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cover of episode Mad Money w/ Jim Cramer 04/24/25

Mad Money w/ Jim Cramer 04/24/25

2025/4/24
logo of podcast Mad Money w/ Jim Cramer

Mad Money w/ Jim Cramer

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This chapter discusses the competition between the U.S. and China for global leadership and the importance of U.S. international assistance to national security and economic dominance.
  • US and China compete for global leadership
  • US international assistance is vital to national security
  • It helps prevent terrorism, costly wars, fights diseases, and maintains US economic dominance

Shownotes Transcript

The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world.

U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will.

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I'm here to level the playing field for all investors. There's always a home market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. To my friends, I'm just trying to make you a little money. My job, to explain to you what happens, to educate, to teach. Call 1-800-743-CBC. Tweet me, at you, Kramer.

If you know how to bowl, you made a killing today because we had some of the best pin action offerings that I've seen in ages. It was pure joy as we watched one lead pin after another slash and slam the sticks behind it. Kaboom! Strike after strike after strike. Throw in total radio silence from the White House on anything business related and you end up with a nice, powerful rally.

Now getting 487 points. S&P climbing 2.03%. NASDAQ pulverizing 2.74%. Now, there's a lot that goes into a meaningful multi-day rally like this one. For example, you need a certain level of despair as a launching platform. On Monday, if you recall, the White House hit a new low as the president attacked the one person who's universally respected on Wall Street.

Jerome Powell, the chairman of the Federal Reserve. Keep in mind, Powell was originally appointed by Trump in his first term. In his time on the job, he's done many things right, almost single-handedly saving the economy from the pandemic with a strong assist from former Trump Treasury Secretary Steve Mnuchin. Sure, Powell's gotten some things wrong. We all do. Arguably, he waited too long to raise interest rates as COVID waned, spurring inflation. But overall, his record is about as good as it gets. One point now.

Powell's a symbol of effective, independent leadership. We don't have many examples of that these days, do we? In a world where every branch of government seems tarnished, where we have less respect for politicians than ever, there was this one man who actually had the respect of almost everyone. Federal Fed Chief Jay Powell.

He truly is beyond reproach, an imperturbable, implacable man who diligently comes to work every day and tries to get it right. He cares more about the working person in this country than any Fed chief I've ever seen. And the president chose to mock him while very publicly debating whether to fire the guy, even though that's technically illegal.

The president can only fire the Fed chief for cause, but there was absolutely no cause whatsoever. Powell's as upright as Mr. Smith, the one who went to Washington. He'd be right at home in a Frank Capra movie.

That was, in short, a trashing too far. As Wall Street sees it, if Trump really fired Powell, that would put us on a course to become a true banana republic. And I don't mean the one that's two steps above Old Navy and the gap pecking order. Nobody in this industry trusts elected politicians to control interest rates. If the president can just fire the Fed chief, rates will always be kept low. We'll develop a serious long-term inflation problem. That's why when Trump went after Powell, even the wolves of Wall Street were terrified.

So when the president did the unthinkable, at least for him, and he backed off saying he had no plans to fire Powell, he gave us the fuel we needed for a spectacular rally. It's a pleasure. All aboard! That was easy.

The market had something else going for it that was a little less dignified. A series of charts that seemed to mock any possibility of a positive push higher. Everything was breaking down except for a handful of recession stocks. And the worst were the bedraggled, tortured, spindled, spindled and defenestrated Magnificent Seven. In this version of the movie, Brooklyn's own Eli Wallach, a.k.a. Calvera, actually wins. Or in Sergio Leone terms, that's Tuco Ramirez sending an invitation to Blondie's funeral.

When literally every chart is telling you the sky's falling, there's the maximum surprise factor the moment anything good happens. And to deal with China, we heard rumors of peace from the White House and the PRC suddenly threw the best part of the Yangtze River on anything positive. And that cesspool of negativity, avertable Gowanus Canal of pessimism. We got some good news from the most unlikely of places.

Corporations, earnings, prepped by endless talk of recession, mostly from the pompous usual hedge fund managers, the bears who could care less about leading you astray. They don't care about you. You see, they've already made theirs. We figured they said these companies would show us the true blood-drenched colors when they started reporting.

No, actually, we've had the opposite. Hence the bowling alley, the lucky strike, where the pins begin to fly. Consider just the guests on last night's show. The markets, like Dante's Divine Comedy, are nine circles of hell, the ninth and worst being where Satan, a.k.a. the Enterprise Software cohort, resides. The most dazed and confused surface now, N.O.W.

Previously, one of the best performers out there. That is until the last quarter, which brought actual guffaws from the Bears and Bulls alike. Then last night, ServiceNow reported a quarter that showed why you should never count out CEO Bill McDermott. This company picked up more major contracts in one quarter than most get in a year. It was a blockbuster. And do you know that that stock roared 15 percent today in response?

Then there's Vertiv. At one point, Vertiv strode the earth, as you'd expect from a company that makes the guts of the data center. Then some Chinese outfit claims that they can build AI models using far less hardware. And the whole data center complex collapses. Suddenly, Vertiv reminds us of something out of Jurassic Park. Until yesterday, when we learned that business accelerated quarter to quarter, something that was confirmed today by executives from both NVIDIA and, more important, Amazon.

I'll go into more detail in the data center later. And by the way, tonight, Alphabet also reaffirmed its spend. Vertib closed below $72 on Tuesday. Now it's at $83 and change. Finally, pulling up the rear, we heard from GE Vinova, verifying the greatest story ever told. The reinvention of the national electric grid, something that could employ hundreds of thousands of people. Vertible WPA worth of work roles. These guys make the best turbines in the world, and they make them right here in the United States.

Of course, it wasn't just the quarters fleshed out in last night's show that spread the bullish gospel. The once-and-future analog semiconductor king Texas Instruments finally called the bottom in industrial semiconductors at the exact same time that Lamb Research, the best semiconductor equipment maker, gave us a pristine upside surprise. The semis? Until last night, we preferred semis of the tractor-trailer variety because at least they didn't blow up every quarter. Hey, now they're back.

Never forget that a real industrial and tech rally requires that safety be last, that safety, never known to take time off, actually goes on vacation. Today was that day. Procter & Gamble put up a series of sad numbers, frankly, more flaccid than a Tide Pod, with a stench that Febreze couldn't mask, PepsiCo, flat,

With the existential threat of a Health and Human Services Secretary who appears to want to take the blue, the red, and the orange out of Gatorade, the yellow out of nacho cheese tortilla chips, and yes, the brown out of Pepsi-Cola itself.

So you have the dangerous safety stocks pulling back and the most aggressive stocks in the room, Rory. Can we draw some conclusions? Here's the bottom line. When the White House is dignified, or at least silent, at the same time that the PRC goes all WWE, while our Jimmy Stewart of the Fed chief gets back to being unsoiled, well, ladies and gentlemen, that's a bowler's bull market. Beware of flying pins, everybody.

Because the balls are rolling fast and furious, and I don't see anything that could be left standing. Charlie in California. Charlie.

No, absolutely not. I went over that quarter with a fine tooth comb. I know the stock dropped down to the low 50s when they reported. I felt that there was an overreaction. I actually liked the quarter, and I am still a buyer. Don't forget, you get monthly dividend checks when you buy letter O, which is one of the reasons why I stand by it so, so much.

Somehow the factors in the White House and the Fed in the earnings season are aligned to create a bowler's bull market. Watch out, there are pins everywhere.

On Man Money Tonight, where do natural gas players stand as the commodities price is down big? I'm checking in with EQT after its excellent report earlier this week. Then, is more power ahead for the AI infrastructure theme that I just talked about? I'm revealing the stocks I think could be standout. So you'll get them and you'll write them down and you'll buy them. And then after the market's whipsaw reaction to Dover's guidance today, I'm breaking down the quarter with the industrial top brass. Who knows? Seems cheap to me. So stay with Kramer.

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This year, before we got caught up in the president's tariff crusade, the price of natural gas was soaring, up 35% year-to-date at its highs in early March. Since then, it's pulled back hard, now down almost 20% for the year, a victim of recession worries, retaliatory tariffs from our trading partners. So what does that mean for the industry? Take EQT, one of the largest natural gas producers in America. They reported a solidly better-than-expected quarter on Tuesday, even slightly raising their four-year production forecast. Stock barely reacted, though, because everyone's so worried about the underlying commodity

And that's why I want to dig deeper with Toby Rice. He's the president and CEO of EQT Corp. You get more insight on where the industry is headed. Mr. Rice, welcome back to Mad Money.

Hey, Jim, how you been? All right. Tell me first, I want people to understand that you had incredible free cash flow, record-setting free cash flow. But maybe more important, you and I have been around a long time. I'm not used to natural gas companies have consistent free cash flow. I'm used to episodic, which means therefore dangerous in terms of a portfolio manager. How are you able to have consistent free cash flow growth in an industry not known for that?

Well, for us, it really has been a focus on our North Star to have a low cost structure. What that has allowed us to do has to be able to create a business that is going to give investors the best risk adjusted exposure to natural gas prices. We highlight this in our earnings deck. You can see the earnings potential of EQT in a high price scenario and in a low price scenario. We're going to provide pretty consistent results in a volatile environment. But

You know, the volatility is a really important theme for natural gas. And one of the things that we want to emphasize is our company value of evolution is getting a business that's going to thrive in a volatile commodity price environment. And I think some of the things that we've proven what we can do in the field operationally

Turning our chokes on and off to adjust to market pricing has been the key to getting better realized pricing and a solid part of our free cash flow beat. Having that type of operational control on an asset base as large as EQTs is going to be a differentiated advantage that allows us to match our activity levels with the environment to meet the demands and capture the best pricing possible. And you also, Toby, show great discipline in where your natural gas goes to.

You're not a hog. You're not trying to ship everything to the Gulf of Mexico so it's exported. You have limits, actual limits about where you send your natural gas. - One of the biggest questions that we get is what price signal would it take for us to respond with higher activity levels? And what we remind people is that we are not the marginal producer of natural gas. We are the low cost producer of natural gas. And so we are not going to chase short term price signals to determine our activity levels. We are a large scale operator.

And what we are focused on doing is getting closer to our customers and being triggered by sustainable demand growth and being able to connect our low-cost supply with demand. Those are the sustainable growth signals that we're looking to create. We think that's going to create an opportunity not only for us to grow, but also create some margin-enhancing opportunities.

And that's where we're focused and with our asset base and all of the demand signals that are coming out in this country, there's gonna be lots of shots on goal for us in this company to flex the power of the platform that we built. - Well, I think that when I look at demand signals,

I think that having been in your area, people don't seem to understand that data centers are not put in San Francisco. The data centers are put in areas that are stable, that are good, that don't have earthquakes with a consistent formula that includes low-cost natural gas. You're in a corridor that I think has been terrific for you. Yes. One of the challenges with being a producer in Appalachia is we've seen our basis get blown out a little bit. And we basically sell our gas at a discount because

Gas has been wanting to move down to the Gulf Coast. But we've got this major demand center, and we think our geographic location is going to be a big positive for us. And we can see this start to materialize in the pricing for the products that we sell because we are right next to Data Center Alley in Appalachia. We have a pipeline asset, Mountain Valley Pipeline, should be renamed the most valuable pipeline, which is going to deliver two BCF a day of gas into Data Center Alley.

But Jim, understand this, this pipeline cancellation movement that's taking place over the last eight years has prevented pipelines that would move gas to these regions. And so what we're seeing is the demand has not stopped. It's going to continue. But without these pipelines, we're seeing that demand move closer into our backyard up here in West Virginia, Pennsylvania, and Ohio. That's going to create even more direct supply opportunities for us to service this new demand.

In total, this could be pretty significant. We're seeing our estimates that there are going to be between six to seven BCF a day of local in-basin demand. A couple BCF a day of that is going to come up from replacing coal facilities. But another big part of the story is going to be new power demand generation to feed this AI boom.

And so it's going to be a big opportunity for us. And we're really excited about that opportunity. We had Gio Vernovo on yesterday and I was listening to him and saying, where are they going to get all the natural gas to put through these through their big turbines? And the answer is going to be from someone like you, because you have the consistent supply and you just made an acquisition. Olympus, which will make it so if there is indeed more, more, if there are more turbines, you can make sure that they have the natural gas go through them.

Yeah, we were really excited to announce the Olympus deal the other day. You know,

That deal was one that stood on its own. I mean, we bought that deal at a very great valuation. 15% free cash flow yield is basically what the price we paid for it. And when we use it, we pay for this asset with a stock that's trading with a high single digit free cash flow yield. You can see really good accretion to our shareholders. But the real special part of the Olympus deal isn't just that we got a good value. It's the fact that we got a good value for a high quality asset.

These Olympus assets have good inventory, but an even better cost structure similar to EQTs. We'll be able to continue to have a quality story. Like I said, we value our cost structure and the assets we're bringing in have got to be quality.

But as you mentioned, there are some other big upsides to this Olympus transaction. Olympus is located in the industrial corridor next to Pittsburgh. And guess where a lot of people are looking to put these data centers? In old industrial brownfield sites. And some of these locations are right in the middle of the Olympus asset position. So this is all upside. There's still a lot of conversation that needs to take place. But with this asset base plus our midstream division,

we'll be able to connect this low-cost resource to these demand centers and create some hopefully exciting opportunities in the future. I do want to point out, I know we're running short of time, but you mentioned about what geographically can and can't be done. I saw a new FERC had, we have an interior department and we have an energy department, very committed to natural gas, but we have a whole region called New England.

And that's the area that should be flooded with natural gas, but people won't let it. In the end, it's still a local business that's defeating a national trend, correct?

Yes, we should be looking at ways that American businesses can help parts of America. There's no better story where we could show a great solution is to get more natural gas in New England where they're burning oil in their basement. Over 25% of the residents up there are burning oil in their basement like we did 100 years ago. There's better ways, natural gas. Pipeline projects have been proposed.

to get more gas into that area. And it's exciting to see this administration, one of the first things that they've done is breathe life and support into these pipeline projects like Constitution Pipeline. Now, Jim, just for perspective, how much natural gas would it take to replace the heating oil in Boston? And if you take it around the rest of New England, you're talking about an additional natural gas demand of one and a quarter BCF a day. That's a big market opportunity. That's going to be met

from Appalachia and Appalachia's natural gas champion EQT is going to be right there in the middle of it. We just need to get the support to get these more of these pipelines built where there's a lot of noise in the air right now, but to our leaders in DC, permit reform is absolutely critical. We know there's some other priorities right now, but with permit reform and this type of support from this administration, we can dominate

bring energy dominance to this country, help lower energy bills for residents, not just here in Appalachia, but also places in New England across the country. Something that's very important to do when we see American energy bills being up. I'm with you, especially because for all we know, some of that is actually Russian oil, believe it or not. It could be. Toby Rice is the president and CEO of EQT Corporation. I am with Toby on this issue. And Matt Money is back after the break. Thank you, Toby.

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Over the past few months, the market has totally given up on AI infrastructure. Even for the time to sell it, this group's been rolling over ever since a Chinese firm announced that they come up with a cheaper way to create generative AI models at the end of January. Then we got the trade war worries, the recession fears caused Wall Street to turn on many of the last year's biggest winners, including anything at all connected to AI. Hey, but you know what?

We've seen zero evidence of a slowdown in the AI infrastructure build-out. In fact, CNBC's own Spencer Kimball, in this terrific piece that I don't think many people talked about, noted that executives from both Amazon and NVIDIA said at an industry event today that there'd been no slowdown in AI data center demand. None of the hyperscalers have said they plan to dial back on their massive capital expenditure plans, with the possible exception of Microsoft. But you know what? Microsoft was building these data centers on behalf of its partner, OpenAI.

And now that they're going through a kind of a slow motion breakup, OpenAI is starting to cover more of these costs itself. They recently raised $40 billion. They can afford it. So I've been saying that I think that the Microsoft so-called slowdown isn't as relevant as people think. Now, NVIDIA is certainly not having any problem selling its high-end chips. Aside from government restrictions on which countries they can sell it to, that has been a bummer.

But it's a regulatory issue, not a demand issue. In fact, now that earnings season is well underway, we've heard from a bunch of companies connected to the AI data center theme. And you know what? They've been putting up pretty darn good numbers. It's almost like there was never anything wrong with the AI infrastructure story in the first place. Oh!

Exhibit A came from yesterday. One of our guests on last night's show. It's a company called Vertiv. It's a company that makes power and cooling equipment for the data center. Now, this stock can come down 54% from its January highs. What?

to where it was trading right before the quarter on Tuesday night. Then Verner reports excellent numbers with easy top and bottom line beats and a 21% increase in orders just versus the previous quarter, the so-called late quarter. Management raised their full-year sales forecast too. So it's no wonder the stock popped nearly 9% yesterday and another 7.5% today.

It's one of the reasons why I talk about this stuff at the beginning of the show. Yet, Furtive's still down 46% from its high. It trades at roughly 23 times this year's earnings estimates, despite the fact the company's on track to grow earnings at a 25% clip. I mean, to me, that's just a steal, okay? I mean, to me, you know what? Oh!

Last time, we also had GE Vernovo on the show. This is General Electric's old power division, big turbine maker for power plants. Management said that strong demand from data centers is driving medium-term orders for gas turbines, while generating plenty of interest in the company's nuclear business.

This nuclear business is for real people. So look, if reports of the AI infrastructure team's death were wildly overstated, what kind of stocks can we justify owning now that they've come down big and people are not saying that there's any stability in the group?

First are the chips that are at the heart of these data centers. You know I'm going to start with NVIDIA. Now, I have, yes, I have become less enthusiastic about this, not because of NVIDIA itself, but because of the political headwinds involved with NVIDIA. We've still got a sizable position in NVIDIA for the Chappell Trust because I'm a believer in their technology. NVIDIA stocks down more than 30% from its January highs, but it still looks pretty cheap. It's 24 times this year's earnings estimates.

Keep in mind, those estimates have come down substantially after the effective federal ban on selling their AI chips to China, even the older ones. And that took my breath away, just so you know. Of course, some other semiconductor stocks can get back on track if the AI infrastructure spending never really went away. I like Broadcom, which we own for the Chappell Trust. Very big position. And Marvell Technologies.

because they make what are known as custom accelerators that provide additional computing power for these warehouses full of servers. Worldcom and Marvell's stock are down 25% and 55%, respectively, from their recent highs. They're trading at very reasonable valuations now.

Then there's Arm Holdings, another one I really like. It's a company that licenses its leading semiconductor architecture designs to chip makers, including NVIDIA. Cadence Design Systems, a nice move on that today. Synopsys, they both work. They make semiconductor design software. Oh, yeah, and don't forget CoreWeave, which makes its own AI data centers, essentially allowing customers to rent its clusters of NVIDIA GPUs. This stock's basically back to where it was trading when it came public in late March. If

If the AI infrastructure theme remains alive and well, CoreWeave, I think CoreWeave could be an absolute steal here. What else goes into data center? Well, how about servers and networking equipment? This is a little trickier, OK? The leading makers of servers are Dell Technologies and Hewlett Packard Enterprise. Sadly, both these companies have major tariff exposure, which is why their stocks, frankly, have just been slaughtered.

But now they suffer 10 and 9 times this year's earnings estimates, respectively. So I'm wondering if the bad news has already been priced in. By the way, the sharp activist fund, Elliott Investor, Elliott Management, they just announced a 7% stake in HP Enterprise last week. HP Enterprise, frankly, has not operated that well, but maybe Elliott shakes it up. Oh, by the way, never bet against Michael Dell. If you do, I need you to do something. Please send me an invitation to your funeral.

As for networking equipment, I'm a fan of Arista Networks, which is some of the best tech, but it's been a hit extra hard because there's a lot of business with Microsoft, which has started to wobble with its data center investment plans. But as I told a caller, we asked about Arista just last night. I think this stock has come down way too much. I mean, this thing is down 44% from its share of yards. This is a fantastic

run company. It looks interesting to me at these levels. You know what? I'm calling out Cisco Systems to long the market leader in network equipment, though it's also made some big moves into software, and by the way, also cybersecurity lately. Cisco has been holding up much better than many of these other names, only down about 15% from its mid-February highs, 1.5.

But it will roar once people get the memo that AI infrastructure spending never went away. It's very inexpensive versus its accelerating growth rate since it made a recent acquisition. All right, now, how about the utilities with nuclear exposure that roared last year because of the data center fuel rise in demand for electricity? All right, here I'm talking about Constellation Energy, Vistra. You might have heard about Vistra during the

Stock craft earlier this afternoon. Now, these stocks have both fallen nearly 40 percent from their highs. These two stocks got overheated during the run up, but they're now selling for barely more than 20 times this year's earnings estimates. They're selling for less than a lot of the traditional utility companies. I think that sounds like an opportunity to me.

The strength of Inverter's earnings also has me thinking about carrier global and train technologies. These are two leading climate control plays that have seen major growth in data centers because you need to keep these servers cool. Now, these two are far from pure plays. They also got exposure to construction with real tariff exposure, too. But if Wall Street embraces AI, they can bounce. I cannot believe how low carriers fall.

I feel the same way about a number of classic metal bending industrials with big AI infrastructure exposure. Think Cummins. Boy, that stock's been just blistered. Makes big backup power generators. You can't have a data center go down. Tonight's guest, Dover. All right. They make these liquid cooling products, among many others. Or Eaton, another stock just been crushed. These are two that the trust owns. They make electrical power management. Hubble, Parker, Hennepin, Powell Industries. All good. All

All of them. Now, again, these are very much cyclical companies, so you can't just buy them if you think we're headed into a recession. Most have seen their stocks get slaughtered because they think people think we are going to recession. But if we get a reprieve on some more tariff issues and these tariff issues and investors return to the trade, I just gave you everything is going to fly again. Bottom line, when it comes to AI infrastructure, Wall Street's become very skeptical.

And I don't think that's really changed. But looking at what we've seen so far this earnings season, I'm feeling much more sanguine about the story, especially if we get some more trade war de-escalation from the White House and stocks stay as cheap as they are. And man, are they ever cheap. Let's get to Sonny in Illinois. Sonny. Hey, Jim. I'm a club member and a loyal follower. Thanks for all you first underdogs. Thank you. Yes. Yes.

That's how I feel, exactly. Booyah, Jim. Oh, man. Familial booyah. I miss those. We haven't had a lot of them lately. Thank you, Sonny.

So, first of all, I think you need to give Regina, Jeff, and the rest of the crew a raise. They're working really hard overtime in this economy. Let me get it. What do I have? I have some money here. I know I had a couple of fives, I think, kicking around. Let me get back to you on that, all right? It's got them somewhere. Here's my question. So I have Apple and Nvidia. Can you give me some thoughts on Taiwan Semiconductor? Taiwan Semiconductor is so low.

I have to tell you, I look at Taiwan Semi. Do people think, look, I have tremendous conviction that we, it's very difficult politically to say that we will protect Taiwan Semi. I will say this, that is one of the greatest manufacturers in the world. And anybody who thinks that Taiwan Semi should be this low, this cheap, is just not a believer in AI. And I am a believer in AI. There we go. And let's take a look.

All right, based on what we've seen so far from the earnings season, I'm feeling positive about the data center build-out theme. I think it's good. Look, yeah, these stocks have just come down way too much. Much more made money, including one of the build-outers, Dover. Fresh off this morning's release, I think that stock's dirt cheap. Then after getting some tough home sales numbers today, I'm mapping out what I think could be on the horizon for the housing market. And all your calls are up in fire in tonight's edition of The Lightning Round. So stay with Kramer. ♪

This morning, we got results from Dover, the diversified industrial manufacturer that's made a big pivot toward the data center aerospace clean energy we own for the Chappell Trust. Wow, right. Dover trimmed their full year forecast, which caused the stock to get slammed in the pre-market trading. Oh, my God, it was down six bucks. However, on the conference call, management explained they were simply being conservative with their forecast. They're not seeing any actual weakness right now. They're being cautious.

Rational thinking? Immediately, the stock started making a comeback, going on to finish the session up 2%. So can it keep running, or is this the kind of company we should genuinely be concerned about in such a tricky environment? Let's check in with Rich Tobin. He's the chairman and president and CEO of Grover Corporation. To find out, Mr. Tobin, welcome back to Mad Money.

How are you doing, Jim? Good, thank you. Now, Rich, I got to tell you, you did give it kind of like my heart jump for a second because when I saw that you basically were, let's say, concerned, I figured, uh-oh, you saw something. But what you really did see was what everybody's seeing, but no other CEO other than RTX really wants to say, which is there is a bit of a zeitgeist and things going on. Can you explain to people how you chose unilaterally to make a decision about what could happen going forward?

Sure. About three weeks ago, when the tariff tumult really started to pick up steam, we got the management group together and basically said, you know what, you're going to get all confused with all this. So let's go back to tactics here. Let's get a real clean Q2 forecast. Let's look at our backlogs. Let's get a Q2 that we can deliver. And you know what? We'll wait to see how the smoke clears as we go through Q2.

My experience tells me in times of uncertainty in corporate America, CapEx tends to get delayed in these situations. And there's a good portion of our business that's levered towards CapEx projects. I don't think they're going away. In our dialogue with our customers, they're all coming. But I think it's fair to say as long as this tariff tumult continues,

doesn't get sorted out relatively quickly, that there's going to be a little bit of drift to the right. So it was purely a mechanical move. I did it from the center. At the end of the day, I don't think it's any reason to be excited. It's approximately $100 million in revenue, or 1%, and $17 million of net income. I mean, with the resulting, we're still double-digit EPS forecast for the year.

If I reran our numbers right now at spot FX, it goes back the other way. But again, FX volatility right now is a little bit too close to call. So we'd like to get some time before we rerun the numbers. Excellent. I'm glad you got that for our people, too. But I would say, Rich, that the intra quarter trends are actually quite encouraging. And if we wanted to, we could say that's history or we could say that's how things could go if we get a little less crazy.

Yeah, look, we're really pleased with the margin performance in the quarter. And, you know, you know this, that margin performance is not, you know, what did we sell in Q1? It's all of the work that we did back in 23 and 24 and the roll forward effect of everything that we did on the portfolio, number one, all of the cost takeout that we that we did last year in terms of skew management or footprint rationalization. So, look, we're in a time right now where predicting returns

Growth or revenue into the back half of the year is going to be a little bit difficult, but we're really pleased what we see in terms of the incremental margin performance that we saw in Q1. And we don't expect that to dilute going forward. Well, there's also some excellent growth here. Pumps and process was terrific. Imaging and identification business I really like. These are businesses that we have the thermal connector business so strong because of a data center. These seem to have a lot of tailwinds behind them.

Yeah, I mean, I think the last time we got together, we said that we had invested a significant portion of both our organic and inorganic capital over the last several years into some priority growth platforms that make up 20 percent of our revenue right now.

They've really begun to get some traction now, number one, in terms of the growth rate. But more importantly, if you think about something like thermal connectors, we built that purpose-built facility two years ago. So not only are you getting the volume coming through, you're getting all of the fixed cost absorption that we've been carrying in the previous period. So going the way we like it in terms of margin. Now, can you put more money behind those or so-called things that you feel like –

at this very moment have momentum? Or if you can't find anything, do you just take your considerable cash pile and buy the stock now that it's down 40 points from where it was? Good question. I think right now, because we have a highly liquid balance sheet, we can do both. So there was a slide in presentation this morning where we outlined some capex that we were undertaking. Unlike some of our customers that may not have the balance sheet position that we have,

We don't have to delay any capex. We can keep spending for what we believe that is a multi-year runway of terms of growth. So we've got a variety of different projects right now.

for organic capacity expansion that we highlighted in the presentation this morning. In terms of intervening on the share price, I think that what we said at the coming into the year with all the liquidity that we carried in, that we were carrying an insurance policy because of the presidential elections and a variety of other things going on.

Right now, we're on the front foot. We'd rather deploy that in inorganic capital. But clearly, if we think that there's a dislocation in the stock price, that we'd intervene as we've done in the past. You also did something that most CEOs don't do. You gave us a commentary on current tariff tumult, which shows me, frankly, if it's $215 million annualized tariff estimate on 24 bases, well, I got to tell you, you are going to be better off than a lot of your competitors, and therefore you will also be similarly advantaged.

Yeah, look, I think that part of the reaction this morning was taking a look at those tariff numbers and not understanding what the calculation was. I mean, I don't believe that the Chinese tariffs are going to be 145 percent for a calendar year. But we had to give some guidance in terms of the exposure from a COGS point of view.

We are, generally speaking, a proximity manufacturer. And as part of the comments I made this morning on the call was we have a good understanding of where we are relative to our competitive base in terms of tariff exposure.

So it's not all about let's go raise pricing to cover tariffs and is that margin dilution? That was a lot of the questions we got this morning. It's more a matter of if you have an advantage against somebody because they're more exposed, because they're bringing more finished product in from China, for example, then let's go and be a little bit careful in pricing. Let's grab some market share.

Now, I want to just point out that one of the people I talk, you know, you're in our club, so to speak. And we have a lot of club members and they they send me things. And one club member sent me something. It was kind of he said, why does he own some some divisions that are down? Why doesn't he own all divisions that are up? Could you know? And I tried to explain them. That's not the nature of the conglomerate. But maybe you can just speak to the idea of, look, they don't all go up at once.

Yeah, I think other than the real acceleration out of the COVID period, I don't think the portfolio has ever moved in tandem. Look, a lot of people like pure play. We would argue that the accordion effect of the portfolio is actually a strength at the end of the day. But having said that,

We are stewards of capital. So we do have a clear-eyed view of sum of parts and how that drives the stock price. You saw us do some divestitures last year. I think that that has been a result of our margin moving up over time. And then we redeploy the capital into, you know, hopefully higher margin, higher growth businesses over time. You know, our engineered products division used to be 12 months ago, 25% of revenue. Now it's down to 15%, for example.

as we've proven the portfolio. So, look, we drive for performance and we all want them to create value over time. But there is a semi-cyclical nature to the different parts. Well, the consistent nature of Dover over multiple years would indicate it's not such a bad way to do business.

I want to thank Rich Dobin, chairman and president and CEO of Dover. I also want people to go listen to his conference call because his conference call is different from most others. That's all I'm going to say, other than it's often fun to read. Thank you, Rich, for coming on Mad Money. Thanks, Jim. Mad Money.com. It is time. Time for the White House. We're going to start with a stock question. We're going to start with a stock question.

And then the lightning round is over. Are you ready? Let's start with David in Pennsylvania. David. Jim, Jim, Jimbo, Banana Fanta promo, Jim. Jim, I am heavy in Reddit. Well, I'll tell you, Banana Fanta, oh man. Reddit, I think Reddit is a very good stock. It came down way too much because there was a short squeeze and then it evaporated. But I think management helps to do a great job. I would be a buyer. Let's go to Jim in Mississippi. Jim.

Booyah, Jimmy Till. How are you doing, buddy? I am doing well. How about you? Good, my man. Can you talk to me about Walmart? Okay, your stock's down 10. Now, admittedly, it's up 10 from where it was just a couple of days ago. But I tell you, if I wanted to buy the stock, I'd put a little on here and then wait for someone to talk about tariffs, let it come down, and then do some buying. For the rest of it, let's go to Bobby in Louisiana. Bobby.

Hey, Jim. I want to give a shout out to Marcus and Dalton. Now, Marcus, Dalton, and I are contractors in the pipeline industry. And one of the pipeline companies we work for has been sold. The buyer feels to be a good company, and the stock has held up well with this task in motion.

What's your opinion on Brookfield Asset Management? Oh, man, those guys are real good. You know, the reason why its yield is only three is because the stocks actually not come in like so many of the others in the business. I like the stock. Let's go to James in Virginia. James.

Hey, Jim. This is James from Chesapeake, Virginia. I currently own some shares in one main, ticker symbol OMF. Too risky. Too risky. I want you to get out of that right now. And tomorrow, I want you to go by Capital One. Also, which I tell you, it's got much better risk controls. And it's going to have a nice buyback. And I think it's going to 200. I told that to the club members. Let's go to Jeffrey in Massachusetts. Jeffrey. What's up, Jim? I don't know. You tell me.

I don't know. First off, I just pre-ordered your new book. Looking forward to that. Oh, my. I mean, this guy wants to make money in any market. Thank you so much. Let's go to work. Now, with all the board shake-ups and plunging performance, should I hang on for the ride or take my losses on hogs?

Harley. No, don't do it here. It sells at seven times earnings. 3% yield. Look, I don't have a great. It doesn't have the sales that I really like, but I think you can bounce from here. And that lands you on the conclusion of the lightning round.

Sometimes you wonder what a bottom in housing looks like. Could it be when existing home sales dropped to their slowest March pace since 2009, which, if you recall, was the tail end of the financial crisis, a scourge that was precipitated by some of the worst home overbuilding in decades? These March numbers stink in so many ways. The ones we got this morning, existing home sales fell 5.9% month over month,

The biggest monthly decline since November of 2022 when existing home sales fell 6.7%. Sales slumped in every region. They dropped more than 9% in the West. Heinous. To which I say, perhaps, just perhaps, we're going to get what I've been anticipating for ages. Maybe these numbers will bring about the great housing thaw that we've all been waiting for. Like everything in business, housing has a cycle. It starts when home sales slow down. The Fed has to cut rates. Buyers come in eager to pick up costs.

a home with cheaper money, or at least 18 years of rate they can lock in. The homebuilders sense a better market and start to lose a little discipline, putting more of their land to work. The buyers get more aggressive, then rates start climbing. Existing homeowners who've been waiting for better prices start offering their homes. Rates go higher still. The Fed's losing at this point. The housing market gets real hot.

The buyers can't resist fearing that they're going to miss out. We're going to see multiple orders on most houses as rates go ever higher and home prices go ever higher. But that's the peak.

Then the inventory dries up. Why bother to sell if you're going to get multiple offers? Might as well hang on to your property, hoping ultimately to get much higher prices. So the sellers then step to the sidelines. Buyers are flummoxed. There's no supply. We get stasis. Nothing happening. Then people start worrying about a recession with higher interest rates tipping us into the abyss, just like some believe might be happening right now.

The president's worried that J-PAL will cause a recession by leaving short rates too high. Most business people think the tariffs will precipitate a freeze in commerce, with the effect of embargo on China chilling everything, although they're usually afraid to say it outright. When the fear becomes palpable, the sideline home sellers, they get antsy. They reappear.

But the buyers, they're no fools. It's their turn to play the waiting game. The sellers grow fearful and flood the zone with homes. But the buyers are on strike. Only then does the Fed start cutting rates and homebuilders realize that they're not going to make their course unless they start cutting price and doing some selling.

Quickly, inventory builds. The buyers step up. The sellers whack bids. And the cycle does its job as more and more homes come out of the woodwork. Prices keep coming down and the market works its magic. Can that happen now? You know what? I think this could be the darkest before dawn moment for housing. I mean, does anyone seriously believe that homes, one of the most severe sources of inflation, will ever give up their gains since before the pandemic? I don't think so.

Most people don't think so. But, you know, if history is any guide, that's exactly what could happen over the next few months. And I'll tell you something. For most families, it would be a godsend. I like to say there's always a bull market somewhere. I promise I'll find it just for you right here on MadMoney. I'm Drew Kramer. See you tomorrow.

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