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 4/25/24
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So call me at 1-800-743-CBC or tweet me @ you Kramer. It takes a special kind of stock to do well when the economy is slowing. Well inflation just won't quit. I mean typically this wheat grows domestic product number. Just 1.6% growth anemic and a surging inflation number connected to the GDP is a up 3.7% bad combo. Which is why the Dow tumbled 307 to hug points. This is being lost 0.46%. Now that's our job 0.64%. But you got to tell you it was much uglier at one point today. If the Dow was down almost dumb where it went out as we heard all day about the slower growth at higher inflation and that meant the dreaded term stagflation. And that environment is toxic for stocks. The House of Fame. On top of that one of the markets greatest leaders met a platform. It's got crushed today. I mean just annihilate it. Now because of its earnings which were stellar because it committed a huge amount of spending most of it directed toward generative artificial intelligence. What's bad for the meta goose though is good for the Nvidia and Broadcom gander which is up 29 points and 37 points respectively as they're going to get a huge chunk of capital expenditure budget. I still believe in meta more on that later. In the end this decline was all about a slowing economy and this would persist inflation which drove up buying yields and bought sellers out throughout the day. So you got to ask yourself who can win in this environment. Are we done? We just fold up shop? No. We just have to work harder. Let's look at today's sparse winners. First two of their right in our faces. Let's talk about Microsoft and Alphabet both of which are flying in after hours trading. Microsoft beat the estimates for every major line item with 17% revenue growth which is incredible. 20% earning growth that's looking good. Their Azure cloud business growing nicely again. I am much better than expected. Their integration of artificial intelligence needs to be helping them sell enterprise software which is Microsoft's bed and butter. These AI workloads are incredibly strong for them and they are seeing stability even in the PC market. Yes, it's stabilized. A lot of stocks you can buy if that's the case. It had been pretty awful. Nice quarter. That's for Alphabet. Wow. They finally did it. It was a magnificent set of numbers. Now, what are the stocks so strong? Searching YouTube core businesses were much, much better than expected. Hey, they finally broke out some numbers for YouTube and they were spectacular. AI business incredible. Google Cloud was great growing it. 28.4% of the other big boys authorized to get this $70 billion buy back to the strength share account directly boosting the earnings per share and hallelujah. A dividend. All right. So it's only 20 cents. Doesn't matter. It's a great sign and the market loves it. Unlike matter, while they did say they'll be investing heavily in both their AI business, they also said they'll be expanding margins as they do so, which is why Alphabet still gets credit for its credit results. I haven't seen a quarter like this. I can't even recall one where they delivered on everything we wanted. It's like they listened to the show. Next, there's Merck. All right. The secret here is key true. It's the most revolutionary anti-cancer drug in history. Each rate of sales came in at 6.9 billion, 6.1 1/4. That's up 24% in constant charging, which is astonishing. As Merck just keeps finding different types of cancers that can be treated by this thing. Of course, drug patents don't last forever, which is why Merck's been buying up new medicines to combat both cardio and immunological disorders. This stock, which gave you a 3% gain today, might be perfect for the current moment, given how it raised revenues, raised margins, insured and terrific new drug pipeline. I've got to go out on a limb here a little bit. Rob Davis is so great to see. But I think they could make a lot of cancerous chronic diseases that would otherwise be fatal. Fourth, you've got to take it with the Union Pacific. I mean, here's a railroad that this had been this. And now it's this. The triple center numbers. Maybe because it's so much better run. Now it's CEO Jim Venice running the show. This guy started as a break man, by the way, 40 years ago. Don't show a lot of that in America. Last summer, under pressure from an activist hedge fund, the board picked then a protege of the late Hunter Harrison, who practiced what's known as precision scheduled railroading, PSR. This is a method of railroading that makes more money by getting the trains to run with maximum efficiency. Yes, trains on time. Even a slower economy in the Union Pacific still can deliver an excellent self-help story. Hence the 11-point rally, it was spectacular. And that is the real deal. Fifth, we've been promoting the performance of the gold miners here versus the underlying commodity. But this morning, Newmont Reminders not old gold companies have created an equal. Last year, Newmont bought newcrests. And I figured it'd just be one more sad, sad, gold deal. Almost all of them were bad. Nope, it was able to produce much more gold than expected lower costs. And that's how you outrun the economic backdrop. Faster revenue growth and lower expenses gives you a 12% rally. Six world equipment shut the lights out again. Maybe people are used to it because it was up a lot at the beginning of the day and started coming in. But it still finished positive. It's right in one of the great ways of cruising with record bookings. So much was good here from the return of high-healing Chinese customers. They're back to the fact that the repeat rate here is 30% higher than it was in 2019. There are some powerful secular themes that can trump the noxious backdrop and travel fits the build. Remember, Merckers Press gave us those amazing travel statistics previous Friday? Well, it's looking that Royal Caribbean has got the same great thing going. Seven, speaking of a certainty to the Chinese consumer, we heard from Boston Scientific Great Medical Device Company that the China market's now roaring with strong double-digit growth for seven of their eight business units. Who would think that's something that China's coming back for some companies? This company, by the way, is prolific. It launched 90 new products to give you an astonishing 13% growth rate. What I like best about Boston Scientific is it's just crushing the rest of its co-worm with ease and they're doing it through pure innovation, something they can't be contained by slowing GDP growth. Now, here's one I don't talk about, and I'm Dover. I knew Dover as a sleepy industrial company, which means, frankly, I didn't know it at all. The new Dover's reinvented itself moving aggressively and to get this. Some companies are so darn smart. They moved into clean energy, engineered products for the data center, aerospace, and bioformal. All four verticals are in the same bull market function. I think the analysts are just now catching up the reality, like me, that Dover's a very strong company. The order goes terrific, the sales are coming in at the high end, and by the way, they're not promotional and they're humble. That's a nice combo. All right, how about carrier? It's just being a humble. We've had CEO Gabe get in the run a bunch of times. He goes, "This company's located in Palm Beach." Not bad, huh? Anyway, you might think that his heating ventilation, air conditioning business, would be hostage to the broader economy. You would be wrong. Wow, commercial HVAC was never so interesting. Something that's down in mid-teens, thanks to large parts of the need to cool down those. Yes, data centers. I mean, they're putting them up, and these guys aren't cooling them off. Get them delivered 280 basis points of margin improvement. That is extraordinary. Close on a key opposition of v-spen european, which dominates the heat pump business. Europe definitely needs more heat pumps to adjust to a warmer climate. They're much better for the sky. In order to pay for a v-spent, carriers sold three non-core business lines, a fourths on the way out, puts them in a great place to be able to acquire something, or even better, how about a monster buyback? Caterpillar, Mr. and Rhetter. So you think about, wait a second. We must be hurting heavy machinery. No, you'd be wrong there, too. United Reynolds, star of the show. Quipment, rental, company, lever board of fleet productivity, and the sale of used equipment, both were terrific. By the way, so many people have asked me if there is an investment in the Baltimore rebuild. The answer is United Reynolds. They're doing almost everything about it. I'm saving the best for last, okay? We wanted to get one, but I think they're out of it. Chipotle. Every line of Chipotle from expenses to revenue, same store sales to earnings was better than expected. The reason? Demand. They have what people want. Now, how do you know that? How about the list you know that Chipotle has this limited time only. I always call that LTO. Is it so hard to say limited time only? We have not only offering a chicken apple store. They're so popular. Get this. The company's urgency, it's associates, to not order chicken dishes for themselves, because there isn't enough left for the customers. That's incredible. Now, the most impressive statistic, California put through a steep minimum wage boost to 20 bucks. So Chipotle had to put through a six to seven percent price increase to pass on the cost. Do you know the sales weren't even gented? I mean, holy cow, that's extraordinary. When we're looking for reasons to buy a stock in this environment, we want companies to generate constant self-help. Chipotle does it by improving throughput. How many people they can serve to say every 15 minutes was the way they measured, especially at lunchtime? It just gets better and better and better. That's got nothing to do with GDP or inflationals, and now I know how they're going to get to $4 million average unit volume, because they are surging. Bottom line, that kind of self-help is the antidote to the big picture worries that I heard about all day today, which made me feel like, "Oh, maybe it's not worth picking stocks." That would be wrong too. I expect the bond market will be our enemy for a little bit. It's probably going to get worse. I'm not even ruling out stagflation. I'm not even saying the magnificent set will never ride again. I am saying this. Always, I get the end of the show. You know what I say? There's always a bull market somewhere. Even when this market's down, it gives you some pretty darn good stocks to buy. How's the pleasure? Jonathan in California, Jonathan. Who are you, Jim? Who are you, Jonathan? What's up? First time, long time. All right. I like my... My best friends and I are huge fans, and you've even inspired us to start a mad money group chat. Get out of town. Put me in it. Have come up Regina Gilman in my second bruiser right now. She's trying to get into the group chat. She's struggling. All right. What's up? My question is, what impact could future fed interest rate adjustments have on the broader banking sector, and should we buy, sell, or hold JP Morgan? All right. JP Morgan's terrific. The stock is down very big. Jamie Diamond, of course, came on. He had some negative things to say. I got to get that guy to cheer up. I mean, he's kind of like it. What's with him? But Charlie Schwarff doesn't eat cheering up. That's why I suggest you buy Wells Fargo, which is the exact right bank for this environment. The one that you get me on that chat, and give me the chat. I'm very good. I mean, I have 2.1 million people who hate me on Twitter, but it's all right. Kevin in my home state in New Jersey, Kevin. Yeah. Hi, Mr. Kramer. How are you? I'm good, Kevin. What are you up to? What do you want in the Garden State Parkway? I have you. Where are you? Yeah, yeah, I am. Yeah. Feel my, yeah. I just got bored. Yeah. Is it still a goodbye? I'm so glad you asked me that because Renee Haas has told me, periodically, Jim, you forget how good we are. You forget what we're doing. I'm going to throw a arm in as I was waiting for it to get to the 80 to re-recommend it. It's in 97. So Kevin here, what you do? I would buy a quarter of a position here, and then every five down until it's finished, that's how I would buy it. I think Garb's great as Renee Haas is great. I think the data center's great, and they're in that big time. All right. Companies that are generating self-help are the antidote to what's ailing this economy. And I think you need to stay on the lookout for those names while the bomb market remains the enemy. How about that Chipotle? Don't order the chicken, because you've got to save some from guys like me with Alpa's store. But why don't you? The barbeque line. That's supposed to be very good. Man, money tonight, tractor supply was a glimmer of green, and today's ugly team. So what stood out of the country's quarterly port? Let's talk the hell look. Then from trash to treasure, could W&B a winner for your portfolio? Don't miss my poster. He's exclusive. And there's no tractor supply without a tracker. So why don't we go and speak to one of the largest space? I go to see how day is there. So stay with Kramer. 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. 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. With Indeed, Indeed is your matching and hiring platform with over 350 million global monthly visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. Use Indeed for scheduling, screening, and messaging to connect with candidates faster. Plus, 93% of employers agree Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey, leveraging over 140 million qualifications and preferences every day. Indeed's matching engine is constantly learning from your preferences. Join more than three and a half million businesses worldwide that use Indeed. Listeners of this show will get a $75 sponsor job credit to get your jobs more visibility at indeed.com/madmoney. Just go to indeed.com/madmoney right now and support this show by saying you heard about Indeed on this podcast, indeed.com/madmoney. Terms and conditions apply. Need to hire? You need Indeed. Even on a tough day, some stocks just can't be stopped. Take tractors supply. The retail have focused on recreational farmers, managers, gardeners, and anyone else might need a six, six foot tall rooster statue. All right, this stock's been on fire ever since the market-wide bottomless fall. Found its footing a few weeks after I recommended it in early this October. Tax supplies now up more than 43% from its late October lows, and that includes a nearly 3% gain today after the carbon-reported stellar quarter. These guys delivered modestly better than expected sales, which translated into a substantial 11 cent earnings beat off a dollar 72 basis. Tax supplies take market share. It's pretty up to solid transaction growth, and it's seeing real strength in big ticket items. Even better, management sounds confident about the rest of the year, even though they didn't raise it for your forecast. So can the stock keep climbing? Are we back into the territory of a constant positive comp store sales? Let's check in with Hal Lawton. He's the President's CEO of Tax supply. Get a better read over the quarter of what's coming next, Mr. Lawton. Welcome back to Man Money. Hey, Jim, how are you? Thanks for having me on the show. Okay, I'm glad you're here, Hal. I get a sense of optimism from you. We've been thinking about this as an economy that people want to go services. It looks like there's a good tailwind coming. And I think your company, you know, has a long history of bumping up the comp store sales. Can we be back into that mode? Jim, thanks for the photo confidence. First, I'd love to give a shout out to our 50,000 team members who just every single day live our mission and values and are committed to serving life out here. And to your point, we've been facing really for the better part of nine months now, the headwind where consumers are spending more on services than they are on goods. Combine that with disinflation over the last six months in our categories, we've been kind of navigating through those headwinds and really offsetting it with market share gains. But to your point is we look on the horizon, there's another quarter, maybe two ahead of us on that, but we can really begin to see light at the end of the tunnel now against those those headwinds. And we look forward to getting back to at a minimum kind of neutral market conditions. Well, I think I know you'll do it and you're adding some storage, but this is great. But something else, Hal, is still working. I know that there was a change in migration during COVID. What I was surprised to see was that you're still saying that the move to rural has legs. What's going on? Rural America is alive and well and growing and really leading in many ways in this country. You know, if you look at population outflows out of cities, to your point, they spiked heavily in 2020 and 2021, but they've continued, albeit to a lesser absolute number, but net, we're still seeing significant migration out of urban America. And most of that migration or a lot of it is going into into rural America. And you know, we would push for two reasons for that. One is just affordability of housing. We all know interest rates right now, housing prices. And if you're a millennial and you're looking to buy a home, rural America is really the most affordable place for you. And secondly, it has similar characteristics from a kind of life out here, being able to, you know, live a clean life, you know, raise your fruits and vegetables, chickens, all those sorts of things that the millennial generation really appreciates, you know, they can find out in rural America. And the good news is that's what tractor supply is. That's where our stores are. Those are the customers we're served. And you know, we continue to see the tailwind from from that trend. Well, I think that's one of the reasons why I'm so confident about you. The other thing is, as you mentioned, you dropped something that I think is great metaphor for your company, chickens. The number of people who regard chickens as pets. Now, we know big ag likes the slaughter chickens, little ag meaning people will go to tractor supply. I know that's where you got our chickens. They are treasure. And this is a new world where people understand animals and love them. How did that happen? Yeah, Jim, chickens are really the new third pet out there. One in five of our neighbors club members owns chickens. And we have 34 million members in our neighbors club program. It's a category that's been on an incredibly an incredible tear, continuing into this year. We're seeing our customer. It's attracting new customers. We're seeing them attracted to new breeds, organic feeds. And most importantly, it creates one of a kind retail theater in our stores. And customers just come in all day long looking to see the chickens. And then they, you know, even if they're not buying chickens themselves or perhaps their food for chickens that day, you know, they're buying other things in the store. But one in five of our neighbors club members now, which is the vast majority of our customer base, partake in the category and your point, they think of them as pets. They name them. They take care of them that way. And it's really been a great new source of growth for us over the last five years or so. Well, to continue the analogy, when you buy a chicken, you got to build a lot of different things, but most certainly fence because the foxes love to get in there. But also, and you mentioned the feed, you have to create a backdrop for them. There's a lot of different things that they want. And I don't know where else to get any of it other than a tractors plot. That's your point. I mean, we really have been the enabler of the poultry category and the poultry passion in the United States. No one does it like we do. We're a one stop shop for the category. You can start with your chickens. Again, your point, very low ticket on a chicken, maybe three bucks, four bucks, depending on the breed you're getting. But then, once you're in the category, you're buying your coop, your waterers, your heaters, your feeders, all that, your feed on an ongoing basis. But what the customer gets out of it is the joy of the hobby plus, obviously, eggs every single day for them and their family and friends. Now, how I know you also as a merchant, and I don't know how many people go to tractors apply like I do, where I buy my clothes. And how fast are we going to be this spring for gardening season? I tell you, we've got a lot going on in the apparel area for gardening. This year, in addition to our mainstays, Carhartt, Columbia, Wrangler, Ariot, Muck boots, all those sorts of things which people need for their spring outdoor clothing. We've also got some great new products this year from Martha Stewart and Eddie Bauer. And the Martha Stewart program has received rave reviews and we're very excited about it. But, you know, Jim, across the whole garden category, whether it's apparel, garden tools, and now our 500 garden centers that we built over the last four years, you know, we are ready for spring. Well, good because I'll be at your store in another four weeks. I don't want to plant too early. It always goes bad if I do that, Hal. That's Hal wanton, President CEO of Tractor Supply. If you haven't been to a TSCO store, you're in for a real treat. Thanks, Hal. Thanks for being on this job. Thanks, Jim. Everybody's back here for the break. Coming up. Waste not want not. Earnings are in. See if this dog can turn trash into treasure. Next. 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/business gold card. Well, I've been freaking out about that weak GDP number this morning. I just were pointing out that last time we got one of the best unofficial bombers in the entire economy when W.M. That's the artist formerly known as Waste Management reported. Now, you know, they're out from garbage. I mean, when business is humming and lots of construction is happening, we produce massive amounts of trash. That's why I always like to follow W.M.'s results. They help take the pulse of the economy. This time the country put a small revenue miss, but thanks to managers, big push for efficiency, which boosted their margins, W.M. still delivered a huge 25-cent earnings beat off a dollar for the basis. As of the four-year forecast, the lower the revenue outlook, while raising numbers for the EBIT dollar free cash flow, some of what they just reported swapped their sales better profitability. Well, the market sure liked it. What do we make of the results though? Let's talk with Jim Fish, who's the president, CEO of W.M., who joins us now. Jim, this was quite an impressive effort because I know you use being levered, let's say, to home building, levered to some construction. We've had a slowdown in those, and yet you still deliver great numbers in the market applauding it. How are you able to do that? Well, look, Jim, I think certainly home building affects us a little bit, industrial, the industrial segment of the economy affects us a little bit. But as we said at the beginning of the year, this year was going to sound a lot like last year, where we weren't so much focused on volume growth. We were focused on the middle of the P&L, which was going to be cost control through automation and optimization. We're focused on our sustainability growth initiatives, and we're focused on pricing. So while volume was maybe a little bit soft, maybe 50 basis points soft from where we expected, we're really doing well on the middle of the P&L. Well, let's talk about some things that I have not talked about with you. Let's talk about this R&G facilities. We once went to a Phillips station in Camden, New Jersey, but this is different. This is big business now. You remove our energy business. It's $500 million in Avidah. Once we get it fully built out, we're building 20 plants. We've got five of them that'll come online this year, but it is a great business. It's business that is really enabled by, first of all, the gas coming out of landfills. So we capture it, and then we turn it into a renewable natural gas. And then the credits that we're able to sell, these R&Credits is enabled by the fact that we have a fleet that's 75% natural gas. And so the way it works is you burn the fuel and that enables you to generate a credit, which you can then sell to a third party. Well, I've got to tell you, I think that that and another thing in the sustainability that you're doing, you're incredible, I also think you're making money again on recyclables. That's been terrible business. It's up and down. I mean, that business is somewhat dependent on commodity prices, but we've changed some contracts so that it de-risks it a bit for us. But we're happy with where commodities are now. You remember a couple of years ago, everything we were selling, particularly cardboard, was all going to China. And now that's changed, and most of it's staying here in the US, some of it is going overseas. But a lot of it's staying here. And that's been helpful for us as well. So that business is a good business for us this year. It's not driving the lion's share of the earnings though. I mean, we today said we'd be $100 million better than we thought we'd be a quarter ago. And 15 of it comes from those sustainability businesses, 85 of it comes from just the core solid waste base. Now, you're doing something, I'm not quite sure what you were doing before because I should know, but you're talking about customer lifetime value. I mean, I've always thought that you've considered that, but this is a newer business model for you. Well, it is. It's taking customer lifetime value and really using that as one of the key metrics in our data and analytics process for pricing. And it should be, right? I mean, are you not going to price increase a customer that you've just missed their service? So we want to make sure that the customer is happy. We always look at pricing as being a very small part of that customer's overall cost structure. Waste services themselves are a small part of the overall cost structure, but certainly understanding the customer analytics is an important aspect of pricing. Now, how have you been doing in a tight labor market with all the technology you have to take the place of a person just in case you can't find one? So if you'd asked me five years ago, what I mean, you know, there's been a lot of discussion today about, you know, the slower growth in the economy. And of course, a couple of weeks ago about maybe higher inflation sounds a little bit like kind of stagflation in the textbook. If you'd asked me five years ago, what are you going to focus on? I would have told you we're going to focus on exactly what we're focusing on right now, which is reducing our labor dependence to your point. We've been a very labor dependent business. And so how do we use technology to reduce that labor dependence, but but in a low impact way, we're not we're not doing any big, you know, reductions, we we just take advantage of attrition. And when we have relatively high attrition in some of these jobs, some of these trade type jobs, if if somebody leaves and and we've been able to squeeze efficiency out of that position, then maybe we don't need to refill it. So that's one of our big initiatives that's helped with that margin growth that you saw. Well, also what your repairs, how do you keep repair costs down that up with margins big? I think part of the repair problem that we've seen over the last couple of years is we just weren't getting the trucks. I mean, the supply chain was pretty tight. And so we weren't getting the trucks. And now we are. And so that's that's helped with it. And at same time, we've got process chains that we're putting into place. You combine those two and and repair and maintenance looks a lot better. Right. Now you announce a sustainability deal. It's a partnership with with Major League Baseball. I think this is important because I think a lot of people don't regard you as part of the sustainability portion of the country. But ever since you came in, it's been a huge factor for you. Does things like this matter in terms of city contracts? I mean, why do it? Why do you need to have people think of you as sustainable? I mean, sustainability is a huge part of our business. And it really is. And it has been for a long time. I mean, this renewable natural gas piece is relatively new. But but recycling has been a big part of our business for decades, probably two decades. And we've just really started to tout that. I think maybe we weren't talking about it as much. Now we are. The golf tournament, of course, has helped with that. The W and Phoenix Open has been zero waste for 12 years in a row. And now this partnership with Major League Baseball is adding to that. And so we're excited about it. I'm a big baseball fan. I think you are filling. Yes, I am. Yes, I am. And we had a tough, my Astros aren't doing quite as well as your fillings. Well, we're still excited about the market. We just beat up on the white socks. That was easy. We face the reds and suddenly it's hard. What do you see about in the economy right here? We feel some mixed signals ourselves. You know, I wouldn't say there's no there's no panic button to push. I think our volume is a little bit soft. We said we would be kind of 1% organic volume growth for the year originally. Today, we said probably more like half a percent. So call it a 50 basis point drop in that. Not in any way time to push the panic button. I do think there still is inflation in the system. And I've said that for a while. I know FOMC came out in December and said there would be three rate cuts. And I kind of question that, not that I'm an economist, but as a business person seeing that there was still inflation in our business, I was a little suspect of that. And now it looks like there's not going to be three rate cuts. There might be one. No, you're dead right. I mean, the way I looked at it, exactly like you, that economy had a huge head of steam and suddenly decided not to put the issue of statements saying they're not going to raise rates. I think that actually led inflation creep back. And I think it's a shame because people are like, you have to hire a lot of people and you need to see your costs not go up in order to be able to do what you need to do. Well, anyway, look, this is a great quarter. The market was at one point the stock was down. It was like screaming, screaming. How is that possible? It was such a beautiful quarter. Of course, the stock finished exactly as it should. You've been a great steward of the shareholders. It's just been nothing but up since I've seen you. Congratulations. Thanks very much. Good to see you, Jim. Good to see you, Jim. That's Jim Fish, President and CEO of W&M Monies Back and forth. Coming up, this company helps feed the country. Feed your need for good research. Kramer goes farm to TV when we return. What's next for Agco? The maker of big ticket farm equipment. Every couple of years of declining crop prices, rising interest rates may be the cost of financing more expensive. Agco stock is between any sideways for some time. During this period, the company's made some big moves under the surface in order to make its business more attractive. They've embraced precision agriculture, doing more retrofitting and resisting equipment and a mattress working very hard to cut costs, make the company more efficient. Is that enough to overcome this difficult tape? Let's go straight to the source with RK and SOTI. He's the Chairman, President, CEO of Agco. He's one of the runners. Welcome back to Bad Money. I'll fund to be here on the floor of the stock. I'm so thrilled you're here. A lot of times we talk about Ukraine, talking about Brazil. It's great to have you here. I think it might just do us all good to say, to start with the fact that a tractor is no longer an analog device. It's a digital device and you're the leader. Absolutely. There's so much technology on our combines, the machine that harvests the crop. There's 43 computers on that, all kinds of intelligence sensing the ground, sensing the crop, making sure the machine can optimize its own performance. So if you have that, then theoretically what would happen is you cut the amount of fertilizer you use and you also don't waste a lot of water. Exactly. You're trying to minimize the amount of inputs used while maximizing the amount of yield gain, how much crop can be grown on every square inch of the ground. Before you took the job, the company got some great nameplates. I mean, we all know that some of these nameplates are just priceless worldwide and yet they stayed where they were. You are now rolling out World Wide Fent, which is by far the best name. How's that going? Well, Fent is the brand that farmers know is the best of the best. It's just the best equipment around. It's for the most demanding farmers. It has historically been a European brand and mostly about tractors. We've expanded to be full-line, planters, tractors, sprayers, combines and taken it worldwide. Step-by-step, we're allowing only the very best dealer locations to carry this Fent brand. It's premium. It's the best. We want to make sure it's matched with the best in the dealer network. We're growing steadily. We're already growing from 2021 to this year, or 2023, to 1.5 billion reached our target two years ahead of schedule. So it's growing, growing steadily, great appreciation by our farmers who've tried it. Now, a lot of times people want to know, what are you levered to? Is it interest rates or is it the price of crops? Is it to how some governments subsidize? Is it to China? What are the big factors right now? The biggest thing is the price of grain. If you look at what's the highest correlation, it's really about that. Interest rates matter and higher interest rates are a bit of a headwind because many people finance their large equipment. But the bigger factor is what the grain prices are, which turns into directly in profitability for the farmer. Now, when you were the first one, in total, said 13% of the world's calories have been taken offline because of Ukraine, something... Look, it's a horrible war, and we know that. But it didn't jack up the price of commodities other than at the very beginning. How did that happen? Is it more global market than we realized? Well, it's stabilized. Essentially, two things happened. One is new routes were found and new customers were found. So the Ukrainian grain wasn't able to get out through the natural seaports at the same rate, but they found a lot of land corridor to get out. And then secondly, Russia, that was restricted from selling to some of their customers, found new customers. So China, North Korea, Africa. So the world reshuffled. All right. Now, Agco is known as a farmer-first company. Well, C.N.H. and Dearer, I mean, not to play devil's. They're farmer companies too. What's the difference? What are you guys doing that you think you can take share? Well, the big thing, the difference between when we say we want to be the most farmer-first and we think we are the most farmer-first company in the industry, it's different than being a product-focused company. So a product-focused company comes on to the farmer's lot and says, "Hey, tell me about your tractor. What do you like? What do you not like?" A farmer-focused company says, "Tell me about your crops. Tell me about your profitability. What are your pain points? What can we serve for you?" And then we solve all of the problems with machinery, data, services, and those type of things. It's helping us rewire how we think, make us more innovative and make us serve the farmer better. Is that how you came up with all the different technologies in your meeting their needs right now? Exactly. By understanding their pain points, we find the lowest-cost way to have the machine be able to solve that problem for them automatically. That's why we just closed on this, the biggest ag-tech deal in the history of the industry. It's triple deal. Tell me about that. We just closed on it April 1st. We announced the last fall, but regulatory approval took to April 1st, which is exactly what our plan was. It allows now ag-co-tech assets, the tech stack, plus this to become the world leader in precision ag solutions for the farmer for the mixed fleet. Essentially, what that means is we're going to serve every farmer all around the world regardless of what brand they have. So most of our competitors design technology for their brand, but not for everybody else. We serve our brands of equipment, Fent, Massey Ferguson, but then we retrofit technology onto other people's equipment. So a farmer may have a five-year-old brand X or an eight-year-old brand Y. We'll upgrade that equipment with a retrofit solution and make that machine more capable. It can now have sensors and automation and intelligence to be able to do something automatically. That's what we call retrofit. This business is going to be the market leader in the world for mixed fleet retrofit technology. All right, so what are you doing self-driving? We're already, we showed it last year in the field. We're going to be showing it again this summer. Next year we're coming out with our first autonomous retrofit kit, making an existing tractor where it's autonomous. And then we've declared by the 2030 point, we'll have autonomy all the way through the cropping cycle from planting, spraying, harvesting, and so on. That's what we're heading in order to get there. You need to automate all the things the operator does in the cab today. But isn't it necessary given the fact that a lot of people view of what jobs they want to change? That may not be a job that people want, and the only solution may be autonomy. Yeah, labor is a challenge, and so autonomy is a solution that is going to be attractive to some farmers. But even the journey to get there, automating all the complicated tasks, that helps every farmer. So even the farmer that may not want autonomy in the future, they still want to drive themselves. By automating a complicated feature, the machine can do the job better than they can. So on the path to getting to autonomy, we're adding probably more value than the autonomy step itself. The big value is automating the features and help the machine do a great job. And then lastly, how's the American farmer doing? Well, you know, these last two or three years were really great. Now they're okay, but when you go from great to okay so fast, okay doesn't feel okay. And so, you know, Agco is probably going to have the second best year in our history. Farmers are, you know, their sentiment isn't very good right now. So we've come off a few hot years. Things are cooling down a little bit. But, you know, we're working really hard to make sure that we can provide low-cost solutions that give them a one maximum two-year payback to make their farming more profitable. Well, I think your company should be more levered to the for your stocks, even more levered to the farmer and to the equipment you're selling. But right now that people just look at it and say, all right, you know, what's the price of corn, let's sell Agco. It's not as easy. If that's what you think is you just get out of the space. Right off. You have the wrong way to look at the company. That's our case studies. The chair presents you, Agco. Great to have him in person. I like all the things you're doing. Thank you. Really enjoyed it. Yes, you can see it. They have my expectations right now. Coming up, hit us with your best shot and electrified fast-fire lightning round is next. It is time to have a light round. It's time to have a light round. Hey, Jim, thanks for taking my call. Of course, Brian, what's up? Jim, I really appreciate the advice you give us home gamers every night. It really keeps things in perspective, especially after certain days in the market if you know what I mean. Oh, yeah. And people panic. They panic all the time. It's really crazy. How can I help? Yeah. Well, Jim, a couple of nights ago, I thought you were spot on with your comments about luxury goods maker, tapestry, and luxury goods company, Capri. But I've had my eye on another luxury goods company, and I've recently opened a small position in it. This one has a current dividend yield of around five and a quarter percent. And I'd like to know your opinion. Should I expand my position, hold or sell Movado Group? You know, it never really does anything. I think stuff is kind of overpriced, but you get that yield. It's a decent level. I feel it's neither here nor there at that price. Let's go to David and Pennsylvania, David. Hey, Jim, David comes back here from Boston Bay, man. Bill Eagle's fan. How you doing? Oh, go birds. What's happening? Go birds. Hey, I got turned onto this talk about eight weeks ago, and after the earnings, I bought in and it's been up 30% in the last 30 days or so, and my question isn't in a long-term play. If it's been doing good, you know, I just don't know. It's a gig of cloud technology. DCC. Yeah, you know, it's a neat commerce play that I just don't know enough about. I mean, look, I know eBay. I know Shopify. Obviously, no Amazon. I've got to do work on that one. I've got to learn more about it. Let's go to Gianni in Wisconsin. Gianni. Hey, Sam, this is Maria. I've got my under eight Santiani here in the line. Fantastic. I'm going to start by giving you a big, big booty app. That one's going to know what you think about the future of new skill. What does it look like? Which one is that? New skill power. Oh, new skill? Okay, look at Smallmate. It's called a small nuclear reactor. I want you to do this. I just go by GEV, okay? Go by GEVanova. They have it as a division. They're not making any money with it. I don't want to lose any money. You sound like a nice kid. Don't want to hurt him. And that ladies job a conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, are you a believer when it comes to this stock? You're either in or out. Kramer explains. Next. When it comes to meta platforms, they have more than 10% to them. You either believe or you don't. I'm a believer, which is why we're sticking with the company. In fact, we told CMEC investing club subscribers today that if we weren't restricted, we would have bought some for the child trust when it opened. Last night, meta blew away. Give me a static 27% growth rate. Much better than most of us looking for. Add revenue growth, also accelerated 27%. For all this, you only had to pay 22 times earnings. Look like a steal. So then why the stock plummeted today? Because in tech, the forecast is all that matters. And people didn't like how meta's outlook showed a market deceleration of revenue growth. We're only talking about 18% in the midpoint of the second quarter revenue forecast. But more important, people didn't like what Mark Zuckerberg had to say on the conference call. After explaining why he thinks artificial intelligence will make meta into a powerhouse, as it has with Microsoft, as it has with Google, Zuckerberg decided to end his year of tight expenses and return to the era of aggressive spending. Because of the AI opportunity, he believes some of the quote, we should invest significantly more over the coming years. End quote. He talked about quote, a multi-year investment cycle before we fully scaled end quote. The AI business, well, let's say it's going to be profitable not now, but later. Oh, I got it. Lose money now, make money later. That's why people sold the stock. So now meta's planning that $35 to $40 billion in capital expenditures this year. When they previously said they'd only do $30 to $37 billion. That's a lot more. Zuckerberg gave me his plan why this is an issue for shareholders. Quote, "We've historically seen a lot of volatility in our stock during this phase of our product playbook where we're investing in scaling a new product but aren't yet monetizing it." Volatility? You know what? In this business, that's code for going down. There. That's what freaked everybody out. That's why the stock went down so hard to which I say, wait a second. Wait a second. As I told you at the top, shouldn't we believe in this man who's given us some incredible performance over the years, especially when the stock's more than doubled over the past 12 months? Many data at Zuckerberg when he personally worked hard on reels, his TikTok knockoff, that I actually found better at to advertise than TikTok itself. When he first started monetizing reels in 2022, it made about a couple billion bucks. As considered, Zuckerberg's following. This year, it should make around $27.5 billion next year, $42.8 billion. Those are, we're going to stay on the numbers. Oh, and that's assuming there's no TikTok ban, but it's going to get banned if the Chinese parent company doesn't sell it to a domestic operator. Winfall meta. So, should we give up on Zuckerberg now that he's ready in a lot of checks to broadcom an NVIDIA for the equipment to power his AI ambitions? That met a capital expenditure budget is the reason both stocks could work today in the finance and the tape. What does Zuckerberg say about all this? How about, quote, "Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and investors who have stuck with us." And the initial signs are quite positive here too, end quote. He says that we're entering and I'm going to quote again, "This period where I think kind of smart investors see that product is scaling and that there's a clear monetizable opportunity here before the revenue materializes," end quote. He also reminds us he did the same drill here with reels and Instagram stories and the shift to mobile, which were handled in a jointly and made you a ton of money. House of pleasure. Now, Zuckerberg didn't say he was actually banning meta-suites and push for efficiency. He called it under focus still, even as he continues to lose a gigantic gob of money on the nebulous reality labs. This time 3.8 billion, billion here, billion there. That new manga spend will continue. But you know what? I don't care. We ranked the stocks in the travel trust as part of our own going work for the CMC Investing Club. Earlier this year, we downgraded meta from a one to a two and we sold stock at 490. That two means it's worth buying only to pull back. So, you know, we said to do today, we said buy it back. Now, we wanted to straight back to 420 when we said buy it, and we will. Because Zuckerberg has earned our trust and we aren't going to give up on him just because he sees an opportunity to the rest of us don't. An opportunity to monetize Generative AI. I'm getting right, Zuckerberg. You should, too. I like to say, there's always a bull market somewhere. I promise I'd find it just for you right here. We have money. I'm Jim Kramer. See you tomorrow. 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/madmoneydisclaimer. At Cappella University, you'll get support from people who care about your success. From before you enroll to after you graduate, pursue your goals knowing help is available when you need it. Imagine your future differently at cappella.edu. [BLANK_AUDIO]