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Sunday, December 2, 2012

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but again only on news of setbacks to the fiscal cliff talks. we're not going to go in and buy anything these days. you'll get some representative congressman, senator come on say you stupid idiot. you bought stock and i'm talking on a microphone. i'm sending the stock market down because there's no progress. we have not one but two huge analyst days next week. only one an opportunity to buy. starbucks is coming to town on wednesday. you better get ready for one terrific show as the one and only howard schultz i believe will tell you that business is smoking in so many places in china to the united states and that tebana will be the next generation starbucks as soon as the merger is completed. the next day yum brands. it's coming to town. that company will have some explaining to do. i will have more on what yums needs to tell us. the sting of the earnings shortfall last night will still be with us no matter how good kentucky fried chicken might taste. also we hear from lulu lem athletics. i got a situation for how to trade this wild stock. wait until it looks like it blew up. then buy some. but listen, i'm sanctioning buying this stock at the opening only if i give you the green light when i'm on my other show. it's called on the street. i need you to exploit this pattern which is in part orchestrated by short sellers who always try to make the stock look worse than it is. you'll get the early look from me. i'm try to give it to you around 9:15 about whether i think the quarter isn't as bad as people think it is. the nonfarm payroll report on friday. normally that would be the first thing i talk about. this time around i'm not going to emphasize it. sandy has made the month of november virtually irrelevant. we can sweat it, puzzle over it. in the end we'll have to dismiss it unless the unemployment rate has shockingly dropped. which would be an odd anomale which shows the rest of the country could pick up the slack of the northeast. i don't think that's going to happen. next week's game plan starts on sunday when treasure secretary tim geithner will appear on meet the press with my friend david gregory and hopefully explain how we're going to get out of this fiscal cliff mess. for once i actually believe we'll be able to bridge the cliff on the eve of destruction. and knowing that, i am both a guy who wants to take the pin off before new year's and i'm a buyer into negative capital chat ernext week. not a seller like so many of the pessimists out there. why don't we start with neil in florida. neil. reporter: boo ya, jim. it's neil in florida. facebook dropped. what should i do? hold or drop zynga? have a little january effect. everybody selling that thing nine ways to sunday. bad news. maybe they'll finish accepting by the end of december. and then you sell in the first week of january when it should lift. let's go to ramon in california. ramon caller: hey, jim, boo ya, baby, calling you from riverside county but born and raised in the san fernando valley. i'm a frequent watcher, jim. thank you for all that you do. thank you for that. that is a -- go ahead caller: my question is with the recent news of a possible takeover on walter energy, what is your stance, sir, on the possible buy on the stock. i cannot recommend anyone buying stock on a takeover basis when i think the fundamentals are not going the right way. the fundamentals are not going the right way. let's go back to florida. bart in florida. bart. caller: yes, jim, i really enjoy your program. i see where the earnings on tether pharmaceuticals has been reduced. i wonder what you think the future of the stock looks like. sunshine that stock was down about 1.70 when that news came out between 7:30 and quarter of 8 and it rallied hard. to up 13 cents. my take is this. i don't like it. i think it can go to 42. and then sell sell sell. okay. keep an eye on sunday's meet the press for yours truly. of course treasure secretary geithner to tell us about the fiscal cliff. if we hear that we can bridget, and i'll bet you we might, then i'm all about trying to find out the next special dividend stock. plan the analyst meetings and getting ready for what could be a rip roaring rally. mad money will be right back. coming up, software sensation? well, some in tech have struggled, sap's push has sent its shares skyward. tonight cramer gets the hard facts of where the software giant could be headed in its exclusive with its ceo. and later what the heck? office max has defied the street's expectations, causing its shares to double this year alone. but can it continue to supply you with profit or is a paper jam just around the corner? plus still yummy? shares of yum brands were tarred and feathered today as the owner of some of the world's biggest fast food brands revealed a less than satisfying outlook. but is your opportunity to order up some shares or cut out the fat? don't miss cramer's take all coming up on mad money. don't miss a second of mad money. follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney at cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. listen up. not all contingency companies are created equal. text stocks stuck in the past hewlett-packard. the companies that have embraced the future have been rewarded. not just apple or amazon. consider sap, the giant company that makes software for the enterprise. doesn't make a red hot gadget. it's better than that. sap has a vision of where the future is headed. applications for the mobile, cloud, memory computing, big data. all the big themes i talk about constantly. the strongest themes in technology. and sap dominates them. that's where you want to be. so tonight we have -- sap refused to allow the world to pass them by or be confined by the weak europe including germany appears to be on the brink of recession. the last quarter was fabulous, best in its history. stocks a half a point off its high. terrific 51% gain since i got behind it on august of 2011. it's not done. i think it has room to run. let's check in with the co-ceo of sap. good to see you, jim. best third quarter in history. yes. how is it possible? we're focused on the nexus of forces as you mentioned. when we put the strategy of the company together we were determined to double the addressable market. where's the world going? it's going mobile. do you know anyone that doesn't have a mobile device? no. and i don't want anything else frankly. exactly. more mobile devices in the world than toothbrushes. that was good enough for us to focus on mobile. are you still the largest buyer of some mobile devices? i don't know in we're the largest but up there. we have done a lot of work with apple no doubt about it. we focused on mobile and big data. data is doubling in the world every 18 months. so it's probably a good idea to manage that big data and have the crystal ball for the enterprise which is sap hana where you bring all the data structured and unstructured into main memory so you can google your data. bill let's put anytime english for people. is there a bigger piece of data out there than any bank or bank of america constantly being used? we took bank of america. they used to close the bank at 4:00 in the afternoon. work all night to figure out where to invest their cash. that was an all-night process. lots of people. now hana does it in minutes. in minutes! at 4:30 they know what they have. they know what they've got and they know exactly where that money's going. saves them a fortune. and their investors will be happy because the money will go into the right play and they know it. it's not just banking. that's a good vertical field. you bring up caterpillar lately in your presentations. what did you do for cat? cat wants to do things like smart farming. their big iron should be in those farms actually really understanding the turf and the dirt and what's likely to happen for the farmers so they become a strategic adviser to the farmer with their big gear. so you now take business models and rethinking them and innovating them in ways that were never possible. nonfu springs? china go to a spring, bottle up water, put it in trucks to deliver to their constituents. that process was five hours. now with hana we have the transportation plan figured out. not from five hours, in 2 1/2 minutes. what does that mean? 30% lower transportation costs. 15% lower total costs for their company. 4% margin improvement across the enterprise. the winning strategy. yes, it is. but now i want to one up that. tell me what you've done for nfl. i am very tield. we have a commissioner here for fantasy football. sometimes i want to wring his neck. he says i can't get the download of the waiver wire for multiple hours. this is a rival web site. what have you done for nfl.com? eric and roger goodell, these are great leaders. they know what to do for their fans. they want to improve the fan experience. phone call you? i know you call everybody. call me. exactly. or i'll call them. as long as we talk we can solve problems. now it will be run on sap hana in the cloud. now you've got people getting immediate answers to their questions. you get your favorite players. pick your favorite teams. nfl wins the game and you're a happy fan. we're going to try it next year. we may wean ourselves off the guys that we're currently using as nice as they are. did a great acquisition. ariba. it is the e-bay of the enterprise. think of it this way. more than four times the amount ofmerce that goes through ariba -- excuse me that goes through e-bay goes through ar more than four times the amount of commerce. in that global network they have in the matching network they have? exactly. so 350 million u.s. dollars go through the ariba network oh and every day. but it's an addressable market of 8 trillion u.s. dollars. so you're connecting buyers and sellers in a global business network. what does that do for the customer? i got everybody competing for my business. i'm going to get a lower price point. okay. i get that. now, our friend peter mcclausen, i'm sure you know, he brought in sap and we weres anxious to have it done fast. we made a series of acquisitions. sometimes they just can't call you and have it be done in a day, can they? here's the deal. the days of sold implementations have radically changed. why? because you can put it on the cloud. so many companies today are going to innovate at the edge of the enterprise for their people, their suppliers, their customers or their money. and they'll innovate on the edge of the enterprise in the cloud. or some company, small, mid size as an example and some large once will run their entire company, either a public or private cloud. the good thing about sap is we can run an entire company in the cloud or innovate at the edge of the cloud. so the days of old long, time-consuming implementations over. last side. they're waving me off. i'm not done. please go. europe is incredible strong for you. we know europe is falling off a cliff. on the one hand europe could be falling off the cliff and on the other hand very strong for you. think of it this way. if companies have less revenue they got to reset their cost base. they'll have to do more with less. software from sap will help them do that. also if you look at certain markets in europe like germany, middle east, africa, there are some parts that are really growing. and with very strong brand. if you want to grow your revenues, be mobile with your consumer, leverage the cloud for lower cost, optimize your supply chain, whatever you want to do, sap does it all. it does. normally someone might say jim why did you give him that last minute free pass? that's what happens when you got a stock as fabulous as your. you're able to tell the story. jim i have 65,000 people and an echo system six times that size that's passionate about the customer. what we tried to bring to this company is a custom centristity and innovation. bill mcdermott the co-ceo of sap. when we have to prove that other web site from fantasy football to nfl.com for your work. trying to make you more money. thank you, jim. coming um, what the heck? office max has defied the streets's expectations causing its shares to double this year alone. can it supply you with profit or is a paper jam just around the corner? if everything on the fiscal side kaifs what incentive is there for tax reform in 2013? ]this -- you can stay inand share something... ♪♪ ♪♪ ♪♪ ♪♪ ...or you can get out therewith your friends and actually share something. ♪♪ ♪♪ the lexus december to remember sales event is on, offering some of our bestvalues of the year. this is the pursuitof perfection. ] scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. at scottrade, seven dollar tradesare just the start. our support teamsare nearby, ready to help. it's no wonder so many investorsare saying... i'm with scottrade. market sometimes will do things that will seem downright senseless. occasionally you'll see a stock performing in a way that's so bizarre all you can think is what the heck? often there's a method to the market's madness. let's do some teaching. take office max. omx. smallest of the three big office supply chains. this is an industry you'd think would be in terrible shape right now. after all, office max makes the lion's share of its money selling supplies to small businesses. and we know that it's a very tough time to be a small business owner in this country. most small firms aren't expanding. they're not hiring. we're not seeing much in the way of new business creation. in part because of worries about the fiscal cliff. have entrepreneurs sitting on who wants to start a business without knowing what the capital gains tax will be, tax code rate. plus the whole office supply industry has been shrinking for awhile, not just office max but office depot andtaples as shifted away from using lots of paper towards digital solutions like apple ipads. meanwhile there's not that much demand for the technological devices some of the companies sell which have become increasingly commoditysed. just witness hideous performance of best buy. despite all these big perceived big picture, office max has been rallying like crazy. stock has run up 122% for year. and it's fallen from 4.26 from the beginning of august to nearly $10. right now where the stock is less than a point off its 52-week high. what the heck, right? five months ago this stock had been left for dead. but now somehow office max has managed to find new life and become a monster good performer. just when you expect the company to be take it on the chin. what the heck is really happening at this company? could it be that perhaps we're simply wrong about the sector? maybe that's the judgment. that the office supply business is much better than we thought? and office max is leading the charge? no no no. that's not it. we know because while competitive office depot is up 56% for the year to date an excellent move not as good as office max, staples which was once considered to b best of breed in this base is down 16% for the year. so there's no industry-wide turn. there is no rising tide lifting all office supply boats. this i a company-specific move. i think it's got two causes. expectations were incredibly low last year. office max got put through the metaphor cal meat grinder. it was horrible. falling from $17 to $4. as the company came into 2012 the ball was set very low. when the expectations are that low, even lousy results can take the stock hire as long as they aren't downright pitiful. last year sales nowhere near good. but in line with the street's expectations and not absolutely hard which was good enough to give the stock some lift at these levels. even though max has rallied this year, it climbed from $17. it still has a way to go before it's back to even. when you look at it in that context, this rally doesn't seem insane. office max has been trying to get its house in order. it announced it was reinstating its two cent per share quarterly dividend. not much. the stock yields about 1%. it also told us it was conducting a comprehensive capital allocation review. designed to simplify its balance sheet. a couple of important elements here. office max got caught up in the terrible lehman bankruptcy. they had bonds backed by lehman connected to timber assets. the courts resolved this in september. office max debt was reduced by about $735 million. big deal considering it's only an $860 million company. two weeks ago we learned about the ipo of boise cascade. what a great old name. a private company that made paper, corrugated containers, wood products and building materials bcc. used to be a big position of mine in an old hedge fund of mine. i was able to swing around a couple of them. 100 mill. office maximum owns 20% of this company. ipo will unlock hidden value by putting a hard value on that investment. office max is supporting the sale of its crocksley business in new zealand which is a wholesaler that does some manufacturing.we should hear about when the company reports its fourth quarter. impending boise cascade ipo, new zealand business became apparent office max was worth more than people had thought when they initially wrote the company off and left it for dead. investors thought this stock was a value trap. turns out it has real value. as the company had a better balance sheet than we imagined. a bunch of hidden assets. all the office supply states are shutting down. shutting their stores to reduce their footprint. too many of them. office max was ahead of the curve in this regard. they started reducing their square footage early. you probably saw some abandoned stores. in 2005 they started. way ahead of the competition. especially staples which decided to sit back and wait for its competitors to close stores in hopes that it might not have. to since office max is the smallest player in this space, about 900 stores they have less to lose than office depot. staples and office depot do business in new york. another reason why the stock's outperforming. lately there have been whispers and you go on the web, you google this thing and you're going to see it. i google it. i don't want to be a part of it but possible merger between office depot and office max. it's true that office depot and staples tried to merge in the mid 90s. justice department nixed that one. but the dynamics of the office supply system has changed a lot since the rise of the internet. i think it's more likely a dea would be allowed to happen in this base. staples buying office depot was the number one player by the number two. ixnay on that. the other merger number two player combining with the number three. justice is alwaysier on those. i never like to invest on takeover speculation. but there's no doubt office max would go higher if it happened to catch a bid. after this run office max is still cheaper than office depot or staples on an enterprise value basis. not recommending this on a takeover basis. here's the bottom line. i wouldn't recommend buying office max up here. it's just had a huge run, people. but the company's doing better than the competition. and it's balancing out to be a heck of a lot better than anyone believed six months ago. if we get a huge fiscal cliff-induced pull back i think you can feel good about pulling the trigger and taking down some office max if it were to drop a couple of points. as it turns out the value is in the better earnings stream, it could soon to follow. let's go to kelly in pennsylvania. kelly. caller: a big booyrom bucks county, pa. that's where i lived for a long time. what's going on? caller: my question is about microsystem inc. the company consistently beats analyst estimates an has had impressive double-digit revenue growth. is this a good technology play in the retail and hospitality industries? it is. you know what, this is really interesting this company. we looked at this before. i don't understand why the stock isn't doing that well. it's down for the year. let me do this. 3 billion company. we're going to do some work on this. because it is a little confounding. the company's doing okay. you're absolutely right. the company doigs okay. wel'l do more work and come back. let's go to steve in new york please steve caller: greetings jim from the beautiful finger lakes of central new york. i love the finger lakes. what's going on? caller: two-part question for liberty brands. it looks like the revenue numbers are finally catching up with the same store sale numbers as evidenced this past month. the stock has been in a trading range 45 to 49 for several months. today it closed at 52.15. is this the breakout we've been waiting for? i'm going to say yes. no one had a good month in november except for amazon and euro play and limited. if you have have a good month of november when a lot of businesses were shut down because of sandy, who knows what could happen during the closer we get holiday season period like right now. limiteds for me for you. what the heck was up with office max? i thought it would be left for dead but it's coming back to life. the company has some things going for it. if you're looking to get in, you'll see some senator or can goer or can go mn say /- /- -- or kong mann say. coming up send cramer an e-mail to mad money.com. or tweet him on an all new edition of mad mail. america. we don't let frequent heartburn come between usand what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburnin the first place! one pill each morning. 24 hours. zero heartburn. you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? break from the holiday stress. save on ground shippingat fedex office. @ it is time. it is time for the lightning round. are you ready?it's time for the lightning round. start with michael nebraska. michael caller: hey, jim, a big nebraska corn huskers booyah, man. i like your kicker. one of the good players on that team. what have you got? caller: excellent. win. i think china is coming back. i'm always a believer in steve wynn. how aboutoh jn in california? caller: boo ya, jim. my question is double down on barnes & noble right now? no. i went over that with a fine tooth comb. a lot of people didn't like the book basis. unfortunately those guys i love them they are a temple of sector learning you can't own the stock. illinois, charlie. caller: boo ya, jim, from ntral illinois. heart land. what's going on there? caller: well, i wanted to thank you for your excellent presentations scaling in and out of stock transactions. last friday it was very good. i'm interested in scaling into rentech nitrogen. with that good yield i think you're taking the appropriate action. i do want to scale into it. i think it's very attractive here. kevin in north carolina. kevin caller: yes, jim, a big boo ya to you. calling in about applied materials. oh, boy. all right, mr. tar heel. that's got a 3.5% yield. sell it because i don't think it's got anything cooking. laura in new york. laura caller: hi, jim, it's laura from new york. how are you? how are you, laura? caller: good, thanks. my stock is allen communications. buy or sell? it had gotten beat up because of the possibility people thought things were going to go awry in israel. the fundamentals are good. my friend who does breakout stocks tells meet fundamentals are terrific. i am a buyer not a seller. a lock. let's go to lee in california. lee. caller: mr. cramer, thank you very much for all the wisdom you share with us. sure do try. what's going on? caller: my stock is valley. i've been wrong and with the stock down should i hold, fold, double down? this used to be 28, 20, 32. it's been cut in half. we both think that at $17 this one is the chip. this is the way to play china because it's a huge iron work company. i want to own vale. let's go to terrence in new york. caller: hey, jim, i'm doing a portfolio for my professor alexander. i just want to know about general dynamics. i think general dynamics is a winner. why i do say that? i think we will avoid the fiscal cliff. and $66 stock could go higher. that ladies and gentlemen is the conclusion of the lightning round. the lightning round is sponsored by td ameritrade. believe it or not, i actually used to be a mountain climber. what do you think? 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