If a stock is loved by investors, there is no price they will not pay. But if it is hated, there are no depths that it cannot sink. That’s Jim Cramer’s view of the markets during Mad Money on Friday.
The superb jobs report on Friday means the Federal Reserve will have to raise rates, and quickly, to cool the economy – which is bad for stocks. But maybe we sold enough so we could melt the profits next week.
On top of Action Alerts PLUS, co-portfolio managers Bob Lang and Chris Versace said it has been a difficult week for benchmark indexes and they say the decline in Meta/Facebook (FB) – Get Meta Platforms Inc. Class A Report and PayPal (PYPL) – Get a Report of PayPal Holdings, Inc. they felt better about their decision to lock in their gains and leave the two names a few months ago. Get more of their investment ideas and trading strategies at Action Alerts PLUS.
Cramer’s game plan for next week will begin on Monday when Tyson Foods (TSN) – Get Tyson Foods, Inc. Class A ReportTake-Two Interactive (TWO) – Get Take -Two Interactive Software, Inc. and Report and Simon Property Group (SPG) – Get a Report of Simon Property Group, Inc. will give us an update on supply chains, gaming and what’s trending with stores in the mall.
Next, on Tuesday, Cramer looks forward to the Chipotle Mexican Grill (CMG) – Get a Report of Chipotle Mexican Grill, Inc. to put in a very good income, with health plan provider Centene (CNC) – Get a Centene Corporation Report and Pfizer (PFE) – Get a Pfizer Inc. He was worried about DuPont costs (DD) – Get a Report of DuPont de Nemours, Inc.
Wednesday brings in revenues from four of Cramer’s favorites, CVS Health (CVS) – Get a CVS Health Corporation ReportPepsico (PEP) – Get a Report of PepsiCo, IncWalt Disney (DIS) – Get a Walt Disney Company Reportwho is not getting enough credit, and toymaker Mattel (MAT) – Get a Mattel, Inc.
Then on Thursday, we’ll hear from Coca-Cola (KO) – Get a Coca -Cola Company Reportwhich should have great results, along with Twitter (TWTR) – Get Twitter, Inc. ReportCloudflare (NET) – Get Cloudflare Inc Class A Report at Zendesk (ZEN) – Get a Report of Zendesk, Inc.none of this excited Cramer.
Finally, on Friday, it’s Under Armor (UA) – Get Under Armor, Inc. Class C ReportCleveland-Cliffs (CLF) – Get a Report of Cleveland -Cliffs Inc and Goodyear Tire (GT) – Get a Goodyear Tire & Rubber Company Report in the spotlight, and Cramer expects good things from the three.
Executive Decision: Columbia Sportswear
In his first “Executive Decision” segment, Cramer spoke with Tim Boyle, chairman, president and CEO of Columbia Sportswear (COLM) – Get a Columbia Sportswear Company Reportthe outerwear maker just posted a monster 60-cents-a-share earnings, but still trades 17 times the profits.
Boyle admitted that Columbia is seeing supply chain disruptions around the world, but he said they have done everything they can to alleviate them and they are still able to deliver good profits.
When asked about those revenues, Boyle explained that consumers are smart and buy earlier this year, leading to fewer promotions and higher gross margins. Columbia has also slowed their online sales to help support retailers and ensure they have all the inventory they need this winter.
Columbia still has solid good brands that customers love, Boyle says, and that is for innovations and new technologies, those brands are only getting better and selling better around the world. .
Analysts Are Not Always Right
When it comes to earnings, things get complicated, Cramer told viewers, and that means you can no longer rely on analysts to be your guide.
In a typical earnings season, companies beat estimates, raised their guidance and analysts raised their price targets in response. But this quarter, the Fed threw us a curve ball when they announced that interest increases were coming. Meaning for most companies, analyst estimates are too high right now.
So when ServiceNow (NOW) – Get a ServiceNow, Inc. Report reported very good earnings, shares fell. On the surface, it looks like the company has done something wrong. But in reality, analysts have cut their price targets to catch up with the new reality.
The same pattern is seen in Qualtrics (XM) – Get a Class A Report by Qualtrics International, Inc. and Thermo Fisher Scientific (TMO) – Get Thermo Fisher Scientific Inc. Unity Software (U) – Get a Report by Unity Software, Inc. saw its price targets reduced from $ 174 to $ 158 per share, despite the company only losing revenue by 17%. Bill.com (BIL) – Get a Report of Bill.com Holdings, Inc. delivered amazing numbers and also saw large analyst price reductions immediately afterwards.
Analysts are playing catch up in a big way, Cramer concludes, so don’t rely on their estimates.
Executive Decision: Waters Corp.
For his second segment “Executive Decision”, Cramer also spoke with Dr. Udit Batra, president and CEO of Waters Corp. (WAT) – Get a Waters Corporation Reportthe analytical instrument and software company for the healthcare industry.
Batra explained that 80% of all molecules submitted for FDA approval last year used Waters ’Empower software system, which allows samples to be tested and data automatically submitted in a seamless process. .
Batra added that Waters is not a Covid stock. While they are involved in vaccine and therapeutic development, most of their revenues are not associated with Covid.
Circle of Lightning
In the Lightning Round, Cramer was bullish on General Motors (GM) – Get a General Motors Company ReportVerizon (VZ) – Get Verizon Communications Inc. Report and Berkshire Hathaway (BRK.B) – Get Berkshire Hathaway Inc. Class B Report.
Cramer became bearish on Rivian (RIVN) – Get Rivian Automotive, Inc. Class A ReportGilead Sciences (GILD) – Get a Report from Gilead Sciences, Inc.AT&T (T) – Get AT&T Inc. Report and United Continental (UAL) – Get a Report of United Airlines Holdings, Inc..
Going to the Extremes
In his segment “No Huddle Offense,” Cramer mentioned how intense investors were this week. When Amazon (AMZN) – Get a Report from Amazon.com, Inc. reported an upside surprise, investors fell in love, bidding the stock rise 13%. But when Facebook/Meta Platforms (FB) – Get Meta Platforms Inc. Class A Reportalso known as Facebook, fails, wants investors at any price, sending shares.
You can earn a lot of money on extreme winners, Cramer concludes, but only if you can only prevent your extreme losers.
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