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Bowled Over by Bulls: Cramer's 'Mad Money' Recap (Wednesday 12/11/19)

Jim Cramer talks about how he became a Tesla bull, and why he's still waffling on Netflix.
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If you want to make money in the stock market, you should avoid the battleground stocks, Jim Cramer told his Mad Money viewers Wednesday. But sometimes, even a battleground is worth owning -- if you have a staggering level of conviction. Tesla  (TSLA)  and Netflix  (NFLX)  have been two long-running battlegrounds between the bulls and the bears, Cramer said, and he's recently changed his opinion on both of them.

There are three things that define a battleground stock. First, the stock is cult-like, with shareholders that are fans of the products the company makes, causing valuations to defy traditional earnings metrics. Second, the stocks have questionable financials that the bears are quick to call attention to. And third, they have a charismatic leader that the bulls are quick to call attention to. 

In the case of Tesla, Cramer said he's seen first-hand in his own family how appealing the cars can be. Add to that, they have 250,000 orders for Tesla's ugly-duckling of a Cybertruck, and Tesla surely fits in the cult category. As for their financials, Tesla clearly has had a bumpy road, but Cramer said Tesla could easily raise another $2 billion if it had to. Finally, there's CEO Elon Musk, who defines charisma and also has matured over the past year, no longer posing a threat to his share price with every errant tweet. Add it all up, and Cramer said he's changed his stance on Tesla and he thinks the stock should be bought. 

Then there's Netflix, a former Cramer favorite that's fallen out of favor. The company still has cult status and a charismatic leader in CEO Reed Hastings. However, its financials are much more troubled now that there is increased competition in the streaming media space and content is getting more expensive to make and compete with. Cramer said the bears might eventually be right with this battleground name.

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Executive Decision: Palo Alto Networks

For his "Executive Decision" segment, Cramer spoke with Nikesh Arora, chairman and CEO of Palo Alto Networks  (PANW) , the cybersecurity company whose shares have been under pressure since it last reported earnings. 

Arora said after taking the helm of Palo Alto 18 months ago, the company has exceeded all of his expectations. He explained the company has transitioned from a single product -- firewalls -- to three different security platforms that can meet the needs of more customers. 

Arora added that while Wall Street often looks toward short-term quarterly earnings, he's running the business for the long term. The key is to reduce the cost of sales, he said, and that's what Palo Alto Networks has been doing. Their sales team sold $173 million worth of their next-generation platforms last quarter, but their firewall products are also still in demand. 

Cybersecurity is a $140 billion a year business and Palo Alto is the largest pure play in the sector, but the company still only commands between 2% and 3% market share. Arora said there's plenty of room for all players in the market to win and competition is not a factor.

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Executive Decision: VMware

In his second "Executive Decision" segment, Cramer also sat down with Sanjay Poonen, customer operations COO of VMware  (VMW) , the cloud software provider with shares up 9% for the year. 

Poonen said business is strong, and VMware's networking business in particular increased 50% in the past quarter, as companies continue to migrate to the cloud and modernize their systems. He called VMware the Tesla of networking, as they provide an end-to-end, software-based solution. 

When asked about the recent weakness in the shares, Poonen noted that they are planning for the long term, which is why they made the acquisitions of Carbon Black and Pivotal for $2.1 and $2.7 billion, respectively. The addition of these services will make VMware's platform stronger, he said.

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Follow the Millennial Money

Want to make money in the market? Follow the money. If you can figure out where the millennials are spending their money, your portfolio will prosper. 

Tracking the millennial generation is not easy, Cramer said. All we really know is that they're a fickle bunch. It seemed like they enjoyed cruises, until they didn't. The same with camping and makeup and possibly even Netflix. But if you listen to homebuilder Toll Brothers  (TOL) , we might finally have a clue. 

Now, 10 years after the recession, it appears the millennials are finally emerging from their parents' houses and buying their first homes. This should come as no surprise, as Toll Brothers called it "affordable luxury." Home prices are stable and interest rates remain at historic lows, making this a great time to buy into the housing market. 

Cramer said that soon, the money could flow to Amazon  (AMZN) , Costco  (COST)  and Home Depot  (HD)  as this generation begins to furnish their new houses. That's why he plans to keep a close eye on this group.

Executive Decision: Trade Desk

For his final "Executive Decision" segment, Cramer sat down with Jeff Green, founder, chairman and CEO of Trade Desk  (TTD) , the trading platform that's expanding into streaming video and audio advertising. 

Green said that Trade Desk took a unique strategy to growth: They became profitable first and then put their profits into expanding into new areas. He said while many know household names like Roku  (ROKU)  in the streaming media space, Trade Desk works behind the scenes to sell advertising. 

In the online advertising world, there's Google  (GOOGL) , Facebook  (FB) , and everyone else, Green explained. And Trade Desk helps companies expand their markets and place ads for everyone that's not Facebook or Google. The company does the right thing when it comes to the fine line between showing relevant ads and protecting privacy, Green added. 

Cramer said he's a big fan of Trade Desk, even though most people haven't heard of the company.

Lightning Round

In the Lightning Round, Cramer was bullish on Synopsys  (SNPS) , Lockheed Martin  (LMT) , Cisco Systems  (CSCO) , Accenture  (ACN)  and Aimmune Therapeutics  (AIMT)

Cramer was bearish on Welltower  (WELL) , Cara Therapeutics  (CARA) , and Cognizant Technology  (CTSH) .

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