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Cramer's Mad Money Recap 10/26: 3M, GE, Google, Microsoft

Jim Cramer says some companies are fighting inflation with innovation and ingenuity, but others are losing the battle.
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In the great inflation debate, the jury still out, Jim Cramer cautioned his Mad Money viewers Tuesday. Some companies have managed to use innovation and ingenuity to combat rising costs, while others have lost the battle. By the end of this week however, we should know the final score.

The problem with the inflation debate is that both extremes are, well, too extreme. Can productivity really triumph over inflation? It depends on who you ask.

Over on Real Money, Ed Ponsi writes that if Twitter CEO Jack Dorsey is right about inflation, then investors might want to be in a REIT. Read more about Ponsi's investing strategies and see what he says about the iShares U.S. Real Estate exchange-traded fund.

At 3M  (MMM) - Get 3M Company Report, rising costs have muted the company's formative innovation track record. But at General Electric  (GE) - Get General Electric Company (GE) Report, the company was able to win over inflation, at least for now, sending shares higher by the close. Shares of Otis  (OTIS) - Get OTIS WORLDWIDE CORPORATION Report fell 1.9%, despite strong sales in the U.S. But UPS  (UPS) - Get United Parcel Service, Inc. Class B Report was able to surprise to the upside, keeping costs low and sending its share soaring 6.9% by the close.

Cramer was bullish on a few serial innovators, including steelmaker Nucor  (NUE) - Get Nucor Corporation Report, drugmaker Eli Lilly  (LLY) - Get Eli Lilly and Company (LLY) Report and Microsoft  (MSFT) - Get Microsoft Corporation (MSFT) Report. The only disappointment on the day, he said, was Alphabet  (GOOGL) - Get Alphabet Inc. Class A Report.

Alphabet shares fell in after-hours trading despite the company reporting that its third-quarter revenue beat analysts' estimates.

Executive Decision: Logitech

In his first "Executive Decision" segment, Cramer spoke with Bracken Darrell, president and CEO of Logitech  (LOGI) - Get Logitech International S.A. Report, the computer peripheral maker which has seen its shares fall from highs near $150 to below $85 Tuesday. Shares currently trade for 19 times earnings.

Darrell said that despite Wall Street's loss of enthusiasm, Logitech's business remains strong and all of its product categories are still growing. Logitech provides equipment for video conferencing, home and mobile workspaces, gaming and creating and streaming content, all of which are in demand.

Get more trading strategies and investing insights from the contributors on Real Money.

Digging into quarterly results, Darrell noted that video sales did slip this quarter, but only after doubling last year during the height of the pandemic. He also admitted that Logitech is not immune to supply chain pressures.

The company is adding inventory to the channel in an effort to combat the logistics slowdown going into the holiday shopping season. He expected slight impacts on the company's gross margins as a result.

Off the Charts

In the "Off The Charts" segment, Cramer checked in with colleague Larry Williams to see where crude oil might be heading next.

Williams first looked at a weekly chart of crude oil futures from 2012 through 2014 for a frame of reference. He noted that during that time, there were four times where speculators were buying, while commercial traders were selling. Each of these periods signaled a top in crude oil prices.

Fast forward to today and Williams saw the same pattern in the 2021 futures charts. Commercial traders are unloading their positions, while hedge funds and home gamers are buying aggressively, signaling a top in crude should be close at hand.

Williams' thesis was confirmed by his own COTSI indicator, as well as the historical seasonal patterns for crude. Typically, oil would have peaked in July, making this year an anomaly, but those seasonal pressures are still out there and will eventually bring prices back to Earth.

Cramer noted that the trend for oil is still higher, which means a peak in the crude market may still be days away. Nonetheless, he urged investors to use caution in the weeks ahead, as crude is poised to make a turn soon.

Executive Decision: Centene

For his second "Executive Decision" segment, Cramer also spoke with Michael Neidorff, chairman and CEO of health plan operator Centene  (CNC) - Get Centene Corporation Report. Shares of Centene are up 15% over just the past two weeks, including a 4.4% gain Tuesday after the company reported another strong quarter.

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Neidorff said you need scale in the healthcare business, and Centene now has the scale it needs to deliver on all of its promises. The company had a clean quarter, he said, and is beginning the value recognition phase of all of its past investments.

One of those investments has been the addition of artificial intelligence to take over monotonous tasks like preauthorizations. Neidorff noted that it takes a nurse, on average, 18 minutes to review a patient's chart and authorize a procedure. Their new AI system does the same task in a single second. Centene is not relying exclusively on AI, however. Any procedure that is not preauthorized still gets a human check, Neidorff said, but the new system is a huge cost and time saver.

When asked about his position on vaccine mandates, Neidorff said he's in the business of keeping everyone healthy. Everyone that can get a vaccine, should get a vaccine, he said, to protect themselves and all those who can't be vaccinated. This is a public health issue, he continued. The unvaccinated are a host for the next variant, and with each new variant, we run the risk that variant will be resistant to our vaccines and start this process all over again.

Another Look at Facebook

In his No-Huddle Offense segment, Cramer took another look at Facebook  (FB) - Get Facebook, Inc. Class A Report, shares of which fell another 3.9% Tuesday. He admitted that the social media giant has a lot of work to do to fix its platform and reassure the world that its network won't be used to promote hate, violence, and a host of crimes including human trafficking and even genocide.

But outside of the company's current troubles, Cramer said he's looking forward to Thursday, when Facebook will debut its plans for the Metaverse, an interactive virtual reality platform that Cramer said will be the driving force in technology for the next decade.

No one knows exactly how Facebook envisions the Metaverse, only that the company has invested millions into creating it. Think of the Metaverse as a place where you can interact with friends, or celebrities, in virtual reality. The platform could be used for everything from gaming and entertainment, to learning and training, to arts, concerts and culture.

The Metaverse will be built by millions of creators, Cramer concluded, and Facebook is likely the platform that will enable those creators. That's what makes Thursday's announcements exciting.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Tuesday evening:

Chewy  (CHWY) - Get Chewy, Inc. Class A Report: "The stock is down 24% for the year. I think you should buy it. They're in good shape."

Perficient  (PRFT) - Get Perficient, Inc. Report: "This is a red-hot analytics company. I have to stick with Salesforce  (CRM) - Get salesforce.com, inc. Report. We have too many of these. "

Berkshire Hathaway  (BRK.B) - Get Berkshire Hathaway Inc. Class B (BRK.B) Report: "You will never go wrong buying Berkshire."

The Metals Co. TMC: "This is a Canadian battery company and there's not enough room for all of these companies. I don't want to be in this one."

The Lion Electric Company LEV: "Be careful with these names. Everyone wants to be Tesla  (TSLA) - Get Tesla Inc Report but we already have a Tesla."

Microvast  (MVST) - Get MICROVAST HOLDINGS, INC. Report: "No. There are too many battery companies."

Jazz Pharmaceuticals  (JAZZ) - Get Jazz Pharmaceuticals Plc Report: "I like Jazz. That was a good acquisition they made."

Ncino  (NCNO) - Get NCINO, INC. Report: "This one has not taken off the way I expected. I'd be a buyer."

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