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 5/21/24
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Tasty trading is a registered broker-dealer and member of FINRA and SIPC. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a more market somewhere, and I promise to help you find it. Man money starts now. Hey, I'm Kramer. Welcome to Man Money. Welcome to Kramer America. I'll be with my friends. I'm just trying to make you some money. My job is not to entertain, but to educate, to teach you. So call me at 1-800-743-CMC or tweet me at Jim Kramer. Sometimes you have to ask yourself, "Where is the money going?" Right now, it's pretty hit or miss when it comes to consumer. Homebuyers like Toll tonight are seeing some good money flows, but retail is your spotty. Macy's, Urban Outfitters, and Walmart hit, but lows in Home Depot. Well, they miss. Not a lot of money flowing to retail. Instead, it's flowing from one business to another, or maybe from a government to business. After day with the Dow Advanced 66 points, S&P climbed 0.25% to a new high, and NASDAQ also hit a new high up 0.22%. We've seen it at this moment, at this very moment, because of these money flows, you've got to be investing in companies that don't cater to just the consumer, albeit with some rare exceptions, and instead zero in on those that make money off the enterprise, as they call business. Now, I have a long chance to be this market. I've truly gotten comfortable with many of the sectors, but consumer spending on hard goods just ain't one of them, and that's a big reason why lows saw its stock get hit today. Marvin Ellison, the CEO of Lowe's, is the one tonight's show, and he'll talk about a consumer who's on the sidelines, which just isn't inclined to start spending on big home improvement projects. Why? He's something that I'm pretty darn well in his college school, and I quote, "Uncertainly around interest rate cuts, stubborn inflationary pressures, and consumers still showing a preference towards spending on discretionary services and experiences continues to weigh on and to do it yourself home improvement demand," end quote. Too many homeowners with low or no mortgages, too many people who don't want to take out a 7% mortgage to buy a new house and then be underwater immediately. No buyers of existing homes, but that means, of course, no renovation. So what can change that predicament? See, that's the problem. That's why I am so uncertain recommending consumer stocks. What can change the predicament? I'm not sure. As Brandon Sink, the CFO of Lowe's, said quote, "We're not seeing that inflexible," end quote, and then he goes on quote, "We don't necessarily expect or understand the timing of that," end quote. If he doesn't understand, how am I supposed to get it? So for Lowe's and for Home Depot before it, the landscape's not so much bleak, it's just not that rewarding. And that's how both stocks can get hammered on earnings, because the consumer's not opening her wallet enough in the stores. In a sense, it's become almost a winner-take-all-loser-take-none situation, with the winner at least in the big box segment being Walmart, which puts through breathtaking same-store sales and deserves a trade higher than his current $65 level, even though, to many, it seems like an exalted post. But money doesn't stay in a cul-de-sac, people. It doesn't wait for something to happen, it gravitates to where the spending's going. So where's the money going if most of the retail area is a no-go zone, even though two-thirds of our economy is, indeed, consumer? But we know there are some big themes that seem to just can't be stopped, and the biggest one is data. Any kind of data. The data that Lowe's collects from its loyalty program, the data that Target has from its store of floorboard and ports tomorrow morning, the data that gets stored in the cloud so it can be interrogated by employees and machines looking for patterns. Right now, just as there are individuals who aren't spending all that much to fix up their homes, there are companies that will spend any amount of money to build out their computing power with much of that going to, yes, the data centers. In a way, it's unfortunate because retail's so easy to understand, and everybody shops. But unless your computer scientist is difficult to understand where that data's going, and it's even harder to figure out which company's benefit from the newfound corporate need for analytics training and for instance. For me, I keep thinking simple for you, okay? And the companies with the most data, they can do the most data interrogating, Amazon, Alphabet, Microsoft, Meta and to some degree Apple Salesforce and Service now, they got some data. They're spending millions, they're spending just billions, actually, on buildings that are filled with, yes, Nvidia chips. Hence the anticipation of tomorrow nights, according to, remember, I remember when I was the only guy thinking about Nvidia. What the heck happened? Well, I'd chance someone was always thinking about these, the CEO. But now it's like Nvidia, I've been walked down the streets, I hear them talking. They're like, hey, have you seen Nvidia today? I mean, not to me, to each other. What the heck? Hey, let's talk about Eaton. Emersonverted, they make money too. How about the plumbing? Marvelltack, Aristonnabros, blogcom, Super Micro. Nvidia. Alright, did you see the action in Palo Alto's networks today, which we had one last time? At one point, the cybersecurity stock was down almost 24 percent, 24 points in wake of last night's quarter, okay, 24 points. That's the stock cut that loss in half. At one point, it cut it by two-thirds, finishing today down 12 bucks. Why was that? Because investors refused to hold off when buying shares in a cybersecurity company. Not when business can't afford to stop spending or something, because they got to protect their data. So you got to mine the data, you got to interrogate the data, you got to protect the data. Otherwise, it ended up by United Health, which is hit with the devastating hack that needed to be stopped but wasn't. I found it very telling today that CrowdStrike stock didn't get dragged down by a competitor. That's because the shareholder base knows how valuable CrowdStrike is to stopping the data from being hacked. They know that CrowdStrike's on a roll and his customers need it more than ever. This big and from the tech titans to everything else, I don't know, it's just endless. You can't avoid it. Now we've been stuck mostly talking about business spend, but lately we've been also getting signs that there might be another big form of spend with the consumer buying tech hardware. They're kind of just like, let's say they could be just sweetening things. I don't know yet, but we're now hearing from Microsoft about a brand new kind of PC that replaced most personal computers, one with an artificial intelligence co-pilot. The craziest thing is that even as Microsoft makes that pronouncement with such certainty, it hasn't meant much to the stocks related to the revolution. Okay, yeah, HP is almost back to the two week high, but that 52 week high was back in July of last year when it was almost impossible to pick the new PC product cycle. Same with Best Buy, where you might be drawn to sample the AI-powered PC. The stock is getting pummeled down to where it yields more than 5%. It's entirely possible that it'll take another whole quarter for the machines to get there, which is why I just say it's tantalizing, this whole thing's tantalizing, but it's just not tangible. Maybe we don't need to outthink it though. The biggest winner of people buying more Windows PCs is the maker of Windows, Microsoft. The biggest winner in the day to war might be Microsoft. The biggest winner in the web services war might end up being Microsoft. What else is the consumer spending on? It's hard to believe this from the pandemic, but the consumers still traveling, going to live events, hence why live nations stock is soaring. As a consumer, I hate these extortion ticket master fees, but as an investor, I love the business model. Consumers still spending on cruises, as we saw last night with the region cruise line holders, but she's not spending on herself the way she used to, except at Walmart, like I mentioned earlier, maybe Urban Outfitters, maybe some Macy's. The good news about the limited consumer spending is that we don't have to declare a static. Just like Lowe says, there will be an inflection point and the money will start going to home improvement again. Right now though, we just don't have enough housing turnover. The mortgage rates simply too high. The lack of existing homes on the market is at least good for builders of new homes, like we saw from Toltonite. Once rates come down, the money flow might shift and then things will be better. But the bottom line, right now you have to follow the money, and it's currently flowing to businesses that cater to other businesses and the ones that need to interrogate the data. The rest, not much there, ain't got nothing for them. Let's go to Chad and Wisconsin, please, Chad. Hey there, Jim, how are you doing today? Today's a great day. How about you? Excellent. We're doing excellent as well. Hey, I had a question about a group that is going to eventually compete with Chipotle. It might take a while. The PE is a little high on it. I did get into it a while back around the upper 49s, got back out of it around the 69 mark, down and regretted it because it's not over 80, wanted to know what your thoughts were on Cava Group. Cava, I'm very bullish. I'm very bullish. I think the comparison with Chipotle is actually, and I rarely ever say this, reasonable. It's not excessive, and I think Cava is really good. All right, listen, you always have to follow the money when you're picking stocks. Right now, it's flowing to businesses that cater to data and to data, but also data. Well, man, money tonight, I'm catching up with lows after this morning's report, since the stock lowered to see if the investors are getting an opportunity to produce a buy in that home improvement retailer, then can gear plow ahead for the long-term, or was the bet beating lower quarter, a sign that you should take your position out the pasture. I'll give you my take. And I'm going off the tape with the CEO of 100x, going more about how the data company is giving investors a consumer-driven angle to help make more informed investors decision. So stay with Cramer. This is 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. Take your business further with a smart and flexible American Express Business Gold card. You can earn four times points on your top two eligible spending categories every month, like transit, U.S. restaurants, and gas stations. That's the powerful backing of American Express. Four times points on up to $150,000 in purchases per year. Terms apply. Learn more at americanexpress.com/businessgoldcard. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search. 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 match 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. What do we make of these numbers from Lowe's? This morning, the Home Improvement Retail reported an 11 cent earnings beat. The higher they expected sales, the better than fear of the same store sales. However, Lowe's merely maintained its full year forecast. Imagine we gave some tepid commentary about we just do it yourself home improvement projects, ones that are alluded to at the top of the show, which is ultimately why the stock tumbled almost 2%. So I got to wonder, did the market ever react to what I thought was otherwise pretty decent quarter? Earlier today, we got a chance to dig deeper with Marvin Ellison, he's the President Chairman CEO of Lowe's. So take a look. Marvin, welcome back to Bad Money. Thank you, Jim. It's great to be with you. Now I've got to tell you, Marvin. I got up. You know, I get your email. I look at the things. I say, well, this stocks can be up nicely. It is up nicely. Then it goes down. Let me tell you. I think the first reaction was right. I'm going to give you one. You exited a sense of optimism and a belief about both the consumer and the, let's say, the professional that we didn't hear at a competitor, and I think that what I'm seeing is a great progression and that eventually when things get better, that inflection is hit. You're going to crush it. Tell me I'm wrong. Well, Jim, that's our belief. You know, we've been investing billions in our business so that we can not only weather the near term, but we can grow our business when the market improves. Look, for the quarter, we delivered 21 billion in sales. We grew our pro business, mid single digits. We grew our online business positive. We delivered positive comps and learning garden, building materials. We reduced our inventory by $1.8 billion, generating $3.9 billion in free cash flow, and we returned $1.4 billion to our shareholders in the quarter, but more importantly, 93% of our stores, which includes all of our early associates in those stores, qualify for our quarterly profit sharing bonus. So not only did we have a good quarter in a tough environment, but we rewarded the most valued associates we have, those men and women working in our stores and distribution centers. So we're not looking at the market, trying to determine our success based on how our shares trade on a daily basis. We look at the last five years, and we feel great about the value we return to our shareholders. We're going to continue to invest, continue to leverage our great balance sheet, and we're going to be great in a tough environment that will be even better when the macro returns. Okay. Well, let's go over the switch that needs that in the so-called inflection. Your excellent CFO, Brandon Cink, does say that, look, we're not seeing that inflection point yet. Consumers remain sidelined. Marvin, what's going to take it so that you do kick up to the next level? Well, Jim, I think this is a product of customers and consumers just waiting to see what's going to happen next. Look, if you think about just the housing data for a second, and you think about kind of what is available, you have $33 trillion in equity available that's been accumulated in the current state of housing. You right now have 90% of the homeowners out there that either own their homes outright, or they have a fixed mortgage rate, and the average mortgage rate in the U.S. is 3.8%. And so right now, customers have equity in their home, roughly 40% appreciated since pre-pandemic. They have low rates, they have disposable income to spend. I just think they're cautious based on the interest rate environment and the inflationary environment, and they're just waiting. So for us, Jim, we can't time the inflection point, but what we can do is invest in our business, make sure that we are ready to perform irrespective of the macro environment, but more importantly, we know that all macroeconomic cycles are cyclical. They go up and they go down, and we're just preparing to be at our best when the cycle turns up, and we know that's going to happen, and when it happens, we're going to take meaningful market share based on the working investments we put into the business. Well, I think it's a great point, because there's a moment in the comps, Colver, I was concerned about directly at you address. I figure you've been there for five years, I've watched what you've done, okay, for five years of the technology revolution, let's put it that way, and I thought you were over. I didn't know what more you could do, and then it turns out, I mean, you went 30 years of a not great customer relationship, you've got this Milo rewards, this is from March. Give us an early indication through Springfest, what is the rewards program meant? So for some context, Jim, and you know this, roughly 70 plus percent of our customer base is do it yourself. And so we're designing a loyalty and rewards program to reward these do it yourself customers. And so we focus in the March rollout on enrollment, on engaging active members and driving app downloads. We've been extremely pleased with the early response, and the goal is simple. We want to drive one additional trip from our DIY customers to our stores throughout the year. That within itself, from a financial perspective, pays for this program, plus much, much more. And so the program allows rewards members to earn points toward Milo's money, it provides free standard shipping, other benefits and gifts, and if you are a Milo's rewards credit card holder, you get 5% off of purchases on a daily basis. And so look, you and I know that data is the new currency, and we want to take the data that we are accumulating with this new loyalty platform. We want to use it to create a better customer environment, both in-store and online, but we also want to personalize our offers and create an environment where these customers choose us over other competitors in the market space. So what I will tell you is early and you know that reward programs are designed to accumulate information and drive multiple trips throughout a period of time, and we're really, really pleased with the early results, and we think this is going to pay big dividends for us over the long term. I believe that 5% off daily is not bad. Now I know these bigger tickets, emerging kitchen design. Previous quarter, you talked about how Vision Pro's been helping. That is the currency, and the data that comes from Vision Pro, is it working for you? It's absolutely working, and more importantly, Jim is giving us the ability to attract great technology partners who want to do business with us, they want to innovate with us, and they want to be part of our strategic plan. So you know, Vision Pro is a great partnership with Apple, we've had great work with NVIDIA on AI and AI technology that we're using within our store, and so we're just excited about all the possibilities that's in front of us. We have 50+ active AI models. We have used it for sourcing logic, inventory planning, pricing, our focus is on creating an environment that's easier to sell, shop, and work, and we're one of the first in our industry to have a custom chat GPT plugin that allows customers to get assistance with a difficult home improvement project, and they can do it online by leveraging this custom chat GPT plugin that we've developed. So there are just so many things that we're doing in addition to Vision Pro that's creating an innovative environment, and let me take you back five years ago, we couldn't even give customers an e-receit. So you think about where we've come from, from that really what I call pre-storey time to now partnering with Apple, partnering with NVIDIA, partnering with some of the best technology minds in the world, and we're excited about what's to come, but what we know that these partnerships will create incredible value and incredible differentiation over time. Last question, Marvin. When I go to your store member head this weekend because I want to get my tomato baskets, what else should I be looking at that other people are buying that I put in my cart? Well Jim, I love innovation, and look, we got great innovation, and customers are still paying for innovation. We get the backdrop that discretionary DIY is down on the big ticket, and that's true. But you know, Toro launched a smart store more for people in urban spaces that you don't have a lot of area to store more. You can reduce the storage space by 70% because it stands up and has proprietary, your patented technology to keep the oil from leaking. You know, if you're an electrician and you want to have a quick water heater installed, Ayo Smith has a 120 volt plug-in water heater that goes into an outlet on the wall. I mean, client tools, the number one tool brand for electricians and HVAC professionals, I mean, have great technology, but I think for you Jim, you're an avid gardener, and we have the best garden business of any retailer in this space. And we've done an incredible job, not only with battery, outdoor power, with our partnership with Ego, but the launch of Toro in our business gave us incredible strength on battery and gas. So anything you need for your garden, whether it be plants, or whether it be outdoor power equipment, we are best in class in providing that to you and to all of our avid customers that want to do work on the outside. Well, I look forward to that, and look forward to getting my 5% off. And I want to thank you very much. Marvin Ellison, President, Chairman, CEO of Lowe's, Marvin, I love it when you come on the show. Thank you so much. Jim, great to be with you and look for all of the people shopping our stores. When you see an associate win, a camouflage vest that reflects an associate who is either current or past military service. And so make sure you stop for Memorial weekend, shake their hand, and thank them for their service. We have over 26,000 associates that are current or former military working for us, and we're proud to say that they're members of our team, and we're proud of the service that they gave to make this a great kind of service. I can't wait to say, wait to say thank you to them. Marvin Ellison, thank you for coming on Midmont. Always great to be with you, Jim. And Mike's back in the car. Coming up, no traction in tractors, Kramer digs into what's gone rotten with deer. First, imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. What do we do with the stock of deer? The market is number one maker of farm equipment, keeps reporting great results, and then what does it do? It slashes the full year of forecasts. Last Thursday, they did it again, delivering a big top and bottom line at the end. Nobody really cared about it that way, because management cut their full year forecast, causing this stock to tell them a nearly 5% in response. The funny thing about deer is that it keeps beating the estimates, eight revenue beats in a row, seven earnings beats in a row, but the stock has basically been going sideways for the past three years. Some of that's purely because we've been an agricultural down cycle since the industry peaked in 2022. When farmers make less money on their crops, they're less likely to buy new equipment, especially when the Fed raises interest rates and the cost of financing it, new equipment goes through the roof, and make no mistake, you need financing for this big stuff. Deer's largest tractors and combines can cost as much as a house. So even though this company delivered record sales and record earnings last year, even as it has an unbelievably good reputation for machinery, the stock gets no respect because everybody recognizes that the whole ag complex is headed for tougher times. Ever since the market-wide bottom last October though, investors have been grappling with just how tough this lean period will get. It's hard to fathom, because deer keeps reporting phenomenal results while giving worse forecasts. The stock will get clobbered. Then when there might be any sign at all that the Fed might be willing to cut rates this year, so signs of life again. Plus, it didn't hurt when all sorts of crops seemed to bottom earlier this year. Then last Thursday, we got another beaten lower quarter from deer. Even though the actual results were terrific, management slashes their earnings forecast, while also cutting their sales growth outlook for the production and by a precision ag segment. That's been a pristine one. Previously, it had sailed me down 20% this year, and now they're saying me down 20%, 25%. Even worse, deer took its sales growth outlook for the small ag and terpuses from down 10 to 15%, all the way down to 20% to 25%. As for the rest of the business construction far, they left the forecast unchanged, but it's still down 5% to 10%. Now, deer also gives you an outlook for their end markets. What's frustrating is that every time they cut their guidance, it's much worse than what they see from the broader end markets. Basically, they keep telling us that they expected to do worse than the industry as a whole. Thanks for nothing. Worse, every time these guys report huge sales growth, their hideous full-year forecast makes it seem like the rest of the year is going to get much out of the year. On the conference call last week, deer's director of investor relations, Josh Beale, gave some color on the weird dichotomy of these repeated beat and lower quarters. He described the better than expected results as a function of strong execution and some good luck in the form of, for example, lower freight costs. But the overall demand environment has worsened over time. Farmer's sentiment has worsened, in part because of shrinking crop margins all across the world. Used equipment inventories have been rising, that's very, very negative, and persistently high interest rates have all contributed to the weakening backdrop. Plus, deer's getting hit particularly hard because its highest margin products in regions are experiencing some of the most significant declines. And that's why management keeps saying they expected to do worse than their end markets as these high margin sales dry up. Huh. What do we do with this stock? What do we do with this stock and year now? Let's start by stating the obvious, which is that the agricultural environment remains fluid. How about that? But we clearly haven't reached the 12th of the industry just yet. Now as investors, we sometimes have to take a leap of faith and buy a stock before the actual business bottoms. I do that a lot for the travel trust. I don't think we're necessarily there yet with deer. With that caveat out of the way, I've got to tell you, I am not as negative on deer as you might think. Why is that? Three primary reasons. First, I like how the stocks actually act since the market bottom last October, while deer sold off with each of the last few quarters and deservedly so given its consistently ugly guidance, the stock keeps trying to go higher between those quarters. That tells me investors actually really want to own the stock of deer. The second, we start getting incrementally more encouraging updates. Let's think of making an impressive run, higher so then it'll be too late to get into if we wait. Second, we know this company's been squeezed by downturned agricultural commodities and the Fed's higher for a longer interest rate environment, but both of these things might be improving. Quad prices have had a nice bounce over the past couple of months. Like this, weed is quietly risen when it was 35% from its mid-March lows, corn is up more than 16% from its late February lows, soy is up over 10% from its February lows. I'm not ready yet to declare an ag bull market, but obviously it's good news for deer that weeds up 35% last two months. Meanwhile, there's been a ton of misdirection on the interest rate front. I still believe that rates are ultimately headed lower this year, especially as we keep seeing signs of economic weakness. The so-called brown shoots I talk about all the time. If I'm right, that will take care of a major headwind that's been holding deer back. Finally, when you look at deer's slowly eroding for your forecast, you need to know that much of the big downturn they're projecting is actually intentional. The company recognizes it's facing a softer demand environment, so management decided to intentionally restrict its production in the back half of the year, rather than running its factory's full bore. That's great, because then they won't be left holding the bag of a ton of inventory. This is something that was mentioned by several deer executives on the conference call, including the head of the Precision Ag business that I care so much about, Corey Reed. He emphasized that they really don't want to create an oversupply situation like they have done in the past. Here's how I put it, I'm going to quote, "We're focused on proactive management to ensure that we keep inventories in balance with demand. This is to keep component to ensuring better structural profitability through the cycle for our business." In short, deer is trying to become less of a cyclical boom, buzz business. By the way, that is something that Caterpillar has accomplished under the great Jim Uncle Big. It doesn't hurt that some of their highest tech offerings are so we're carrying revenues, software products that can make money in good times of bad. Still one more example of how the company is trying to take control of its own destiny, rather than staying hostage to the cycle. Of course, for the moment, deer is still very much hostage to the Ag cycle, and we're in the down cycle now. We're searching for a bottom, and it continues to be elusive, which is why the company keeps giving us these good in forecast. These may well get worse before they get better, but let me give you the bottom line here on a company that has been maligned by the street and by me. If you're willing to take a long-term view, I don't think you should give up on deer here. Some of the worst headwinds that are behind the company's control right beyond, well, they may soon reverse. In the meantime, management's been doing a terrific job of taking control of their own destiny. So yes, deer stock has been stuck in a ditch, but I don't think you should give up on a company just yet, when things get better, and they always do for deer, this stock could soar. Larry and O'Hydoh. Larry and O'Hydoh. Larry and O'Hydoh. Larry. Larry. O'Hydoh. Whatever. Booyah Jim. Booyah. What's up? I own two thousand shares of Archer. Should I stay with Archer or buy a Joby? What? No. Go buy Walmart or something. Go buy a real company. I mean, we got to step up our game here, Lar. I mean, you're from Idaho. Come on, man. Don't be a potato head. I need you to think about buying something really good, and Archer and Joby aren't good. I'm coming out to Idaho, and I think in June, I'm going to have to come out there to explain you. But we're not going to be in the Archer and the Joby. We're going to be in the Walmart's and the real good ones. Okay? I love you, buddy. How about Eric and Michigan? Eric. Jim, I love the show. Thank you, buddy. What's going on? I'm calling on General Motors. I'm a longtime shareholder of General Motors. I've had it for about three years now. I've been pretty flat because I've purchased it in the 50s, but I also purchased it in the 30s. The reason I'm calling today is I know General Motors is buying back shares, which is a positive. Yes. But I also know that you are, you like Ford for the investing club, and Ford has a higher dividend. What are your thoughts of me flipping my shares of General Motors in the Ford? You know, well, look, one's in the child with trust and one is, and Ford is. But this GM buyback of Mary Bars has really worked, and I think the stock's going higher. Ford, I am betting, will come to its senses and do a buyback. If it does, then you'll wish that you were in Ford stock. But right now, stick with the GM. I'm not going to urge you to sell. Thank you for being a member of the club. I think it's just a matter of time for the buyback, and I'm being paid almost 5% to get it. But I can't say swap one for the other right now. You've got the one with the buyback. That's what matters. Right? Dear stock has been stuck in a ditch, but management is doing a great job at taking control of their own destiny. I don't think I would give up on this one, and if anything next, next, I'd kick down. Maybe give some buy. All right. Much more may I might have included myself with 100X. Can this private players date up for good business model help you get a read on companies you're eyeing for your portfolio? I'm talking to CEO, then Red Lobster recently filed for bankruptcy. So what was behind the restaurant chain's collapse? I'm thinking of the endless shrimp and giving it my pink. It ain't scamp. And all your calls, "Rabbin' Fire," tonight's season of The Lightning Round. So stay with Kramer. In this business, as you know from the top of the show, we're always trying to get a read on what the consumer exactly wants, because we live in a consumer economy, two-thirds of the economy. If you can figure out what people want before they want it, well, you can get a head of trends, and we know that's very lucrative in the market. Which brings you to a privately held company called 100X. It's found out a little over a decade ago by a former Goldman Sachs partner, Rob Pace, 100X sources' feedback from actual customers of over 3,200 companies across more than 80 industries. They're so going to collect and analyze a consumer data, that just tonight we learn that Goldman Sachs is going to start incorporating 100X's insights into their equity research and investment banking units in which you know I like so much. So how does it all work? Let's go straight to the store at the Rob Pace. He's the founder and CEO of 100X, so we're more and Mr. Pace welcome the man Monday. Thank you. Alright, I'm going to ask you the first question. How do you get your data? 100X, actually, you go all the way back to biblical times, and the illustration of if a farmer puts the right seed in the right soil, you can create a crop of 100X. Yes, I actually knew that. I was thinking maybe that's you guys. That's what it came from. I said no, no one ever is spiritual and you have an innovative way in that I want to get this at the top because I think it's really important. A lot of people are very cynical. You actually have helped charity to take that and get information. Yeah, we've given away tens of millions of dollars to charity. It's a unique model. I think we may be the only company out there who our entire cost of goods sold goes to charity. So the real question is how do you get the normal consumer to give you the feedback on the brands they use because there's paid survey takers, there's allowed voices on social media. So I know, having been the head of the Salvation Army at one point in my life, that we had 30 million beneficiaries just in that one charity, and every charity needs money. So basically what we did is we hit on a fundraiser that said, okay, you give us this feedback and we'll sponsor the charities. Now at the same time, Goldman's not a charitable endeavor, but they seem to know a good entity when they see one. So this is a very important tire for you. Yeah, no, it's quite significant. So from Goldman's standpoint, they're adding the dimension of customer experience to their leading research and investment banking so they can advise clients. And I think that's the big theme, is customer experience and connecting it to financial outcome. So you may know, like we do, for instance, that we like ELF and every time it's been hit, we like them and then I saw that you have data which says that we may be right. We've been big fans of DEX, both for the previous CEO and the car one, and we've been concerned about Starbucks, where we have a travel trust position and it seems to be going awry. Now those are all things that I might have been able to have a hint of, I go hear data. Yeah, we called all of those out six months ago, and again, my opinion means nothing but the crowd collectively. Well, look, the crowd can be wrong, but if it's right a little more than it's wrong, we know what that means. Yeah, in fact, Jim, when we see a material move in our data, we know there's a two-thirds probability that within two quarters that the company is going to beat or miss estimates in line with the way the crowd is guiding us. Very. And that's why Goldman is so interested in this, it provides that forward-looking headlights for their investor clients. Well, should I presume that many of the retailers are going to be as part of your database? Yeah, we, as you said, two-thirds of the economy, we have 3,200 brands, but we don't just do retailers, we do financial services, airlines, healthcare, so it's the full wallet of the consumer that we track. Do any of these companies not pay you to get to skew the data, but pay you to get the data? Yeah, that's our business model. The way we make money is we have a syndicated data product that is used by corporate leaders, and corporate leaders need an independent view of what's really going on. Then that would be you. And that's us. We can only have so many secret customers who might tell us really what is anecdotal. We don't want anecdotal. You're anti-anacto. Yeah, and we believe absolutely in the feedback of the crowd on what we do that's different. We don't survey people. We listen to them. What I mean by that is when you sign up for a 100x program, you pick the brands. You say this is who I care about, why they're good, why they're not good importantly, Jim, how much they're going to use them in the future, and that's been what's predicted. Well, you did something in this that's really rather remarkable. You talk about GOP-1 drugs. I have felt that Lilly is a great brand. I don't know what it is. Zempic. I would go be some out. You know, it's over there. It's over there. It's right now. Yesterday, the FDA said you could have some, I don't know, it's like a compassionate use almost to some of Joe Blow's GOP-1. It sounds like brand name matters for a drug. Yeah. First of all, GOP-1 drugs, our data is spectacular. Really? Up until the right. But amongst them, best in class are the Lilly drugs. So now Zepbound, before that, Monjaro, double digit improvement in terms of patient outcomes like lifestyle, et cetera, versus the alternative. So we had a strong point of view that they were going to emerge as the strongest player in GOP-1s. And the other issue, which I know you've focused on, is what's the derivative impact? And we're not seeing it in restaurants, we're not seeing it in snacks. We do see it in traditional ways you lose weight, right? Like traditional weight loss programs, meal kit deliveries, we see those really facing headwinds. Well, I wish my father was still alive because he sold doggy bags to restaurants, and that's where you would see it in, because they can't finish the steak. That's what's going on. Well anyway, I want to congratulate Rob Pace's, the founder of CX, of which I am incredibly intrigued. Maybe I got a medal at the trade stocks, I have to hope maybe the goodness of heart gold medals show me the data, but I congratulate you on all your success. Thank you, Rob. Of course. We have bodies back in for the break. Coming up, hit us with your best shot, and a electrified, fast-fire lightning round is next. Here's time, it's time for the light record, it's my grandpa, it's me, it's my grandpa, it's me. And then the lighting round is over, are you ready to keep that down, the light record, let's start with Rocco, New York Rocco. How's it going, Jim? I'm wondering if you see growth in M&A for two three inches, two four, and I'm wondering if you can do that in the middle market, especially for companies like Lizzard. I think Lizzard is a good buy here, I do believe that things are going to get a little less owners for when it comes to takeovers. So it's a really good idea. Thank you for bringing it to us for attention. Let's go to Frank and O'Haw Frank. Hi, Jim. I had too many energy in my portfolio for years, and I was losing money on it, so I sold it, and I purchased Enbridge, and I'm making money on it, so I want to hold it a long time and just keep me investing the dividend. I like Enbridge continuing to invest, well I'm one of the few people that's like Enbridge all the way down, because I trust that management team. Let's go to Ed and Florida Ed. Hey Jim, what do you think about WMS Advanced Drainage Systems? Another incredible infrastructure play that I should have brought me so many on PWR. There's so many good ones, and I keep trying to get them all together in one particular place, and I've not been able to do that, I've let people down, I'm going to work on this. Let's go to Clinton and Florida, Clinton. Hey Jim, AST Space Mobile hasn't made any money yet, not a nickel, but what do you think of its potential for a few people? No, I want you to stay away. We've got so many great companies, so many terrific companies, and we don't need to be in that one. We've got to add in Florida Ed. Hey Jim, new company over here, thanks for taking my call. Of course, I'm going to help. I have a question about zero technology. It's made it all the way back, it's made it all the way back, how are we for them? I've got to take it, because I like, I have to take it, I've always liked those guys. I wish Honeywell would sell its near-to-well division to those guys, it'd be nice if any trust would let happen. Let's go to Mike in Pennsylvania and Mike by bike. Hey Jim, I'm calling about SERPTA Therapeutics, ticker symbol S-R-P-T. Yeah, you know what, I have not looked at lately what it's doing with RNA and some really tough diseases. It has been a company that has not made money, but is about to break out and make money, I'm not going to say no to it. Let's go to Larry and Oklahoma Larry. Boo Yucky, Jim, I have one question and it's about... Alan here. Well, Paltier's got good commercial and good military, they want to emphasize the commercial. I think it's fine, when it comes to cyber security, I am partial to Palo Alto, even down here, down 12, and Crouse right. Let's go to Brendan in New Jersey, Brendan. Hey Jim, so I know you have to feel the oil, so I want to ask you about CDR. Let's stick with domestic, I like Cotara best for my travel trust. We can follow that on the CNBC Investing Club, of course, that's the best one. Let's go to Barry in Florida, Barry. Hey Jim, thanks for taking the call. Yes. I currently own a stock, I want to know by so a hold of Jacob Solutions. Yes, you went down Jacob Solutions again, like the American drainage. These are infrastructure plays, that one's doing very well, I would want to own it, and that ladies and gentlemen's inclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, pinching pennies, why Red Lobster got shell shocked, next. Pretty roots for bankruptcy, especially one that stemmed from this magic. We now know the tail of Red Lobster with it's all you can eat shrimp promotion for 20 bucks, where it got beat endlessly by customers, who fasted and then chow down on the scamping. The ultimate endless shrimp deals should have remained an LTO, limited time option, and it was priced way too low for the giant number of serving some patron scarf down. Of all places, how does Red Lobster not know that people love shellfish? It was a disaster. The ultimate unforced owner, frankly, had caused Red Lobster a swing to a loss of $11 million in a ship when it was the approximate cost of the collapse. That said, this chain with more than 580 locations has been falling apart for years. It's been through several different owners, it had no CO for a year, and frankly it was an accident waiting to happen ever since it was spun off by Darden a decade ago. Now it didn't have to be this way, those of us who've been around forever remember going to Red Lobster and it was the best seafood place in America. With lots of oil you can eat shrimp deals for a limited time only of course, and giant schooners of beer which made the place fun and inexpensive. Once I got to meet the cool guys from the deadliest cash, and they said Red Lobster always took the best stuff only, but didn't pay well, kind of what you want from the shoulder perspective. No matter, that was all ancient history. It's multiple owners, including the last one, which supplied the shrimp, seemed about as confident as I was at running Bar St. Miguel before I realized, hmm, you need a professional manager to help, in other words, they were restaurant amateurs, just like me. The balance sheet alone was a nightmare, these guys did a ton of sale leasebacks with a real estate and the cost of labor, just killing them, and they couldn't find decent management in an environment where there's so much competition for leaders. Of course, I feel terribly about the layoffs, but the more I examined the situation the more I realized that the consumer had nothing to do with Red Lobster's collapse. I hesitate to call it Red Lobster's demise though, because one of their critters is very smart, it's fortress, so they may actually resuscitate the darn thing out of bankruptcy. Now, if they're Fed Chief Jay Powell, you might, just for a moment, think, "Oh, here it comes." The consumer is finally starting to pull back, getting ready to take an axe to rank. But Red Lobster, like Bedbeth Miam, was not put down by a more frugal consumer, it was a victim of its own mismatch. Plus the newly empty locations will quickly be snapped up, something you have to see a real-to-income letter, "Oh," which did some of the sale leasebacks, told me not that would happen not that long ago. Red Lobster's a top 20 client, albeit with about 1% of real-to-income rent-based, so not going to hurt her letter "Oh," which I like very much. Now, Red Lobster's the classic case of why I cannot expect more than one rate cut from the Fed this year. If you're going to get multiple rate cuts, you need to see some good operator struggle, not poorly run ones like these guys. You need to see one of the four cruise lines that come to their massive debts, but as Norwegian made clear to me yesterday, that just isn't going to happen. For having sake, you need to see some real belly ups that slow down the hiring juggernaut, take the pressure off wages. The simple fact is that almost any Red Lobster employee who wants a job in the food service industry will most likely get one. Until we've seen good outfits with too much debt or OK outfits with the raw merchandise start to go under, you can forget about the Fed riding to the rescue of the consumer because they will never cut rates with unemployment below 4%. There's just not enough weakness in this business right now. That's incredible. And a one-off all you can eat shrimp you'll go on bad is not going to upend the whole restaurant industry. It's just going to make Red Lobsters competitors stronger. They're about to be down a competitor with a lot of great real estate up for grabs. Good for them, not necessarily good for rates. I like to say there's always a more market somewhere and I've probably tried to find just for you right here at Mid 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. [BLANK_AUDIO]