Cramer said at IBM, under Louis Gerstner's leadership in the 1990s, the company exited the retail desktop PC market, fixed the balance sheet and reinvented the company as a primarily software and service company. That's where Whitman finds herself with HPQ, Cramer said. The industry is moving so quickly to smaller, faster devices. Cramer doesn't know if this is transitioning too fast for Hewlett-Packard to transcend the riptides.
Unlike Howard Shultz, the CEO at Starbucks who expanded overseas and turned the stores into places that beckons customers inside, there's no new products coming from HPQ, and it's already huge internationally. HPQ can become a value-added software, service and printer company, Cramer says. Without economic growth worldwide, it can't make owning the stock a worthwhile proposition right now.
Bottom line: Cramer says HPQ needs a new product, worldwide growth and a lot of luck to spark another turn.
Cooking With Hain'sIn today's installment of this week's "Cramer's Cookouts," Cramer took a look at Hain Celestial Group (HAIN), which offers a defensive position in today's market. On Monday, Cramer suggested buying Hain's ahead of its quarterly earnings announcement. On Wednesday, the company blew away fourth-quarter expectations, reporting 32.1% year-over-year revenue growth and posting earnings of 65 cents per share, besting estimates by 3 cents per share. At the close Thursday, Hain was up 10.96% over the last two days, hitting an all-time high. Cramer welcomed Irwin Simon, the founder, chairman and CEO of Hain Celestial, to his cookout. Simon joked that there was so much excitement about his company that HAIN froze the Nasdaq. He said he shared Cramer's disappointment in the Nasdaq, particularly on a day when his company reported such promising numbers. Simon said that with childhood obesity on the rise, his organic and natural food products are selling more and more. He pointed to juices and personal care products as a key area of growth. At home and overseas, combined consumption of its products has increased 6.7% over the last 12 weeks, compared with 8% in the previous quarter. Conventional food business is flat, Simon said. The juicing category is soaring, and consumers are moving away toward organic, natural products. Whole Foods (WFM) is the biggest purchaser and retailer of Hain's products, followed by other retail giants Wal-Mart (WMT), Costco (COST) and Wegmans. Eating healthy is not a fad, or a trend, Simon told Cramer. It's becoming a more important part of life.
No Huddle OffenseCramer wanted to know: Could we be more in hostage to bonds? He sees an angry, mean bond market, bent on revenge. The Federal Reserve is fed up of shouldering the load. Where is Congress? Where is the president? Cramer wonders how many houses can Fed Chairman Ben Bernanke buy and sell? How many bridges, tunnels and exit ramps? If this is what the bond market is like when the Fed is buying, who knows how high rates will shoot when it stops, Cramer said. If he was Bernanke, he'd stop talking about what he's doing -- can the transparency and start playing a little coy. With 10-Year Treasury yields nearing 3%, where is the demand coming from? Even if homebuilders are optimistic, Cramer thinks the bond market has cooled off housing, the recovery's leadership sector. His best guess is that foreign governments are selling. Given that foreigners own nearly 50% of the U.S. $15 trillion debt, why shouldn't they be selling? They're hearing comments about tapering, they don't want to see their gains disappear, they want to ring the register and repatriate the money, Cramer said. The trend of higher rates is here to stay, Cramer said. The economy can handle that if it can just catch its breath. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. -- Written by Chris Sahl in Boston.
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