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NEW YORK (TheStreet) -- The secret to higher stock prices isn't rocket science, Jim Cramer told his Mad Money viewers Tuesday -- it's common sense. Yet, common sense seems to elude some CEOs, which is why investors are fleeing their stocks.
There are two types of CEOs: those who are working for shareholders and those who only think they are. Among the former is Netflix (NFLX), a company that announced today it is making its first full-length film starring Brad Pitt, all while continuing to mull the possibility of a 5:1 or even at 10:1 stock split to attract new shareholders.
On the flip side is General Motors (GM), a stock Cramer has been selling from his charitable trust, Action Alerts PLUS. GM's CEO scoffed at even the possibility of a merger with Fiat Chrysler (FCAU), all while GM's stock seems stuck at $35 a share indefinitely.
Avago (AVGO) is taking a "get rich fast" strategy, making all sorts of mergers and deals to boost its share price, while Twitter (TWTR), another Action Alerts PLUS name, seems content with everyone being discontented with its lack of growth and direction.
Clearly there are companies, and CEOs, who get it and those that don't, Cramer concluded, and shareholders are finally getting wise to those who don't.
Executive Decision: Bill Cobb
Cobb said H&R Block had a good year on all fronts, with do it yourself, or DIY, services in particular growing by double digits. The company continues to control expenses and paying a solid dividend of 2.5%.
One thing that is not going according to plan, however, is the company's planned sale of its banking division. Cobb said he and Block's shareholders are all frustrated with the regulatory delays, but he still expects the split to win regulatory approval eventually.
Turning to the issue of tax fraud, Cobb said the industry needs to do a lot more to protect taxpayers from having their identities stolen. H&R Block now offers a suite of services called Tax ID Shield, which will monitor and notify taxpayers if someone else files with the IRS using their Social Security number.
The inconsistency in retail is enough to drive you mad, Cramer told viewers. With the sector getting too hard to predict it may be time to invest elsewhere.
The stock of Burlington Stores (BURL) had been on a tear the past two years, up 90%. But after a dramatic deceleration in same store sales, this once consistent earner fell 8.5% in the blink of an eye.
That's why Cramer said it's time to avoid the retail stocks unless that have a specific story to tell, like the successful turnaround at Target (TGT), an Action Alerts PLUS holding.
Off the Charts
In the "Off the Charts" segment, Cramer went head to head with colleague Carolyn Boroden over the direction of the broader markets.
Boroden accurately predicted the S&P 500's top on May 20 at 2,134 earlier this year when she pointed out a strong ceiling of resistance for the index at 2,138. She also noted that it took 91 months for the S&P to travel from its peak in 2000 to its peak in 2007. Since then it's been another 91 months leading into the May 20 peak.
Where does Boroden see the averages heading from here? She noted the markets are still in a healthy uptrend, long term, but they could see a sharp selloff if they're unable to breach the 2,138 ceiling or if they fall below a key level of support at 2,067.
Off the Tape
In his "Off the Tape" segment, Cramer sat down with Mike Tuchen, CEO of the privately held Talend, a company offering open source data integration software and solutions for companies' big data needs.
Tuchen explained that Talend is helping companies migrate their data onto the next generation of database software. These databases, such as Hadoop, can handle more data faster, and are less expensive than legacy systems.
In addition to migrating data, Talend also helps companies clean up their data, fixing mistakes that will ultimately lead to better analysis later on.
When asked for an example, Tuchen noted Otto, a large retailer in Europe, which used Talend's services to study online shopping cart abandonment. Otto not only calculated how much money it was losing from customers not completing a purchase, but took it one step further and was able to predict abandonment and made special offers to keep customers engaged.
Cramer said Talend is another example of a pre-IPO company with a huge business opportunity.
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