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Cramer's Mad Money Recap 11/2: Avis Budget Group, Bed Bath & Beyond

Jim Cramer's bullish and he says he would be a buyer on any Fed-induced weakness Wednesday.
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Wednesday we'll hear again from the Federal Reserve, and Jim Cramer told his Mad Money viewers. If the market goes down, he'd be a buyer.

Cramer said Tuesday evening that there are many pundits who are critical of the Fed, and chairman Jay Powell, accusing him of being too soft on inflation. But Cramer reminded viewers that most of the inflation we're seeing is due to shortages, and shortages can't be fixed by destroying the economy with higher interest rates.

Case in point, the blowout earnings from Avis Budget Group  (CAR) - Get Avis Budget Group, Inc. Report, the rental car giant that posted $10.74 a share in earnings even the analysts were only looking for $6.52. Shares of Avis immediately doubled as short sellers were blown out of the water and forced to sell.

Avis's results had nothing to do with interest rates and everything to do with the fact that America is out of cars and without semiconductors, we can't make more of them. That makes companies like Avis, which have lots of cars, a lot more valuable.

The rise in home prices, and everything that goes into a home, is also being driven by shortages. And while it's true that rising interest rates will curb demand, it won't make up for the millions of new homes America needs after decades of under-building.

Rising food prices also won't be fixed with higher interest rates, it will be fixed by finding more truckers to move the food from warehouses to store shelves.

All of these issues can only be fixed by time, Cramer concluded and Jay Powell knows that. That's why Cramer's so bullish and why he'd be a buyer on any Fed-induced weakness tomorrow. The bears and inflation hawks will be out in force tomorrow, but as the shorts of Avis and Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report learned today, good news can be very bad for your portfolio if you're on the wrong side of the trade.

Executive Decision: DuPont

In his first "Executive Decision" segment, Cramer spoke with Ed Breen, executive chairman and CEO of DuPont  (DD) - Get DuPont de Nemours, Inc. Report, the chemical maker that saw its shares surge 9% after posting strong earnings and announcing the acquisition of Rogers Corp. for $5.2 billion.

Breen said DuPont has been on a five-year journey to transform itself and Tuesday's announcement of the acquisition is the last big move in that plan. Rogers gives DuPont exposure into several fast-growing end markets, including 5G wireless, consumer electronics along with clean energy and wind turbines. The combined company will be faster growing, with better gross margins and far less cyclical than in the past.

DuPont has a stable of great, trusted brands, Breen continued. They include Tyvek and Corian, which are critical for housing and construction, and Kevlar, which helps keep our military and law enforcement safe. DuPont is also making strides in automotive, a segment which is growing at 15%.

Breen was bullish on DuPont's outlook as the world's economies continue to recover. He said everything from autos to construction to manufacturing is slowly recovering.

Executive Decision: Estee Lauder

For his second "Executive Decision" segment, Cramer also spoke with Fabrizio Freda, CEO of Estee Lauder  (EL) - Get Estee Lauder Companies Inc. Class A Report, the beauty company which opened lower after reporting earnings, but rallied 4.1%, by the close.

Freda explained that Estee Lauder has multiple growth drivers, so that the company can always deliver for shareholders no matter what the environment they find themselves in. Shares of Estee Lauder are up 27% for the year.

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Freda added that as consumers went back to school and began going back to work, demand for beauty products grew as they expected. Sales in China were also strong as the growing Chinese middle class flocks to health and beauty products.

As for the company's growing gross margins, Freda said that Estee Lauder is constantly optimizing its operations, and that was especially true during the pandemic. Coupled with innovation, his company was able to exceed expectations.

Freda also commented on Estee Lauder's reverse mentoring program, which pairs executives with lower level employees. He said the program has been highly successful in staying in touch with consumers and learning about the latest trends and technologies. "We will never lose touch with consumers," he said.

Chegg's Hard Lesson

In his "No Huddle Offense" segment, Cramer opined on the terrible, and surprising, results from Chegg  (CHGG) - Get Chegg, Inc. Report, the education services company that plunged 49%.

According to the company, there are not only fewer students attending college, those students are taking fewer, and less rigorous, courses that require less of Chegg's textbooks and other services.

Between mental exhaustion, robust job opportunities and the astronomical cost of higher education, it's no wonder students are hitting the pause button on their education. But Cramer said this trend would be a tragedy if it continues over the long term. College is not only an opportunity to learn and socialize, it's also an opportunity to challenge yourself to learn from some of the best minds out there. To skip that, would be a shame.

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 Tuesday evening:

Blink Charging  (BLNK) - Get Blink Charging Co Report: "I think these are too risky to recommend."

Mimecast  (MIME) - Get Mimecast Limited Report: "This is one of the hottest stocks. Go for it!"

Heartland Express  (HTLD) - Get Heartland Express, Inc. Report: "I'm going to suggest you go with United Parcel Service  (UPS) - Get United Parcel Service, Inc. Class B Report."

American States Water  (AWR) - Get American States Water Company Report: "This is a solid grower. I like the company and you can sleep at night owning it."

Bakkt Holdings BKKT: "This is a meme stock, so no comment."

Zenvia ZENV: "Why don't people like this stock? This is an interesting company."

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