insulted your fillies on air. How dare he comes into your house like that? - Yeah, I was gonna put him down like a dog, but I like dogs, so go ahead. - All right, Jim, I'm an American Express card holder, and I want to be a shareholder. It's now the time to wait. Is it time now to wait the next time? - I think it's a terrific time to buy American Express. All it's gonna happen is you got a Fed rate coming. I don't know about the black card. I've been trying to assess the advantages of that. It seems like it's cool, but I don't, what do I care? But I do think that our business is a good time. The stock should be up more than it is. I love that last quarter. Everybody hated it, and they were wrong. Let's go to Alejandro in New York, Alejandro. - Hey, Jim, I'd like to hear your thoughts on Airbnb. I got a buddy who's got 40% of his portfolio on this thing, and I'm wondering if it's time for him, and for other support ways, given the weak guidance they provided during their most recent earnings call. - Well, 40%, that gentleman does not have horse sex. You can't do that. The Airbnb call was not a good call, and it wasn't a good call because they didn't want it to be a good call. It was not us. It was not me making a determination, "Well, you got to avoid Airbnb." It was the company making a determination that things aren't as good as we thought, and the travel's not as good, and I even think about hotels are too expensive, but Airbnb, I have to see that the stock has to go lower before I can recommend it, because I was so shocked at how negative Brian Chesky was on the call, and he's the CEO, so he shows the nose more than I do. Home Depot's conference call told me that the housing market is simply waiting for the Fed to rescue it by cutting rates. I think when they do, we can avoid a hard landing for housing. Right now, we need housing back. We don't have it. They have money, it's back at the break. - Coming up, rising costs took a bite out of earnings. Is this restaurant stock still on the menu? Here are the specials. Next. (upbeat music) At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care, and we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line, it's possible. Complex specialty care that cares about your ROI. It's possible, because we're already doing it, all while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. - Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success, and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. - Imagine your future differently at Capella.edu. (upbeat music) - All right, what the heck happened to Kramer Faye Brinker stock today? That's a pair of chilies and Magions. I thought this one of the few restaurant changers working in the world where the consumer's belly gets high prices, but after the company reported this, one of the stock plunged more than 10%. What went wrong? Not clear. - You're originally getting hit because the company's investing heavily in labor and facilities in order to improve the guest experience. They don't have a pricing problem, they don't have a traffic problem. Traffic was actually a big achilles. Same for sales were amazing. I think it's just a stock that was up being going into the quarter where shareholders were looking for an excuse to ring the register. If these new investors can keep fueling the company's growth, that sounds good to me. Let's check in with Kevin Hochman, the president's CEO of Brinker International. You're getting deeper into the quarter of the stock and welcome back to Bad Money. - Hey, thanks for having me on, Jim. - Okay, so we do need your help because I see someone who has made a tremendous success of a chain that I didn't really think that much of with great same-shore sales, most important metric. And what you want to do is continue that momentum going. But in order to do that, you need to spend a little money. What's the matter of that analysis? - So we had a great quarter. I mean, we outpace the industry by 16 points on sales, which is, that's kind of like video game numbers. And we did it through incredible value with great service in a fun and friendly environment. And those are the fundamentals of casual dining. And every quarter we keep getting stronger and stronger. I think what happened today was we pulled forward some investments. Number one, we wanted to have a little bit more labor in the restaurants when we had this influx of guests that came in to make sure they had a great experience. Most of those guests were actually first-time people to chillies, so we wanted to make sure it's a great experience and it was. Our guest metrics did not suffer. Typically that happens when you have big traffic bursts. And then the second thing is we pulled forward some facilities investments. We saw the opportunity given how well we were doing in the quarter, we pulled those forward. And I think that's what happened. I think the Wall Street expected a certain level of flow through on those incremental sales. We reinvested it back in the business and that's where we are. But we are very much on the trajectory that we want to be. All right, let's compare this for a moment to Starbucks. Now, Starbucks got the big influx, but they did nothing. They didn't add people in the back. They didn't fix the facilities. Next thing you know, you're in a long line. Next thing you know, you hate Starbucks. I can't believe that all restaurants, I have three low restaurants are the same. If I start going to see a big line at your place, I'm going to another place. To avoid that, you need to make some changes that are positive. >> Yeah, that's exactly right. We know we've been at this for almost two years now, where we're making investments in labor, we're simplifying the restaurant so that there's less things for them to do so they can win with the guest. You know, we've kept over 22% of our menu since we started this journey, right? And then we're improving the facilities. And the whole idea is we've been beating the industry for 18 months now. This was even a better quarter and it's just another stair step in our turnaround and it's happening, it's real. >> So if you had done nothing, you as an expert in this business have to believe that two, three years from now, that's going to come back to haunt you if you did nothing. >> Well, it'll be sooner than that, right? 'Cause if, you know, we have new guests that come in and they don't have a good experience, they're not going to come back, we're not going to sustainably grow the business. We don't want to have two or three years of record growth and record profits. We want to have a dynasty and that's what we're investing for. >> Now, I am looking at the making of a dynasty right here. This is not a cheeseburger fries diet coke and then you've got to have it in a little bag and you're hoping the car you don't want to spill a ketchup or yourself. This is a sit down meal for a similar price. >> Well, that's exactly it. So you've got a half pound burger, you've got fries, you've got unlimited chips and salsa and unlimited soft drink and it's a 1099. You know, we continue to say it's an unbeatable value. When you see it all together like this, you realize it's unbeatable value and that's what the guest is saying. This is an unbeatable value and that's why we're, you know, really school in the industry right now by double digits and I think it's gonna continue because we're doing all the right things. >> All right, so how many more units can you put up if you figure it out? >> Well, right now we're focused on investing in our current business. >> I know, but I think that I would, if I were you, I've perfected the formula, it's time to start putting 'em up. >> Well, we built anywhere from 10 to 15 a year. You know what I'm thinking. >> But you're thinking to accelerate and I think we got to continue to focus on the core. I think we got to, we cannot get bored of the fundamentals. You know, Coach K used to say, if you do the fundamentals so well, that could be your competitive advantage and that's exactly what's going on with our brand right now. >> Okay, talk about how you got a same store sales number with everyone else. I mean, people, if there's been chipotle as great same store sales number, here's better. How? >> Well, it's the fundamentals, right? I mean, what, so you talk about when the macro gets a little soft and we know guests are gonna pull back on their trips. They're gonna choose the places that one have superior value and two, they know they can trust. They know they can have a great experience because when you're making less trips, you don't wanna go to a place and hey, I might have a great experience. You're gonna go to the places that you know you're gonna have a great experience and that's the reputation we're not getting in the industry. >> Now, in the industry, you also are getting a reputation for knowing how to market drinks. There are many large companies, including some major liquor companies, that somehow think that their brand is more important than your drink. You have broken that mold. I don't know the tequila you're putting in, but it tastes every bit as good 'cause it's a blanco and they're all the same anyway. >> Yeah, well, we do use great branded drinks though. >> Right. >> And we have all the different segments covered. So you can go to a $6 margarita of the month. Our current one is the, it's a mango mamba. It's got an alhima door, it's got triple sec, it's got fresh sour. You can get that for just six bucks. Yeah, it's unbelievable. >> Why isn't that not, how come you, I found it unbelievable, that's a $12 drink everywhere in this country. But you're moving to what, make less or is it just? >> Well, absolutely not. We have what's called the barbell pricing strategy. >> Okay, tell me. >> You got to be guess where they are. Some guests want great tequila. They want it at a great price, right? And they want it to taste great. And we have that with the $6 margarita of the month. Other guests want something maybe a little smoother, a little more super premium. We got the Casa Migos, we got the Turmono Blanco. And those things are obviously a lot more than $6. Well, we don't just sell the $6 margaritas, we sell all the margaritas. And if you want something more premium, that really rounds it out for us. So we able to make a lot of money on alcohol, a lot of money on drinks because we have a barbell strategy. We're doing that with all the core four segments. You know, for that entry point, price point, guests that needs just a low price, we have that. You can go all the way up to pretty much whatever you want in our restaurant. >> Okay, now, a lot of attention on TikTok. At Triple Dipper advertising, Secret Nashville Hot Mozzarella Skisk. But football starts in five weeks. >> Yeah. >> Are we going to see major presence in football NFL? >> Well, I wouldn't call it a major presence gym, but we are certainly going to have all the games on Sunday ticket. We obviously have amazing food to watch the games. And we created an environment that people want to come to watch games with us. So, you know, are we going to be a sports bar per se? No, but are we going to have amazing food at a great price point and you can come watch your sports? Absolutely. And I think we're ready for it. >> Well, look, I'm glad you cleared everything up. There are a lot of people who felt that they look at the stock. Honestly, can they look at the stock and say, "Oh, something's wrong." They never think, "Wow, investing for the future "is what they have to do. "New year, it's going to be amazing." And that's what I think is going on. >> That's exactly right. You know, we don't want two years of amazing stock price performance. We want to dynasty and that's what's happening right now. >> And we've seen the two-year-in-off. You and I have seen that many a time because people were afraid to take a hit. >> That's right. >> And you weren't. That's terrific. That's Kevin Hockman, president's heel of Brinker National. Not only is nothing wrong, what's happening is bright. That money's packed everybody. (upbeat music) >> Coming up, more than a game, Kramer's got the fun-making stock that plays by its own rules. I'm Max. (upbeat music) >> All right, we know the video game industry has been through a wild ride. Many gaming stocks have stalled out in 2024. And I'm wondering if the dynamics of this business have changed over the last five years? I don't know. It's another case of take to interact. Best known for Grand Theft Auto, one of the largest entertainment franchises in any medium. Let's just call it the largest ever, 'cause that's true, okay? It's also got red dead redemption, various consistent sports games, under the 2K banner, and a growing portfolio of very successful mobile games. After a nice run last year, in the early part of this year, the stock went out of steam, it rolled over. It's now down 10% for 2024. SVs have 14% of the same period. So what gives you? What is the street doing wrong, and not realizing? Because I gotta tell you this, they always seem to care about take-tos of whether Grand Theft Auto is on track. Nothing else seems to move the needle. In fact, when the corporate portal last week, even though the net bookies and earnings came in tad light, stock rallied 4% because they didn't delay Grand Theft Auto 6. I don't know. What else does take to have going for it? I think a lot. But let's go straight to the source of style selling. The Chairman's CEO of Take-Two Interact, you get a better sense of the quarter of what comes, what comes to actually sales trials. If I'm frustrated, it must drive you crazy, but you're non-promotional, which I love. So could you clinically tell me what the company is made up of right now so we can kind of figure out what that's worth rather than what happens in the future? Well, look, first of all, it's nice to be here, Jim, and nice to be here. Yes, it is. I'm sorry, and thank you so much. I'm fresh. I'm not frustrated, I'm really, look, I'm thrilled. We are today the number two pure play Interactive Entertainment Company. We'll have about five and a half billion in net bookings this year. We're a highly profitable business. And look, we do have Grand Theft Auto, which is the biggest entertainment property of all time. And we're thrilled that Rockstar Games is part of our network and that Rockstar Games is bringing us Grand Theft Auto 6. How could we not be thrilled? 50% of our net bookings come from mobile. And Zinga, our mobile company, is showing that it is a bigger and better hit creator than anyone else in the business. In the last year, we've delivered Match Factory, a massive hit from our label Peak. Top hit, top hit. We have Star Wars Hunters. We have recently launched Game of Thrones Legends. We have a title you haven't heard of called Screw Jam, which is another huge hit. Two in Blast, which has been around for seven years, and are still meaningfully up in the last period. Now, we don't have the biggest mobile title right now, but we have a bigger collection of new hits than anyone else. The acquisition worked. Zinga, it worked. That's highly creative. It worked, highly creative. So let me tell you what I was thinking. I happened to go over this, and people had hunted us. I happened to go over your release before, which I'm embarrassed. So I don't do anything I can't talk about. And I thought the stock would be up to it. Okay, I just did business. Not only is great that photo on time, but Zinga's just so lucrative, it's amazing. And other things at NBA2K is good, and you've got a bunch of other things that we've got, Sid Meyer, which matters, that a lot of guys play in the office. And I come back and I say, "How could I have been so wrong?" It's a rumor me. I'm thinking that there is a myopic group of people who focus on only one title, but that's 'cause it's the biggest title of all time. And nothing else can move the needle against the biggest title of all time. Is that a possible analysis of why the stock's being incorrectly valid? I think there are times when we've been seen as only Grand Theft Auto. But remember, Grand Theft Auto was 15% of our revenues last year. 85% was our catalog, our other new titles, NBA2K and the like. We're thrilled that we have that title. We have a lot of other things going on. The truth is, Jim, you know this. If the markets were always efficient, there'd be no buying opportunity. True, but I'm talking about a company that may turn out to be selling at the lowest multiple other than Ford and GM when this title comes out. Well, we feel really good about the position that we're in. And of course, our view is we go do our work, we never take anything for granted. It's our job to create the biggest hits in the business. We now have 11 franchises that have each sold at least five million units with one release. And a title that we don't really talk about that often is Red Dead Redemption. Red Dead 2 sold 65 million units. That's bigger than virtually anything else in the market aside from Grand Theft Auto. Okay, so how big really is the digital advertising market? Maybe we're looking at that role. Maybe that can be far bigger than we realize. Oh, that's a very significant part of our business on the mobile side. We're really excited that I mentioned Screwjam. We have another title called Twisted Tangle. These come from a studio called Rolic that used to be in the hyper casual business, which only was ad supported. And now is in the hybrid casual business where we have in-app purchases and advertising and that business is booming for us. Okay, now on Grand Theft Auto 6, let's just go there. The technology that Jensen won, the NVIDIA technology, is so great that I have to believe this will be something that is a giant step function higher versus all the others. So what do you do? You just, you don't really need to do anything, Strauss. That's what's so nutty. You can just wait for that to come out with this stream of income that the other games generate. I know you always want to innovate. I know you're constantly doing that. But again, this is the biggest problem I had if I were you, which is it? Are you seeing what numbers are we going to put up? You know, waiting isn't really part of my program. I know. We have a three-part strategy. Try to be the most creative, the most innovative and the most efficient. We obviously have really high hopes for Grand Theft Auto. I would note that Grand Theft Auto 5 cost over three generations and remained both the technical and creative standard bearer after the third generation. It's been 13 years since that title was released. And it's sold in over 200 million units. It continues to sell every quarter. So if history's any guide, six should be just amazing. At the same time, as you mentioned, we've been BA2K. We have WWE2K. We just bought Gearbox. So we have Borderlands. It's an amazing franchise. Civilization, we just launched a mobile version of Civilization in China in partnership with Tencent. That's huge. There's a lot of other things that are going on at the company. OK, so all right, well, let's go there with the movie. The movie was not that successful. No, it was not. It was a disappointment. Interestingly, it moved the dialing on Borderlands Catalog sales to do with that, which was kind of amazing. So we were criticized for the movie. Now remember, we had no financial-- You had no financial state. That's really important. This was kind of like whenever you're on cries. And the Mattel movie goes out, and I'll blast him. Why don't you own more of it? And he's saying, well, well, that's not the way it works. And well, this is why it shouldn't be the way it works. It's not a poor business. We don't want to be exposed to business. Right. That's not your judge. However, it is pretty amazing that we got a marketing halo from the movie, even though the movie was seen as a disappointment. By the way, we and the team worked really hard on it. OK, so let's-- if you don't mind, let me sum it up. I think that the rest of the company is worth a great deal more than people think. Because if it's only being valued for the large part, for Grand Theft Auto 6, then you get all these other things for free. And that's the only way I can come up with this, Ralph. So you get them for free. It doesn't mean that they should be free. Maybe people think they should be free. It's hard to imagine, given the cash flow, that they should be valued at free. I tend to agree with you, Jim. Let's see what the market is. Well, I would say that I would buy every share I could when I got a lot more cash in for granted. I find it frustrating, because you are doing such a great job. Oh, thank you. And sometimes it's frustrating. We have an amazing team. And we have a lot more work to do. Fair enough. OK, that's Ralph Salding. Chairman, you have taken you into account-- you just saw a discussion about how to try to value something that is worth a lot more than selling, not about how to promote, not about how to push, but just how to value and get money spectrum. Coming up, hit us with your best shot and an electrified, fast-fire lightning round is next. [MUSIC PLAYING] It is time to have the lightning round. Thank you so much for watching this video. No, no, no. Of course, what's up, except for this play. But play this out. And then the lightning round is over. Are you ready, skate? That is time for the lightning round. We'll start with Tom in New York. Tom. Jim, good evening. Good evening, Tom. I know today, Jim. And how's it going? Well, I'm fine. All right, let's make some money. What's up? OK, listen, Jim, my question for you is on global foundries. I don't like to frown your business as much. It turns out that the only people really know how to make them cheaply is Taiwan, Sami. So if you want another foundry, Taiwan, Sami is the one to do it. Let's go to Bill and Connecticut, Bill. Hey, Jim, thank you for taking my phone call. My pleasure. The stock that I'm talking about is stock symbol S, that's not no one. You know what? I had not been a believer in asking to come, and he's coming after that guy. Comer's really coming after George Kurtz. Holy cow. But I do think Sentinel's picking up some business. So therefore, I'm going to tell you that I actually supported for only for a trade, Matt, Ohio, Matt. Hey, Jim, thanks for taking my call. Sure. I've had this back in a while, the one that I'm calling about tonight. It's done well over the last two months. It got hit pretty hard after I was trading today. It needs some guidance at the Horak called Sentinel-P-L-X. OK, so Linda Rendell has done a remarkable job. Let's understand that. She did not get a good hand. She was not delivered a good hand. I do believe that she's doing a fantastic job. How about the way she covered from that? From that, incredible cyber attack. She, boom, she was right there. And I liked the fact that she rode off the vitamin supplements. They were losing a fortune that that was a bad hand too. I like her. I'm a biocore. Let's go to Dave in Iowa, Dave. Hey, Jim, who you are from Northwest Iowa. OK, I love Northwest Iowa. What's happening? Yeah, 10 years ago, I purchased a couple hundred shares of Altria from my Roth. That shares a double. Rice is almost crippled in value. Fred, where would you put it for a dividend high flyer, please? This is so hard. Look, I used to be Altria's biggest supporter. I knew the CEO. And then, you know, something's happening in your life and you see people die. And you see people die and just connected to cigarettes. And then, you just say, you know what? I can't take the money. I know that they don't care. I know if you buy it, it doesn't really matter. I can't live with myself having seen what happens. I'm going to have to take a pass on that question, though, other people who have a better answer. Let's go to Anthony in New York, Anthony. Booyah, Jim, thanks for taking the call. I love the show. Of course. Thank you, buddy. Yeah, why don't I ask you about Delta Airlines and how they feel about that? I'm not recommending any airlines. I mean, if they couldn't make that money with the extremely full flight in the overhead and you can't get in to move around, I can't get to see it. They take my seat by $100 if I don't buy the CEO. Forget about it. How about Jake and talk to a lot of Jake? Hey, Mr. Kramer, cost football player here. Just wanted to get you the thoughts on alphabet. Oh, D1, D2. Wait, wait, wait. Are you D1? He's done? All right, I mean, D1 player just called in. That's a big deal. All right, alphabet, here's the problem with alphabet. It's my least favorite of the mag 7. Why? Because they don't run the company well. I didn't want-- I like the fact that Jonathan Kanner wants to do one of these some of the part situations. It's just that the problem is he's then the Justice Department. He's not an analyst. If he was a corporate finance guy, if Jonathan Kanner or a corporate finance guy, that stock will be double. All right, is that in? No, give me some more. Let's go to George and Massachusetts, George. Hi, Jim. I bought stock in Ferrari when it was around $50 right between public. The stock is now around $450. Should I hold on to the stock? George, you really need me. Look what you did. You bought it 50. I mean, I'm sitting here nursing the stuff that I own, like some stocks, and I'm down like 20% on. You know more than anybody. Take out your cost basis and let the rest run. But I'm like, George, you're my co-host from now on. I'm getting rid of Kanner. Kanner, what are my co-hosts for today? And that, ladies, I'm losing-- of the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, Kramer took your questions at today's monthly meeting. But he's not done yet. We hear more from you, next. Earlier today, we held our CNBC Investing Club monthly meeting. What's among my partners at Fox and I get together to walk? The club members through the process of how we make decisions for the portfolio. We discuss our current holdings. Now, we take questions from our club members. My favorite part of these meetings is taking your questions. And since we didn't have enough time earlier today to go through all them, I'm going to give you an inside look at what we do for the club tonight show. Now, by the way, if you want to take a look at what you missed and you are already a member, the full video on demand will be at cmdc.com/investingclub/live. And if you like what you hear and you want to be part of next month's monthly meeting, scan this QR code or go to cmdc.com/jointheclub to become a member. I hope you do. First up, we have a question from Nick in Indiana who asks, I'm interested in your opinion on General Motors. It seems all signs have very, very positive under Mary Barra. But the stock hasn't been reflecting that to the level that I would expect. Also, am I willing to think that the automotive industry will get a boost once rates begin to fall? Should I keep holding it? You are right. It's one of the biggest beneficiaries of lower rates because people buy cars on credit, so to speak, one time. And what you need to know is that GM is doing much better than Ford. GM has a big buyback. Mary Barra is doing a terrific job. And I like the stock very much. An expensive stock, good place to buy. Now, let's see the question from Martin who asks, when is the time, if ever, to buy CrowdStrike? Last week, I called the bottom of CrowdStrike. I said it wouldn't go around below 230. I think it's going to be up from here. But I do like Palo Alto Networks more. That's the one that Trust Dones. But I think George Kurtz is going to pull back. Other than Delta, I don't see a lot of people in companies leaving the world of CrowdStrike. It's a love product. Next up, Glenden in California, yes. Both Presidents of the Central candidates have said they want pharmaceutical companies to lower drug prices. How would this affect companies like Eli Lilly? Well, I can tell you, is that Eli Lilly has a GOP just one drug. And it's got so many different things that are helped by it that all we need, if you own Eli Lilly's stock, as my travel trust is, is to get approval from Medicaid in a couple of health care companies. And there's nothing in health insurance and neither president is going to be able to do anything about it. Now, let's go to Gabe in Michigan who asks, with strong earnings, free cash flow, guidance and dividend, Devin appears to be a strong buy. What are your thoughts? I shared similar sentiments to club members. We own Cotara, it's good. I'm wondering whether Devin might be better. And why I say that is because Devin has made a series of acquisitions, giving himself a lot more oil. And I think that Rick Moncrief's doing a good job. Next up, we have a question from James who asks, what do we do with Dell Technologies? But right after earnings just can't catch a bit. OK, listen to me. It's Michael Dell. You will catch a bid. I think you should buy some now and buy some of the goals below 90. You'll get a better basis and you'll be able to ride it up because that is the favorite partner of Nvidia. And that's what matters. Now, let's go to Kim in Arizona who asks, I know gold is at its highest level, but I would like to know if you recommend getting in at this point or wait for a pullback. Also, is it better to buy actual gold, gold stocks or an ETF? I like them all. Gold, you can go to Costco, join up a Costco, buy gold from them. Gold ETFs, very good. Agnico Eagle, best gold stock. They all work. Don't buy it all at once. You can buy the boy in now. Do not store it at your house. Store it at a bank deposit. Next up, we have a question from Jason in Pennsylvania who asks, would Celsius drop you into the 30s? Would this be a good time to buy? We had Mr. Feudley on. I was not sure about the answers. I do feel that the energy drink category has slowed dramatically. I am concerned about that. I'm a fear getting involved in a value trap because if they don't pick up the growth, you don't want to be there. Let's wait for a couple of months where the growth is better. Lastly, we have a question from Mandy in Virginia. Who wants to know, should I name my new puppy Nvidia? Or do you have a name that might suit him better in the long run, long time member? Thank you. Look, I think that we've already had Amazon, a terrific pup. Okay, it was a great, it was a great, straight dog. I would name your, you know, what do I name your dog right now? Oh, gee, yes, there's Nvidia. And there's, oh, that's Raghu. Raghu and we also have Tony. We have Raghu and Tony, Raghu Tony, okay. Here's who I think you should name your dog after. I think you should name your dog Starbucks in honor of Brian Nickel. It's kind of a good name. It's kind of like, you know, from Melville. Anyway, thanks again to all our coars. Remember to join the club ahead of next month's meeting. I'd like to say there's always a more market summer. I promise I'd find it just for you right here on Man Money. I'm Jim Kramer. See you tomorrow. (upbeat music) All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates. And may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable. But neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit CNBC.com/MadMoneyDisclaimer. Learning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success, and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. [BLANK_AUDIO]