After the Pandemic: Cramer's 'Mad Money' Recap (Tuesday 9/29/20) - TheStreet

After the Pandemic: Cramer's 'Mad Money' Recap (Tuesday 9/29/20)

Some changes to our way of life could be permanent, and Wall Street's trying to figure out the winners in the post-pandemic economy, says Jim Cramer.
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The stock market is a forecasting machine, Jim Cramer told his Mad Money audience on Tuesday night. The market is focused on the future, not the past, and therefore is trying to figure out which companies will be successful once the coronavirus has passed. 

Cramer took a closer look, too. 

He said names like Peloton  (PTON) - Get Report have staying power. Despite the short-sellers trying to crush this one, the stock has held up as the business continues to expand its offerings. Peloton is “clearly here to stay,” he said.

So is Pinterest  (PINS) - Get Report, Facebook  (FB) - Get Report, Etsy  (ETSY) - Get Report and Shopify  (SHOP) - Get Report, all of which lean on e-commerce and/or digital advertising for growth.

Another name benefiting from e-commerce is Wayfair  (W) - Get Report. In February this company was teetering on the brink. Now investors have seen its stock go from $21 to $300 before the recent pullback.

Elsewhere in retail, RH Inc.  (RH) - Get Report has been incredible. Even though the stock has soared over the past six months, Cramer thinks there’s still long-term potential with this one.

Airbnb continues to do well, which will likely go public soon. Carvana  (CVNA) - Get Report has also done well and is a stock that just can’t seem to go down, he noted.

What about the stocks that can’t rally, even though the numbers have been strong? At-home food stocks like Campbell’s Soup  (CPB) - Get Report and McCormick  (MKC) - Get Report have reported great numbers, but aren’t getting any love from Wall Street. 

“I don’t think we should be writing off the food stocks,” Cramer noted. 

Another company Wall Street doesn’t seem to care about but continues to do well? Brunswick Corp.  (BC) - Get Report. The boat maker has a deep order book, but investors seem to think it’s only a short-term phenomenon. Thor Industries  (THO) - Get Report has had a similar experience despite great results. 

Here’s the bottom line: If the market turns against your favorite COVID-19 plays, it’s hard to expect a short-term reversal of fortunes. However, don’t be so quick to give up on them over the long term, Cramer reasoned. 

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Executive Decision: McCormick

On the show’s first “Executive Decision” segment, Cramer spoke with Lawrence Kurzius, chairman and CEO of McCormick. 

Tuesday morning, investors received some “great numbers” when the company reported earnings, Cramer said. However, the stock still sank 2.7% on the day. This has been a great long-term performer and Cramer said the dip is likely another buying opportunity.

Kurzius agreed with Cramer's sentiment and said the company’s consumer division is “seeing strong, sustained consumer demand as eating at home continues.” This trend is becoming a habit. 

He added that McCormick is gaining market share in most of its categories and continues to see strength in quick-service restaurants. However, traditional restaurants are still struggling. 

Kurzius reasoned that the quick-service restaurants are one area of growth, while customers who pick up their orders and bring it home use sauces and spices, offering more growth. More at-home cooking adds an obvious layer of growth, too. 

China, McCormick’s largest non-U.S. market, is a few months ahead in the pandemic recovery, yet the company has seen sustained growth there as well. Kurzius reiterated that these trends are not just temporary. 

Touching on McCormick’s just-announced 2-for-1 stock split, he said the company wanted to keep its stock accessible to retail investors. It doesn't make much of a difference for institutional investors, but it does for the retail investor.

Executive Decision: Polaris

On the show’s second “Executive Decision” segment, Cramer spoke with Scott Wine, chairman and CEO of Polaris  (PII) - Get Report

The price action has been “nutty” in Polaris, Cramer said. Despite a blowout earnings results two months ago, the stock is down 17% from its August high. 

Business has been strong due to the pandemic, which resulted in “unprecedented demand,” Wine said. Many of those buyers are first-time customers, too.

Dealer-inventories are low and thanks to year-round offerings — spanning boats, snowmobiles, off-road vehicles, motorcycles and more — customers keep coming to Polaris. 

There have been issues due the pandemic, too, Wine acknowledged. For instance, it created a bit of a liquidity situation at first and caused headaches in the supply chain. But overall, demand has been very strong as consumers seek outdoor and distanced activities. 

While the growth rate is bound to slow, Wine said he’s confident there will still be growth in a post-pandemic world. 

One source of that growth could be electric vehicles. Polaris has agreed to a 10-year partnership with Zero Motorcycles to help develop and produce electric offerings. Zero Motorcycles is a fantastic company with a great team, Wine said, adding that the company’s capabilities will help make great products. 

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Executive Decision: Thor Industries

RV-maker Thor Industries  (THO) - Get Report isn’t getting much love from Wall Street, despite reporting a “mammoth earnings beat” on Monday and providing “very strong guidance,” Cramer said. 

The company has a high-quality problem, which is high demand but not enough products for its customers. That’s why he spoke with Bob Martin, president and CEO, on the show’s final Executive Decision segment.

Thor is ramping up production and working through supply issues to get caught up on demand, Martin said. The company faces a record backlog of orders and inventory levels lower than he’s ever seen. The European business is having a similar experience.

Once those issues are cleared up though, Martin argues that there’s “great long-term runway.”

He conceded that Thor may have lost a little market share, but that’s only because the company took extra precautions in getting its factories and businesses back online during the outbreak. 

Martin said he’s confident Thor will take back market share, given how much demand there is in the market.

RVs tend to be a leading indicator for recessions, however Thor’s business isn’t exactly flashing warning signs. Instead, more remote workers, first-time buyers and a wide demographic of young and older customers are driving strong business, Martin said. 

Thanks for Nothing, Washington

On the show’s No-Huddle Offense segment, Cramer said the lack of a stimulus bill from the government is going to crush small businesses. 

When the virus first hit, a wave of stimulus helped soften the blow. But with COVID-19 still around and no stimulus in sight, these companies are set to suffer. 

Boutique and small-chain hotels can’t compete with Marriott  (MAR) - Get Report, just like small restaurants can’t compete with Darden Restaurants  (DRI) - Get Report or Chipotle  (CMG) - Get Report. Independent coffee shops don’t stand a chance against a deep-pocketed juggernaut like Starbucks  (SBUX) - Get Report

Without a stimulus bill, the strong will get stronger, while the smaller players falter. That’s only going to make Home Depot  (HD) - Get Report, Lowe’s  (LOW) - Get Report, Walmart  (WMT) - Get Report, Target  (TGT) - Get Report, Costco  (COST) - Get Report and Amazon  (AMZN) - Get Report larger than they already are. 

It’s a shame to see this part of the economy crumble and “it’s a real shame our political system was too dysfunctional to save them," Cramer concluded. 

Lightning Round

Here’s what Jim Cramer had to say about some of the stocks during the Mad Money Lightning Round: 

Switchback Energy Acquisition  (SBE) - Get Report: “It’s another blank-check company. We need to find out more before we make a decision.”

Walt Disney Co.  (DIS) - Get Report: “My charitable trust owns Disney and we’re not going to trade it. I’m willing to accept short-term pain in this one.”

Teladoc  (TDOC) - Get Report: “I think this is a fantastic purchase. People are confused with the merger with Livongo Health  (LVGO) - Get Report, which has hurt the stock.”

Dynatrace  (DT) - Get Report: “I like Splunk  (SPLK) - Get Report instead.”

W. P. Carey  (WPC) - Get Report: “It’s good. It’s got a nice yield and I like that story.”

Enphase Energy  (ENPH) - Get Report: “It’s one of the only energy companies I like. It’s terrific.” 

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