Mad Money w/ Jim Cramer 2/20/25
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Hey, I'm Kramer. Welcome to Made of Money. Welcome to Kramerica. I'll be your friends. I'm just trying to save you a little money. My job is not just to entertain you, but to educate. Put things like that in context. Call me, 1-800-743-CNBC. Tweet me at Jim Kramer.

You might believe you own a portfolio of totally diversified stocks, but if you lost a ton of money today, you're probably not as diversified as you think. That's because high-flying stocks are a category by themselves, regardless of what sector they belong to. On days like today, the high-flyers, well, they all get slaughtered. They fare much worse than the averages. So after the sell-off, where the Dow lost 451 points, that's been declined 0.43%, and the Nasdaq shed 0.47%.

I want to prove that you need to think twice before you pile all of your money into the most volatile stocks out there, the momentum plays. I mean this especially for some of you younger investors who use options and ETFs to make what amounts to bets on these stocks because I know you got your clocks cleaned today.

See, you never want to lose a huge amount of money in any one day because the real challenge in this business is convincing yourself to stay in the game. And nothing is more discouraging.

than seeing everything you own get clobbered. So let's talk about speculation. Inform speculation that can lead to big-time investing as long as you are disciplined and don't roll it all into the highest of flyers and nothing else. The most speculative stock in this entire market right now is Palantir. That's a data analytics and artificial intelligence company that is loved, loved, loved, especially by young people.

I'm basing that speculative crown on its ridiculously high valuation, with the stock selling for 197 times this year's earnings. And that's after falling nearly 15% over the past two trading sessions. Now, I am a big believer in Palantir as a decent SPAC.

I've listened to Alex Karp, the charismatic borderline messianic CEO, talk about how the company should be valued by the abstruse rule of 40, where you add its revenue growth rate to its operating margin. And if you get a number north of 40, well, then you've got a good business. On the last conference call, Karp said Palantir's sales growth rate and its operating margin together added up to 81%. 81%! 81% is the best in the entire market.

Does that mean it's worth 197 times earnings? Not on a daily today. This consulting and data interpretation company, among so many other things, does a huge amount of business with the Defense Department. And we're now hearing chatter that the defense spending could be cut back by 8%.

In each of the next five years, now I could make the case that Elon Musk, the head of Doge, might actually appoint Palantir to cut the fat. Or you could easily argue that Congress and the courts will never let the defense budget get cut without an actual piece of legislation. But today that didn't matter, did it? The stock, which had gone up for weeks, gave back a huge amount of money in the last two days. Why? Now some of it was the Defense Department rumor, but some of it was simply that Palantir has gotten too expensive.

which is why we're starting to hear chatter about insider selling plans. It actually doesn't bother me, though.

See, most of all, what really happened is about the shareholder base that turned tail. Palantir is mainly owned by retail investors who are true believers. They love Carp and his irreverence and his bag of dojo about how everyone at Palantir is much smarter than you and I. They think this stock belongs to 1000, not at 106, where it went out today. Is there some metric to justify that that price? None whatsoever.

For the owners, the traders, it's all about charisma and brilliance and take their word for it. They do tremendous work for customers, work that pays off soon after you hire a balance here. Now, most of these kinds of shareholders don't intend to sell, but it gets a little too dicey on days like today and yesterday for most owners.

That's because there's another cohort of owners, red-hot mutual funds, who are addicted to stocks like Palantir. There are managers who are mesmerized by things like the Rule of 40. They buy into every cockamamie method of valuation. They have total contempt for those of us who like to have some rigor, some methodology that can make it so you can buy a stock and justify buying more on the way down as it gets cheaper. These managers are not investing. They're simply taking chances.

And as long as they do so somewhat wisely with a plan to buy more on the way down while measuring each quarter for the showmanship, well, then maybe they got a winner. But on days like today, let me tell you, they are your worst enemies if you own stocks like Palantir. Because when I see all these kinds of stocks go down at once, I know there's some big time money managers are bowing out. They've gotten bearish and they're taking every one of your stocks down with them.

Remember, I have no problem with this kind of speculation. I've been telling people to buy PoundTour on every dip if they're willing to take the risk, including, by the way, this one. I actually am encouraging you to pick one or two speculative names, that's all, and own them.

have no illusions. If they don't work, you'll be up Speculation Creek without a paddle, which is why I don't want to own five or six of these. Then why am I even countencing this kind of activity? Well, because when it works, it works spectacularly. Take Amazon. Hard to believe now, but for years I heard that Amazon was ridiculously overvalued, endlessly.

I was willing to go along after spending some time with them, publicizing Confessions of a Street Addict in 2002. I saw that they could easily wipe out the bookstore industry, maybe even the rest of retail. But I recognized it was speculative. If you had conviction, it made you a fortune.

Netflix and Tesla is no different. They looked incredibly expensive the whole time. At certain moments, you had to spend any sort of sense of rigor and prudence to own the stocks. And you had to hold on for dear life on days like yesterday and today. Most investors I know can't do it or they do it in options. Now they're done. They're done. They have nothing left.

Yet there are some amazing opportunities all over the place. If you're patient, take Caravana, which reported last night saw its stock plunge 12% today in response. At no point could this stock be justified on the basis of any metric, earning, sales, rule of 40, nothing. But,

When I used it to buy a new car, which we didn't like when we got it, they took it back. They said nothing. I was sold. Carvana was in single digits back then without a good balance sheet. It took a restructuring and infusion of capital to turn things around. But last night, the company reported a quarter that many thought was weak enough to sell. I disagree. And even after this decline, it settled at $247 and change. Nice run from the single digits of years past. How about Kava Group, the restaurant chain that may be the next big thing because it sells fresh, healthy Mediterranean food for a reasonable price.

Of course, the stock trades at 191 times earnings. Who can possibly justify that? Only a person who believes that Kava could be the next Chipotle, one of the greatest performers of all time. He put $1,000 into Chipotle when it came public, $120,000 now. How about Apple oven? Here's a company that links mobile game advertising with players. It was the best performer in the NASDAQ 100 last year, up over 700% for the year. It looked like the most expensive stock in the universe. But then when we saw the quarter not that long ago, it turned out that ballpark.

The problem was it was making a fortune. It now sells for just 68 times earnings. Sure, that's a lot, but it's much cheaper than it used to be. You have to stick with it through days like today when it closed down. Most cannot do that because they own five or six or 10 of these kinds of stocks. And those people were obliterated and they don't know what to do other than turn off the TV, stop investing. And there you go.

Now, let me go back to what I said at the beginning. If you believe in these companies and you can stomach dicey balance sheets, you should by all means own a couple of speculative stocks. Keep in mind, many of your fellow shareholders will want to cut and run when they see all their stocks clobbered. Meanwhile, there are professionals who own nothing but speculative stocks. And if they choose to look at it all at once, as is the case we saw in the last two days,

You can be annihilated. That's why even though I am the only person I know who comes on TV and actually recommends speculation, albeit in an informed way, I urge you to diversify your portfolio beyond speculative stocks because these things will all trade together. Bottom line here. My primary goal in this show is to keep you in the stock business.

I want you to stay in the game. I can't do that if you're nothing but Palantir, Carvana, Applovin, and all the others. And you trade nothing but options and ETFs to include them. At the end of the day, you simply won't know what hit you, which means...

The next time we get a Daily Today, I don't want you to sell everything and possibly give up on the entire ice class. If you have just two of them, though, you'll make it through and be able to buy more into weakness that everyone else is fleeing because they can't take the pain. But you'll be able to. Let's go to my suede in Maryland. My suede. Greetings, Mr. Kramer.

How are you? I'm doing great. I'm previously from Miami. All right. Sounds good. I'm a longtime listener from your era, co-hosting with Larry Kudlow. I'm a first-time caller. Thank you. I really appreciate all the knowledge you share with your audience. Thank you.

Thank you. I have a pretty good portfolio of 31 stocks, and I'm up about 38% in 18 months. Wow. That's fabulous. I've been taking your advice on easing into buying the stock, like 25% of what I want to buy at a time. Perfect. Done my due diligence. The chart looked good, so I bought five shares of BlackRock, ELK.

on February 4th for $1,049. It went up a couple of days to all-time intraday high of $1,084 and immediately started going down almost every day. Yes, it did. Yes, it did. And we own it for the Travel Trust. And Jeff Marks and I talked about it extensively today when we did our meeting. We had our club meeting. It is online. We feel, and we just bought more. We think it's a great price. We don't think the stock can underperform that much longer.

It's that good a company. But thank you for your call and for your confidence. Look, I'm all for owning a couple of speculative stocks, but you have to make sure your portfolio is diversified. It's the only way after a day like today that you'll stay in the game. I'm having a time. Can coffee chain Dutch Bros. Oh, there's one up just like the ones I've just talked about. Can that stay caffeinated for the long term? I'm checking in with the top brass after last week's post earnings.

Pick me up. Then Denim Maker Contour Brands just announced in addition to its apparel portfolio. I've got to see you to talk about the deal and its pre-announced quarter. You will not want to miss it. And later, safety science player UL Solutions, you might know them as Underwriter Laboratories, pulled back on today's earnings beat. I'm taking a closer look because I think this might be an opportunity. So stay with Crayon.

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What can I even say about Dutch Bros, the Oregon-based coffee chain with a hyper-caffeinated stock? When Dutch Bros reported in November, its stock shot up 28% of response. When it reported again last week, it was deja vu all over again. This time, 29%. Thanks for a tremendous set of numbers. Now, I've been

Now, I've been telling you to buy this one for ages. Everybody knows that. But now the stock has more than tripled over the past 12 months, quitting nearly 57 percent gain year to date, which might make you feel a little squeamish about pulling the trigger. But how many players in the restaurant space are actually doing this well? I wouldn't be surprised if this one's got a lot more room to run. Let's don't take it from me. Let's check in with Christine Barone. She's the president of Dutch Bros. Get a better sense of the quarter and where our company's headed. Miss Barone, welcome back to Mad Money.

Jim, thanks so much for having me. Okay, so Christine, when did you know? When did you know it was all coming together? Because this is a remarkable acceleration in same-store sales, maybe the most I've seen in a very long time.

You know, I think it's because we start with such a strong foundation. We are in a category of our own with our people, our service and our awesome quality drinks coming together with just fast speed. And so I think all of that foundation and then building just some great tools on top of that.

having awesome innovation. We've got a paid media strategy that's really working. Our Dutch rewards program is going quite well. And then we fully rolled out mobile order and saw the fruits of that in Q4. Well, who comes up with these drinks? I mean, for instance, the cinnamon swirl. No spoon required. Savors the flavor of cinnamon sugar. Siri!

cereal flavored meals, cereal. Who knows that that's going to work for people? Because these are what I would think are high. They could miss. But boy, if they hit, everyone's going to be talking about it. I think innovation is really an art and science. So we are watching what's going on around us. We're always in tune with our customers. We have customer panels where we're testing things.

We have an awesome group of folks who go and open all of our shops and we bring them in for tastings to try things. So we see what they love and what hits with them. And so I think it's just this awesome collaboration of figuring out what do people want now? What is that fun thing that's going to bring you back into the shop? What do our broistas love? Because our broistas love it. They love to sell it. Now, when they're funny like the ones I just read, I can imagine that your paid social media must be a huge hit.

So I think the social media is really to continue to engage our customers. So we don't only do it with drinks. We also do merch drops. In fact, today we've got a sticker drop to celebrate pet owners. And so we've got some really cute dog stickers. We have a number of sticker collectors out there. So our innovation isn't just with our beverages. We're also doing merch drops and sticker drops with folks, which folks really love to collect. Yeah, it's funny. My daughter's PC is covered with your sticker drops and

And I was so I was mystified until, of course, we went and realized that it's part of it's part of the zeitgeist for Dutch pros. Now, one thousand stores and incredible. But you've got a goal of four thousand stores. Is that realistic in any particular time frame when you or is it just going to be, well, when we can get it done?

So we shared a couple years ago that we were going to get to 4,000 shops in the next 10 to 15 years. And I'm really excited about that goal. But you get there one at a time. I was in Orlando for our 1,000 shop opening. Unbelievable how far we are away from our home in Grants Pass.

To see that line, we had someone waiting in line at 11 p.m. the night before. And it was so cool to welcome our customers. We had some come from other states to visit us for that opening. And the energy that our teams have for those openings is just unbelievable. I was kind of amazed. You just have...

a way about you guys. I mean, for instance, your new chief technology information officer was at Lululemon Athletic. I mean, I just think that's brilliant. How did you know about spotting this synergy between a really fabulous clothier and Dutch pros?

So, Vinke is awesome. I just finished a quick meeting with him. And what it starts with is actually finding folks who really fit with our culture first. That is what is our fuel. That is why we have the permission to grow. And Vinke is just such a wonderful person.

culture fit for us. And so he's come on board as not only does he have an incredible set of capabilities, so looking ahead for what we can be, how we want to engage with our customers online, how we want to engage with our customers through the Dutch Rewards Program. But most importantly, he cares about people. He's done a shop training. He passed his flow check so that he knows how to make all of our drinks.

And we have all of our new leaders who come on board really start with that in-shop training because that's what it's all about. I bring them up because when I think about what Brian Nicholas would do at Starbucks, I mean, you've got to do mobile order. You have to do making it so that those people don't come in and create a mosh pit at your place. They also have to you also have to do drive through. It's really incredibly important. And you still have to do throughput. Obviously, your throughput must be magnificent or you wouldn't be able to get all these customers.

So our throughput is something that we focus a lot on. So about 90% of our transactions go through our drive-thru. So we've got to be really fast at greeting folks, smiling, having that connection, bringing out a drink to you or handing it to you at the window. And it is something we focus on a lot. As we launched mobile order, the throughput was super important to us. But what I would say was even more important was getting that service through.

exactly right so that when you came, our goal is that you come to Dutch Bros and when you leave Dutch Bros, your day is a little brighter because you were with us. Now, when I first saw you in Oregon many, many years ago, you'd be in a parking lot. There was always some place that was open. It was just natural. Now you must be bumping up against some of these chains, of which I know you know because of your background. Are you fighting over real estate or is there still plenty of siting to be done for Dutch Bros?

We have so much of the country still to go. We're only in 18 states right now. We just reached 1,000 stores. So we shared that 4,000 is still, we still have a lot to go. And so I would say real estate is competitive, but it's something I think landlords understand that,

how important we are to be a part of the community. I think when we go into a community, we make awesome connections with our neighbors around us and are bringing people in. And so others like to be near us as well. So I feel like although it is tough, it is something that we're really successful with. I hope next time you come here and we get to taste some of these fantastic drinks. It's too much to ask for you to open a store in New York. I pressure you already enough on that.

But I love what the I love what a marshmallow dream cereal sounds like. A chocolate covered strawberry mocha, because I want the most creative. And a lot of the new guys, by the way, a lot of the struggling guys can't make them and they don't have the resources to make them. And it's it's just too difficult right now. You're still making the greats. And I think it's so part of it. Like I said, it's a cult following and I absolutely love it, but it's blowing out.

4,000 stores means it's much bigger than cold. Christine Barone is president and CEO of Dutch Bros. I've told you over and over again that I love their drinks and I love their stock. Christine, thank you so much. Thank you, Jim. This is a regional national story, people. They're in 50 states. They can be in 50 states. There isn't anything about what she makes that can't travel everywhere in this great country and then overseas. We have money back in for the money.

Coming up, is this company as rugged as the denim it sells? A look at the company behind Wrangler and Lee. Next. Every day, thousands of Comcast engineers and technologists create connectivity solutions that change the way we work, live, and play. Like Kunle, a Comcast engineer who is focused on revolutionizing the in-home Wi-Fi experience today and for the next generation. Learn more at comcastcorporation.com slash Wi-Fi.

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EY, shape the future with confidence. Yesterday morning, we learned that Contour Brands, maker of Wrangler and Lee jeans, is buying Helly Hansen. That is a global outdoor and workwear brand for roughly $900 million. This is a major move for Contour, which was put off by VF Corp back in 2019. It's been the next few years trying to stabilize its denim business during the pandemic. Terrific business. After years of cost-cutting, they're back in growth mode, and that includes making acquisitions. On top of this deal, Contour,

Contour pre-announced the fourth quarter results, delivering a comfortable top and bottom of my beat. There's a reason this stock shot up three and a half bucks yesterday and a bit more today. So can it keep climbing? Let's dig deep with Scott Baxter, the chairman and president and CEO of Contour Brands. For more of Mr. Baxter, welcome back to May I Have Money. Hey, Jim, how are you? It's good to be back. I'm so glad you're here. All right. So I have to tell you, I polled everyone in the office yesterday.

Everybody knew about this company. Everybody. Everybody had either some foul weather or they had some ski or I had some jackets. I never I saw H.H. many, many times, never even knew what it was, just knew that I liked it. How did you spot this one and how did you get it?

Well, I'll tell you, that's great to hear because, you know, Jim, it's a small market for us in the United States. One of the reasons that we got it was because it's about a $140 million business here and it should be much bigger. It's a hundred million dollars in Canada. We got it through a relationship with CTC and, you know, those folks up in Toronto, just a terrific group of people. Greg Hicks and his team have been absolutely wonderful to deal with. We knew that we wanted an outdoor and or a workwear company, Jim, and here we got

both in this acquisition. So it was a really nice fit for us. And now we've got a growth opportunity. You know, it's growing a little bit faster than the denim business. And I think the other thing for us, Jim, is I've got a strong background in outdoor, as you know, and our CFO, Joe Alkire, has a really strong background in outdoor. So it'll be a really nice fit for us going forward. Now, in terms of the price points I looked at on Amazon, I mean, you've got stuff that

inexpensive that frankly is terrific and stuff that's a little more expensive. But this is really a brand new kind of category for you. I mean, we're talking about some $300, $400, $500 stuff. Do you have the right people? You have denim people. How are they going to do this?

Well, I'll tell you one of the things that we're going to do, Jim, is we've got a really good technology platform, and we also have a really strong back end of very experienced people around the globe. We're going to go ahead and merge the back end of the technology piece, and the business itself is going to be a standalone SBU that's going to report directly to me, but we're going to let the business stay.

because we have such a good team there, very seasoned team that's been there for a very long time. They've grown the business now 3x over the last 10 years, and we think that's one of the big advantages in why we bought the business. I know, it's sensational. How about Europe? What's going to happen there?

Well, about half of the business is in Europe, you know, about 75 percent sport and about 25 percent workwear. And we're going to continue to grow that business. We think that the big opportunity is here in North America. So that's where we're going to go ahead and put some assets in place to make sure that we help that and aid that along. But we think that we can continue to grow about 650 million dollar business, Jim. And there's no reason it can't be a billion dollar business. I thought the same thing. I really felt that this is the biggest thing that could have happened. I

I also thought, by the way, there was a moment where I said, oh, my God, did they have to fight against VF Corp to get this? This is what VF Corp needs, too. But obviously, you know, Rack has got his hands full. He's got to get that balance sheet a little better. But your balance sheet was superb. He could handle this very easily.

Yeah, very easily. I mean, you know, we're going to probably put 200 million or so down on it and borrow about 700 million dollars. Puts us in a really good position. You know, our balance sheet has been very strong for a few years now. I think, Jim, most people want to know what we were going to do with our cash. We already pay a healthy dividend. We've been buying back stock.

But we were patient, Jim. We've looked at a lot of deals here in the last few years. And this one came and we moved really quickly. And like I said, it was a really good transaction with a really good group of folks. And we made it happen quick. Now, I know a lot of people focus on denim. I bought a lot of your stuff on Amazon, a lot of shirts. I mean, you know, shirts that I think I'm going to mention a competitor. OK, that are I'm going to mention Carhartt. I

I think they're every bit as good as Carhartt, and they're usually not half the price, but maybe only a third of the price. There is some, I mean, Carhartt has got a huge markup, but there's plenty of room for you to actually have a little bit higher price.

You know, we do a really nice job going all the way from, you know, maybe $20, $22, all the way up to $75, $80. Some of our Western shirts are very expensive relative to the marketplace, but they're worth it. You know, they've got great style and great design. So we run the whole gamut in most respects from a shirt standpoint. But we also, Jim, like I've said before, and you and I have talked about it, we just offer a great value. You know, one of the things about our brands is they're a value and a brand that you can trust, and that's why our consumer likes us so much.

Absolutely. Now, I do think there's one thing Steve will put out of peace today, which talked about you being perhaps the most sensitive to tariffs. Now, tariffs are tricky. We don't know what's going to happen. Can you ameliorate it? You have room. That's one of the reasons why I said your price is low. If you have to, I know you don't want to pass it on, but you'll be OK.

We'll be OK. We've got a really strong back end. We have a plan. You know, we know what we're going to do if that does come in place. And we're in a really good place with our consumer right now. So I feel real confident no matter what happens, Jim. All right. Good, because I know when you preannounced it, I said, oh, they must be pretty darn confident. I know you are now.

What is, when I look at HH, the stuff that I have in my closet, right? Why did I never know who HH was? This is what's so interesting to me. I know Timberland. I know Columbia Sportswear. I know Patagonia. This company is so under-marketed in our country that we don't even know if we own any of it.

See, that's exactly it. And again, back to those green shoots. I mean, just what an opportunity for us to go ahead and grow this market. You know, this is far and away the largest outdoor market in the world, right? And here we've got a small business that we can make much larger. I'll give you an example, Jim.

Canada is a $100 million business for HH, and the United States is a $140 million business for HH. We know how big that business should be in relation to the Canadian market, and we think that that's one of the key reasons why we were very interested in the brand.

But it's really popular, Jim. It's funny. When you go to Europe and you go to Canada, it's extremely popular. Well, I wanted to know where it's going to be. I mean, is it going to be like North Face? We have some standalone stores. Is it going to be wholesale? Obviously, DTC, you guys are unbelievably good at DTC for those who don't know that. Where am I going to spot it?

All of the above. You just nailed it. So everything they have about 50 stores right now, big wholesale partners around the world, you know, DTC, e-commerce. We'll just go ahead and make sure that we bring those to life in a little bit more bigger view. And now when you talk to your friends at VF, I mean, you kind of really outperform them mightily. I know it's not really a contest, but do they look at you and think, well, maybe we just should have kept you?

I'm not so sure about that. I don't think they'd ever tell me that. But I'll tell you this. We're thrilled that we were spun off. We're thrilled that we're an independent company because we can do great things for our employees and we can buy these great brands and we can do great things for our customers. And I got to tell you, Jim, it's been it's been a lot of fun. It's been a great journey with a great team and we're having fun. And I do want people to know that I met Scott right when it happened first and he had a

vision of what could happen. A lot of us were thinking, oh my God, that's not the gene company. It's what I might have worn when I was growing up, but I don't do it anymore. You had a vision of what it could be, and it's exceptional. And I really applaud you for what you've accomplished. It's just pretty amazing.

Well, thank you, Jim, and thanks for having us on. Of course. Great to have you on. That's Scott Baxter, Chairman and President and CEO of Contro Brands. This is a terrific company. And what they did with this HH is just going to be great for years and years and years. Mad Money's back after the break. Coming up, UL Solutions might be known for its safety marks. But does the company have Kramer's stamp of approval? His post-earnings exclusive is next.

I've been a big fan of UL Solutions, a global leader in safety science. They handle all sorts of product testing ever since it came public. It was back in April. And from the IPO price, the stock is now up more than 90 percent, also up 55 percent from the close that first day. But this morning, the company reported what I thought was a strong quarter, albeit with inline guidance. Somehow, look, maybe the market had a lot of profit taking it because it fell almost 3 percent in response.

So could this be one of the rare buying opportunities I've seen in this stock? Or maybe there's something else we need to be worried about. Let's take a closer look with Jennifer Scanlon. She's the president and CEO of UL Solutions. Find out more about the quarter and what comes next. Ms. Scanlon, welcome back to MadMoney.

Thanks, Jim. It's always great to see you. Oh, thank you so much. You know, when I look at your quarter and what drove things, I come back to something that we hear typically when we have a tech company on. What's driving things? Global energy transition, the electrification of everything, digitalization. So these are so pervasive that they are directly impacting your quarter and your company.

Absolutely. And we are thrilled about our quarter and our first year as a public company. I mean, we hit two point nine billion in revenue. We had eight point seven percent organic growth in the year. And, you know, Jim, I think I'm feeling as good as you probably felt when the Eagles won the Super Bowl. Well, let's I don't mind you saying that. OK, that means you're pretty excited. Then how about we leave it like that?

I am and I am excited about these megatrends. I'm excited about the global energy transition and the way in which it's really changing everything on our industrial customers, all the innovation that they need for power and controls and industrial automation. And that then trickles down into the built environment and the ways in which you have to build

buildings to ensure that you don't have problems like thermal runaway, things that can happen when energy storage systems go awry. And then you think about how it's changing the materials and the cables going into all of this equipment.

It's just a constant set of innovation. And then you go to our consumer side and you look at the ways in which, you know, sustainability is affecting raw materials into products. And you look at the way in which energy consumption needs are changing, you know, processing hardware, storage systems. It's just a

across the board. It's just an exciting time to be in this industry. And how about that software division, which I, software and advisory, which I think could get to be gigantically given how much, how much of a software controls our day-to-day life.

You know, we were really pleased to report that organically our software line of services grew 9% in the fourth quarter. And where we're really seeing strength is both in the ESG data reporting and also in product regulatory compliance needs, helping our customers maneuver online.

all of the different requirements that they have to fulfill all over the world, and then the derivative ways that they use that data to promote their own businesses. Let's talk philosophically for a second. I know you've got China, and China cares more about safety than I think people realize. In our country, we're beginning to hear businesses talk about, you know what, we are going to be deregulated. It's going to be terrific. Does anyone ever, ever push for deregulation of safety?

I don't think that anybody pushing for things to be less safe is ever a winning proposition. You know, let's start with consumers. You know, we all want to keep our families safe. We want to make sure that our work environments are safe. You go into, you know, the manufacturing facilities, people want to make sure that they leave work in as good or better condition than when they came in the morning. And all of this requires, you know, safety of that built environment,

safety of the equipment, safety in the processes that people use every day. So I am not concerned that the focus and emphasis on safety will do anything except increase. Because, you know, Jim, you can't have innovation without safety. Failed safety means failed innovation.

A lot of people get hurt. A lot of people lose their job. Now, President Trump is pushing this America First agenda. We know that. Trying to reduce our reliance on others overseas, including Chinese manufacturing. Is this shift also a tailwind for UL? Could it drive more demand for testing certification here in America?

You know, what we've seen throughout tariffs that, you know, really started in the first Trump administration, continued through the Biden administration, is that our customers are smart and they make smart decisions about what's best for their businesses.

So those decisions could cause a change in raw materials, value engineering of components, a shift in manufacturing locations. And certainly in many of those situations, you need to retest products or you need our help in getting that new factory certified. So for us, we did see a bit of a tailwind in 2018, leveling out between 2018, 2019, mid single digits.

in growth. And we're confident that we'll be by our customer side as they work through this round of tariffs. I know that you are intensely focused on battery, battery testing. I don't know. I mean, we're starting to hear a lot of the love for EV seems to be over. Can that impact your business?

You know, EVs are more than just automobiles that consumers drive. And it's vehicles across the board. You've got buses. You've got commercial vehicles. You've got construction equipment being powered electrically. You've got agriculture equipment. Forklifts. Across the board, this shift to the electrification of everything continues. And additionally, our focus on battery testing continues.

is also focused on the batteries, the very large-scale batteries required in industrial environments. So you think of these new AI-powered data centers and the ways in which they're changing that source of power. And in many of those cases, they need very large-scale batteries

batteries, these energy storage systems to help power or to back up that data center. So we see no shortage in demand for battery testing. Well, look, another great quarter, just consistently good numbers from you. Industrial, very, very exciting. I want to thank Jennifer Scalin, president and CEO of UL Solutions. Jennifer, just another just terrific job. Thank you so much for coming on Mad Money.

Thanks, Jim. Thank you. All right, guys, consistent. Great since it came public. So many different trends going their way. This is the kind of game you could own this stock and just kind of, I don't want to say forget about it. We can never do that. But just keep it in your portfolio for a long time. Ned Bunny's back here. Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. Next.

It is time! It's time for the lightning round. And then the lightning round is over. Are you ready? Let's keep that. It's time for the lightning round. It starts with Jacob in Alaska. Jacob.

You're a good man. Thank you. You make it worthwhile for me. I really appreciate it. Make it worthwhile. Let's go to work together. Suck?

He dropped. Jacob dropped. What a bummer. Oh, bummer-oony. Let's go to Scott in Illinois then. Scott. Booyah, Jim. What do you think about Anheuser-Busch? I don't like the beer business. If I had to do it, I would be in Molson. But I got to tell you, alcohol is still a... Don't fight. Don't fight. Don't fight. Now we're going to go to Ian in Florida. Ian. Hey, Booyah, Jim. How you doing? I am doing well. How about you, Ian?

I'm doing all right. Third time caller and club member as well. Oh, fantastic. Hope you like today's conference. We got everybody can go listen to it. It's online. Let me let me help you. Let me help. I thought it was phenomenal. Thank you, Jim. Oh, thank you, man. Thank you. My daughter liked you, Jim. Yeah. Yeah. I was looking at kind of an energy stock and slash nuclear. It's been in a range lately. What do you think about VST?

OK, I do believe that there's an energy shortage, but I must tell you that I think that these speculative stocks are all trading together. I think this one should come down and I want you to wait till the 27th. That's when they report. And I think the stock could be weaker. Now we're going to go to Robert New York. Robert.

Hi, Jim. I want to thank you for 20 years of Apple, for helping me through 20 years of Apple growth. And I'm just turning 59 and a half. And I'm looking for a safer stock with a better dividend. What do you think about Sunoco? I like motor fuel business very, very much. I know it's unexciting. I don't care about excitement. I like that. Let me throw in that I like realty income now that they boosted the income, boosted the dividend today. She got a two for an hour. I need to go to Jack's.com. Jack.

Hey, Jim. How are you today? I am well. How about you, Jack? I'm good. Hey, I'm calling from South Carolina, but originally grew up in Ashton, Oregon. I know that's near and dear to your heart. Thank you.

Hey, call it about Novo Nordisk, which is down 40% from its high. I know, I know. But let me tell you something. This is a problem, Jack. I know it looks so much cheaper than Eli Lilly, which we own for the Chapel Trust. But at this point, it's about war chest. You have to be able to have the ability to build these factories, to be able to have the injectables and do the big tests. And Lilly has that more than Novo. So it's going to leave Novo behind. And I still think Lilly goes higher. Let's go to Michael in Tennessee. Michael.

Mr. Kramer, happy belated birthday. Oh, you're very kind. Thank you very much. Considering AST Space Mobile's current financial challenges and your previous concerns about its speculative nature, what specific milestones or financial improvements

Would you need to see from the company to reassess your position? I need to see that burn. I need to see that burn go down. I cannot put that as a stock that has to be really down and down much, much lower for me to be able to say that you're fine. And that, ladies and gentlemen, is the conclusion of the lightning round. The lightning round is sponsored by Charles Schwab.

Coming up is on holdings on the right foot. Kramer is trying on the sneaker company for size ahead of earnings. Next, tomorrow, kick off the trading day with Squawk on the Street. Live from Post 9 at the NYSE. I'm also going to be severely critical of a company that I've liked very, very much. One where I'm going to suggest that maybe it would be ill-advised not to change management.

And I typically do not on a conference call suggest that. And I know it's going to rankle some feathers, but I don't care. It all starts at 9 a.m. Eastern. Buying shares in a sneaker company can often be an act of faith. I've seen more than my share of footwear go in and out of style. They can be fattish. They can shimmer and flicker and then go out of fashion faster than any other billion dollar company.

That's why at Blanche Momentarily, when Josh from Arizona called yesterday, he said he wanted to buy shares in One Holding, the hottest of the publicly traded sneaker brands. Then he caveated his pick with some important points. First, he was familiar with the tried and true methods of Peter Lynch, the legendary portfolio manager from Fidelity, who famously adopted a position of keeping his eyes open for intriguing ideas, especially in the mall. Once he'd spotted something that was selling well, he'd dance.

He'd then begin the research. But when you go about buying a stock from observation, you have to recognize that it's the beginning of the process, not the end. Of course, Josh understood the sports business, and he'd done more than just spot a hot shoe on a couple of figs. But let me give you exactly what you need to do before you pull the trigger.

Step by step in situations like this. First, just because you see it on a lot of people's feet doesn't make it a winner. Otherwise, we'd have been buying VF Corp all the way down on a sunsetting advance. We might have stumbled on a hook after many others had already spotted it. You can't say you're early on the growth path of all in holdings. It was 21 bucks two years ago. Now it's at 51. You may have spotted it too late. Second, you need to recognize how hard this particular part of the retail world is. Just look at Under Armour. They got

in his shoes still, but they haven't recovered. Footlocker's another testament to the degree of difficulty here. And of course, Nike's the elephant in the room. It was a juggernaut until it wasn't. Although I think this new CEO, Elliot Hill, really does get it. But New Balance and Adidas have suddenly come on so strong. I don't know if I want to bet against Hokey now that the stock of his parent company, Deckers, has been crushed.

Third, on-hawks only start trades at 50 times earnings. That's very, very expensive and leaves very little room for error. All but two of the 22 odd analysts who follow the stock have a buy or strong buy on the darn thing. When the analysts are collectively that bullish, you're definitely not in the early innings anymore.

And there's no one to upgrade and create a floor if the company stumbles. Everyone's already in. Those are all solid objections. But against that is the caller's self-professed knowledge of the sport business and the sheer popularity of this shoe. This is a performance shoe with a performance pedigree, backed up by the support of tennis great Roger Federer, who's said to be very active in the crafting of the shoes. So what do you do with this?

I can't get super comfortable with on holdings at these levels. We know the company reports on March 4th, and I'd be willing to miss some of the potential upside just to see how it might be doing now. But this is a well-run company with great ambitions and well-liked shoes. So what I'd recommend is putting on a small position and waiting till the stock comes in before I would buy more or certainly wait until the quarter scene. I don't like the idea of just saying, all right, I've done my homework. Let's go buy. I

think you need to increase the odds of it, augment them, either by seeing another quarter or by waiting to get in at a lower price. Doesn't help that the stock sure does act poorly right now. I'd be less circumspect on this one if I hadn't experienced so many athletic footwear and apparel crash and burns dating all the way back to British Knights, Fila, LA Gear, K-Swiss, all of which drew huge interest from buyers at one time or another. The recent downturn of Vans, the decline of the once red hot all

They don't inspire confidence either. And of course, while I believe that Under Armour can eventually turn it around now that Kevin Plank's back of the helm, it's moving to sneakers over the last decade has been pretty disastrous, even though it has Steph Curry under contract, for heaven's sake. That should be impossible to screw up, but the sneaker business is really hard. So while I applaud Josh's power of observation, I can't go all in until I see the quarter. Wish I could nail this one down. But footwear is one of the biggest battlefields out there, and it's littered with fallen brands that were hot.

Until they were not. I'd like to say there's always a bull market somewhere, and I promise you I'll find it just for you right here on MidMoney. I'm Jim Cramer, and I'll see you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

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