Look for signs of opportunity during next week's trading, Jim Cramer told his Mad Money viewers Friday. It's likely that the short sellers will continue betting against the wrong stocks, he said, and that means big gains when they're forced to cover their positions.
Cramer's game plan for next week starts, as it often does, on Monday when he'll be watching crude oil prices to see if a top in oil finally materializes. He'll also be watching the Lucid Motors IPO on the heels of Rivian's (RIVN) - Get Free Report successful launch.
Over on Action Alerts PLUS, Bob Lang and Chris Versace tally the notable gainers in their portfolio for the week, including Advanced Micro Devices (AMD) - Get Free Report, Mastercard (MA) - Get Free Report, Boeing (BA) - Get Free Report and Marvell Technology (MRVL) - Get Free Report. Get more of their trading strategies and investing ideas with a free trial to Action Alerts PLUS.
On Tuesday, the highlights include Walmart (WMT) - Get Free Report and Home Depot (HD) - Get Free Report. Cramer was bearish on both retailers, as Walmart's chart indicates a double top, and Home Depot's expectations are too high to meet. He suggested buying rival Lowe's (LOW) - Get Free Report, which reports on Wednesday, on any weakness.
The retail earnings continue on Thursday with Kohl's (KSS) - Get Free Report and Macy's (M) - Get Free Report both reporting what Cramer expects to be good numbers. He was also bullish on Applied Materials (AMAT) - Get Free Report, Intuit (INTU) - Get Free Report, Workday (WDAY) - Get Free Report and cybersecurity giant Palo Alto Networks (PANW) - Get Free Report.
Executive Decision: Duolingo
In his first "Executive Decision" segment, Cramer welcomed Dr. Luis Von Ahn to the show for the first time. Von Ahn is the co-founder and CEO of Duolingo (DUOL) - Get Free Report, the online language learning app with over 103 courses in 40 different languages. Duolingo boasts 42 million monthly active users.
Von Ahn described Duolingo as a product-driven technology company that also happens to be the most popular way to learn new languages. He said their app isn't just for travel and is popular with people of all ages. The company has done very little marketing and simply uses word of mouth.
When asked about their business model, Von Ahn explained that it was important that Duolingo be universally available, which is why there's a free, ad-supported version of their courses. However, most users opt to subscribe to the service and remove the ads.
The secret of Duolingo's success is its data, Von Ahn added. The company closely monitors customers' progress and knows every question they get wrong and why. Duolingo personalizes future lessons to improve success.
Cramer said Duolingo is a great success story and a great company.
Executive Decision: American Electric Power
For his second "Executive Decision" segment, Cramer also spoke with Nick Akins, chairman, president and CEO of American Electric Power (AEP) - Get Free Report, the utility with an 3.8% dividend yield.
Akins explained that not all electric grids are created equal, but the industry is at the leading edge of a transition to cleaner, renewable power. It will be a delicate transition, however, because every fuel source has its limitations. In the dead of winter in cold climates, renewables alone will not be enough.
Turning to their business, Akin said that industrial activity continues to pick up as companies make up for lost time. Meanwhile, the work-from-home economy continues to propel residential electric demand.
Finally, when asked about the sale of Kentucky Power for $2.8 billion, Akins explained that as the company transitions, portfolio adjustments will need to be made so it can achieve both objectives of a green economy and reliable power.
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.
The first portfolio included Shopify (SHOP) - Get Free Report, Apple (AAPL) - Get Free Report, Nvidia, Upstart (UPST) - Get Free Report and Tesla (TSLA) - Get Free Report. Cramer said while both Apple and Nvidia are tech, they trade differently as they're in different areas of tech.
The second portfolio's top holdings also included Nvidia and Tesla, along with Square (SQ) - Get Free Report, Crowdstrike (CRWD) - Get Free Report and Applied Materials (AMAT) - Get Free Report. For this portfolio, Cramer suggested selling Applied Materials and CrowdStrike and adding American Electric Power (AEP) - Get Free Report and Johnson & Johnson (JNJ) - Get Free Report to properly diversify.
The third portfolio had Blackstone (BX) - Get Free Report, U.S. Bancorp (USB) - Get Free Report, Realty Income Trust O, Ford (F) - Get Free Report and Procter & Gamble (PG) - Get Free Report. Cramer said to sell U.S. Bancorp and add Apple.
In his "No Huddle Offense" segment, Cramer said there's only one reason to break up a company, and that's because the parts are worth more than the whole. That's why this week's announcements from General Electric (GE) - Get Free Report and Johnson & Johnson were brilliant moves to unlock a lot of value.
General Electric's aerospace division has always been dragged down by its ailing healthcare division, and the split will allow each company to stand on its own merits. But Cramer said it's the J&J breakup that has him most excited.
A decade ago, Abbott Labs (ABT) - Get Free Report spun off AbbVie (ABBV) - Get Free Report. At the time, Abbott was worth $81 billion. Today, the combined companies are worth $434 billion. That level of value creation is staggering, Cramer said, and that's what Johnson & Johnson might also look like in the years to come.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Friday evening:
The Blackstone Group: "This has had a gigantic run, but I think it can still go higher."
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