Sometimes, it's easy to miss the forest for the trees, Jim Cramer told his Mad Money viewers Wednesday. When many investors look at bank earnings, for example, all they see are net interest margins and book values. They totally miss the wealth of information the banks provide in their commentary about the overall health of our economy.
Listening to what the banks had to say this quarter was stunning, Cramer explained. Consumers are flush with cash and are ready to spend, and that means great things for a host of companies.
Consumers are spending on travel, which is great for American Airlines (AAL) - Get Report and Delta Air Lines (DAL) - Get Report, along with American Express (AXP) - Get Report, Cramer's favorite travel-related financial. Americans also want to look good, which means new apparel from Poshmark (POSH) - Get Report and Levi Strauss (LEVI) - Get Report.
When you see the entire forest, you can see luxury items like the boats Brunswick (BC) - Get Report makes are in demand. People are flocking to other luxuries at Williams-Sonoma (WSM) - Get Report and RH (RH) - Get Report. Finally, people are spending on tech, upgrading their cell phone plans at T-Mobile (TMUS) - Get Report, buying big-screen TVs at Best Buy (BBY) - Get Report or picking up the latest Apple AAPL gadgets.
All of these picks can be found inside the bank earnings conference calls, Cramer concluded, but only if you're looking for the big picture and not getting hung up on loan ratios and default rates.
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Cramer Does His Homework
In his "Homework" segment, Cramer followed up on the stock of Arlo Technologies (ARLO) - Get Report, which had stumped him during an earlier show. He said that Arlo is a tiny company, but it's also a good one.
Arlo was spun out of Netgear (NTGR) - Get Report in 2018 as a stand-alone maker of home security hardware and services. The company makes connected cameras, doorbells, and other security devices and pairs them with apps and services.
Cramer said the hardware business is awful, which is why Arlo pivoted to offer more cloud services, including artificial intelligence.
But while there's a lot to like about Arlo, the company is not without problems. Shares trade in the single digits for a reason, he said, including the fact that Netgear still owns 84% of the company, which has zero coverage on Wall Street. Beyond that, Arlo derives 72% of sales from hardware, which is still too much, and while its margins are improving, the company is still not profitable.
However, Cramer said Arlo's metrics are moving in the right direction and at less than one times sales, he'd be a buyer for speculation.
Is it a Good Match?
Online dating was already a hot secular growth trend going into the pandemic, Cramer told viewers, but after a year of forced separation, vaccinated people are ready to mingle again, and that is great news for Match Group (MTCH) - Get Report, the dating company behind Match.com, Tinder and other dating websites.
When Match last reported, the company posted solid 23% revenue growth, 12% subscriber growth and a 38% boost in operating income. Cramer said this once tiny company has definitely left the nest of IAC Interactive to become a full-fledged online powerhouse all on its own.
Match also shelled out $1.7 billion to acquire Hyperconnect, a video and chat service that is already adding to its strong portfolio of services. Cramer added that Match has a management team that knows how to take lessons from one brand and apply them to the others.
Match may be expensive, but shares are worth it.
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Executive Decision: RBN Energy
What's going on in the oil patch? Cramer checked in with Rusty Braziel, founder and executive chairman at RBN Energy, for a fresh take on where oil prices are likely headed next.
Braziel said that the oil industry is performing as it ought to. Prices are rising, which is allowing oil producers to pay down debt and get ready for the next wave of drilling. Oil production has already risen 600,000 barrels a day in the U.S. just over the past six weeks.
There were also a lot of DUCS, or drilled-but-uncompleted wells, earlier in the year and many of those wells are now completed and coming online. Drillers can make some "serious" money at these levels, Braziel added.
When asked about OPEC, Braziel noted that OPEC plans to increase production by about 400,000 barrels a day, which should put the market in equilibrium.
Turning to natural gas, Braziel said that U.S. exports are up to 10 billion cubic feet per day and there is now a lot of demand for LNG exports, far more than we saw last year at this time.
No Buy-and-Scold, Please
In his No Huddle Offense segment, Cramer told viewers to forget about "buy and hold," the new mantra on Wall Street is to "buy and scold," as in money managers criticizing Federal Reserve chair Jay Powell for not raising interest rates, then buying lots of stocks anyway.
Cramer said these managers would be 100% right if they truly believed what they were saying about the health of our economy. But instead, these hypocrites are only scaring you out of the market, so they can keep buying at lower levels.
While these fear mongers were pounding the table about inflation, commodity prices for everything from metals to lumber collapsed. You'll never hear an apology from these managers. however, even if their predictions never come true.
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 AAP.