MAD MONEY 文字起こし MAY2121 Next Week's Game Plan, SailPoint CEO, & Sysco CEO

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Mad Money w/ Jim Cramer - Next Week's Game Plan, SailPoint CEO, & Sysco CEO on Stitcher

0:30
 Wouldn't it be amazing if we could stop talking about Bitcoin and start talking about stock sometime? Sadly, I don't think it's gonna happen anytime soon. Not with so many younger people buying all sorts of cryptocurrencies with borrowed money sometimes are 100 to one basis. nutty Hmm, that's right, you can control huge volume of crypto for little capital up front. And while we follow the stock market, the Dow gaining 124 points today with the s&p declining point oh 8% and the NASDAQ losing point 40%. We're just waiting to see slow motion crypto currency collapse and see if it can bring the house down.

1:21
I say bring it on. I think that the easy money in crypto has been made. Although if you forget to ring the register a lot of that easy money has been unmade with Bitcoin down nearly $30,000 from its peak rerunning. It's much more difficult because there are too many of these different kinds of cryptocurrencies and nothing stopping you or me or anyone else from creating a new one out of whole cloth. So much for the chief reason why I got involved to begin with the scarcity value. More important if ripple or Dogecoin, or theorem can cause a run or a bunch of shadow banks, that clobbers the stock market, which is exactly what I expect to happen, then you need to be ready to buy your favorite stocks on weakness that are brought down by crypto madness. Now, I'm not sure how crypto captured our collective imagination, except that these coins had huge moves. And at certain point people put up by this stuff, simply because it's going up, including yours truly. But before that you had a bunch of billionaires very publicly pushing their cryptocurrencies of choice. I say the same thing about non fungible tokens which have all the negatives of crypto with none of the positives, and certainly no market to speak them to dump them off once you bought these digital keepsakes. And of course, the speculative mania extends to the stock market, although at this point is feeling more like speculative depression. Either way, it could use some lithium, the drug, not the battery. On Monday, we get a bit of the other big fascination besides crypto Oh speak of lithium electric vehicles. When Lordstown motors reports I love the symbol ride, right? And that's the only thing that's really good about it. Or sad is one of the myriad companies that are that's riding on the overburdened coattails of Tesla, they took an old GM plant and converted it into a factory for light duty electric trucks. Of course, right now, this market despises all the pre revenue SPAC plays, because they burn people so badly over the last few months. portsdown stocks down roughly 70% from its highs, I don't know how they can get their mojo back. But you know, maybe they'll surprise me. I'm an open minded fella. Tuesday morning, we hear from one of my favorite companies, to AutoZone incredibly lucrative Auto Parts chain, it's addicted to buying back its own stock. This is a very reliable company. She gets the zone both before and after earnings. After the close, we get results from a company, it's quietly become one of the greatest stories out there. And it's called Intuit. This is $119 billion company. And it creates the best software for small business accounting, something I know from my experience with by restaurants, which I'm very grateful to say are both back in business, Intuit stock hit an all time high today. I don't think that's going to turn bars. Now that the great reopening is upon us when people keep fleeing the cities from new houses in the suburbs, or even the country. You know what that's been a great theme for Toll Brothers the high end home builder, but the stock hit a wall earlier this month, along with the other stay at home stocks. My view if told tells a story of strong orders. And this is really important, expanding gross margins. I think the stock can get his groove back but everything has to be perfect, including assurances from management that lumber and appliance costs are indeed under control. We got a period a pair of really important animal species that want to mention to you and I usually I've got to focus on some of these but these two I think are going to be terrific JPMorgan yum brands, I think they're gonna go extraordinarily well that might not matter to JPMorgan, depending on today's action, but I pictured this your mantle session can move the needle. Wednesday's insane. I mean, just a huge batch of earnings report starting with Dick's Sporting Goods, new CEO, I bet they deliver astounding numbers because all sorts of sporting goods are in short supply. As Americans venture outdoors. unmiss go to one you'll see I was at Cabela's this weekend. They they claim they're out of a lot of stock. I believe that it's the largest physical add to the clothes. We hear from some of the hottest Companies on earth and I predict they'll be very good. first few got retail American Eagle Outfitters that's the A and the lag trade which is Elle brands. Remember, this is the one that that Matthew boss JP Morgan says, elle brands, and then american eagle and then gap. We'll talk about that one in a second. We got William Sonoma, which you know, is Laura Albert, they've done a great job. So far this earnings season, though only one retailers really stood out. And that's target, which outperformed on every metric. Give me more on that later. I think we could see a similar strength from American Eagle as is currently the hottest power chain on Earth. What about we have snowmen why expect great numbers but it's been tagged as a stay at home stock of late which is the kiss of death in this post pandemic market. Maybe they can tell the story in a way that we know is that it's a long term positive. Then we've got several beloved tech stocks, there's Nvidia snowflake, aka workday, Nvidia now support for one stock split today buyers want banana taking up 15 points at one point of 20. I think the chipmaker is a lot going for it but I still want to hear how confident they feel about getting Regulatory Commission for the ARM Holdings acquisition. It's a big position for my chapel trust workday should deliver so one more stunning quarters they use cloud software to automate back office jobs in human resources and finance. As for octet and snowflake. Well, they're two of the fastest growing companies on Earth. I expect great numbers from both, but you should only buy them if you think this market will change its attitude toward high flying growth. names that don't trade on earnings trade on sales. modeles the fantastic confection stock has an animal's been on Wednesday. I expect good things to this company besides free samples is quietly building an empire cookies, candies, snacks, you got my permission to both eat all that they make and buy it ahead of the meeting. Thursday morning. We've got some wild card retailers you have Best Buy Dollar General Dollar Tree I like all three and think they're good stimulus place but their stocks have become awfully controversial and I don't really care for controversy. There are easier ways to make money. You wouldn't noncontroversial I got one for you. I think you buy Medtronic don't yawn I like boring. I bet they report a stellar number because it's medical devices are being installed in record numbers post pandemic there's a lot of pent up demand from people who delayed surgery until they could get vaccinated makes sense right now I feel close Thursday we got an embarrassment of riches in retail both the gap and Ulta beauty are reporting I'm expecting perfection here and I bet we get a gap is very much back something you can tell if you visit their stores crisp, clean and reasonable prices. All this big winter once everyone can take their masks off. We also hear from Costco Now listen to me on this This is hard. Costco has a tendency to run up into the quarter and then sell off immediately. Even if the numbers are great. Doesn't matter what they print. I love Costco the store I love the cost to the stock I love if my child will trust but you don't want to buy it until after you see the results. Let this one come to you. Finally, we've got to tech Salesforce and Dell Salesforce reported a barnburner late last time and nobody seemed to care maybe because they still need to close the slack acquisition. So be careful. As for Dell, you can buy it ahead of time because Michael does go and tell fantastic story. Friday's light but we do have the two retailers that do intriguing big blocks in hibbett Sports I'm betting both will be terrific big losses a discounted it's really gotten together of late him it's in the hottest part of the retail business which is sporting goods so if you see Dick's do good number and you will Why don't you grab some hibbett for Friday's trading the bottom line on all this is it historically slow week release it used to be but they're now on a new companies come public that reporting it's now jam packed as we like to use it in the cliched term. maybe just maybe that can finally please overshadow Bitcoin or ripple or threadbare or whatever they had as long as you on musk and keep his mouth shut about the currencies. Robert in California Robert

8:46
Hello Jim. Thanks for taking my call.

8:48
No problemo What's up?

8:50
Hey, hey quick question for you and get your opinion on oh and a minor there's Medical Supply Company. ticker Oh MMI.

8:59
Okay, we listen. We add add on we add add on when this was single digits, and I said I wanted to go all in. Then quite literally. We caught a quadruple. When you catch a quadruple here's what you say. I chain catching, catching. And thank you very much. How about we got to do it in Florida Dylan.

9:19
Booyah Jim Dylan. Hey, my dad and I are longtime fans of the show. I'm calling I'm calling in reference to the crippling gaming stock Penn national gaming in particular, then fallen sense can pre pandemic and gaining a lot of interest when they acquired part of barstool sports. The stock is almost cut in half from all time highs as opposed to going after a very solid earnings report for spending Indiana just went live for Penn giving them a total of four state movies to come by the end of the year. What Thank you.

9:52
This is very tough because I've been thinking a lot about this this stock. And you know what, I think that you have to accept the fact that NFL vs. NFL betting is gonna be big in the NBA betting and that is what's going to make it so that you're gonna have another home run in this but you know the NFL doesn't start until the fall so bide your time mark in Wisconsin Mark

10:13
Hey Jim How are you?

10:15
I'm good How about you?

10:16
I'm okay thank you

10:17
Hey Jim FL fleet $7 stock down from 35 clean energy electric drive systems cell support suddenly Vietnam if you had management on your show back in March that was a fiasco right? I mean, Mark there's a fiasco we had him I had him one and then some short salary report came out instantly saying that they were a bunch of jokers I don't know. I mean, look at seven bucks. Anything can bounce tonight. I like to say well, I like that and awesome but I'll give you another one. Stocks gratefully stop at zero usually next then that's not good. I'm just saying these are these are pithy. Maxim's usually next week would be a slow one but with all these new copies that came public on a snowflake in a heartbeat. Well, you get the picture there's a lot of stocks that are companies and reporting and maybe just maybe all this for once overshadow Bitcoin hysteria that Musk is an on site live against theory okay are now wanting to Dogecoin by WorldCat oh man money tonight. Could Cisco see a rebound as restaurants reopen across the US? That's the S y s co ky. I'm sitting down with the CEO of zoom after Santos date to see what what's ahead for the stock then the warm weather is here is Yeti a buy? I mean, I don't know right heading into the summer. Isn't this interesting? I'll tell you if the stock can help your portfolio keep it's cool. And is it time to sell into an investment in sailpoint? A little cybersecurity on the clock the CEO stay with Kramer.

11:44
Don't miss a second of Mad Money. Follow at Jim Cramer on Twitter. Have a question? Tweet, Cramer hashtag mad tweets, send Jim an email to Mad money@cnbc.com or give us a call at one 807 43 CNBC miss something head to Mad money.cnbc.com CNBC is workforce Executive Council is a premier group of C suite Human Resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences the network and resources HR leaders need now applying to the workforce Executive Council at CNBC councils.com slash WEC

12:39
to find out the recently you know the restaurant industry is making an incredible comeback. So what's the best way to play it? Well, I would say it's s y y Yes, Cisco, the food distributor that supplies restaurants, hospitals, schools, hotels, a by the way, not just here, Europe company in Ireland, by the way really good business there. Yesterday, the company held an investor Day event where they laid out a new plan for the future Cisco's aim to grow 50% faster than the rest of the industry. They also announced a $5 billion buyback boost and the dividend by 4.4%. And now it's the acquisition of a key property Greco and sons Italian specialty food distributor, put it all together. There's a lack of light here. And you know, I've liked it for a long time. Let's check in with Kevin hurricane. He is the President and CEO of Cisco Corporation hear more about his vision for the future. Kevin, welcome back to Mad Money.

13:23
Thank you, Jim. Appreciate you're having us on the show. Again. great to talk to you.

13:27
I got to say I'm so glad you're on the show. Because you know I get all this different anecdotal evidence about how well restaurants are. You are not anecdotal, you are empirical. Can you please give me the state of the restaurant business in our country right now.

13:39
Now here in the domestic market, the business recovery for independent local restaurants, the recoveries here, Jim, on the national level, on average, we're running increases to 2019. And yes, I said increases to 2019 right now. And I would say fully reopened, the markets are running double digit increases to 19. Because as you know, there are still major metropolitan markets like New York, where you happen to have restaurants that are still under some pretty heavy restrictions. And those markets are down double digits. So when you put it together nationally increases to 19. And the harbinger of good success to come with that data is as New York and Chicago and Boston and parts of California reopen there's only upside to this recovery.

14:21
Okay, so they tell me these national numbers are that there's 150,000 or restaurants that have gone out of business. Is the rest of the business going to get these fewer in the good. Well, where's that statistic just plain wrong?

14:35
Well, the data that we have, Jim is that fewer than 10% of the unique restaurants that were open pre COVID are now closed. And I would submit that's actually a better number than most pundants had speculated they were speculating numbers well north of that. So I would say there's some success there that fewer than 10% of closed at Cisco actually we're serving 10% more unique doors, Jim than we were back in two In a 19, which is a 20 point delta to the industry due to the good work, our sales team is doing to be out there, prospecting new customers and educating them on what Cisco has to offer. But to specifically answer your question, consumers want to go back out to eat, they have food at home fatigue, and yes, the stores, excuse me, the doors that remain open will see higher productivity, because of what you just described using

15:23
your data from now on, because it's boots on the ground data. Now you've done something that I think was it did many great reorganizational ideas during this period. I mean, really, and you accelerate everything, but one that you did that I thought was brilliant, you are doing cuisine, focus selling, and I kind of wish Well, why were you doing that before? What a great idea, right?

15:44
Again, we unveiled at our investor day yesterday, what we call recipe for growth, which is a five point plan for how we can better serve our customers from improving our digital tools to improving our marketing capabilities, improving our supply chain, which I can talk about later. In this fourth part, which is what you just mentioned, as our as our cuisine focused selling, we know that we under index in the ethnic cuisine segments, like Mexican, Italian and the many forms of Asian food, the weijun is our Salesforce wasn't properly trained, I wasn't given the right tools to be able to succeed in the product offering wasn't optimal. So yesterday, we announced the acquisition of Eddie Greco his company, we welcomed Greco his family to join the Cisco family, they have perfected the model of better serving the Italian cuisine segment, which is you know, is fast growing in our family and enabled us to have a better go to market strategy, we're going to take that platform that grecco platform and bring it to many other geographies across the country.

16:41
I thought that was a brilliant idea. Then other the growth toward number three is something people come on our show all the time, they say well supply chain broke, or the supply chain, that was the proper supply chain semiconductor supply chain for consumer packaged goods, you your supply chain works, how come

16:57
we get the broadest and strongest supply chain in the food service industry. As you know, we're the backbone of the food away from home network. So it's robust, it's strong, it's efficient. The difference, Jim, what we're doing in the future better than the past is we're going to be more flexible to meet our customers where they are. So what does that mean in straight talk, it means more frequent deliveries, more agile and flexible later in the evening cut offs. So if you run out of something for one of your restaurants, we're going to be there for you tomorrow morning, if you need it. So meet the customer where they are increased delivery frequency. That's point 1.2 is something we call omni channel inventory management. We have the broadest inventory in the industry over 150,000 unique skews. But any individual customer today only sees a small percentage of that. So work we're doing with our supply chain and technology teams is to open up all of our inventory, specialty produce specialty proteins, plus our bottom line inventory to be able to get what they need in a timely manner. Jim, what we said to our investors yesterday is we can double the number of unique skews available to an individual customer without adding a single piece of inventory to our network, which is obviously an efficient use of our capital. Yeah,

18:06
absolutely. You made that point. I think it's so important for people in business winning more share from existing customers, you have their wallet, that's the best way to have best gross margins and therefore best sales.

18:17
100%. Right. We said yesterday by adding one additional case to customer that we're delivering to that case flows through at a higher profitability than the case before and on and on it goes and the tech tools that we're deploying the improvements to our merchandising and marketing capabilities, plus the supply chain and Salesforce improvements that I described. We're very confident we can increase our share of wallet with customers we serve in gym today. That's only 30% We're the biggest in the industry by far. But we have only 30% share of wallet for customers we serve and we're confident we can increase that through the planning. We deployed yesterday.

18:50
I believe that I mean this is your time. It really is and you come in came out very strong. That's Kevin who work in Cisco but the S yy kind guys, President and CEO, it's great to see you again. Thank you.

19:02
Thanks, Jim. appreciate being on.

19:04
Absolutely. Absolutely great company. We have monies back after the break.

19:08
Coming up even for those Florida face. torridge is the pace at which they're ready to run in the sun. Can this outdoor stock harness the power of a Yeti and fire up investors was scorching summer returns. Mad Money We'll be right back. CNBC is workforce Executive Council is a premier Group C suite Human Resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry content. With access to breaking news calls and digital networking experiences. The network and resources HR leaders need now applying to the workforce Executive Council at CNBC councils.com slash WEC.

19:56
You know me I'm always on the lookout for companies that report great quarter I only see their stock sell off, especially when those companies are part of a broader secular theme. It's actually working in this environment. Which brings me to Yeti holdings, the maker of high performance, outdoor gear, especially coolers and drinkware. They've got everything you need for a tailgate party or a camping trip. yet he's a player in the great outdoors, a group that did great last summer, because the great outdoors was the only way to safely take a vacation at the height of the pandemic. But unlike most COVID winners, the outdoor stocks have mostly been able to keep running in 2021, because they still got a lot of things going for them. 10s of millions of Americans have been basically stuck indoors for the last 14 months and now many of them they've been vaccinated. There's a widespread desire to finally go outside and have a good time and that is where this comes in. Yet when the company reported a fantastic quarter last week, the stock didn't get much lift. Thanks to the recent turmoil, it's actually down a couple of bucks from its pre earnings highs last week. In other words, I like to say you're getting yetis latest quarter a great one for free. at these levels, I just be bar betting against Yeti has consistently been a mistake ever since the stock came public in the fall of 2018. And many have made that mistake. See I started recommending it A month later, when I was trading at 17 and change not to toot my own horn. But that was one of the best quality made since this show begin with a stock now trading at $6 and change. It's up more than 390%. And about two and a half years. And one of the reasons I recommended it was yes, I looked at the product, I liked it and then looked at the financials. I think this can't be beat along the way. Yet he stamped out a lot of the skeptics just demolishing every bearish argument they that anyone could come up with one after another. Not long after the IPO the big word was the Yeti come public with a private equity backers firm called coretec. And they still want a majority of the company shares. It didn't note that the private equity guys had also loaded this thing up with that I don't like that. But it's what happened. These problems did solve themselves. kortek gradually unwelded status the stocks rallied they're now just the 20th largest shareholder owning barely more than 1% of the business so much for that worry. As for the balance sheet, yet his performance has been so strong with so much cash generation that the balance sheet has never been a problem. In fact, Dell has got more cash than debt pretty extraordinary. Got an incredible Buying Opportunity last March when the COVID collapse took down the entire market. But you had to pounce immediately but this within a few months yet he was making new highs. Again, a big beneficiary I said of the great outdoors trade. This stock has more than quadrupled from its lows by the end of last year. And unlike boasts a 2020s biggest winners, it's continued to work to run in 2021. Right now yet he's up more than 25% year to date, because the company reported a pair of phenomenal quarters with absolutely staggering guidance. Now coming into the new year the general feeling was that these stocks while they were getting played out, sure the company was doing great, but it run up dramatically. And you had to wonder if the strength is already baked into the stock as has been the case in a lot of technology stocks. For example, in January Citigroup raises price target free it from 69 to 85. But they also downgraded the stock from Biden neutral as the stock was already at 78. Well, they didn't turn against Yeti the conventional wisdom and guidance a lot more ambivalent. When Yeti reported fourth quarter results in February the numbers were fantastic. That big top and bottom line beat 26% revenue growth record gross margins what they made on the stuff and an incredibly push for your forecast. That's exactly what we're looking for here. management was talking about 15% plus growth for 2021 it was only looking for 21% I'm sorry, for 10 they got double what the answer we're looking for I mean, I don't know city and also just downgraded the stock turnaround it upgraded back to a buy me a that's a lot of quality, but he wanted you to own Yeti. Yet the stock actually sold off hard response went down 8% 8% as most of the 2020s biggest winners got hammered late February and early March. Nobody cared that yet he had great numbers, but by late March Wall Street stopped being so indiscriminate. After the smoke clear buyer circle back to stocks with excellent results and even better guidance. Plus the spring got rolling. I think some investors wanted to get into Yeti before consumers started stocking up on their products in preparation for the summer. Fast forward to the end of last week in this company delivered yet another stunning quarter the best one yet, not only did Yeti deliver a big top and bottom line beat, they have 42% revenue growth due that's the fastest they've grown since the IPO. Remember the great guidance issued in February? Well last week management raised that substantially rather than 15% growth of four year they're now forecasting 20% or better. That's like what a technology stock does. Meanwhile, Yeti is built out of top notch direct to consumer business, which is one reason they were able to make so much money when we went into lockdown in the latest quarter direct to consumer sales were up 59% year over year, much better in the wholesale business. And these direct sales have higher margins because yetis cut out the middleman hence why the company's gross margin was up 560 basis points last quarter now that the direct to consumer makes up more than half of their total sales. I wish I could somehow explain to how unusual it is. Most companies just don't have anywhere near that direct to consumer penetration. On top of that yet he's invested a lot of money in new products, like cooler bags, and they're growing like wheat overseas, the company's international sales are up 146% last quarter, meaning this brand isn't just for frat boys and fishermen anymore. I'm a fisherman. That's why I have it. Now the one knock on Yeti is that the stock is expensive. I'm not denying that it's currently traded 37 times this year earnings. Yes, but you have to consider this. In mid February before we got that fourth quarter results, the stock was at 78 Wall Street expected them to make $2.70 per share this year. In other words, it was trading at 38 times earnings, but you fast forward to today. Wall Street expects him to make $2.34 per share. So even though the stocks up eight bucks, it's actually still cheaper than it was in February on earnings basis because the SPS keep going higher. That's why stocks end up looking cheaper. I think this is the kind of growth story where you end up kicking yourself for letting the valuation bother you because the actual earnings numbers tend to come in a lot higher than the estimates so I recommend sticking with Yeti here. Okay, so what about the other great outdoors stocks we recommended beginning of the month. Look You don't want it mixed bag. Got a big winner and Lippert the marine and RV parts supplier and put a great quarter stock saved anyway for bouncing right back just like we told you with the golf place they're incredible Callaway acushnet I mean these things are unbelievable. And same thing goes for VISTA outdoor. However there are other outdoor plays that can't get out of their own way Camping World reporter spectacular quarter insane Arispe stock initially jumped 10 bucks. Now rollback that entire game and some and then they're the losers. The makers of the big ticket items Brunswick for boats for industries and Winnebago for RVs since I recommended them just three weeks ago Brunswick is down 10% forcepoint at Winnebago lost 15 the craziest thing about this decline is that there's no clear kallos plans to invest today but it was basically a non event other than that there's nothing I like prawns with my view. These companies still have fabulous fundamentals and women are not socks actually do get cheaper as they go lower. So I'm sticking with Brunswick Thor and Winnebago off. What's happened, of course is people say who needs those now we can go out anywhere else. We don't need to do what we were doing before. The bottom line, the great outdoors is here to stay. And if you want to play it and play it right, I'm telling you my favorite Yeti holdings Ryan in Mississippi Ryan.

27:16
Mr. Kramer? I'm a longtime listener second time caller. Good question. By the stock. It appeared in October for $12 a share. It's ran up to about 30 it has kind of went stale and down here in South Mississippi. It sure has got hot. So it makes me think summertime. What do you think about Academy sports and outdoors?

27:37
Nice Ken Hicks. I'm a big believer in Ken Hicks. This stock has been a horses I'm 63%. And I like them and I think you got a horse sense my friend. Let's go to Chris in California, Chris.

27:48
Hey, are you doing?

27:49
I'm doing well. How about you?

27:51
Yeah, I hope you're doing really well. Thank you.

27:55
All right. I'm doing what?

27:57
Yeah. Thanks.

28:03
I don't think we should talk stocks. I mean, look, the Phillies have lost so many games in a row. Let's float stocks instead. Okay, so

28:09
my question was more about Marriott?

28:12
Well, Marriott is you know, it's a tough one. I was speaking actually to a professional football coach the other day and the former Army Sorenson was the CEO and he was just quite simply a great man. And I want to see a couple of quarters under the new fellows belt. Because Arnie Sorenson was one of the greats and I don't know how you can walk in his shoes. I'm sure this gentleman's trying hard enough. He did a very good job and it's on CBC, but I am having a hard time recommending Marissa until I see more, because Bonnie Sorenson was a giant. Alright, my favorite way to get on the red hot Great Outdoors trend is Yeti which is my go to everywhere this stuff stays cool. It's really great. I mean, that's one of the reasons why people liked it so much. Hey, Mad Money, we got a lot more we're gonna sit down with sailpoint technologies will companies consider hybrid work model could the company bank on the trend Then who's to blame for the recent supply choice shortages we've seen? I'm giving you my take. I think it's gonna surprise you. And all your calls rapid fire in tonight's edition of the lightning round. So stay with Kramer is is when they circle back to some of these beaten down cyber security stocks. Now we'll be only cybersecurity incidents. I mean, some of these names are finally getting some real live but not all, kick sailpoint Technologies that's an identity security software play with a stock that's fallen from 30% from its February highs. Alright, so some of that week is with just about that rotational I keep talking about out of the turbocharged growth stocks with little in the way of actual earnings. So I'm going to do with competitive elements. Last month, we learned that optis tried to encroach on Sep one surgery, although sailpoint would tell you that they actually don't see them that much. But the real issue is the most recent quarter sale points currently switching from an old school software license model to a much more modern and loves software as a service model. And we know this kind of transition can be a bumpy ride, even if it's a good To move long term which are almost always this, while this cloud transition is happening, though the earnings become confusing. So when CEO put and put it two weeks ago, a lot of people were turned off by the imperfect headline numbers. And the fact that management they know let's say the report word Taj said they cut their four year forecast. However, sailpoint argues that the most important metric is now their annual recurring revenue. That's how you judge a cloud play. I can't agree more. And that number was a stunning 43% year over year, and maybe they're just getting some traction after opening down the stock recovered a bit. It's now up nearly 2% this quarter. So let's take a closer look with Mark but claim the co founder and CEO of sailpoint technologies, you get a better sense of where his company's headed. Mr. McLean, welcome back to Mad Money.

30:40
Thank you, Jim. Great

30:40
to be back. Thank you for having me again.

30:42
All right. So Mark in your recent quarter, which I know because we said the annual recurring revenue was what we care about. You said, I want you to think of sailpoint as your i t wing man. Why are you our it wingman? Well, I

30:57
think, Jim, we've talked about this a couple times. Now, I think you're all over this with a lot of your interviewing in the security space security is a very, very hot sector has been continues to be it's still a very unsolved problem. We saw that with colonial right. But more and more people are very tuned in to the centricity of identity in the realm of security. So if you're going to run, you've heard all talking about digital transformation, depending more on it to advance and make your business more competitive. Well, then making sure that business is secure and trusted is a big deal. And identity is at the core of that. And that's right where we sit.

31:29
Okay, so I think got to drill down in this identity, because another term that you use that I think our our viewers want to know about, is the the question of you said at one multinational you are involved with protecting 200,000 human identities, but also 200,000 machine identities? How can a machine having an identity different from a human?

31:52
You saw Space Odyssey 2001? Right? No, I'm kidding.

31:56
How, where's

31:57
How?

31:59
No,

31:59
I think what we're talking about here is that increasingly, both machines and even programs, you know, a subset of a machine, a software program, there's a term software, but these things are actually mimicking the behavior of a human. That's why they get a reference as an identity. For instance, a software program might be the initial loan processing triage, right? You're seeing loan applications come into your bank, and the first thing that does it goes to a program and kind of credit risk credit scores it, that behavior is the kind of thing a human used to do. But that's a program that actually often will reference other business applications reference data, it's doing the thing a human used to do which is touch multiple systems gather information make a decision? Well, well, our IT professionals are very tuned in to the fact that that just like a human is now a point of attack, it could be hacked, it could be compromised. So they want us to help them not only protect all the access coming in from humans, whether employees, contractors, business partners, or even customers, but they also want us to help them protect those identities, those non human identities that also represent a point of risk.

33:04
Do we have non human identities at home now when we do work from home?

33:08
I've heard that our refrigerators are going to start ordering milk for us, I'm afraid.

33:13
Look, I have a computer at home. It's not okay. It's not hard. You have a computer. Why have ankle biters come on? But I do fear that for instance, I'm going to mention a country that I My father worked for the Chinese Okay, work for the PTA for the PRC, but I don't want the PRC looking in my in my PC. But I imagine it they're really smart. They could do it.

33:37
Yeah, and really, it's a it's a like a target question for the for the bad guys, if I will, Jim, like, their motivation to break into your home computer is far less than to break into Bank of America's or jpmc or the government. So it's partly a target rich environment question of they're gonna go, the old bank robber said, where the money migrates. So they're gonna go after those targets. So there's an increasing focus on protecting those targets, right? one of the hottest topics is fishing, right? How do you protect the people that work for you for not accidentally giving up credentials or information? So the bad guys continue to adapt and get smarter? I think now they're going to start trying to figure out how do I attack those non human identities? Can I compromise one of those software programs or that machine? Now I'm into the enterprise and they don't even know I'm there?

34:24
Right? Well, I like to bring something when I got a guest as smart as you are. I got an idea for you. If this country we just saw you mentioned the colonial we, we know that there was a big insurance company, very good insurance company that just paid ransom. The Foreign Corrupt Practices Act is about stopping people from paying ransom. Should we all have the cyber security companies like you get together go to Washington and say, these companies, they've got to stop paying ransom, and that would then force him to go higher sailpoint instead of thinking they can get away with it

35:01
Let's just say that I'm sure you're familiar. You know, President Biden signed a new executive order all about cybersecurity. Right? It has impacts on those that do business with the government. It has impacts, I think, for all of us that are in the cyber market and how we reflect. I think, Jimmy, you're right on, I think what you're going to see is more collaboration between key players in cyber between those players and key customers, I think, particularly in infrastructure and financial services in the government. We've got to kind of bring the house has it work, to band together and say, how do we put up better defenses? And it's not up to the commercial sector? Obviously, it's up to the to the government to potentially send some strong signals back that if you do this, there's repercussions. Yeah, our job is to help our customers protect themselves. And I think the government is ultimately gonna have to help us. I agree,

35:47
because I think that the companies that have been paying our companies that have said to the most part, you know what, I'm not paying sailpoint I'm not going to pay off debt. I can get AI in Palo Alto, forget about it. We have strong internal systems and then our whole house a country comes hostage and he's got no no they have to be able to eat you have to say to yourself, I better hire sale point or else maybe I'm gonna pay a big fine or even go to jail if I pay off in Bitcoin. So anyway, you keep fighting the good fight because we need you more than ever Mark MacLean, co founder and CEO of sailpoint technologies, who's who's a COVID got by us every morning. Good bread good swag memories back into the break.

36:26
Coming up next. What's

36:28
big money together? What do we got

36:30
Kramer's bringing the thunder and answering your burning questions in today's edition of the lightning round?

36:43
It is

36:52
and then a lightning rounds over Are you ready skiing? with Bob in Nebraska Bob? Yeah, Jimmy chill

36:59
for a long time watch or read three books. He helped me save lives here in Omaha. Thank you, Jimmy. God bless you, man. Wow,

37:05
wow. Right back at you What's going on? Oh,

37:10
so Oh, pk.

37:13
it's problematic because you have bio reference. And that's common down because of the pandemic. And then you have all these other great things that they've got that they can start talking about, but they don't want to come on the show. So I have to say pass. I think you got a giant in Michigan giant. Hey, hey, Jim.

37:28
I'm a huge fan. I've

37:30
been watching the show regularly.

37:33
What I wanted to ask you what's Boston? Omaha? I've been following it for a few months now. And I think I want to buy it. Do you think it's a good idea?

37:43
watched it? That's a passage about a mosaic of bizarre things like real estate and advertising. I'm gonna say hard pass. Let's go to Dan in New Jersey. Dan. Who we are well, I like that spirit. Of course jersey. We bring it What's up? My question is on WTF v. Box. The last quarter was a mess. There's no denying things and unlikely thing for wd 40. I don't know. I'm gonna put it in the penalty box. Two majors. That means I need to see two more quarters. Let's go to Craig in Texas Craig. Hey, what's going on? Man, how are you? I'm

38:28
doing well. I'm doing well. All right. I had a call Bob. I was calling about a company is really good. We're trading but I want to know the long term view on it. Ti IG are up in sec. Okay.

38:39
So you know, yeah, you don't have enough problems with FinTech United States. You got to go clear across to China and do FinTech I say it's a train wreck day. Let's kind of fill in Pennsylvania bill to man everyone is saying chip supply chain supply chain supply chain was empty aiming to do mining and refining in the US that's a no brainer. Come on. There's a Chinese supply chain pop. Now here's the problem with NP just so we know it exists back. It didn't sell a lot of stock. They hate that I mentioned that. The main thing to know is that if you want to hold it long term, I think there's real value here. But short term you know it's part of a whole cohort of stocks that nobody can get rid of. And it doesn't matter what they make. And that is the problem with NP. I need Brenton Michigan bread. Ooh, yeah. Jimmy kill this guy's brain and what's going on? Hey, hope you hope things are going well for you're down on your luck Down on the Farm man. Hey, Mike doc is a 5.5. Jim has Nokia finally Nokia had a decent quarter and Sony Ericsson By the way, I'm giving you a twofer. That's like you know, it's a parrot. It's like, you know, it's like an opening pair to be able to play some poker with but Nokia was good. It's also I'm gonna throw in still one word. It's a river in Finland. That's how it got its name. How about Mike on Colorado, Michael. Jimmy chill. Thank you for having me on. It's my pleasure, Michael. What's up Thank you. Thank you, Mrs. MRO. I mean, I've got two that I like okay I like Conoco. I added that one. And I like Chevron on the majors and then I still like By the way, pioneer his terrific and that lays them in good other lightning round.

40:18
lightning round is sponsored by TD Ameritrade coming up, how did a sensational vaccine response actually leave some companies unprepared to profit, Cramer on why a little baby just the thing to sell the suffering of stocks and their investors next.

40:41
But how can you lead everyone, every manufacturer every retailer be quite short of almost everything. With the people running these companies just stupid. They know nothing did they totally underestimate the recovery in exactly the same way. As this earning season finally draws to a close, I can only come up with one company, one company that had the right inventory and the right amount of the right inventory. And that company was target. So rather than asking how everybody else could be so wrong, maybe we should ask how hard he could be so right for a CEO Brian Cornell made sure he was incredibly close to what his store managers needed boots on the ground, even at the lowest level. Second, he's got an innate sense of optimism about the American consumer. And that's an attitude that would have been disastrous. We hadn't gotten people vaccinated so quickly. No wonder the stock was up big again today, after yesterday's mammoth move. Most industries in this country have adjusted time philosophy for it. For example, decades ago, the automakers learned that there, there are lessons about the needless expense that come from being vertically integrated. At first came by the way from Henry Ford. Because they needed to raise cash, they spawn off their autoparts subsidiaries as separate companies then force those suppliers to keep their wares on their books. So it's not the tie up the company's capital. In other words, maintaining robust supply chain is expensive. And in corporate America, it's widely regarded as wasteful. Our companies never want excess inventory on the books, they want minimal inventory, and go order what they need when they need it. That just in time model worked for a very long time. But it falls apart when your suppliers run out of stock. Again, look at the American auto industry, they ran out of semiconductors. And because they can't get more fast enough, they've had to slash production, even though demand for cars is off the charts. Meanwhile, the Chinese automakers are doing just fine because they still remember what it was like to have shortages. Today stockpile components. There's word of the semiconductor shortage chip makers use to ship their higher priority products. This is something people don't know. So bear with me. Okay, this is something I've been working on behind the seats. They used to ship their primary products when they couldn't get them fast enough on airplanes, commercial jets, okay. But think about there's been a huge decline in commercial jets going from say, Taiwan and Singapore to California, that used to be big traffic. Without those giant passenger planes carrying stuff in the hold. Everything needs to come in via our ports. And that's one of the big reasons why the ports are totally swamped. But just in time, inventory management isn't even the worst problem. Why don't we nearly every company underestimate the strength of this rebound? Because executives were way too skeptical about our ability to beat COVID with the power of science, it's hard to blame them for their skepticism because the negativity was indeed so palpable. You had two main reasons first, before COVID, the fastest we've ever developed. The vaccine was four years that was mops. Second, there was a widespread disbelief in the government's ability to get anything done. Most executives I talked to believe that operation warp speed was just a gigantic PR stunt to help the previous president get reelected. But even a PR stunt can be good policy. They didn't understand that if you took the risk off the table that would incentivize the companies to participate wholeheartedly, which is exactly what happened. Again, I understand the citizens. It's not like President Trump showed much faith in science in any part of his administration, and other than operation were speeding never seem to take the pandemic seriously, even when he covered himself. Sure the White House had a lot of good things to say about the vaccines, but they also had a lot of good things to say about bogus miracle cures like hydroxychloroquine. The result? Most businesses I know were, quote, totally flat footed by moderna and Pfizer. The latter was less surprising, but what really shocked people I mean, even though they've had some success all the way back in February, not wanting it for COVID first caught people's attention, hardly any more bleed there is kind of small biotech. That's right, that that that really was the biggest mistake people as the president touted snake oil and so many drug companies seem baffled moderna, and then Pfizer's little partner bio intek. Well, they broke the sound barrier to get things done. Now we're all paying the price for the lack of faith. Part of the prices shortage is something that's got the inflation Easter's in and out poor, that's also make it difficult for more companies to to deliver. Ultimately those companies will get back on track. For now, though, they've got a high quality problem. The vaccination program is better than anyone anticipated a year ago and the economy's doing so well that these firms are struggling to catch up. Sure, practically the whole business community has been taken by surprise. But you know what, at least It's a good surprise. I like to say there's always a market somewhere I promised I'd find it just for you right here on Mad Money On Jim Cramer See you Monday.