It's time to circle the wagons around great companies with weak stocks, Jim Cramer told his Mad Money viewers Monday. That's because money managers are rotating out of their technology stocks with big gains and back into the weaker S&P 500 names.
There's no denying that buying technology stocks makes sense right now. Tech is immune to inflation and COVID, and it has little to no supply chain issues. But eventually, tech runs too far, too fast, and that makes everything non-tech a lot less expensive.
That's what happened Monday, as money managers began locking in their tech winnings and circling back to other sectors, where the earnings are just as good, but the stocks are a lot cheaper.
Cramer offered up four such stocks he'd be buying. He said all of these companies reported terrific earnings, but have since seen their stocks fall through no fault of their own.
Morgan Stanley (MS) - Get Morgan Stanley Report remains a great financial company, but its stock now trades for less that 12 times earnings. Then there's health plan provider Centene (CNC) - Get Centene Corporation Report, which offers growth and a stock buyback program. Shares of Centene now trade for just 14 times earnings.
It was just a week ago that Johnson & Johnson (JNJ) - Get Johnson & Johnson Report announced it was splitting into two, giving investors a great pharma company that will no longer be weighed down by a lumbering consumer products division. Yet after a quick spike, shares have fallen below where the announcement was made. Cramer called JNJ a steal with a 2.7% dividend yield.
Finally, there's UPS (UPS) - Get United Parcel Service, Inc. Class B Report, the delivery giant with shares that trade for just 16 times earnings, despite going into what will be a lucrative holiday shipping season.
Executive Decision: Traeger
In his first "Executive Decision" segment, Cramer spoke with Jeremy Andrus, CEO of backyard grill maker Traeger (COOK) , which last reported strong sales but weaker-than-expected earnings due to rising costs. Shares fell 28% over the past week and are off over 50% from their August highs.
Andrus said you just can't beat the taste from a wood-fired grill and Traeger has made it easy to enjoy this great-tasting food in your own backyard. He explained that Traeger grills make it easy to hold a constant temperature so cooks get consistent results every time.
When asked about their earnings miss, Andrus placed the blame squarely on transportation costs. He said a shipping container that sold for $1,500 pre-pandemic now costs up to $30,000. Traeger is averaging $10,000 per container as it scrambles to adjust its supply chain. The company is working on a facility in Mexico and is also exploring manufacturing opportunities in the U.S.
Traeger is also expanding into new services and technology, including wireless meat probes that connect to the cloud and can alert you when your meat has reached the ideal temperature. It is also testing meal delivery boxes that provide everything you need, from steaks to recipes and spices.
Executive Decision: Nvidia
For his second "Executive Decision" segment, Cramer offered up more of last week's interview with Nvidia (NVDA) - Get NVIDIA Corporation Report founder, president and CEO, Jensen Huang. Shares of Nvidia have soared 145% so far this year.
Huang said Nvidia is working hard in the area of climate science, using accelerated computing, deep learning and artificial intelligence to build powerful simulations of how nature works in the real world. Its latest technologies can solve problems up to one million times faster than they could just a few years ago, putting many more solutions to complicated problems now within reach.
Nvidia has partnered with Lockheed Martin (LMT) - Get Lockheed Martin Corporation Report to help deal with wildfires. The companies are building real-world simulations of forests around the globe so that they can predict where wildfires are likely to start, how they will grow and, most importantly, how best to extinguish them. These are not video games, Huang explained, but visual worlds that function just like the real world.
Turning to the topic of autonomous vehicles, Cramer asked about the "moral dilemma" of how artificial intelligence would react in life-and-death situations. Huang responded by saying that AI is so much faster and has so much better perception than humans that it's unlikely they'll ever get into situations where they need to make life-or-death decisions.
Executive Decision: Zebra Technologies
For his final "Executive Decision" segment, Cramer checked in Anders Gustafsson, CEO of Zebra Technologies (ZBRA) - Get Zebra Technologies Corporation Class A Report, the business automation company that saw 23% organic growth during its most recent quarter.
Gustafsson explained that Zebra helps its customers digitize and automate their operations to increase efficiency and productivity. Zebra systems are deployed into retailers to facilitate omni-channel operations, seamlessly merging stores with e-commerce sales.
Zebra is also a dominant player in healthcare, Gustafsson explained, providing the tools and systems to help nurses reduce mistakes and provide better outcomes for patients.
Zebra is seeing big trends across all verticals, Gustafsson said, which is why it has expanded beyond just barcodes and scanners. The company now offers automation robots, machine vision systems and software-as-a-service solutions to tie them all together.
Remain Calm About Covid
In his "No Huddle Offense" segment, Cramer urged viewers to stop freaking out every time there's news of a new Covid outbreak somewhere in the world.
The pandemic is certainly not over, Cramer said, but last week's selloff over Austria going back into lockdown over rising infections has no bearing on your investments.
There's been a lot of confusion surrounding Covid, and FDA and other government officials have been dragging their feet when it comes to mandates and boosters and approvals for life-saving treatment options. But when it comes to your investments, we're over the hump, Cramer said, and you should be investing accordingly.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
Cano Health (CANO) : "This stock is down 30% and I think you should buy more."
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