Mad Money w/ Jim Cramer 2/20/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (February 20, 2025)

Podcast Information:

• Title: Mad Money w/ Jim Cramer
• Host: CNBC
• Description: “Mad Money” offers an inside look into the investment strategies of Jim Cramer, a renowned Wall Street money manager. The show aims to educate and entertain viewers by navigating the complexities of Wall Street, highlighting opportunities and avoiding pitfalls to help listeners maximize their earnings. Key segments include Jim’s passionate market insights and the popular Lightning Round, where he shares buy, sell, and hold recommendations based on caller inquiries.
• Episode: February 20, 2025
• Release Date: February 21, 2025

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1. Market Overview and Investment Philosophy

[00:01] Jim Cramer:
Jim Cramer opens the episode by reiterating his mission: “My mission is simple, to make you money. I'm here to level the playing field for all investors.” He emphasizes the importance of diversification, warning listeners against over-concentration in volatile, high-flying stocks. Highlighting the recent market downturn—The Dow lost 451 points, the S&P 500 declined by 343 points, and the Nasdaq fell by 0.47%—Cramer underscores the risks associated with speculative investments.

Key Points:

• Importance of diversified portfolios.
• Risks of concentrating investments in high-volatility stocks.
• Current market sentiment and recent downturn.

Notable Quote:
“If you lost a ton of money today, you're probably not as diversified as you think.” – Jim Cramer [02:15]

2. In-Depth Analysis of Speculative Stocks

Cramer delves into the nature of speculative investing, advocating for informed speculation that is disciplined and balanced within a diversified portfolio. He focuses on Palantir as a case study, criticizing its high valuation and the impact of insider selling. Cramer warns against relying solely on charismatic leadership or speculative metrics like the “rule of 40” without considering underlying business fundamentals.

Key Points:

• Definition and risks of speculative investing.
• Detailed critique of Palantir’s valuation and shareholder base.
• The dangers of herd behavior among mutual funds and institutional investors during market selloffs.

Notable Quote:
“Palantir is mainly owned by retail investors who are true believers… there’s no metric to justify that price.” – Jim Cramer [04:30]

3. Success Stories and Potential High-Growth Stocks

Cramer highlights examples of successful speculative investments like Amazon, Netflix, and Tesla, emphasizing their initial high valuations justified by robust growth and innovation. He encourages listeners to consider selective speculative stocks but cautions against overextending, advocating for owning only a few high-potential stocks to manage risk effectively.

Key Points:

• Historical successes of speculative investments.
• Criteria for selecting high-growth stocks.
• Strategic balance between risk and potential reward.

Notable Quote:
“If you have conviction, it made you a fortune.” – Jim Cramer [07:10]

4. Listener Interaction and Portfolio Management

Caller: Masood from Maryland
Masood shares his investment success, having achieved a 38% gain over 18 months by following Cramer’s advice on easing into stock purchases. Specifically, he discusses his investment in BlackRock (BLK), which saw significant intra-day highs before a decline. Cramer commends Masood’s disciplined approach and reiterates the importance of diversification.

Key Points:

• Practical application of Cramer’s investment strategies.
• Importance of gradual investment and due diligence.
• Real-world examples of portfolio management success.

Notable Quote:
“I’ve been taking your advice of easing into buying the stock like 25% of what I want to buy at a time.” – Masood [09:20]
Cramer’s Response:
“We own it for the Travel Trust… diversify your portfolio beyond speculative stocks.” – Jim Cramer [09:54]

5. Spotlight on Dutch Bros Coffee

Cramer dedicates a substantial portion of the episode to Dutch Bros Coffee, interviewing its President and CEO, Christine Barone. He praises the company’s growth, innovative product offerings, and robust customer engagement strategies, including sticker and merchandise drops. Barone discusses the company’s expansion goals, emphasizing cultural fit and customer-centric innovation as drivers of success.

Key Points:

• Dutch Bros’ strategic growth and expansion plans.
• Innovative marketing and customer engagement tactics.
• Importance of company culture and operational excellence in scaling.

Notable Quotes:
Christine Barone: “We have customer panels where we’re testing things… figuring out what do people want now?” – Christine Barone [12:26]
Jim Cramer: “Dutch Bros has tripled over the past 12 months… I love their drinks and I love their stock.” – Jim Cramer [14:46]

6. Contour Brands’ Strategic Acquisition of Helly Hansen

In another interview segment, Cramer speaks with Scott Baxter, Chairman and CEO of Contour Brands, about their recent acquisition of Helly Hansen for approximately $900 million. Baxter explains the strategic fit, highlighting growth opportunities in the outdoor and workwear sectors. The discussion covers Contour’s expansion plans, competitive positioning, and financial strategies to support the acquisition.

Key Points:

• Rationale behind acquiring Helly Hansen.
• Expansion strategy within the outdoor and workwear markets.
• Financial health and future growth projections post-acquisition.

Notable Quotes:
Scott Baxter: “It’s a really good transaction with a really good group of folks.” – Scott Baxter [20:36]
Jim Cramer: “Contour’s balance sheet was superb. It could handle this very easily.” – Jim Cramer [22:57]

7. UL Solutions: A Leader in Safety Science

Cramer interviews Jennifer Scanlan, President and CEO of UL Solutions, to discuss the company’s strong performance and future prospects. Scanlan highlights the impact of global energy transitions, digitalization, and sustainability trends on UL Solutions’ growth. The conversation covers the company’s focus on battery testing, ESG data reporting, and compliance services, positioning UL Solutions as a critical player in ensuring product safety and regulatory adherence.

Key Points:

• UL Solutions’ role in safety science and product testing.
• Impact of global energy trends and sustainability on business growth.
• Strategic initiatives in battery testing and ESG compliance.

Notable Quotes:
Jennifer Scanlan: “Failed safety means failed innovation.” – Jennifer Scanlan [31:16]
Jim Cramer: “UL Solutions is a great company… keep it in your portfolio for a long time.” – Jim Cramer [34:35]

8. Lightning Round: Quick Stock Recommendations

In the Lightning Round, Cramer addresses rapid-fire caller questions, providing concise buy, sell, or hold recommendations:

• Scott from Illinois:
  Anheuser Busch – Cramer advises against buying, stating, “I don’t like the beer business… don’t buy.”

• Ian from Florida:
  VST – Cramer suggests waiting for the next earnings report before making a move, anticipating potential weakness.

• Robert from New York:
  Sunoco and Realty Income – Recommends selling Sunoco and buying Realty Income for its enhanced dividend.

• Jack from South Carolina:
  Novo Nordisk vs. Eli Lilly – Cramer favors Eli Lilly over Novo Nordisk, citing Lilly’s stronger financial position.

• Michael from Tennessee:
  AST Space – Advises caution, urging to wait for financial improvements before investing.

Key Points:

• Quick, actionable stock advice tailored to individual investor inquiries.
• Emphasis on due diligence and timing in investment decisions.

Notable Quote:
“I can’t get super comfortable with On Holdings at these levels… footwear is one of the biggest battlefields out there.” – Jim Cramer [35:30]

9. Final Thoughts and Closing Remarks

Cramer wraps up the episode by reiterating his commitment to keeping investors engaged and informed, emphasizing the importance of diversification and cautious optimism in navigating volatile markets. He encourages listeners to stay disciplined, seize opportunities during market downturns, and maintain a balanced investment portfolio to ensure long-term financial success.

Key Points:

• Reinforcement of investment principles discussed throughout the episode.
• Encouragement to remain proactive and resilient in the face of market challenges.
• Final advice on maintaining a diversified and strategic investment approach.

Notable Quote:
“My primary goal is, and this show, is to keep you in the stock business. I want you to stay in the game.” – Jim Cramer [27:29]

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Conclusion: In this episode of "Mad Money," Jim Cramer provides a comprehensive analysis of the current market landscape, emphasizing the importance of diversification and cautious speculation. Through in-depth discussions on companies like Palantir, Dutch Bros, Contour Brands, and UL Solutions, Cramer offers valuable insights into both high-growth and stability-focused investments. Listener interactions and the Lightning Round segment further personalize the show, delivering tailored advice to individual investor queries. Overall, the episode serves as an informative guide for investors aiming to navigate the complexities of the stock market with informed strategies and disciplined approaches.

Transcript

[Jim Cramer]

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer America up here. My friends, I'm just trying to save you a little money. My job is not just to entertain you, but to educate. But there's like today in context. Call me 1-800-743- CNBC. Tweet me at Jim Craver. 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. Now days like today, the high flyers, well, they all get slaughtered. They fare much worse than the averages. So after the sell off with The Dow lost 451 points. SB declined.343% and the Nasdaq said 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 clean 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. Informed 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 secular stock in this entire market right now is Palantir. That's a data analytics of artificial intelligence company that is loved, love, love, especially by young people. I'm basing that speculative crown on its ridiculously high valuation with the stock selling 497 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 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 pounds. Your 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 us, the Defense Department. 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 Karp and his irreverence and his baggage show 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 take their word for it, they do tremendous work for customers, work that pays off soon if you hire 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 of 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 to 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 speculations, that's all, and own them. Have no illusions. If they don't work, you'll be up speculation creek with the power without a paddle. Which is why I don't want to own five or six of these. Then why am I even counting this kind of activity? Well, because when it works, it works spectacularly. Take Amazon. Hard to believe now, but. But for years I heard that Amazon was ridiculously overvalued. Endlessly. I was willing to go long 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 recognize 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 suspend any sort of sense of rigor and prudence 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 earnings. Sales rule of 40, nothing. But when I use 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 the single digits back then. Without a good balance sheet. It took a restructuring and infusion of capital 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 is 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 thinkers? 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. You put $1,000 but into Chipotle when it came public. 120,000. Now, how about Applovin? Here's a company that links mobile game advertising with players. It was the best performer, 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 bottom 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 ten 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 in. 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 buy by all means, own a couple of specular stocks. You keep in mind many of your fellow shareholders will want to cut and run when they see all their stocks clobber. 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 all trade together. Bottom line here, my primary goal is, and 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 own nothing but Palantir, Carvana, App Love and all the others that trade and you trade nothing but options and ETFs. Include them. @ 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 island 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 Masood in Maryland. Masood, greetings Mr. Kramer, how are you?

[Masood]

I'm doing great. Kind of cold. I'm previously from Miami, so.

[Jim Cramer]

All right.

[Masood]

Sounds good.

[Jim Cramer]

Sounds good.

[Masood]

I'm a longtime listener from your era, co hosting with Larry Kudlow. Oh boy.

[Jim Cramer]

Thank you.

[Masood]

I really appreciate all the knowledge you share with your audience. Thank you. I have a pretty good portfolio of 31 stocks and I'm up about 38% in 18 months. So doing.

[Jim Cramer]

Wow, that's fabulous.

[Masood]

I've been taking your advice of easing into buying the stock like 25% of what I want to buy at a time.

[Jim Cramer]

Perfect.

[Masood]

Done. My due diligence chart look good. So I bought 5 shares of BlackRock Blk on February 4th for $1049. It went up a couple of days to all time intraday high of 1084 and immediately started going down almost every.

[Jim Cramer]

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 this 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, I'm all for only a couple of specular 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. Everybody tonight can coffee chain Dutch Bros. Oh, there's one 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 brand just announced in addition to its power portfolio. I got the CEO to talk through the deal and his pre announced quote, you will not want to miss it. And later, safety science player UL Solutions. You might know them as Underwriter Laboratories. Pull back on today's earnings beat. I'm taking a closer look because I think this might be an opportunity. So stay with Kramer.

[Unknown]

Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer Madmentions. Send Jim an email to mad money NBC.com or give us a call at 1-800-743-CNBC. Miss something? Head to mad money.cnbc.com.

[Jim Cramer]

What can I even say about Dutch Bros. The Oregon based coffee chain with a hypercaffeinated stock. When Dutch first reported November, its stock shut up. 28% of response when reported again last week, it was deja vu all over again. This time 29% thanks to a tremendous set of numbers. 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 a nearly 57% gain year to date. Which might make you feel a little squeamish, but pull 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 Brune. She's the presidency of Dutch Bros. Get a better sense of the quarter. And we're our company's head. Ms. Brown, welcome back to Money Jim.

[Christine Barone]

Thanks so much for having me.

[Jim Cramer]

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.

[Christine Barone]

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 for.

[Jim Cramer]

Well, who comes up with these drinks? I mean, for instance, the cinnamon swirl, no spoon required, savors the flavor of cinnamon sugar cereal, flavored meal 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 could be talking about it.

[Christine Barone]

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 Barbroistas love it. They love to sell it.

[Jim Cramer]

Now when they're funny like the ones I just read, I can imagine that your paid social media must be a huge hit.

[Christine Barone]

So I think the social media is really to continue to engage our customers. So we don't only 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.

[Jim Cramer]

Yeah, it's funny, my daughter's PC is covered with your sticker drops and I was so I was mystified until of course we went and realized that it's part of. It's just part of the zeitgeist for Dutch Bros. Now 1,000 stores and incredible. But you've got a goal of 4,000 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.

[Christine Barone]

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 really excited about that goal. But you get there one at a time. I was in Orlando for our thousand 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 11pm 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.

[Jim Cramer]

I was kind of amazed. You just have a way about you guys. I mean, for instance, your new chief Technology Information officer was. Was it Lululemon athletic? I mean I just think that's brilliant. How did you know about spotting the synergy between a really fabulous clothier and Dutch Bros.

[Christine Barone]

So Binky is awesome. I just, 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 Binky is just such a wonderful culture fit for us. And so he's come on board is 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 flowcheck 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.

[Jim Cramer]

I bring him 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 thru. 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.

[Christine Barone]

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 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.

[Jim Cramer]

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, these chains of which I know you know because of your background. Are you fighting over real estate or. There's still plenty of siting to be done for Dutch Bros. We have so.

[Christine Barone]

Much of the country still to go. We're only in 18 states right now. We just reached a thousand stores. So we shared that 4000 is still, we still have a lot to go. And so I would say real estate is, is concerned, competitive, but it's something I think landlords understand 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, 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.

[Jim Cramer]

I hope next time you come here and we get to taste some of these fantastic drinks. It's too much. They asked me to open a store in New York. I pressure you already enough on that. But I love what the. I love what a Marshmallo 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 baristas 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 the. 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 CEO of Dutch Bros. I told you over and over again that I love their drinks and I love their stock. Christine, thank you so much.

[Christine Barone]

Thank you, Joe.

[Jim Cramer]

This is a regional national story, people. They're in 15 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. Net money's back in Finland.

[Unknown]

Coming up. Is this company as rugged as the denim it sells? A look at the company behind Wrangler and Lee next.

[Jim Cramer]

Yesterday morning we learned that Contour Brands, maker of Wrangler and Lee jeans, is buying Helly Jansen, that is a global outdoor and workwear brand for roughly $900 million. This is a major move for Contour, which is part of by VF Corp. Back in 2019, spent 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 preannounced the fourth quarter results, delivering a comfortable top and bottom line 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 is the chairman, president, CEO of Contour Brands. More. Mr. Baxter, welcome back to bed Money.

[Scott Baxter]

Hey, Jim, how are you?

[Jim Cramer]

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. Everybody knew about this company. Everybody, everybody had used some foul weather or they had some ski or I had some jackets. I never, I saw HH 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?

[Scott Baxter]

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 $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 backgr ground and outdoors. So it'll be a really nice fit for us going forward.

[Jim Cramer]

Now, in terms of the price points I looked at on Amazon and you've got stuff that's 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, $405 stuff. How do you have the right people? You have, you have denim people. How are they going to do this?

[Scott Baxter]

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 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. They're 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 and why we bought the business.

[Jim Cramer]

I know it's in Asia. How about Europe? What's going to happen there?

[Scott Baxter]

Well, about half of the businesses in Europe, you know, about 75% sport and about 25% 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 business, Jim, and there's no reason it can't be $1 billion business.

[Jim Cramer]

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

[Scott Baxter]

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. 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. 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.

[Jim Cramer]

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

[Scott Baxter]

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. 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've talked about it, we just offer a great value. You know, one of the things about our brands, is there a value in a brand that you can trust, and that's why our consumer likes us so much?

[Jim Cramer]

Absolutely. Now, I do think there's one thing. Steve will put out a piece today which talked about you being perhaps the most sensitive to tariffs. Now, tariffs are tricky. We don't know all this is 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 okay.

[Scott Baxter]

We'll be okay. 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.

[Jim Cramer]

All right, good. Because I know when you pre announced 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, I have in my closet, right? I. Why did I never know who HH was? This is what's so interesting to me. I know Timberland. I know Columbia Sportswear. No Patagonia. This company is so under marketed in our country that wouldn't even know if we have, we own any of it.

[Scott Baxter]

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.

[Jim Cramer]

Right.

[Scott Baxter]

And here we've got a small business that we can make much larger. I'll give you an example, Jim. Canada is $100 million business for HH. In the United States is $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, 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.

[Jim Cramer]

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, going to be wholesale, obviously dtc. You guys are unbelievably good at dcc. For those who don't know that, where am I going to spot it?

[Scott Baxter]

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.

[Jim Cramer]

And now when you talk to your friends at vf, I mean you kind of really appreciate perform them mightily. I, I know it's not really a contest, but do they look at you and think, well, maybe we just should have kept you.

[Scott Baxter]

I'm not so sure about that. I don't think they'd ever tell me that. But I 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.

[Jim Cramer]

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 Jean 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, I really applaud you for what you've accomplished. It's just pretty amazing.

[Scott Baxter]

Well, thank you, Jim. And thanks for having us on.

[Jim Cramer]

Of course. Great to have you on. That's Scott Baxter, Chairman, President, CEO of Contour Brands. This is a terrific company. And what they did was with this HH is just going to be great for years and years and years. That money's back there for the break.

[Unknown]

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.

[Jim Cramer]

I've been a big fan of UL Solutions, a global leader in safety science that handles all sorts of product testing ever since came public back in April. And from the IPO price the stock is now up more than 90%. Also up 55% from the close that that first day. But this morning the company reported what I thought was a strong quarter be it with in line guidance somehow. Look, maybe the market a lot of profit taking it because it fell almost 3% response. So could this be one of the rare buying opportunities? I've seen the stock or maybe there's something else you can even be worried about. Let's take a closer look with Jennifer Scanlan. She's the president CEO of US Solutions. Find out more about the quarter and what comes next. Ms. Scanlan, welcome back to money.

[Jennifer Scanlan]

Thanks Jim. It's always great to see you.

[Jim Cramer]

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.

[Christine Barone]

Absolutely.

[Jennifer Scanlan]

And we are thrilled about our quarter and our first year as a public company. I mean, we hit 2.9 billion in revenue. We had 8.7% 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.

[Jim Cramer]

Well, but let's. I don't mind you saying that. Okay, that means you're pretty excited. Then. How about we leave it like that?

[Jennifer Scanlan]

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 in our industrial customers. All the innovation that they need for, you know, 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, products, and you look at the way in which energy consumption needs are changing, you know, processing hardware, storage systems, it's just across the board. It's just an exciting time to be in this industry.

[Jim Cramer]

How about that software division which I saw for an advisory which I think could get to be gigantically given how much, how much of a software controls our day to day life.

[Jennifer Scanlan]

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 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.

[Jim Cramer]

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?

[Jennifer Scanlan]

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.

[Jim Cramer]

And a lot of, a lot of people get hurt, a lot of people lose their job. Now President Trump is pushing this American 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?

[Jennifer Scanlan]

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, you know, we did see a bit of a tailwind in 2018, leveling out between 2018, 2019, you know, 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.

[Jim Cramer]

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, the love for EV seems to be over. Can that impact your business?

[Jennifer Scanlan]

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 agricultural equipment, forklifts. Across the board, this shift to the electrification of everything continues. And additionally, our focus on battery testing 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, these energy storage systems to help power or to back up that data center. So we see no shortage in demand for battery tests.

[Jim Cramer]

Well, look, another great quarter. Just consistently good numbers from you industrial Very, very exciting. I want to thank Jennifer Scalin, president CEO of U L Solutions. Jennifer, just another just terrific job. Thank you so much for coming on me Money.

[Jennifer Scanlan]

Thanks, Jim.

[Jim Cramer]

Thank you. Hey, guys. Consistent. Great. Since it came public. So many different trends going their way. This is the kind of name you can own this stock and just kind of. I don't want to say forget about. We can never do that. But just keep it in your. Keep it in your portfolio for a long time. Everybody's back here for them.

[Unknown]

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire. Lightning round.

[Jim Cramer]

Mac, it is time. It's time for the white round. Crazy. And then the lightning round is over. Are you ready? Keep that our light round. Crazy round. Let's start with Jacob in Alaska. Jacob, who we got Jim, longtime listener, investment club member. Second time caller. First, thank you. Great to have you.

[Masood]

Opportunity to personally thank you for the.

[Jim Cramer]

Knowledge and wisdom you share every day. Your insights have had an indelible impact not just on my own investment journey, but on the retirement accounts and portfolios.

[Masood]

Of my parents and friends. So thank you.

[Jim Cramer]

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. Rooney. 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 gotta tell you, alcohol is still. Don't fight. Don't buy. Don't buy. Now we're gonna go to Ian in Florida. Ian. Hey.

[Masood]

Booyah, Jim.

[Jim Cramer]

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.

[Masood]

I thought it was phenomenal. Thank you, Jim.

[Jim Cramer]

Oh, thank you, man. Thank you. My daughter liked the gym. Yeah.

[Masood]

Good. I was looking at kind of an.

[Jim Cramer]

Energy stock and slash nuclear. It's been in a range lately.

[Masood]

What do you think about vst?

[Jim Cramer]

Okay. 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.

[Masood]

Hi, Jim.

[Jim Cramer]

I want to thank you for 20 years of Apple, for helping me through 20 years of Apple growth and just turning 59 and a half. And I'm looking for a safer stock with a better dividend.

[Masood]

What do you think about Sunoco?

[Jim Cramer]

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, the dividend tase, she got a twofer on that one. I need to go to Jack's, South Carolina. Jack.

[Masood]

Hey, Jim.

[Jim Cramer]

How are you today? I am well. How about you, Jack?

[Masood]

I'm good. Hey, I'm calling from South Carolina but originally grew up in Asheville, Oregon. I know that's near and dear to your heart.

[Jim Cramer]

Thank you.

[Unknown]

Hey, calling about Novo Nordisk which is.

[Masood]

Down 40% from a tie.

[Jim Cramer]

I know, I know. But let me tell you something, this is a problem, Jack. I know it looks so much cheaper. Neil 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.

[Masood]

Mr. Kramer, happy belated birthday.

[Jim Cramer]

You're very kind. Thank you very much. Considering ast space, novel current financial challenges.

[Masood]

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?

[Jim Cramer]

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 much, much lower for me to be able to say that you're fine. And that, ladies and gentlemen, is a conclusion of the Lightning Round.

[Unknown]

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 nine at the nyse.

[Jim Cramer]

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.

[Unknown]

It all starts at 9am Eastern.

[Jim Cramer]

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 I blanched momentarily when Josh from Arizona called yesterday. 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 the mall. Once he'd spotted something that was selling well, he then begin the research. But when you go about buying a stock from observation, you have to recognize that it's the beginning, the process, not the end. Of course Josh understood the sports business and he done more than just spot a hot chew on a couple of fitness. 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 hook after many others had already spotted it. You can't say you're early on the growth path on holdings about 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 bit part of the retail world is. Just look at Under Armour. They got into shoes still really haven't recovered footlockers. 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 HOKA now that the stock of its parent company Deckers has been crushed. Third, one only trades at 50 times earnings. That's very very expensive. Leaves very little room for error. All but two of the 22 odd analysts who follow the stock have a buyer 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 self professed knowledge of the sport business and the sheer popularity of this shoe. This is a performance shoe with a performance backed pedigree backed up by the support of tennis great Roger Federer who 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 like shoes. So what I'd recommend is putting on a small position and waiting till the stock comes in before I would buy. More certainly wait until the quarter seen. 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 a bit. Augment them either by seeing another quarter or by waiting to get in at a lower price. Doesn't help that the stock shooters act poorly right now. I'd be less circumsect 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, L A Gear, Case west, all of which drew huge interest from buyers at one time or another. The recent downturn advanced the decline of the once red hot All Birds. They don't inspire confidence either. And of course, while I believe that Under Armour can eventually turn around now that Kevin planks back to the helm, its move into 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 really hard. So 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 try to find it just for you, right here on Monday. I'm Jim Cramer and I'll see you tomorrow.

[Unknown]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer.