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David and Goliath: Cramer's 'Mad Money' Recap (Wednesday 2/3/21)

Jim Cramer says before you join the trading revolution, put down the slingshot and pick up the annual report. Here are his 7 tenets of smart trading.
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There's only one reason to own stocks and that's to make money, Jim Cramer reminded his Mad Money viewers Wednesday. If you're a new investor, you might be thinking that it's your job to fight alongside the Reddit crowd and take down big hedge funds.

But Cramer said investors need only be focused on their own investment goals and stick to his Seven Tenets For New Investors.

Tenet No. 1: Invest in stocks that deserve to be higher. If you're a new investor, you can't afford to be trading in and out of stocks on a daily basis. Stick with the winners that have a long-term secular trend.

Tenet No. 2: Don't try and wipe out others. The goal is to make money, not to make money at the expense of others. Focus on your own goals.

Tenet No. 3: Capitalize on emotional moves. Stocks like Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill, Inc. Report fell 1.5% on a great quarter. Use that emotional selling to bolster your position.

Tenet No. 4: The Treasury Secretary is focused on the economy, not on stocks. The government is working in your favor, you don't need to obsess over their every move.

Tenet No. 5: Never borrow money to buy stocks. Buying stocks on margin has been the kiss of death for many investors. Only invest with money you can afford to lose.

Tenet No. 6: Keep calm and do the work. Investing can be emotional sometimes. But don't blindly follow others. Do your own homework and make your own decisions.

Tenet No. 7: Find companies that do good and are doing well. It's no secret that the best corporate citizens often have the best earnings. Stick with companies that have both. 

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Executive Decision: Hologic

In his first "Executive Decision" segment, Cramer spoke with Steve MacMillan, chairman, president and CEO of Hologic  (HOLX) - Get Hologic, Inc. Report, the diagnostic and testing company with sales up 262% year over year as a result of the pandemic.

In the world of COVID testing, there are two types of tests. PCR tests are highly accurate, but slow. Rapid antigen tests are, well, rapid, but aren't as sensitive. The Hologic Panther system however, is the best of both worlds, MacMillan said. The system is both highly accurate, even for asymptomatic cases, and it delivers same-day results in most cases. Hologic currently has 1,300 Panther devices deployed, with more being deployed every week.

MacMillan explained that Hologic has been an amazing job at ramping up its testing abilities. Last year, the company produced 21 million tests across all of its products. Last quarter, Hologic produced 30 million tests just for COVID-19.

Looking past the pandemic, MacMillan was very optimistic. He said now that so many Panther devices have been deployed, hospitals and clinics have the ability to run the full suite of Hologic tests, not just COVID. He was also bullish on Hologic's 3D mammography systems, which have been adding machine learning to help radiologists read the results. The same machine learning is now being applied to cervical cancer screening as well and seeing great promise.

Executive Decision: e.l.f. Beauty

For his second "Executive Decision" segment, Cramer also spoke with Tarang Amin, chairman and CEO of e.l.f. Beauty  (ELF) - Get e.l.f. Beauty, Inc. Report, the cosmetics maker that just posted an earnings miss, but with raised forecasts.

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Amin explained that e.l.f. has been investing for long-term sales growth and the earnings shortfall reflects that investment. He said marketing and digital investments rose from 12% to 15% of total sales to help support all of their digital efforts.

That extra spending doesn't mean e.l.f. isn't committed to retail however. Amin said that Ulta Beauty  (ULTA) - Get Ulta Beauty Inc Report remains an excellent national partner and sales continue to do extremely well. Walmart  (WMT) - Get Walmart Inc. Report and Target  (TGT) - Get Target Corporation Report are also strong partners for the brand.

Amin was also bullish on their partnership with singer Alicia Keys. He said they are expanding distribution for this great line of products that customers love.

e.l.f. also continues to care about what's most important to its customers, including clean ingredients and sustainability.

Executive Decision: Skyworks Solutions

For his final "Executive Decision" segment, Cramer checked in Liam Griffin, president and CEO of Skyworks Solutions  (SWKS) - Get Skyworks Solutions, Inc. Report the semiconductor maker that posted a blowout quarter that included 69% sales growth. Shares of Skyworks are up 15% over the past week.

Griffin said that after talking about 5G wireless for years, the revolution has finally come. Skyworks has enough capacity to meet chip demand, he said, and are working hard to mitigate any shortages.

Looking at the big picture, 5G is still in its infancy, Griffin added. Thus far, the industry has only shipped 220 million 5G-enabled units. This is a multiyear move that will translate into billions of units. Skyworks, Griffin said, is in a position to do a lot more innovating in this space.

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.

Tech Winners

In his No-Huddle Offense segment, Cramer said people love competition. They like betting on a winner and taunting the losers. But investing is not like a football game. Case in point: big tech.

Technology is not a zero-sum game, Cramer said. Companies like Amazon  (AMZN) - Get, Inc. Report, Alphabet  (GOOGL) - Get Alphabet Inc. Class A Report, Apple  (AAPL) - Get Apple Inc. Report, Microsoft  (MSFT) - Get Microsoft Corporation Report and Facebook  (FB) - Get Meta Platforms Inc. Class A Report are all winners. They all have cultures employees flock to and products that consumers love. The real winners are the shareholders, all of which have seen great returns for years.

Lightning Round

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

Futu Holdings  (FUTU) : "This is a good speculative stock in China."

eBay  (EBAY) - Get eBay Inc. Report: "They've hit it out of the park and I say buy, buy, buy."

Magellan Midstream Partners  (MMP) - Get Magellan Midstream Partners, L.P. Report: "I'm not recommending any pipeline stocks."

Verizon  (VZ) - Get Verizon Communications Inc. Report: "I've never gotten hurt recommending Verizon. I like their yield."

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At the time of publication, Cramer's Action Alerts PLUS had a position in GOOGL, AAPL, MSFT, AMZN, FB.