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Cramer's Mad Money Recap: Toll Brothers, Lennar

Jim Cramer says once the rebalancing of America's workforce is complete, there just might be a return to normal without intervention.
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Sometimes, good news is actually good news, and if you overthink it, you're going to miss out. That was Jim Cramer's lesson for his Mad Money viewers Wednesday. Every day, we get another piece of extraordinary economic news, only to be told how it is a harbinger of bad things to come.

Case in point: today's headlines that new home prices are hitting record highs, which, of course, is a bad thing.

But Cramer said he takes his cues from home builder Toll Brothers  (TOL) , who noted that over the past decade, America built six million fewer homes than it did the decade before, despite having a growing population. According to Toll, it's possible that the housing boom in our country is only just getting started and it may take years to reach equilibrium.

Toll Brothers isn't alone, rival Lennar  (LEN)  told investors on its conference call that the current pace of new home construction can't overcome the deficit we've created over the past decade.

Is it prudent to combat rising home prices by raising interest rates, crushing demand and prolonging the home shortage, all while putting people out of work? Or wouldn't it be better to give it time and allow the market to satisfy the demand of 73 millennials needing their first homes?

Cramer reminded viewers that 2021 is nothing like 2006. In 2006, the Federal Reserve raised interest rates 17 times in quick succession in an effort to cool the housing market. This, rather than fix the real problem -- loose lending standards. In today's market, however, there are no ninja-loans and no no-documentation loans. In fact, banks and consumers alike are stronger than they've been in years.

Finally, let's not forget about COVID, which has untethered millions of workers from their office desks and allowed them to work from the country and in areas like Boise, Idaho and Austin, Texas. Once the rebalancing of America's workforce is complete, there just might be a return to normal without intervention.

Cramer and the AAP team are looking at everything from earnings and politics to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.

Playing AppLovin for a Win

Investors looking for a fast-growing gaming stock should take a look at the recently public AppLovin  (APP) , Cramer told viewers. In fact, this may be the greatest little stock you've never heard of.

AppLovin came public earlier this year to little fanfare. The company began as a provider of software development tools, but soon evolved into in-house game development and now boasts a portfolio of over 200 titles, most of them mobile games you can play on the go.

Cramer said AppLovin's game portfolio would be impressive on its own, but the company also has a trove of valuable data it compiles from all of its customers, which helped it achieve a 73% compound annual growth rate between 2018 and 2020. AppLovin forecasts 80% growth in 2021.

Shares of AppLovin trade at nine times sales, which seems pricey until you compare it to rivals like Roblox  (RBLX)  at 16 times sales and Unity Software  (U)  at 24 times sales with a lower growth rate. That's why Cramer said AppLovin is a great business that's worth buying.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Off the Charts

Now that investors are warming up again to secular growth stocks again, is it time to buy some shares of Snap  (SNAP) ? Cramer checked in with colleague Tim Collins in his "Off The Charts" segment to find out.

Collins first looked at a daily chart of Snap and noted that shares just crossed above their 50-day moving average, completing a bullish inverse head-and-shoulders pattern. He also called attention to Snap's stochastic oscillator, which indicates the stock has more room to run.

With the momentum favoring the bulls, Collins recommended buying right away, giving it an $80 price target. He was also bullish on the stock's weekly chart, which demonstrated a bullish "W" formation that confirmed his thesis.

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Executive Decision: Box

In his "Executive Decision" segment, Cramer spoke with Aaron Levie, co-founder and CEO of Box  (BOX) , the cloud storage company that's in a heated battle with activist investor Starboard Value to unlock more value for shareholders.

Levie said that Box is executing the plan they laid out years ago, which includes expanding gross margins and accelerating their growth rate. They continue to be a disruptive content management platform that their enterprise customers can't live without, which leaves significant upside in their stock, he said.

Starwood currently has an 8% stake in Box and is asking for additional seats on the company's board of directors, but Levie said Box has already added seven new members in recent years and he does not see the need for additional changes.

Levie cited the recent endorsement of KKR  (KKR)  as validation of his company's current plans and trajectory. He said when compared to their SaaS peers, Box is executing at the level they should be.

Constellation Ahead of Earnings

In his "No Huddle Offense" segment, Cramer said as the recovery picks up steam, there's one stock that's poised to prosper and that's Constellation Brands  (STZ) . As a restaurant owner himself, and someone who keeps a close eye on the bar scene in New York City, Cramer said he can confirm that people are more than ready to go out and drink with friends.

Constellation has $2.5 billion in revenue from high-end spirits and another $6 billion in revenue from beer and wine, all of which are ready to put up big numbers when compared to 2019. Best of all, Constellation reports next week, meaning we won't have to wait long for good things to happen.

Lightning Round

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:

First Solar  (FSLR) : "I think you're in great shape with that one. It's moving up."

GAN Limited  (GAN) : "There are so many gambling companies. I don't want to be in any of them."

Everi  (EVRI) : "I'd take profits and play with the house's money."

Stem  (STEM) : "I like stem and what they're doing. I think you're in good shape with Stem."

PPG Industries  (PPG) : "At this moment, it is not going to do as well as the faster growing stocks."

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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.