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Cramer's Mad Money Recap 1/6: Constellation Brands, Bed Bath & Beyond

Jim Cramer says we haven't seen the signs that mark the bottom of this downtrend, so be prepared for more losses and for selective buying opportunities.
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We're all waiting for the stock market to bottom, Jim Cramer told his Mad Money viewers Thursday. But unfortunately, we're not there yet and there's likely more pain ahead for investors.

How do you know when the bottom is for real? Cramer turned to a checklist he's been using for years to make the call. The first thing the market needs is a large level of negativity, but so far, we haven't seen a lot of that. There is still too much confidence and optimism, and too many people still buying. That last fact can be confirmed by the second item on Cramer's list, is the market oversold? So far, it isn't.

The next thing we need to see for a true bottom are the analysts throwing in the towel and the big money managers getting clobbered. To date, we've seen a few price target cuts, but few actual downgrades. As for fund managers, only ARK Innovation's Cathie Wood seems to be getting truly clobbered.

Other items on Cramer's list included the notion of systemic risk, which we don't have, and a stop to the flood of new IPOs, which we partially have. Cramer noted that it's too soon for earnings to save us, so we don't have that checkmark yet either.

Rounding out the list was a mixed bag. Money on the sidelines hasn't arrived to prop up ailing stocks, so no checkmark there. There is one thing that could stem the negativity, and that's Omicron, but it will be weeks before we see any uptick there.

Finally, Cramer noted that while the government isn't standing in the market's way, there's nothing they can really do to help either.

Tallying up the list, Cramer saw only two or three checkmarks, which is enough to start nibbling, but not enough to declare the bottom is indeed at hand.

Executive Decision: Constellation Brands

In his first "Executive Decision" segment, Cramer spoke with Bill Newlands, president and CEO of Constellation Brands  (STZ) - Get Constellation Brands, Inc. Class A Report, the wine, beer and spirits maker that just delivered a monster 35-cents-a-share earnings beat on strong sales. Shares of Constellation are up 9.4% over the past year.

Newlands said that Constellation is finally getting its inventory back to normal levels and many of the shortages the company is currently seeing is due to strong demand. He said in tough times, consumers turn to brands they trust and no brands are trusted more than names like Modelo and Corona Extra.

Newlands was also excited for their recent partnership with Coca-Cola  (KO) - Get Coca-Cola Company Report to bring alcoholic versions of Fresca to consumers. In the deal, Coke will provide the concentrate and Constellation will manufacture, distribute and market several new flavors.

Constellation recently upped their capital spending to $5.5 billion and Newlands explained all of that money will be put into their brands and increasing capacity to meet growing demand for their products, including tequila.

Executive Decision: Bed Bath & Beyond

For his second "Executive Decision" segment, Cramer also spoke with Mark Tritton, CEO of Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report, which delivered disappointing quarterly results that initially sent shares down 9% in the pre-market before ultimately closing up 8%.

Tritton admitted that Bed Bath lost about $100 million in sales during the quarter due to inventory and supply chain issues. The company had hoped to do much better, he said, but ultimately came up short.

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Bed Bath continues to invest in systems and infrastructure, Tritton noted, but is still early on in the transformation. He said 2022 will be the year when those efficiencies will begin to be realized.

Tritton also acknowledged one of the "true assets" of his company, their BuyBuyBaby chain that's on track to deliver $1.3 billion in sales. He said they continue to invest in the chain and build on its many strengths.

Tritton was upbeat on their remodeling efforts, saying the plan to refresh 400 stores over three years remains on track with 80 completed thus far.

Executive Decision: ConAgra Brands

For his final "Executive Decision" segment, Cramer checked in with Sean Connolly, president and CEO of ConAgra Brands  (CAG) - Get Conagra Brands, Inc. Report, which just posted a four-cents-a-share earnings miss, but forecast 3% organic sales growth in 2022.

Connolly explained that inflation has been more persistent than originally expected and it's been a challenging environment overall for its supply chain. Those pressures should moderate during this year however, and that's why he remains bullish going into 2022.

Part of ConAgra's success has been focusing on consumers and innovating with new products that consumers love. Younger consumers are cooking more at home, he noted, and ConAgra is giving them items in the frozen food aisle and in snacking, the two hottest categories at the moment.

Lightning Round

In the Lightning Round, Cramer was bullish on Vertiv  (VRT) , Paysafe  (PSFE) - Get Founder SPAC Class A Report and Scotts Miracle-Gro  (SMG) - Get Scotts Miracle-Gro Company Class A Report.

Cramer was bearish on Alteryx  (AYX) - Get Alteryx, Inc. Class A Report, Matterport  (MTTR) , Guardant Health  (GH) - Get Guardant Health, Inc. Report and Trade Desk  (TTD) - Get Trade Desk, Inc. Class A Report.

Inflation Outlook

In his "No Huddle Offense" segment, Cramer imagined a world where inflation was under control and realized that world may not be that far into the future.

Case in point: a box of Kellogg's  (K) - Get Kellogg Company Report Corn Flakes. The ingredients of corn flakes are corn, a plastic bag, a cardboard box, labor to make it and truck drivers to ship it. Right now, the cost of all those things are rising, but that won't always be the case.

As grain prices rise, farmers plant more crops, bringing prices back to Earth. Plastics have been in demand for so long that new plants are starting to come online, which will tamp down prices. So, too, with the price of cardboard, where new mills are imminent.

When it comes to labor, Kellogg just inked a deal with their union to allow for more automation that will help bring labor prices down as well. That leaves only truck drivers as a longer-term problem. But Cramer said as Covid subsides, he thinks we'll find truck drivers faster than many people think.

All of this leads to lower inflation, but it's going to take time. That's why the Federal Reserve knows it only needs to cool the economy, not kill it, in order to let the economy right itself and bring inflation down naturally, he said.

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