What's the difference between a speculative stock and blue chip? Not much, Jim Cramer told his Mad Money viewers Wednesday. In our COVID-19 world, investors are snapping up both types of stocks, sending them all to new heights.
In the blue-chip camp, shares of FedEx (FDX) - Get Report rallied 11.7% on blowout earnings that saw ground shipments surge 25%. E-commerce remains red hot, Cramer said, which is good news for Amazon (AMZN) - Get Report, Shopify (SHOP) - Get Report and anyone else that makes e-commerce possible. Then there's Pfizer (PFE) - Get Report, which reported positive vaccine trial data that boosted shares by 3.1%. Tesla (TSLA) - Get Report surged 3.6%, sending the company's market cap higher than Toyota (TM) - Get Report. Finally, Facebook (FB) - Get Report was able to rally 4.6% after the company announced it will talk directly with advertisers who are boycotting the social media platform.
In the speculative camp, Cramer said investors are gambling with shares of Workhorse (WKHS) - Get Report, a tiny company that's losing a fortune and only has a float of 73 million shares. They are also speculating on China's Nio (NIO) - Get Report, which has risen 96% for the year, and Tortoise Acquisition Group (SHLL) - Get Report, a special purpose acquisition company also in the electric vehicle space. Cramer said he would avoid all of these speculative stocks, especially when you can buy high-quality blue chips that are surging just as much.
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Executive Decision: General Mills
In his first "Executive Decision" segment, Cramer spoke with Jeff Harmening, chairman and CEO of General Mills (GIS) - Get Report, the packaged foods maker that just posted 21% sales growth during the pandemic.
Harmening said General Mills was seeing strong growth before the pandemic, but now the company is growing in nine out of 10 product categories. General Mills has also been aggressively cleaning up their balance sheet, paying down debt so they can return to normal capital allocations.
Harmening said their acquisition of Blue Buffalo pet food has been terrific for the company. General Mills has been feeding families for decades, and now they're able to feed pets as well. Sales at Blue Buffalo have grown double digits for the past two years.
Harmening said consumers are also rediscovering cooking at home with brands like Betty Crocker and are stocking up on breakfast cereals.
Cramer said it's rare that you can buy shares of General Mills at a discount and investors should take advantage of recent weakness.
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Executive Decision: Williams-Sonoma
For his second "Executive Decision" segment, Cramer also spoke with Laura Alber, president and CEO of Williams-Sonoma (WSM) - Get Report, the home furnishings and kitchen goods retailer that managed to deliver positive same-store sales this quarter, despite many of their stores being closed.
Alber said Williams-Sonoma is committed to all of their stakeholders, which is why the company offered full pay and benefits for their retail staff despite most of their locations being closed. Alber called their people the company's "secret weapon" and a key factor in their strong sales.
When asked about those sales, Alber said Williams-Sonoma was able to find new ways to engage with their customers, including online and virtual services that culminated in an omnichannel experience and positive same-store sales.
Alber added that physical stores are a competitive advantage for the company, but they don't need as many as they currently have. E-commerce will continue to be the growth driver for the company.
Finally, when asked about their supply chain, Alber said that they continue to move manufacturing away from China and tariffs ,and into surrounding countries like Vietnam and India.
Executive Decision: Constellation Brands
For his final "Executive Decision" segment, Cramer checked in Bill Newlands, president and CEO of Constellation Brands (STZ) - Get Report, the wine and spirits maker with shares up 6.2% after reporting strong sales.
Newlands said despite many headwinds in the quarter, Constellation was still able to deliver great results. He said while on-premise consumption of their products continued to be down because many restaurants and bars remain shuttered or at limited capacities, off-premise sales were up. Constellation is overweighted toward off-premise, Newlands said, which led to their strong sales.
Another bright spot for the company has been Corona Hard Seltzer. Newlands said they're on pace to deliver 10 million cases this year, all of which is incremental revenue for Constellation. "The ceiling is pretty high" when it comes to this hot new category, he added.
When asked about his company's investment in Canopy Growth (CGC) - Get Report, Newlands explained that he has confidence in their new leadership and zero-calorie, cannabis-based beverages will be a game-changer.
Finally, Newlands said that Constellation's decision to suspend advertising on Facebook is part of their commitment to racial equality and justice. He said all of his company's media partners will be expected to meet their criteria for social responsibility going forward.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Carolyn Boroden over the direction of the markets with COVID-19 cases continuing to rise.
Boroden first looked at a daily chart of the Nasdaq, calling it a perfect picture of higher highs and lows with the index well above its 50- and 200-day moving averages. She also noted that the 5-day exponential moving average remains above the 13-day exponential moving average, signaling another 200- to 400-point rally may be possible.
Things were less encouraging with the daily charts of the S&P 500 index, where the 5- and 13-day exponential moving average have converged. This is now a make-or-break moment for the S&P 500, she said, and if it can break above this resistance, the index can also see a 200- to 300- point rally.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Wednesday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN, FB MRVL.