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Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 3/28/24
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A T S are subject to risk-including possible loss of principal, alps distributors, and distributor. 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 summer, and I promise to help you find it. Mad money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I'll be with my friends. I'm just trying to make you old money. My job is not just to entertain, but to educate, and teach you. So call me at 1-800-743, CBC, or tweet me to Jim Kramer. Say goodbye to the best first quarter since 2019. A quarter we had a broad-based rally. It was supposed to be impossible, thanks to the Fed's refusal to cut interest rates. And while the quarter didn't exactly go out with a bang, The television 47 points, the S&P gained 0.11%, and that's that dipping 0.12%. We'll go back on this period as to one more breathtakingly bullish interval. This time it wasn't just the Magnificent Seven leading the way. It was a broad range of companies across a host of different industries, which is exactly what you won from a bull market. Why were stocks so strong this quarter? Simple. We had great earnings. The numbers were splendid. The forecast seemed better. And the reaction is the best in a long time. The lesson, if you stayed away from the market because you heard that only a handful of big-name stocks are leading us higher, you missed some incredible moves. If you sat on your hands because the Fed hasn't given us the all clear single, you lost out. If you focused on the earnings though, you prospered. How's the pleasure? And going forward, I expect more of the same. Last night, Fed Governor Chris Waller said that the Fed's no hurry to cut rates. That became the new benchmark of central banking transigence. I think his warning kept the lid on the average today, but you know, I think he's right. All in all, still, it's just a waste at this point to be fixated on the Fed right now. Last night, we got great numbers, for instance, say, and a 17% gain from our age, still restoration homework, and a good report from Jeff. We used the brokerage firm, which had a 52-week high before reversing mid-morning. On top of that, Home Depot made this incredible $18 billion bet on housing. With an acquisition of SRS distribution, that's professional building supply outfit. All in all, good news for the market. A little of the weekend ended up surprisingly over-bought. That's what I'm most worried about in ages. We know Wall Street is basically what have you done for me lately business, isn't it? So, let's talk about our game plan. It actually brings about a handful of earnings reports. They're eclectic, but they could be very meaningful. PVH kicks things off on Monday afternoon. This is the maker of Tommy Hilfiger and Calvin Klein, and he had a 52-week high today. Stock's double from where it was traded before long-term interest rates peaked last October. So many stocks were obliterated by skyrocketing interest rates. So when long rates started coming down and the Fed admitted they were done tightening, it was like PVH could come roaring back. PVH would be an amazing test case of the new quarter because its stock has run so much. Can it keep going higher on better than adequate numbers, which is what I'm expecting? Honestly, you know what, I'm a little stumped here because unlike RH, which soared when it's better than expected a quarter after spending a long time in the wilderness, PVH is coming red hot. Let's take the new temperature after the quarter. Paycheck supports on Tuesday morning. This is peculiar stock. It tends to run up into the quarter and then sells off after the results. But the analysts tend not to like it, which is crazy even when the numbers are good. I figured the pattern plays out again. You get a chance to buy this payroll processor after the pullback. More important though, Paycheck will tell us a great deal about the state of small and medium-sized businesses because those are its main clients. Given that we just got a glowing report from Cintos, the uniform rental service accounts more than one million small and medium-sized business customers. Well, I gotta tell you, I think it can be stellar. The small business segment has been the workhorse of this economy, and I think Paycheck will verify that when it reports. Now, best before we stock in the day out for the first quarter, believe it or not, was the Walt Disney Company, with a 35% gain. I believe that's because of what happens on Wednesday, which is the conclusion of the proxy fight between Disney itself and Nelson Pels, who's seeking two board seats. The company's fighting him with everything he can throw at the guy except Mickey and Goofy, the latter of which pretty much defined the board strategy in this context. When the book is written on this, I think it may turn out to be one of them. Really, the most expensive proxy fights in history. Disney's spent so much energy and shareholder money trying to stop this guy Pels. It's a wonder why they didn't just say, "Come on in!" Then again, the activists involved in this clearly giving the board a real incentive to actually get their act together, which is how you end up with Disney's much higher than expected cost cuts, moving to stock higher. And that's why the stock's been able to roar. The whole thing's been great for shareholders, including my charitable trust. By the way, most entertaining proxy fights in season three of succession. Of course, if I were running Disney, I'd probably just say the business has finally turned around. Pels has nothing to do with it. That's not the whole story. Maybe kind of more of an alternative narrative, but I can't argue with any of that, and it got this stock going like this. Next, we have another how to power play. A reporting Wednesday, that's Levi Strassen Company. Where the stock is going from $12 and changed the dark days of October to almost 20 bucks now. The last time we had them on the show was when former CEO Chip Berg handed the reins to Michelle Goss, Lady of Coles, since then everything's going smoothly. Like the PVH, I expect a good quarter, but the stocks coming in so hot, I have no idea how the market will react. I keep telling you this rally is probably based on deep, including areas that haven't led the way in ages like the master limited partnerships. These are high yielding tax advantage oil and gas companies that used to be among the most popular securities for those who wanted a solid source of fixed income, and they're coming back in vote. One of the best is enterprise products partners, which is a terrific process or a transport of petrochemicals. The stock's now had an amazing run. From 26 to 29 in two months, okay, I know it doesn't sound all that amazing, but don't forget, you also get a 7% yield. On Wednesday, enterprise products will hold an analyst meeting. I think they're going to tell a fantastic story. For those of you who want income, this EPD is as good as it gets. Food stocks have participated in the rally too. Really, they've been amazing. McCormick, the spice company this week, putting up some very good numbers, just like General Mills and Hormel before it. I think the inflation inputs have stopped going higher, but the price increases that these companies put toward the supermarket having to roll back, which means that we might get a fourth food surprise, this time from Conagra. The maker of Slim Jim's, we're well-written by Chris Popcorn, Chef Wheelard D, Healthy Choice, among others, reports before opening Bell on Thursday. The company has struggled late with sales, but I think it produced good earnings this time when the rivers aren't even that impressive. Frankly, with a 4.7% yield, you can do a lot worse. Finally on Friday, we get the labor department's non-form payroll board, and I think we're going to see a very strong set of figures. The economy still has a healthy head of steam. We just haven't seen the kind of mass layoffs that so many expected and the hard landing camp has been left wanting. In my view, the market's now well-prepared for a hot employment number, so if the labor report is more lukewarm, we'll go into early season with a pleasant backdrop. Bottom line, keep an eye on the unemployment report because everything else that's coming next week pales in comparison, even the no-holds-barred Disney proxy fight. Let's go to Isaiah in New Jersey. Isaiah! Hey, Jim, how are you? Big fan. I'm doing well. How about you? Great. Just had a question about RTX. What's your overall sentiment about that company and how do you sell it? All right, Jeff Marks and I were marveling. This has been an incredible comeback story. Believe it or not, I mean, look, it had a problem with engines and a problem of a cyclical, but this stock is all the way back to '97, yet it still only sells at 18 times earnings. Our main bush on RTX is a way to play the aerospace cycle, given the fact that Boeing is so bad. How about we go to my home state of New Jersey, Kyle in New Jersey, Kyle? Hey, my best friend, Jim Kramer. How you doing, man? All right, sunshine. How about you? Listen, next time you're at the Jersey Shore, if you're down here this summer, without Jersey Shore, I want to take you to dinner. Are you and your wife? I look forward to that. I'd like to join you for dinner. Maybe we got a little tag. My parents having to tell you a restaurant in Ocean City, so let's go. Yes! Yes! I want to go there. What's the name of it? People tell me. What's the name of it? It's Luigi's on 9th Street in Ocean City. Luigi, write that down. Okay, I'm going to help you. All right, Jim, I swirl myself after the SPAC craze. I would not get involved with another SPAC, but I thought this one was different. I've talked to you about it a couple of times. I feel like maybe the only person I got rich on this one was Chamos. And after listening to your interview with Noto last week, I figured, you know, maybe he's telling the truth. Are you still buying so far? Kyle, I believe in so far. I believe in Noto. I know it's been a... but I've got to tell you, I think it can come back. I really do remember, before they just exercised, before they issued the stock for the convert, it was flying. And they actually did shore up their bounty. I say you've got to stay with so far. All right, look, we've got to keep an eye on next week's jobs important, because everything else pales by comparison, even the Disney proxy fight. I don't remember any time. I'm sitting down with the CEO of Walgreens. He's there for earnings to find out what's next for that company. Then, ahead of next week's spin-offs of 3M and G, I'm taking a look at some previously successful splits and could be worth a second look. And, missing investing close monthly media yesterday, I'm going to give you a sneak peek into what it's all about. So, stay with Cramer. ♪♪ Don't miss a second of Mad Money. Follow @ChimCramer on X. Have a question? Tweet Cramer. #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com. ♪♪ One in eight. That's how many people have worked out at McDonald's, who served millions the best Big Mac and best birthday party they've ever had. We haven't just seen kids graduate from a happy meal, but have gotten help graduating themselves because they know the skills learned here. Bienvenidos, welcome to English Under the Arches. Can help you grow from here or keep growing here. One in eight, start at McDonald's. And where you start, stays with you. In life, we're often driven by the search for better, but when it comes to hiring, the best way to find candidates isn't to search. It's to match with Indeed. Indeed's a matching and hiring platform used by over 300 million global monthly users, according to Indeed data. Need quality candidates fast? Use Indeed for scheduling, screening and messaging, and you'll connect with candidates in no time. And it's not just faster. 93% of employers agree that Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. And here's the best part. Listeners of this show get a $75 sponsor job credit, giving your jobs more visibility at Indeed.com/MadMoney. Just go to Indeed.com/MadMoney right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/MadMoney, terms and conditions apply. Need to hire? You need Indeed. We're making these results from Walgreens Boots Alliance. The drugstore and chain reported this morning, posting a clean top and bottom line beat, but management also lowered the high end of their full year earnings forecast, and they said they're taking impairment charge in their village MD business. More important on the cop school, new CEO Tim Wentworth laid out his turnaround plans, which is what allowed us to talk to rally more than 3% today. This potential comeback story is all about new leadership, so we are lucky that we get a chance to speak with the architect of the turn, Tim Wentworth, the CEO of Walgreens Boots Alliance. Take a look. Tim, I want to thank you first of all for coming on and what feels like kind of day one of the new Walgreens, where you're trying to simplify and strengthen, and I want to know what to simplify and strengthen what you think will look like over the next year. Well, Jim, thanks for noticing, because that's exactly what we're doing over the next year. You will see us continue what we started today, which is, you know, today you saw us stop doing, for all practical purposes, sale leasebacks. You saw us basically say, our St. Korish shares, we're going to sell those into the market as we move out of that position rather than doing complex variable prepaid forward sorts of things. So some of it's on the accounting side, but more importantly, it's really getting focused operationally on the underlying parts of the business that are going to drive our future. And so, as I was able to announce today, we're knee deep, frankly, if not neck deep, in an analysis of our entire book of business and the different pieces to look at what is going to drive our future growth, what gives us synergy, what is in a marketplace that we can win in, and if you can't answer those questions positively, what's the way to then exit our strategies in a way that's most effective for our shareholders? So, a year from now, I think you're going to see a company that's even more focused, probably has a few less of the things that we have now, but also has doubled down on some things where we see a real bright future, including, and I think importantly, Jim, the retail store, the back of the store in the pharmacy, which today you heard is continuing to do well, and the front of the store, as we continue to evolve sort of what that model has got to look like in order for us to win overall. - Okay, well, let me give you a sense of what I get after I read the conference code. Obviously, it's a tough conference code to read. I'm trying so hard. I see a chip filet model of incredible service in the back where pharmacy is where I want to go, and up front is your incredible private brands that you make a lot of money. I don't see a lot of cheese, it's there. I don't see a lot of bad stuff for you, and I think that you are going to be the ultimate in terms of figuring out how the customer is going to get the best price for GOP-1 and everything else. How's that for a version? - I think, you know, if I were hiring ahead of strategy, Jim, I'd bring you on board because, in fact, what you just talked about is very much how we think about the business, which is A, the back of the store, and listen, my family loves Chick-fil-A. I've used them as an example of great service. We believe that that's something we're delivering today, which is why we are so successful, both as a partner for pharma and as someone that people trust to actually give them the vaccines and to the other things that we do at the back of the store. But if you come to the front of the store, it's a process that we're in the middle of in terms of really relooking at the role of private labels. We launched almost 40 new private label products this quarter, for example, and as well, Jim, the service, and the, I hate buzzwords, but the omnichannel experience for our users, and something that we didn't talk about before, but I love to talk about is that over 80% of our online orders, where you're home, you go to our app, you want some things from your Walgreens, are delivered over 80% within one hour. And so we've got a customer experience, whether you come into our store or whether you need something delivered to your home that's going to be unmatched. Wow, I was, my next question was going to be, "How are you going to beat Amazon?" I don't have to worry about that because Amazon can't touch that. They can't, they can't go that fast. Congratulations, you know, Jim. Let me tell you what, I love Amazon. They set the bar and they have driven lots of innovation and lots of industry that they have forced us. You know, would we be doing one hour delivery, but not for Amazon and Instacart and other things? I don't know, but what I can tell you is, our consumers have been trained to expect better. We're giving it to them, and the difference, though, is because I don't think we'll beat Amazon because we're one hour and they're two or they're 10. We will beat Amazon because of the human interface that we offer in communities and neighborhoods, 8,600 locations today, where you can come in if you actually are getting a drug that you want to talk about, if you have a health concern, if you want to get an over-the-counter product to go along with your drug. Those are the things that I think are going to differentiate. It's not just the fact we can do it in an hour. Okay, well, that means to me, Tim, that right now, when I go to a rival of yours, the pharmacy, sometimes they're close, which I have regardless. Odd, because I need my medicine. Are we going to be able to see enough pharmacists at Walgreens that I know if I go there, I'm going to be treated actually by a pharmacist? Yes, and let me tell you why. First of all, we are actually working with a group of deans of college pharmacy from around the country, 17 of them, to actually remap the workplace of the future in community pharmacy and then re-engineer curricula to actually deliver candidates to that model, and we are going to be the preferred place for a pharmacist to come work. But secondly, we are removing massive amounts of work from the pharmacists that are low-value work, whether that's counting pills, using our micro-fulfillment centers, or we have other experiments going on where, in fact, you can actually see or talk to a pharmacist that's not in the store, even as you're in the store, in certain states where the law allows us to have centralized pharmacy like that, where we can take one person to make them very efficient, touching many stores in the patients in those stores where they need counseling. So we think designing the workplace differently, we think designing work differently, we think engaging with the community that's creating tomorrow's pharmacists in a way that's constructive and as a leader are all going to position us to be able to have the workforce that we need to deliver what you would need when you come into the store. That's certainly not the way it is now. That would be terrific. Now, let's talk about Village MD. Let's talk about the so-called Doc in the Box if we want to denigrate it, or convenient doctors want to be right. You're going to go individual by individual alpha. See which ones are profitable or is that everything on the table? Because I know there's some big charges. Sure, sure. So you saw we took the charge this quarter, which again, I would differentiate Village MD from investment that we've made, and that is worth less today than it was yesterday in terms of our balance sheet because we have written that down. But then there's the actual providing of the service, whereas I announced they've actually had a good quarter, grew by almost 19%. They continue to deliver on their model, and so we like very much working with them alongside them to capture the scripts, keep those patients' adherence that they're taking risk on, and so forth. And so from our perspective, while I've been very clear, we view it as an investment. We are not going to add to that investment in terms of where we deploy capital, but by the same token, we view them as a terrific sandbox to create additional services that are going to benefit other provider groups as we move forward. In the meantime, what a gem this boots is. Now, when you've got the front of the store doing incredibly well, I know that I think there were people wanting you to give away boots. Maybe boots, 2000 stores, maybe this thing is a store of the future. You know, boots has responded to its unique marketplace terrifically, and you only have to, the reason I'm one of the reasons I'm super confident about our front of the store kind of revival, I'll call it, is because once you focus on something and put really good people on it, you're going to get results if you've got the right strategy. Boots five years ago was not doing particularly well, and today, as you say, they are setting the benchmark in the UK and in parts of Europe as it relates to what a retail pharmacy that's very front-end sort of centric can deliver. They've had phenomenal results, their leadership is terrific, and we saw them again, this quarter grew again. So, yes, they are a model. Also, the back of their store doing now treating patients for seven different conditions, treating them, not just dispensing, but able to interface with the patient as a pharmacist, diagnose, write the prescription, and take the load off the primary care of physicians in the UK. This will take off, I forget the number, it's more than 10 million visits that will now go away, and frankly, it's better for the patient, it's convenient, it doesn't threaten physicians. We see what's going on there as a really interesting dynamic that we can potentially replicate here as we push to have pharmacists viewed as true providers and reimbursed as true providers. Again, that would be amazing. Now, I didn't even talk about the thing that is your strength, the express grips, the way you're going to handle reimbursement. Mary Lynn Gasky, a huge coup. You are basically going to reinvent, I believe, how much we're going to have to pay as customers. Is that possible? I think so. And the good news is I think we will have willing partners in some of the PBMs and the payers to do it, Jim, because I think the noise from the market, the clear message from the market, set aside the regulatory stuff in Washington. Just the consumers and the people who pay for healthcare, they want it to work differently. And the good news is that will benefit us and it will benefit the payers when a patient actually goes into a drugstore and gets, comes into our store, gets what they expect at a price that they understand, and that's transparent and that's close to what their plan is paying and is rational. Those are things that I think the pull from the marketplace will actually exceed the push that we could ever do, and it's going to create a much better aligned system. All right, last question. You addressed shrink. You didn't give us a number, but can you make shrink to be something that you and I will not be talking about a year from now? We are going to work. We are working really, really hard to do that. And again, there are a number of pieces to that. The one I would just double click on, Jim, is, you know, we talked about delivery to home in an hour, just a moment ago. When we look at the stores that are really struggling, and again, you got to break shrink into pieces. You've got this true organized crime element, and then you've just got pilfering, right? And the opportunity is, you know, shrink is not equal across all 80-some-hundred of our stores, right? There are a subset of stores where we see it as an issue and what we are able to do using home delivery, using potentially a different model inside the store, it may not be as good a shopping experience as if you just come into the open store that we may have in a suburban corner, but by the same token, we'll be able to serve a community where it's a bit more challenging to do that in a way that's safe for the community, safe for our employees, and would reduce shrink meaningfully by basically, I don't want to say locking the door of the store, but meaningfully managing the store experience more closely. I mean, I just say that I saw you in January at the JP Morgan conference where you had just come in, and your knowledge of this organization and what has to be done is just, I don't know how I can say anything other than this, it's just excellent that you brought to us. Excellent, and I thank you so much. It's Tim Wentworth, he's the CEO of Walgreens Boots Alliance. I knew this man would come up with a solution. It's still a work in progress, but it's unbelievable. Thank you so much. We'll be back tomorrow. After the break, Fortune favors the soul. This corporate breakup spun gold for investors, but not in the way you might think. Kramer explains. Next. The spirit of performance defines Acura, and now it's electric, introducing the all-electric ZDX, Acura's most powerful SUV yet. While what powers their cars may change, the energy that makes Acura never will. Crafted using the same formula that brought them electrified supercars and multiple MSA championships, the ZDX has tracked tested performance that packs an energy all its own. With a premium bang and olefson sound system and up to 313 mile range on a single charge and a type S variant with an estimated 500 horsepower, the ZDX is everything they said electric could never be. It was built with the driver in mind, just like Acura has been doing since the beginning. We could talk all day, but the only way to experience this electric performance is to drive it yourself. Unlock the energy and order yours at Acura.com. Let's talk about spin-offs. Earlier this week, we spoke today at Bander. He's the CEO of Masterbrand, which the cabinet business was spun up by the old Fortune brand's home and security at the end of 2022. At the time, most investors figured it was a brilliant move, simply because it allowed Fortune brands to spread its wings and become more of a growth company, rather than being held back by the more stained cabinet business. Yet since the breakup on December 15th, Masterbrand has rallied in astounding 145%, trouncing Fortune brands, which is up 47% over the same period. It was that unloved spin-off that gave you the biggest gains. The business that Fortune brands wanted to move on from, of course, it has actually worked out for everyone, considering the incredibly vicious Fed-Titing cycle. And you know what? This kind of thing happens a lot. In large part, because breakups tend to benefit everybody involved. As Wall Street prefers smaller and more bite-sized companies, they're easy to get their arms and heads around. Let me use some examples of some unloved spin-offs that end up bouncing their former parent companies. Pretty interesting. For years, I've marveled that disparity in performance being lamb-western. That's the king of frozen potato products, like French fries, and the company that spun it off, Conaggler brands. Lamb-western's more food service-oriented, while Conaggler is a typical packaged food play that's now mostly focused on stacks in the frozen food aisle. When that spit-off was completed, and that's way back in November of 2016, Conaggler's CEO said, "This marks an exciting new chapter for Conaggler. We are now a pure-play company with a renewed focus on capturing growth and driving shareholder value." Just like we saw with the master brand, Conaggler couldn't wait to get rid of lamb-western's slow-growth frozen potato business. But you know what? Since November 10th, 2016, when lamb-western's shares began regular weight trading, the stock is up a cool 251 percent, while Conaggler actually is going down in price. You still have a modest game when you include the old important dividends. Still, nearly eight years of nothing is a sub-optimal performance. Meanwhile, lamb-western's been a juggernaut, even though we went through a global pandemic that really hurt the food service industry in the interim. In the end, people love French fries. Again, Conaggler's right to spin a flamewester, but only because lamb-western was severely undervalued when it was buried within a larger company. Hey, coincidentally, both companies report next Thursday. Let's see if the classic food conglomerate can, at last, beat its potato-headed stepchild. Who else fits the pattern? A couple years ago, exolom, huge regulated utility, decided to break up with its far less consistent power production business. They ought to be spun into office, constellation energy. Remember, constellation is all about nuclear with a wind and solar kicker, but back then, energy prices were low and nuclear was seen as a dead end. That cactus was already starting to change by the time the spin-off was completed in February 2022. Not only did traditional energy prices rebound, but nuclear got some major goodies in the so-called inflation reduction act, which passed a few months later. Overall, nuclear power is seen in a much more positive light these days, because for now, it's the only reliable way to produce carbon-free energy at scale. A lot of companies want green energy, can't beat it. Amazon Web Services just bought a nuclear-powered data center campus in Pennsylvania, and that's why constellation energies give you a mammoth gain of nearly 250% in the lower over two years. Well, excellent is down over the same period. Constellation is supposed to be trash. It turned out to be treasure. We've seen the same dynamic from another big breakup that was completed last fall. When Kellogg spun out its North American serial businesses, WK Kellogg, while changing its name to Kellanova, a company now largely focused on snacks. Everybody thought this was about the company, Jealousy, and slow-growth serial business in order to go all in on its snack space, which was beloved at the time. WK's Kellogg's stock, it dropped like a rock in the first few days of trading. On September 29th, all the way down to 10 bucks and change on October 4th, its third day of regular-way trading. It seemed like nobody wanted the serial business. But if you tuned out at that point, you missed out something remarkable. WK Kellogg has made a huge comeback. The stock's now at just under $19. That's up in incredible. 41% since it started regular-way trading. Kellanova's up just 8%. The house of pain. Over the same period, it's the market, perhaps because of the weight loss drug bandwagon has moved away from snacks. Anyway, you slice it. Big surprise. So why is it that unload spin-offs often outperform parent companies? Sometimes they're unique circumstances, like the Constellation Energy, where they kind of get lucky. Energy prices roar, nuclear power came back in stock, spending decades as a prior. Sometimes the part of the business that had been outperformed was actually just starved for resources before the breakup. Resources didn't get because the other divisions gave management better returns on their investment. Overall, though, I think expectation can just get so low for the more undesirable business that if the spirit does anything other than fall flat on its face, it's stocking us some nice gains. And that is the story about WK Kellogg. When the unloved serial stock was bounced around its lows last October, it was selling for just five or six times the forward earnings estimates. That's a very cheap stock, even for a company with little in the way of growth. When WK Kellogg announced his first dividend on November 2nd, we found out that this darn thing was yielding north of six percent. Boy, boy, boy, boy, boy, boy, boy. Not only was that a dividend of a major sign of confidence. Wrong. It also gave you a terrific reason to buy the stock, even if you think it's a no-growth stock. Plus, just because the serial category is some challenges, that doesn't mean that WK Kellogg is some sort of swamp-a-dick operation. This is the house of timeless brands. They frosted flags, fruit loops, and rice crispies. Always some newer, better-born, year brands like Kashi. This company now reported two quarters since the split, and both times the numbers were outright good, so the stock is sore. But even after its friend, WK Kellogg still sells it roughly 12 to 13 times estimates, and it's got a 3.4 percent yield, which is much more reasonable for a packaged food company. What a star. So why bring this up now? Because we've got two major industrial break-ups coming next week. They're going to be gigantic. On Monday, the trouble 3M will complete the spin-off of its health care business as SoulVentum. We watch that one closely. And then on Tuesday, General Electric is finally spinning off its power renewables division as GE Bernova. I am so excited about that. Here's the bottom line. I'll cover both of those splits in depth next week. For now, I just want you to keep in mind that these break-ups tend to be good for all involved. Sometimes the most unloved spin-offs produce the best performance. House of pleasure. Craig in Connecticut! Craig! Hey Jim, big fan of the show. Thank you, Craig. What's going on? I've owned the Whirlpool since March of '22 when it hasn't done well. It seems to be moving in the right direction recently, so my question is, at this point, should I cut my losses and sell it or hold the line? Okay, I have to tell you that I actually think that Whirlpool is okay, but I want to recommend to you instead to go into Stanley Black and Decker, with a 3.3% yield and much more upside. I thought that the Whirlpool reorganization in Europe was not what I wanted, so Whirlpool's fine. Whirlpool's fine. But I prefer Stanley Black and Decker. All right, look. These think company break-ups tend to be good for all involved, and it's the most unloved spin-offs produced the best performance. Much more mad moneyhead. The Dow just had its best first quarter since 2021. I'm taking a look at the top performers and the list might surprise you. Plus, yesterday, we held the monthly meeting, exclusive for CBC Investing Club subscribers. Tonight, I'm giving you a taste of the club, answering some leftover questions from club members. And then, of course, oil calls, rapid fire tonight's edition of the LIDING ROUND. So stick with Kramer! This week, my colleague Jeff Marks and I held our monthly meeting for the CNBC Investing Club. We went through our latest charitable trust holdings, and I gave my unfiltered thoughts on our positions in the market. We also took questions from club members, which is, you know, my favorite part of the whole shoot match. We never have enough time to get through as many questions as I'd like. So tonight, we're going to take a few more and give you a taste of what we do for the investing club. Now, if you like this sort of thing, and I'm sure you do, be sure to join the club. You can scan the QR code with your phone or go to cbc.com/investingclub to sign up. I think this thing's easier. I've learned how to do this because my daughter showed me about a week ago. It's really easy. All right, let's take some questions. First, we have James in Illinois, who says, "I've been watching since the ticker tape was in fractions and have the VHS tapes to prove it. Good for you. I've done very good here like you, Chipotle. Why haven't you recommended for the club, Booyah?" The reason I haven't recommended for the club is because, frankly, every time I wanted to get into it for the club, it moved. And the lesson here is that I was to cherry. This was a great stock. It is a great stock. And I recommended it first after that terrible airborne illness. And we knew from a couple of other stocks that the companies had the same problem that it was going to go up. So that's one is on me. It was my bad. I never got in. Even I've had them on many times. And it's a good learning lesson. Sometimes you can't be as disciplined and you have to let go a little bit. That's the lesson of that one. Glenda in New York says, "Hi, Jim. I'm a preschool teacher, fantastic, who's been hooked watching you every night and hopes to improve my teacher's income. What are your thoughts on Tesla? Should I just take the loss down 46.41 and move on to invest elsewhere?" Well, I'll tell you, this is a very difficult issue, Glenda, because this was the worst performing stock in the SB500. And I'm really reluctant in the first quarter. I'm really reluctant to tell someone to sell it after it's the worst. Let's hold on. By the way, micron is a stock that used to be worst and best and worst and best. I mean, I didn't think the Tesla could be like that. Don't sell it down here. Now we've got cherry in the US, kind of a broad place, who says, "I took your advice on hogs, get slaughtered, and sold SMCI in time. Thank you. How do you maintain discipline to sell when you need to, when your nature is to hold on a little longer for more gains?" Well, this is the exact opposite, frankly, of the chipotle, which is that sometimes what you have to do is just say, "You know what? It doesn't matter. I'm up. I like to use these." It used to be 25 percent. Up 50 percent, I tried to take off between 10 and 20 percent of that stock and then let it climb. And that was the old cashmere sweater line, I used to tell you. When I used to go to the slots and ponies with my mom, she always would leave after we had won to go buy a cashmere sweater. Go take some money off and buy the cashmere sweater. Let's go to Danny in Canada, who says, "Being from Western Canada, commodities are a big deal in our economy. The price of gold has never been this high in dollar terms, but the price of mining companies shares have never been this low. Why have mining shares not gone up? Because the incredible amount of intensity to get to the level of gold that is commercial, the spending is so high. The labor is so high. The equipment is so high that it turns out that the stocks did not do the job. But what did the job was bullion. And I think that's terrific. If you only do bullion, you can always do the ETF. I believe in gold. I think you can have between 5 and 10 percent of your portfolio in gold as a hedge. By the way, I feel the same way about Bitcoin. So we will feel I'm anti-Bitcoin. That's completely untrue. I was anti-simmed, bankman free. Now we have Brad and Florida, who says, "Buyajim." Thank you for all the work that you and the team put in day to day. The team does that. That is very true. My question is about the home builders. Have we missed the window on toll brothers and are even builders' first source? In your opinion, do they have more room to run? By the way, Home Depot bought a company today, SRS, that I think is to compete against builders' first source. I think the toll is still a good buy here. We own Stanley Black and Decker for the club. I think it's got a better yield, and I think it's down a hundred points. This is the better one to buy. But I have to tell you, Toland are our fantastic companies. You're never going to go wrong on either. We feel that it's too under-versified to own toll and Stanley Black and Decker. But you know what? These are all fine companies. Now let's go to Georgia and Ohio's. This apple is being sued by the DOJ. That's part of justice. This represents a serious overhang of the stock price, at least in the near midterm. Does it order your own it, don't trade it thesis, given that the stock may lag the market sector over extended period of time? First of all, the stock was down 10% in the first quarter, which we know is a very good first quarter. I'm not discouraged. I say, own it, don't trade it. I do that because I've said ever since, literally, about 150 points. I've been saying this. It has these periods of underperformance. The Department of Justice, I suit, was filled with errors. I thought it had very little merit to it. Apple will file a motion of dismissal in the month of May, and I don't think that will be granted, but I don't think it's nearly overhang that other people think it is because the case is fatuous. Now we have Joseph in New York. He says, I was impressed with their interview with Medtronic CEO. What would it take for Medtronic to enter the portfolio or bullpen? I told Jeff, Medtronic has got to be in the bullpen. It's a terrific situation. We have to take something else out though. We just, we had new core in. New core took off, not only Chipotle. I'm being perhaps a little bit too, again, disciplined, but the problem is we have so many positions. I said we have to leave a position in order to take one in, but your absolute Medtronic was the medical star, the medical star of the entire GTC. Jensen, I was thinking about the picture, I just saw Jensen in 2003 tweet. But anyway, that was the star of the medical part of the show. A big thank you to everyone who submitted their questions. You're why we do this. Again, if you want to follow a woman every buy, every sale, and every piece of commentary, remember the sales and buys are all done by you ahead of them on weekend. You just have to join the club. And I'm very proud of the club. I'm very proud of Jeff Marks and our team for making everything work so well. They have monies back here. Coming up, hit us with your best shot. An electrified, fast fire, lightning round is next. [MUSIC] It is time for the lightning round. [INAUDIBLE] And then the lightning round is over. Are you ready? [INAUDIBLE] In Minnesota, Eugene. How are you doing? I'm doing well for you. Pretty good. The bucket is for a mane. Okay, corn mane is right at the heart of this infrastructure bull market. I keep talking about because of waste water. It is perfectly positioned. Believe it or not, even though it's just been a horse, it can go higher. I need you to go to Rebecca, New York. Rebecca! Hello. It's such a pleasure talking to you. I've watched Eli and Lily a while ago, and also five. Now, Eli and Lily are doing very well, and five is not. So, five is not Eli and Lily. You know Rebecca, no, no. Rebecca, let's be five years, six percent yielder. I know it's been, what can I say? It's been the worst. But you know what? Mark used to be bad for a long time, and Rob Davis came in, turned it around. Let's give Pfizer a chance. They got this really good acquisition that I like of CJ. Let's give him some time here. I need to go to Tom in New Jersey, Tom! But we are Jim, this is Tom in Berkeley Heights, New Jersey. Berkeley Heights, around the corner from me for heaven's sake. Amazing! I'm calling, I'm calling to ask about FFL, formerly known as ship finance and their dividends. People like these things. People like these bull carriers right now, because a lot of problems. Look, do not overstay your welcome. This has been a big run, but it's going to go a little higher. I need you to go to Blake in Tennessee, Blake! Hey Jim, I'm a club member who wants to say the shipman, and Jeff knocked it out of the park with Wednesday's monthly meeting. He sure did. I told that I said the same to my wife, that Jeff is a powerhouse. How could I help? Hey, how's Jim? I wanted you to put on this stock that just continues to run and run. It's a good stock to get in now on. We're a pullback. It's Lidos. Every time you go through one of those, when you go to the airport, I mean, you see it Lidos. It's a great, it's a defense contractor that is actually not struggling to get money out of Congress. I think it's a winner. I don't want to get off that horse yet. Let's go to Dennis New Jersey, Dennis! Hey Jim, how are you? I'm doing well, how are you Dennis? Good, thank you. Second time caller, founding club member. And I got a thank you for that because I never traded a stock man in my life. All right, we're teaching, we're teaching, we're teaching, we're teaching! You're crushing it. Jim, we're doing some research on one of your favorite land, and came across another one that wanted your advice on KLA-C. KLA is a very good company. I am partial to lamb and Tim Archer. I think he's doing a little better job at KLA. Not finished. He's an excellent company. Let me throw, give it three some. I like applied materials here too. I think applied materials is excellent. Okay, let's go to Rachel in New York. Rachel! Hi Jim! Hi! Rachel, how you doing? I'm getting well, how are you? Excellent, thank you for asking. Thanks for taking my call. I watched it every night with my family. We love it. Aw, thank you Rachel. I was hoping for your thoughts on Chevron. Which one? Chevron, that's my worst copy. I'm not going to leave it here. It's got 4% yield. It's doing pretty well. Let's stay alone. My worth and Chevron and that! Ladies and gentlemen, I'm the lightning round! The lightning round is sponsored by Charles Schwab. Coming up, we're playing until the final whistle. Don't start your weekend until Kramer kicks off. No huddle. Next. Sometimes it feels like everyone in this business is always fighting the last war. How many times have you heard that this market's led by just seven stocks and nothing else matters? I mean that is still the conventional wisdom, isn't it? Even though it hasn't been true for the past five months. We just closed out one of the best first quarters in ages with a broad base advance that was a classic continuation of the last two months of 2023, when all this stocks that had been crushed by high interest rates came from warring back. In retrospect, that was the moment to buy pretty much every stock out there, other than in the Magnificent Seven. In fact, with Apple down 11% and Tesla off 29% the bank seven didn't even outperform the averages this quarter. Tesla was the worst performer in the entire S&P 500. But what's been working? When I tell you that the top five stocks in the Dallas quarter, I bet you'll be shocked because it's the most broad-based old company I can recall. First, there's Disney propelled by Nelson Peltz's proxy fight. He's trying to get a pair of board seats, which is put a gun to management's head. I think that's why Disney's finally gotten his act together and controlling costs, although I don't think management shares that position. Reasonable people can disagree if they are reasonable. I've been pounding the table on this one for the investing club for ages. So it's great to see Disney pan out. I only think both Bob Auger and the CEO and Nelson Peltz for this big active performance. Even as the proxy fight has come at a large cost to the company. But you know what they say, in the NFL, a W is a W, no matter how ugly. Second best performing the Dow is Caterpillar, a stock that we took a tremendous gain for the travel trust, although we left a ton on the table. Why? Because CEO Jim Obelby is doing such a terrific job. He's capitalizing the big data center built out along with the massive infrastructure spending coming from the federal government. I know Cat seems like a gimme in retrospect, but many of the analysts fought this one to the nail. I think they misjudged how positive it would be for Cat when the Fed decided to stop raising rates. And they also misjudged what a candy operator Obelby is. What a great choice for a CEO. Remember, we don't fight the Fed, we don't fight the tape. But once the Fed came in peace, Caterpillar stock, well, it's sore. The third best performer might be the Dow stock that the Bears were most negative on coming into the quarter. American Express. MX thrived in consumer spending, especially travel in Asia. The part of the economy is supposed to be rolling over with rates this high. It did the exact opposite. The restaurant spending, growing double digits, surprisingly small number of defaults, spectacular combo from Steve Squeery, who's doing a monster good job at the helm. I think this rally took more people by surprise than even the running Caterpillar. Again, what a great quarter. Number four is Merck. We had CEO Rob Davis on last night, and his company announced a dramatic breakthrough against an often fatal disease, pulmonary arterial hypertension, tends to strike women in the prime of life, ages 30 to 60. That drug, now named Windrevere, might actually produce as much as $10 billion in peak sales. Berg's been riding a wave of problems from Key Trude, its amazing cancer drug, has tremendous pipeline of potential blockbusters, including some that might come from the breakthrough work demonstrated by Windrevere. I think the stock has much further to run. Finally, Traverse, the insurance company rounds out the top five performances, rates have been going up for most lines of insurance, something that's been deviled with Fed because these insurance increases our major component of inflation. This is one of the handful of industries that is preventing the Fed from cutting interest rates. So let's see, last year we were led by a handful of tech companies, but we're still, we're finishing the first 90 days of 2024 led by an entertainment company and Earthmover, a credit card business, a huge pharma giant, and a colossal insurance company. Now you can say that's one eclectic list or you can reach the right conclusion. This market came in like a lamb and it's going out like a lion or a bull. I like to say, there's always more markets somewhere. I promise try to find it just for you right here at Mid Money. I'm Jim Kramer, see you Monday, last call starts now! 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/Mad Money Disclaimer. Your teenager's behavior might not just be a phase. Many teenagers suffer from undiagnosed depression, due to missing signs like changes in mood, loss of interest in activities, and difficulty concentrating. I MATTER offers free, confidential youth therapy. They can choose the therapist they feel comfortable with and whether they want to speak in person or online. Visit imattercolorado.org to learn more. (upbeat music)