You can hear Fed-obsessed experts, Jim Cramer told Mad Money viewers on Wednesday, but it’s much easier to follow the bullish market and keep up with what works. There are only two things to keep in mind when choosing a winning stock, he said, the industry and the company.
Example: semiconductors. We all know that there is a huge shortage of semiconductors and companies like NXP Semiconductor (NXPI) – Get the report, Qualcomm (QCOM) – Get the report, Marvel Technologies (MRVL) – Get the report, Nvidia (NVDA) – Get the report and Advanced micro devices (AMD) – Get the report they are all fantastic companies. This makes any of them a great investment.
In addition to real money, Cramer says investors “want sectors that are in bullish market mode, even if they are microclimate markets. You want to stay away from battlefields and the underperforming.” Read more about his investment strategies and the actions he says “run with the oxen”.
There is also a bullish housing market and the best companies in the space are Lennar (LEN) – Get the report and Toll Brothers (TOLL) – Get the report. Cramer said these two companies are not only well managed, but have a lot of land to build on in order to take advantage of our country’s shortage of homes for decades.
Other stock markets include financial, with Goldman Sachs (GS) – Get the report, JPMorgan Chase (JPM) – Get the report and Morgan Stanley (MS) – Get the report among Cramer’s best options. It was also bullish in retail, with Best Buy (ABY) – Get the report and Bed Bath and Beyond (BBBY) – Get the report to be among the most prominent in this sector.
Finally, investors can examine the bullish market in agriculture and the bullish market in environmentally friendly energy. Cramer was bullish on Agco (AGCO) – Get the report and Deere & Co. (D ‘) – Get the report, along with Devon Energy (DVN) – Get the report, Pioneering natural resources (PXD) – Get the report and last night’s guest, Denbury (EL) .
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Executive decision: Salesforce.com
In his first segment of “Executive Decision,” Cramer spoke with Marc Benioff, president and CEO of Salesforce.com (CRM) – Get the report, which has just closed with the acquisition of the Slack business communications platform.
Benioff said Salesforce had another fantastic quarter that included a 23% increase in revenue and saw the incorporation of new customers such as Ikea and insurance giant GEICO. Salesforce also expanded its gross margins and saw solid improvements in cash flow according to Benioff.
When asked how Salesforce companies like Ikea use, Benioff explained that, like so many other companies, Ikea is undergoing a digital transformation and that it needed tools like sales, service, commerce and marketing clouds, which will soon be integrated with Slack to facilitate communications.
On the subject of COVID, Benioff said that we are entering the new normalcy and that the business seems to be very different in this world. Employees choose to stay home and not return to the office. But the good news is that over the past 18 months, they have proven to be more productive when working remotely.
Cramer and the AAP team are looking from earnings and politics to the Federal Reserve. Find out what they tell investment club members and join the conversation with a free trial subscription to Action Alerts Plus.
Executive decision: Toll Brothers
For his second “Executive Decision” segment, Cramer also spoke with Doug Yearley, president and CEO of Toll Brothers. (TOLL) – Get the report, the home builder who just made a 33-cent gain per share that helped send shares up 11% last week.
Yearley began by saying that low interest rates continue to generate sales as more and more tenants discover they can afford to own a home. Plus, with more people working from home, they can live where they want to live and upgrade to the home they’ve always wanted. As a result, new homes continue to be in high demand.
Yearley added that while the real estate market is not as “crazy” as last year, demand remains very strong.
When asked about affordability, Yearley noted that house prices in Toll have risen 20% over the past year, but the company remains cautious when it comes to affordability. Nearly 40 percent of their homes belong to the “affordable luxury” category, he said, which is aimed at millennials and first-time homebuyers.
Yearley noted that Toll’s future depends on its land bank and they continue to be shrewd land buyers who are increasingly gaining more efficiency in capital.
Finally, when asked about commodity pressures, Yearley explained that wood prices have fallen $ 40,000 per home from their peak, but other products continue to press their margins. Supply constraints and labor shortages have also been added to the two-week construction of a Toll Brothers home.
Executive decision: Snowflake
For his latest segment of “Executive Decision,” Cramer consulted with Frank Slootman, president and CEO of data and analytics software provider Snowflake (NEW) – Get the report, another company that helps companies advance in their digital transformations.
Slootman explained that Snowflake does not create demand for its products, but allows it. Legacy data systems simply couldn’t do what customers wanted, and with Snowflake, it’s much more possible and technology no longer slows down businesses.
Snowflake is also at the forefront of the online privacy debate, creating new products that allow companies to share data while protecting data privacy and complying with all privacy regulations.
Slootman maintained Snowflake’s plans to reach 1,400 customers who paid more than $ 1 million a year and a global revenue of $ 10 billion in 2028. He said the company is building strong teams to turn those goals into reality.
Snowflake’s efforts are being aided by COVID, which demands more than ever that companies use the data to determine what’s really going on with their business rather than guessing.
The Fed does not foresee the future
Cramer urged viewers to stop trying to predict the future through the Federal Reserve and interest rates, in its Seamless Offense segment. He said these economic metrics worked before the pandemic, but in the new world we have little visibility into the future and the pandemic has proven to be incredibly unpredictable.
We have already seen four phases of this pandemic and each has brought new challenges. First there was the blockade with stimulus controls. Then there were the vaccines and hopes of a strong reopening. It was soon followed by a hesitant demand for vaccines and political rhetoric. And finally, the phase we are in now, advanced cases and an increase in the Delta variant that we could have avoided.
The important thing in a situation like this is to focus on big business and big management. What you really want to invest in are companies that can navigate these changing phases and thrive, no matter what the world throws at them. Finding these companies, Cramer concluded, has nothing to do with the Federal Reserve or bond yields.
Round Lightning
Here’s what Jim Cramer said about some of the actions callers offered during the Mad Money Lightning Round on Wednesday evening:
Applied Materials (AMAT) – Get the report: “I love the quarter. This quarter is great and this one can be bought.”
Coinbase Global (CURRENCY) : “I think this is cheap, but I’m not a fan of management. However, I’m a believer in cryptography.”
Party group (MTCH) – Get the report: “I think this company is worth it. I’ve been liking it for a long time.”
Royalty Pharma (RPRX) : “This stock is so cheap. You should buy it.”
Mitek systems (MITK) – Get the report: “This company is doing incredibly well.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position in MRVL, NVDA, AMD, MS, CRM.