Never underestimate the power of a trade deal, Jim Cramer told his Mad Money viewers Friday. Even positive talk of a deal with China was enough to send stocks higher Friday, Cramer said, but next week will continue to be about earnings.
Next, on Wednesday, Cramer was bullish on CVS Health (CVS) , an Action Alerts PLUS holding, along with Bausch Health (BHC) , which trades at just seven times earnings. Chipmaker Analog Devices (ADI) should continue to be a winner among the semis, Cramer said, and he was even upbeat on Avis (CAR) after the company received an analyst upgrade.
Thursday brings earnings from Hormel Foods (HRL) , Norwegian Cruise Line (NCLH) , Wendy's (WEN) and Domino's Pizza (DPZ) , along with tax prep software maker Intuit (INTU) . Cramer found no bears among these great stocks.
Finally on Friday, Cramer said that AutoNation (AN) may see an uptick in sales this quarter, but he's still betting on AutoZone (AZO) in the used car market. He was also concerned about Wayfair (W) , which has seen its shares already rally 35% for the year.
Executive Decision: Johnson & Johnson
For his "Executive Decision" segment, Cramer sat down with Alex Gorsky, chairman and CEO of Johnson & Johnson (JNJ) , which closed up 1.5% Friday.
Gorsky said that Johnson & Johnson just completed another solid quarter and they remain very excited about the outlook for 2019. The Food and Drug Administration just approved Esketamine, the first new treatment for severe depression in the past 30 years. He said nearly five million patients suffer from depression in the U.S. and they couldn't be more excited for this new treatment option for an unmet medical need.
Gorsky was also upbeat about J&J's recent partnership with Apple (AAPL) to help bring new apps and functionality to the Apple Watch. He said the combination of technology and healthcare can be very powerful and help save lives and money for our healthcare system. The Apple Watch can already detect conditions like Afib, he said, but that's only just the beginning.
Robotics is another area Gorsky was excited about. He said only 5% of surgeries today are performed digitally or with robotics and that leaves a huge area to improve patient outcomes.
Competition may be great for consumers, but its bad for business, Cramer reminded viewers. When it comes to the online food delivery space, things are getting mighty crowded.
For years, GrubHub (GRUB) was the only game in town for food delivery and its stock prospered as a result. But now the company has competition from the likes of Postmates, Doordash, Square's (SQ) Caviar and of course, UberEats. All of these players are well funded and getting bigger, Cramer said, and that's never good for business.
When businesses have competition, they need to spend more on marketing, Cramer said, and they need to speed up their growth. This leads to increased costs, lower margins and ultimately, lower stock prices. That's why its no surprise that GrubHub posted disappointing results last quarter and again last week. The company saw a massive earnings shortfall as margins deteriorated.
GrubHub will have a difficult time competing with the likes of Square and Uber, Cramer said, as both of those companies can operate their food delivery services at a loss to bolster their other businesses.
Executive Decision 2: Zoetis
In his second "Executive Decision" segment, Cramer also sat down with Juan Ramon Alaix, CEO of Zoetis (ZTS) , the animal health company with shares that have vaulted 9.8% this week after another strong quarter.
Alaix said that when you're talking about animals, diagnostics is incredibly important, because unlike humans, animals can't tell you what hurts or what's wrong. That's why vets are relying more and more on tests and treatments provided by Zoetis.
Alaix added that Zoetis has effective treatments for a number of conditions, including ticks, fleas, heartworm and other parasites. The company is also developing a combination pill that will include treatments for all three that can be given once a month for maximum convenience. He said the company's dermatology drug for dogs, Apoquel, now boasts sales of $464 million a year.
When asked about China, Alaix said that China is now the third largest market for Zoetis, just behind the U.S. and Brazil, both of which have been among the leaders in the humanization-of-pets trend.
No Huddle Offense: Nvidia
In his "No Huddle Offense" segment, Cramer opined on Nvidia (NVDA) , the semiconductor maker that practically called the bottom on their conference call this quarter.
Cramer explained that Nvidia had gotten their forecast terribly wrong last year, failing to see a slowdown in China, a slowdown in data centers, a collapse in cryptocurrency and a difficult transition to the latest generation of the company's chips. All of these factors led to excess inventories that Nvidia simply didn't see coming.
But after seeing shares cut in half last year, Nvidia now says the world needs more computing power and Nvidia's chips are perfect for the job. Cramer said he was impressed by the company's bullish stance, but saw no reason to rush in and buy the stock just yet.
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