MAD MONEY 文字起こし 10JUN21 Chewy CEO, PerkinElmer CEO & J.P. Morgan Retail Analyst Matt Boss

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Mad Money w/ Jim Cramer - Chewy CEO, PerkinElmer CEO & J.P. Morgan Retail Analyst Matt Boss on Stitcher

0:47
Cramer, welcome to Mad Money. Welcome to create America. Other people want to make friends. I'm just trying to make you some money. My job is not just to entertain you but to educate and teach you so call me at one 807 43 CNBC or tweet me at Jim Cramer. How could the s&p 500 closed at a record high when we got such a terrifying inflation number this very morning. Simple. When everyone expects an outrageous government statistic, then it isn't actually outrageous when you get it. So in the Labor Department reported a red hot number. This morning super Price Index up 5%. The biggest year over year increases august of 2008. The market took it in stride, dow advanced Nike points as a beginning point four 7% Hey new high and most important the tech played NASDAQ climb point seven 8% inflation winners in the Dow underperformed today, while the classic growth stocks NASDAQ names like Microsoft ServiceNow, Adobe CrowdStrike, Amazon and alphabet they all know. It's like when you're throwing a surprise party for someone and they find out ahead of time. They usually try to pretend that they didn't know just to spare you the embarrassment. Today, many people pretended they didn't know about this inflation, which is why you got a real photo surprise. It was so obviously going to be harder than projections that then you have to wonder who the heck is making these stupid darn forecasts in the first place. Here's the thing. When you've got a phony surprise everyone always afraid that someone's not an old joke. It's some big firm with a lot of stock will be shocked and say, Wow, that's awful. The Fed will have to tighten up immediately. So the fear of clueless big money keeps people on the sidelines once the number prints and nobody freaks out. The buyers who've been biding their time. Come in off the sidelines and bye bye bye bye bye bye. What are those bars been too glib? It may. It may not be a surprise but 5% inflation seems pretty serious doesn't want to force the Fed to tighten wreck the economy Not so fast. This is a case where you have to read the fine print. Remember fed cheap Jay pal keeps insisting this inflation is transitory. Many will eventually suicide even if the headline numbers currently seem real bad. When you break them down though. It sure looks like pal may be on to something. First, the biggest price increases were for us cars and trucks up 7.3% in may continue a trend from April, US vehicles alone account for 1/3 of the total consumer price inflation, transitory You bet it is. What's happened here is that new cars and trucks contain a lot of semiconductors. Right now we've got a chip shortage because no one expected this level of demand. That's your COVID sparked an exodus from the cities to the suburbs who thought that would happen forcing millions to buy cars. Meanwhile, all the semiconductor foundries are running at full capacity, so the automakers hadn't been able to expand production. That means anyone who needs to buy a car or truck pretty much has to bite you wherever you can find them. If all the oh really does go back the semiconductor shortage though, and the thing about chips is that the foundries are pumping them out. 24 seven plus there was a fire to major Japanese facility a few months ago. Now that's coming back online. Sooner or later these are going to reach equilibrium. And then the market will be flooded with supply and this problem, transitory it'll resolve itself remember, there's nothing in Federal Reserve can do to solve the chip shortage. We need more foundries not higher interest rates. Now let's take down more line items from the CPI board airline fares job Whoo. I say so what of course airline tickets are abused over a year. Nobody was flying in May of 2020. Plus the airlines didn't misjudge the strength of the Pfizer and moderna vaccines. So they haven't grown their capacity to keep up with new demand. But there are more than 90 new airlines 90 new airlines launched this year. And there are plenty of planes to be had. fares will plummet once these companies get rolling. Next oil and gas Alright, it's much tougher. We all feel it. But this is actually another supply issue. Remember that by the administration is a friend of the oil patch. Right? I mean, get what is the big give up on the Keystone pipeline today, the Trump administration is sowed the seeds of oil and gas price destruction by encouraging companies to drill build pipelines. Now though, there'll be far fewer pipelines built. And oil companies are far more concerned about environmental issues, so they aren't producing as much again, it's got nothing to do with interest rates, the more president hates oil

5:25
goes the grain complex way up to However, this is another problem that tends to fix itself if you give it enough time, when grain prices spike farmers buy more equipment and plant more crops, which in turn sends price prices back down. And that is exactly what's happening going. The deer conference will be this with me. What else I'm not surprised to dining out costs were I believe something like 150,000 restaurants closed during this period. Their Mayor needs to charge more in part because they haven't been able to make it up in volume due to COVID restrictions. Now these restrictions are easing prices should come down. Or at least stop climbing. Sure Starbucks is taking talking about a cop cup shortage, but they have more volume themselves because so many of the independent coffee shop competitors went under. They just misjudged the supply chain glitches in this industry tend to be related to freight and plastic plastic prices abroad because we've got so many petrochemical plants along the Gulf Coast, and they've gotten hammered by winter storm Yuri as for free, and the last one. I got no answer on that one. We don't have enough truck drivers. It's a difficult profession, they need to pay more. When people fret about inflation. That's what they're really afraid of. They're afraid of wage inflation. That's what they're scared of. But before you start freaking out about Weimar Republic level hyperinflation. Remember what we really saw in last Friday's non farm payroll report, the labor participation participation rate, it fell a 10th of a percent. average hourly earnings were up just point 5% month to month, and they only increased by 2%. year over year. Meanwhile, the average workweek actually fell a 10th of percent. Honestly, I'm surprised these numbers are so low given the pressure from expanded unemployment benefits, those benefits go away in September that it wasn't that strong unemployment number. How about the port congestion is pent playing havoc with so many goods. Alright, get this is a little bit inside baseball. I think the pressure goes away when commercial flights restart from Asia, the United States, they're gonna make a comeback to that lots of cargo normally travels when there's passenger planes, not just in the containers and ship. Once they start flying again, that log jams gonna diminish, put it all together and it's so one of the Federal Reserve's keep rates low. They don't have to lift the finger, most of these problems are going to sort themselves out. In fact, it's already happening port and freight index great proxy for commodity demand cheaply out of China has come down a great deal in the last couple of weeks. That's a big reason why almost all the industrial structures crushed today. While the drug stocks look well, they took off even as that's exactly the opposite of what you'd expect. If the red hot CPI number actually took anyone by surprise. Okay, look, I am not saying that we've got inflation whipped now, I'm saying there are too many things that went wrong last year, and most of them won't be solved by higher rates. Businesses just weren't prepared to handle such a strong economy. But that's a high quality problem. And they don't need a rate hike to work things out. Time will do it for them. I think j pals gradual approach is proven. I'm betting he's gonna be dead, right? So we should just simply stop bugging the darn guy already. He's doing a real good job. Bottom line, maybe pals responsible for a big chunk of this rally in the stock market, or maybe businesses just playing good. Either way. The only truly non transitory inflation I see is from that wall street bets mob who've gotten in their head somehow to inflate stock prices. Or although even that's probably temporary, given what happened to the mean stocks in January. And given what happened to them today. Let's go to Anna Massachusetts and

9:03
Booyah Jim Cole, I'm calling about peloton I'm a mom of two boys under the age of two so you can imagine I love the company love the bike. I'm a conservative investor so where do you see the stock going gyms are opening up

9:20
the weather's nice conservative investor does not buy peloton as much as I think the company's well managed. It is not the kind of stock I mean you need to be looking at a Pfizer by the way it's no single look at Pfizer it's not it's not bad I talked about it today in our video I did you need to be located. At some you call you can bind Bristol Myers it's all right here. I just think peloton is not for you. It's just risky. I want to go to Ellen in Pennsylvania, please, Ellen. Ellen, what's up?

9:50
I'm affiliate girl. Yes, very strong. gym You're the reason I can retire and my daughter isn't investing. There you go. There you go. Thank you very much. Thank you. That Thank you. My question is about a stock you recommended very highly and I invested. I don't know if it's a whole buy or sell ever since it's going down and I'm wondering if it's being shorted? If so, could it be a good target for the Wall Street crowd? Because I'd like to see it go to the moon. I'm asking about Encino.

10:27
Yeah. And she has been weaker. I don't think the washy fetch crowd is thoughtful. None of that was mean. I don't think to look at this one. This is cloud banking solutions. This is a company that Marc Benioff from Salesforce thinks the world of AI I think it's doing a real good job as a movie camera. Carolina if it was actually based in Sunnyvale probably do pay attention to it, but they're talking about their software works. And I'm sticking by it even though it's damn 14% this year. I think Encino is good. As a matter of fact, I was just playing around with their bell that they gave me right before the show. Although handily the ringer wasn't quite perfect pals gradual approach I am telling you is proved. Okay, maybe it is possible for a big chunk of the rally or maybe this is just good. Either way. The only non transitory inflation I see is from the wall street bets crowd, but I think that's real temporary. Oh man. Tonight, what happens to a COVID winner once COVID becomes less of a worry. I'm sitting down with a co worker to find out how the company has positioned itself in a post pandemic world. Then 11.3 8 million households adopted a pet during the pandemic. Is chewy poised to profit off these new animal owners. I'm chewing on the latest quarter with the CEO and who is really winning the retail world. I'm talking to the man. Don't miss my exclusive with Matthew boss. So stay with Kramer.

11:51
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12:53
Last year we saw a bunch of life science stocks soar when they do all defective COVID tests and the underlying companies are making fortunes. But now thanks to faster than expected vaccine rollouts, most of these stocks have started pulling back because it's clear the COVID business, let's just say it's might not be around that much longer. So what do we do? What do we make of these companies in the post pandemic world take perkinelmer, a maker of life science and diagnostic equipment with the status with a double off its lows last year makes sense given that the earnings were double to right perkinelmer peaked at 162 bucks earlier this year. But it's now pulled back to the 140s. Lately though the stocks been bouncing off its lows possibly anticipation of a big animals day later this month. So tonight, we're going to give you a preview of that event and find out more about how the companies deal with pull out Singh. Now he's president, CEO of perkinelmer. Mr. Singh, welcome back to Mad Money. Good to be back, Jim. Okay, so we got to get right to it. Recently, one of the companies I follow that is a terrific company. And I think you and I both said at Abbott Labs had to pre announce that they did not make projections. And the reason is because frankly, the pandemic has, let's just say tail off. And when we had broken I'm on last time you guys are the leader in machines that make it so that you can test for COVID. So what happens now and perkinelmer?

14:17
Good question. And Jim, you know, it the beginning of the year, when we gave out a guidance on COVID we were very pragmatic in our approach. So unlike our peers, you know, we have in fact continued to see resilience in our testing. And in fact, we have slightly raised our COVID guidance for the year. But but the rationale around us is that it's not just COVID you know, we have more than COVID as you pointed out in life sciences and diagnostics, we will continue to see acceleration in our portfolio. And in fact, since the beginning of the year, we have raised our guidance by several 100 basis points for our core business.

15:00
Now that there have been series of m&a has begun, I don't want to make anyone think that you're just that. I like diagnostics, applied genomics, we've got to talk about that reproductive health, great new area food, which you've always been dominant environmental safety, you're talking about just a series of analytical solutions. All these can more than make up. From what I can tell for maybe a fewer machines being sold that analyze PCR correct?

15:30
Absolutely. I think the way to think of it is, as you look forward, you know, over the past couple of years, we've continued to pivot our business more in the life sciences and diagnostics arena. Today, more than 75% of our revenue is from consumables software and services. And this is a recurring revenue stream, which will only continue to grow as a proportion of our business, Jim. So you know, if you just take the acquisitions as an example, right, because of the tireless efforts of our 14,000 employees last year, we had a very strong financial performance. And given the agility and innovation that we have put in place, we were immediately able to deploy the returns from the financial performance back into acquisitions. Over the last six months, we've done five acquisitions, Jim, and these are specifically in the area of life sciences and diagnostics, but more specifically, in cell and gene therapy, and infectious diseases, do areas, which we foresee seeing continued growth over the next decade.

16:38
But let's give the people an example. Because this is to me the ingenuity of your company plot. Something that I had to do a lot of work on, just to be able to ask the question, you're going to dominate and sell painting, tell people what cell painting is.

16:51
So as we look at the avenues of you know, from an asset perspective, at the cellular level, you know, when researchers are looking at, you know, for example, in oncology, what is the basis of how you differentiate in cells. So under cellular and you know, cell and gene therapy is an area of research and where we see accelerated and disproportionate amount of funding going over the next decade. And I think cell painting, cell editing, cell analysis, cell storage, cell engineering on the cellular side. And similarly, on the genomic side, gene editing, bass editing, these are areas where researchers are going to be putting their focus on, and we want to be at the forefront of that technology to be able to provide researchers with tools that they would need in this arena. And in a field of view, which we just partnered with Broad Institute is on the jump sell consortium is one example in that in that arena,

17:53
and I don't want to miss miss the pickup in China is fantastic Chinese and food safety. One minute on that, please, because I think that that business only can go up.

18:04
Yeah, so you know, for us, China is a, you know, close to 25% of our revenue, you know, and we a disproportionate amount of amount of our revenue in China comes from the diagnostic side. But food is a very important growth avenue for us there, specifically around food quality and safety testing. You know, we recently completed the acquisition of maize and in China, because of COVID. Obviously, there was a depression in that side of the market, right, but it has come roaring back. And in fact, in all end markets that you participate in, Jim, you've seen a significant amount of growth coming back to pre 2019 levels to be more specific. Well, I've

18:45
got to tell you, I think we've heard some I think that annual status could be unbelievable, because what you're doing no one else is doing okay? Maybe a little bit Danner, maybe a little bit, a little bit Thermo Fisher, but you're going to be the dominant, the dominant company, in this new area of trying to explore and map cells. And I think that's a much better business, frankly, even though I thought you dominate PCR. This is a much more long lasting business. I salute you, sir, for what these acquisitions and what you're doing, because it's going to be a multiple year expansion for perkinelmer. Thank you so much. plod Singh, President CEO of perkinelmer. pk. I Great to see you and I hope the annual State goes well. Thank you very much and look forward to seeing you. There's only a couple of life science companies that worth owning. Just a couple and this is one of the big monies back after the break.

19:35
Coming on the dog days of summer out here early. You have three minutes to walk your best friend and get back to your screen. chewy joins Kramer offer earnings next year edge invest like a pro access CNBC live streams around the globe unparalleled access to CNBC experts actionable investor insight and ideas start a free trial today@cnbc.com slash Pro

20:10
is market finally developing a taste for turbocharged quote stocks again, from February through last month most of the COVID winners with rapid growth rates sold their stocks just obliterated. money managers sold them so they could swap into the newly hot cyclicals that make fortunes when economy's booming, the ones that really did terribly today, and last few weeks. So some of these growth names have gotten some left picked up the online pet food and supply store. It's a month ago, the stock had been all the way down to 64. Yes, down nearly 50% from its highs, but in the last few weeks, it's rebounded to the high 70s. Still to import a solid quarter if the close today. And the stock actually kind of went down a little bit after hours, nothing big. Even though these guys deliver the nice top and bottom line beat with a higher than expected for your forecast. It's struggling to gain some traction at these levels. So why don't we do this, let's think deep with Suman Singh is the CEO of chewy, one of our longtime favorites here on the show, to learn more about the quarter and what he sees going forward. But you're saying welcome back to Mad Money. Good to be here, Jim. Nice to see you. Okay, so let's go over some of these numbers, to me looks like a little bit better in every line. But what I want to know is a lot of people are worried the pet Renaissance that happen through COVID, they figure Once COVID is over? Well, people are going to let's say not not adopt as many pets, there won't be the market will go down, I look at these numbers, and it tells me that there's a could actually be accelerated.

21:40
You're exactly right, we are not seeing that in our numbers. And we're also not seeing that, you know, data coming back from the shelter partners that we work with, which is over 6000 at this point. See, overall adoptions we believe is up still year over year by double digit percentages, both across dog and cat. And when you look at you know, there's this notion about pets coming back into the shelters, that's actually the data does not support that. So the pets coming back into the shelters actually matches the rate that we were seeing in 2019. Which actually would say that when you balance out new adoptions and pets coming back, there's still a whole lot more pets getting adopted right now, which is great for the great for the industry.

22:18
Okay, so now one of the things that makes you stand out versus everyone in your industry is auto ship, there are some who will say that your auto ship customer sales line was a little bit lighter than we thought, I want to know about renewal of auto ship, because that's what I think determines chewies future.

22:39
Well, 60, or 69%, I think 69.4% to be exact percent of our volume, you know, when to auto ship customers. And the amount of net sales that we push through this program is absolutely phenomenal. You know, what's interesting, Jim, is we what we report is customers that are subscribed into the auto ship program, if you notice, if you look at the number of customers that we have, so for the number of customers that are subscribed to auto ship, there's about half more that behave exactly like an auto ship customer. And they just haven't pushed the button. Because you know of personal reasons, they might live someplace where you know, they want, they travel a lot. So they don't want to be in the auto ship program they want to be we deliver them a service that they actually rely upon. So they don't want to they want to write the check themselves or something like that. But the point there is that the auto ship program is really meaningful. And there's a whole lot of customers and a net new and incremental number of customers that are subscribed to it that haven't pushed the button yet. So overall, we're really pleased with the program and we don't see no challenges.

23:39
Okay, that's good to know. Because I also know that you've introduced a couple of new programs, I like this pet scription program, because so many people say you know what, I it turns out, I've heard that it takes it costs a lot of money to to adopt the dog, but with pet scription you come up with something it makes it so the most expensive part of owning an animal, which is medicine can actually go down.

24:00
Yeah, that's exactly right. You know, we've been we've been innovating behind healthcare quite a bit. Yeah. And, you know, our intention is to make health care affordable and accessible for every pet parent out there. So we started with if you look at telehealth telehealth, which we launched, you know, a couple quarters ago, it's exactly it solves a really critical need and a pain point for him from a customer endpoint. And from a veterinarian standpoint where, you know, it takes care of, you know, qualified traffic or triage or, you know, hours but healthcare isn't available. And we've expanded telehealth now to a video feature, so the products being loved even more, and we have extended service over the weekends and so customer adoption is up. And then we launched in a couple quarters ago. We haven't talked about this but this product called pet scription, which is essentially, you know, a digital solution. That's a prescription management platform that veterinarians can use and it reduces in clinic costs makes veterinarians more efficient and improves customer experience at the same time and at this point, over 7000 veterinarian clinics are using So we're tremendously proud of these kinds of innovations that we're bringing into the marketplace that allows service to be better, and cost of service to be lower, which is actually a net net positive for everybody involved.

25:10
Well, I want to go back to something that you slipped in that I think it's what you said, 6000 shelters. You're involved with seven shelters.

25:18
Yeah, so 7000. You know, clinics are using prescriptions. And then very recently, I think the shelter that you're talking about is we launched pet adoption services, and over 6000 shelters are now enrolled with our pet pet adoption service that we launched recently.

25:31
Okay, so those who have never adopted a pet from a kill, shelter, much know this is personal to that it's almost impossible, but you're always trying to match these things you're trying to find find a dog. So you are doing yeoman's service when you do it, you're doing the Lord's work, but these animals can't help themselves. It's been impossible to find we're trying to adopt one right now, I'm going to go to your site, if you're good because we go to your site. And and one of the reasons why we use you. And I think that it's a difficult thing, if you look at auto ship, we can look at it in visual numbers, but you do personalization into at scale, which everyone tells me can happen. You know, our pets, there's a new thing. You send pictures of our pets, you send condolence notes tour to Nvidia, but you're also got something new, in turn that you're doing that for someone who has a new pet.

26:19
That's exactly right. Yeah, you know, let's talk about this for a second. So we there's a couple couple of ways that we that we approach customer experience and how we build loyalty into the brand, which is essentially I think, the crux of the question that you're going after. So first thing is culture. Okay, customer experience, and intentional focus and a deliberate attention to customer experience, vowing surprising, delighting and innovating on behalf of customers is built into the DNA of the organization. And we practice that on an everyday basis. And we don't look at it for for a base of customers, we look at personalization on a per customer basis. And so you've talked about things like you know, we've done pet portraits, we've done flowers, and recently, we've actually launched birthday cards, where we'll issue a personalized birthday card when you know, fluffies birthday is coming about. So you know, it's these kinds of mechanisms that allows us to earn trust. And when there's surprise and delight involved, it's even actually more positive. So that's one culture, our culture supports customer experience in a way that, you know, cannot be replicated very easily. Number two is an intentional focus on innovation. And and I'm coming to your point on how do you scale this, right. So innovation allows you to do two things a it allows you to do more for your customers. I talked about telehealth recently, and I talked about, you know, all of the personalization that we recently launched, and innovated towards, you know, personalized dog tax products, etc. And then second, innovation allows you to scale because humans are really good at creative problem solving. And the utilization of technology really, you know, can preserve that that high touch experience but allows you to bring it to a mass number of customers. And you know, ultimately we are an experienced led company on the back of product and technology. And then the third 1/3 one Jim has just give back right our work with shelters like we donated $35 million last year to shelters. This year, we've now launched a pet adoption service and customers take notice you know we earned our trust every day and we keep that trust and that engender customer loyalty for long periods of time.

28:24
Yes for the 15 million plus pet owners we aren't anyone is a pet owner has to listen to these things because they do matter and if you're not we please put it on kill center and adopt a dog before it is put to sleep. I want to thank Suman Singh delivering one more solid quarter for chewy and great to see you sir. Always love to have you on thank you so much that monies back into the break

28:45
coming via brick and mortar or point and click retail runs through the veins of any market master the industry for the man who knows next

29:06
what do you do with retail stocks now it's so many of these have had an enormous runs about 10 months ago map was the best retail analyst in the industry started recommending l brands American Eagle Outfitters and the gap as part of what he called the lag trade elegy since then the stock should be the double, triple. So now we got a huge problem. High quality one post COVID do we stick with these stocks as we get closer back to school season four do we bring the register who the winners who are the losers? How about we check in with Matt boss himself, Managing Director JPMorgan and their senior retail analyst get a better read on what's about to happen. Mr. Boss, thanks for the lag trade we share with everybody and welcome back to Mad Money. Thanks for having me back, Jim. All right. So Matt, retail has been unbelievable. I mean, every day these thoughts in a great moves, time to ring the register, or is there more coming?

29:57
Absolutely not. I think there's a lot more coming. In the retail sector, Jim. So I would start off by saying a couple factors. On the economic front, you have savings rates in the mid teens debt service ratio at 40 year lows, and you have nearly $12 trillion of wealth creation from some of the stock market gains that that plus you have on the employment front more jobs available at any time in the last 20 years. So economically, I think the backdrop is a home run for retail. And at a more micro level. Look, as we look at consumer spending, we have this chase credit card data here, which right now is pointing to the month of May, accelerating 500 basis points or up mid teens consumer spending up mid teens relative to 2019 pre pandemic that's actually 500 basis points better than what it was in March and April and March and April had the government stimulus as an underlying driver. That's extraordinary.

30:57
Right? Yeah, you've got Of course proprietary data because it's Chase. Alright, so we had gap one and we had American Eagle Outfitters on I thought both stories were terrific. But I also know that we didn't catch them early stay with them.

31:10
You absolutely stay with the lag trade. So lb, American Eagle and the gap lb. I mean, when I look at the bath and Bodyworks concept, mid 20s margin, sustainable double digit top line story that's trading at a distressed multiple we see close to 40%, upside in lb from zere. On the gap and American Eagle, two of the hottest brands, in my opinion heading into back to school, a back to school that I think could be, you know, one one that you know, arguably in our careers might be the best physical back to school, for the first time in nearly two years. You have that ladder at the gap, which is hitting on all cylinders, Old Navy, I think is a consolidation play from all of the closures that's happening across retail, those are both drivers of the gap plus you have Kanye zz brand, which kicks off very shortly. And then on American Eagle, look, airy is probably arguably the hottest brand right now and all of consumer, too much growth within this overall American Eagle umbrella. With the denim potentially leading to a cycle. I know you had chip from Levi's on a few weeks back and he talked about the potential denim cycle we see as it as a potential upside or next leg beyond back to school where that would be a driver for the gap. That would be American Eagle that would be Levi's and a number of other brands that I think could benefit from an overall fashion cycle.

32:35
I know that American eagle eyed my bullpen for actual orcs just won't come in maybe just sometimes you have to bite the bullet right? somebody suggested by boat they're not going to come in big Why are they not?

32:45
Look again, when I take a step back and I think about the underlying consumer, the structural changes that are happening. I mean, you look at American Eagle, the gap lb the department stores, they've all taken a cut and they've cut you know some of the slack which is the brick and mortar exposure. So I think retail comes out of this a better place on the other on the other side of the pandemic. You know, as I look at Nike, Lulu lemon Vf Corp, these come out with higher penetration of higher margin e commerce and so you know as I look at retail before versus after the pandemic, you want to associate yourself with the growth health and wellness athletic and you want to follow the market share and the market share to me you're seeing it across the discounters the dollar stores in the off price. There's

33:33
quite so much zoom Price Index came out today was a little bit hot. It said that apparel was hot. If that's the case, maybe I should trade down something like TJ Maxx Ross stores, one that you put me told me 200 points. Burlington are those good too?

33:49
You know, the interesting thing with with as we look forward, Jim, I mean, look, we're watching COVID, obviously, for any twists and turns and you know, could we see a surprise that a surprise setback, but I'll tell you inflation, I think people may be looking at it wrong for a parallel. Moderate inflation is not a bad thing. It's actually something we haven't had in this sector. The overall apparel sector has been deflationary for the better part of the last decade. And so as I look across the spectrum, there's two beneficiaries. If you're selling innovation, and you're selling newness, that to me is the global brands. So that would be your Nike, your Lulu your Vf Corp, brands that people want, I think have pricing power. But the second side that you brought up, which would be the off price sector, I think the real opportunity here is a little bit of average unit retail expansion, meaning a little bit of additional price that they can pass through as they index off of the general retail apparel sector can go a long way to leverage the supply chain and distribution costs. That's been the biggest headwind on margins. If that turns, you have a real inflection with these off price retailers, TJ x, Burlington and Ross stores. I think you The whole sector.

35:00
I mean, this is so good because people keep asking me if I miss it if I missed it. The answer is clearly not from the guy who knows the most Matthew boss, Managing Director, senior retail analyst at JPMorgan. Matt, thank you so much for coming on the show. Great to be back. Guys. remember some of these to be sweet. We have market Eagle Outfitters on gap scores, and everyone other people's stories and Jim, why wouldn't you be so late? Obviously, we're not looking at Monday's packet. Stick around, man make a suggestion. I would stay with

35:31
the lightning round is coming up next. And then the lightning round is over. Are you ready? ski. Steve in New Jersey, Steve. Hey, Jim, how you doing today? I'm doing well. Thank you Preston. How

35:59
about you? Okay, my sock is in the containers shipping in the state, which is doing quite well now. The last earnings three weeks ago saw our revenue more than double from last year's March quarter. And they raised full year guidance as well. Also, there's a special $2 share dividend coming up. One more thing to note, a recent 8 million shares secondary offering the stock I speak up then shipping.

36:26
Oh man, that thing is just too hot for me. It's too hot. It's just let's see where now that one's too hot. I mean, it's had a very big run and those kinds of stocks are cooling right now. I want you to just walk away for a little bit I think you can go lower. Let's go to Kurt and Florida occur.

36:42
Little your gym boy. Hey, I invested in DC IV. Back when it first hit the market. It went to the moon and then it came back down. And just wondering if you think it's going to do anything special.

36:57
I like close it and I like this girl. Okay. I like both of them. I don't like Lordstown by the way. I think that one is a bad ride. I believe in lucid even as far as going 80 miles an hour is almost tossed out of it right after I have my back sir. Who is very unfortunate moment. What I do like that one. I think you should go to Joe in New Jersey Joe. Hello, Mr. Kramer. What's going on? It wasn't the same with you out last week. I'm glad you're back. My wife said the same thing she said on back. My stock is Cadman holdings ticker tape. You like little speculation? I think time speculation would cabin. Please understand. That's up 10 down 10 All right. As long as you get that, let's go to jack in Ohio jack.

37:45
Thanks for taking my call. Sure, no problem. I got it at a good dividend yield months ago, and more take them off the table or whole IBM,

37:56
like IBM, like I like garbage here. You know, I mean, he's, he's doing a good job. Remember, they're gonna split the company. So you're not going to get the you'll get together the dividend but you're buying Aravind IBM, you're going for growth. And I think there will be growth. I like to Sidgwick. By the way, I like what Gary Cohn is doing there, and he's doing an excellent job. He's helping out trying to craft a longer term strategy. Let's go to George in Pennsylvania, George. George, I'm doing good. I'm asking about ctmp oil prices. I know I like to midstream parts by the fact that it's hidden this morning on squawk on the street. These are the kinds of stocks you have to buy I like enterprise I like 110 I like this whole group. Why? Because after what I saw today with the Keystone de never going to be able to get another pipeline in this country. So the ones that are existing are going to make money now stolen in Florida shot. Jimmy Choo we are showing this in the days of Kudlow and Kramer I was I was 13 that

39:02
that's all right. I'm glad we're doing over the phone because I got a face made for radio. Wow, self denigration. One of my skills Go ahead. Okay, I got a cup company I've made money on. The stock is up from where I bought it. It's about feeding people for less money. I like it. I know it's got some detractors. ticker symbol aq B.

39:24
No, I've not been one of them. It's kind of interesting situation. But then again, I also like beyond meats, maybe I shouldn't be trusted. Although I had some this weekend. It was particularly good. And no one knew it was even beyond me. Everyone thought I was making burgers. Let's go to a notch in Illinois nosh. What's up Jim boulia How you doing?

39:47
Good you so happy to be here. I just want to get your thoughts on the trade desk TTD

39:55
guidelines trade desk has come down but remember those kinds of high multiple stocks people don't like them, right? Yeah. That's one of the most expensive stocks. The entire market is like Roku, that snowflake, but I'm gonna stick by why cuz I like Jeff Green. Yeah, yeah, I like Jeff Green and that les jumps inclusion of the

40:15
lightning round is sponsored by TD Ameritrade coming up, don't make a move on names alone. How can you tell if a stock is really reliable, or just riding a Reddit rally? Kramer explains next.

40:37
Look at me. Not everything that rockets higher is a meme stock. It's worth remembering that read. It's Wall Street's best. It's not the only thing that can power big loose moves like we've just seen in Cleveland cliffs clean energy fuels, both of which have been labeled meme moonshots. Let's start with people. Plus, we recently profiled this steel maker is one of the cheapest stocks in the entire market, even though it had numerous run over the past year. Even close is an amalgam of older steel and iron ore producers. So they've been able to take advantage of the relentless rise in steel prices. We had them on the show when the stock was at just under 19. I was astonished at how inexpensive this thing was given there's almost no new capacity coming in the steel industry. In fact, many of the mills that have been shut down remain on economic even at these much higher prices. Plus when it comes to cheap government supported steel, Chinese steel, it turns out President Biden just as much protectionist against the Chinese dumping steel as President Trump was. So I'm not worried about that. Two years ago, Cleveland Clinic was a storied iron ore company. But it's hard to make much money from iron, which is a definition of an undifferentiated commodity. Now, thanks to a couple big acquisitions, aka steel and Arcelor Mittal, USA, it's a vertically integrated steel maker, Cleveland plus had to take on a lot of debt to do those deals, but now can pay down that debt by selling stock as it did earlier this year. As the company keeps chipping away at the roughly $5 billion in debt it has I bet the stock will keep climbing especially since it's now spewing vast quantities of cash. You could argue the virtuous circle makes it similar to the mean stocks it draws now before it's been going on with AMC. The difference Cleveland Clinic has incredible earnings companies making fortune right now business is booming. And here for yesterday's explosive really 15% move its stock remains incredibly cheap. When you put it on what's known as an EBIT dot basis with cash flow with true mean stocks like GameStop or AMC. Well, you gotta spin these elaborate stories just to justify owning them. If they keep raising money, the management comes up with something brilliant, and maybe it's maybe you can think well hold on just a second. It could be I don't know, the valuation might be Yeah, okay, I'll buy with Cleveland, Chris, you don't need use your imagination. They just have to keep doing what they're doing. And the stock could continue to charge higher. And then there's another kind of mistake in meme play. It's something called clean energy fuels. Now longtime viewers might remember this one, the company that build out a network of fueling stations for natural gas powered vehicles seal and he was championed by the late Boone Pickens and CEO Andrew l'affaire told a great story about Nat gas is a cheaper cleaner bridge fuel that could replace petroleum or diesel. Of course, natural gas vehicles never took off. Clean Energy fuels flounder suffering years after years of losses. Now that the company has pivoted, it's largely in the business of selling what's known as our n g renewable natural gas and that's 73% of the production. In this time shelling he is a big supporter in Amazon Tesla's largest customer just like we saw plug power the fuel cell play Amazon's got to deal with got warrants from clean energy some big could backbone could want them in the form of bad press. If Amazon ever exercised the morn stumps the stock. In this case, though Amazon's apparently committed to hundreds of millions of gallons of clean energy fuels renewable natural gas, which is made by capturing methane from landfills farms, wastewater treatment plants silanis, building 19 new stations for them this year, and Amazon already has 26 existing stations quoting a little fare the potential for Amazon alone is 15,000 heavy duty trucks do also solidifies the joint venture relations with a PRC as with BP and totaal, two huge oil companies that have been under fire for not doing enough to clean up the environment. Now we've been burned by sileni before but the company's now guy kept positive cash flow from operations sitting on 300 million in cash very different from the old days. I think little fair set the company up to make a lot of money maybe as soon as next year. A shocking development if you remembered him from our earlier interviews. Then again, ruble natural gas has a great pitch. When you extract natural gas from say nor do you know that it's the least carbon intensive fuel out there. Better evening clean hydrogen fuel cells better Isn't electric vehicles if they don't turn that manure methane into fuel it goes into the atmosphere anyway, which is why this is so environmentally friendly. I mean, plus, it's cheap. I mean, what is what's that? About? I tell ya, Wall Street beds may have finally notice cleaving cliffs and clean energy fuels, but I think they're both buys with or without the mean stock affection. I like to say there's always a market so I promised I'd find it just for you right here of add money. I'm Jim Cramer.