The early bird gets the worm, Jim Cramer reminded his Mad Money viewers Wednesday. In the case of the stock market, that means investors need to buy a stock before the underlying fundamentals begin to turn. If you wait for an all-clear, Cramer said the gains will have already been made.
Semiconductor giant Texas Instruments (TXN - Get Report) told investors Wednesday that it expects two more quarters of declines before the next chip cycle kicks into high gear. Cramer said that means the time to buy is now. If investors wait two quarters for the cycle to actually begin, it will be too late. Last quarter, semiconductor equipment maker Lam Research (LAM) made a similar prediction, and this quarter posted the strong results it promised.
Shares of Apple (AAPL - Get Report) have also been weak, as the company was embroiled in a lawsuit with Qualcomm (QCOM - Get Report) . Investors who waited until this week's settlement also missed out on the easy gains.
Cramer cited Walt Disney Co.'s (DIS - Get Report) upcoming streaming service as another example. The company had been touting the service for months. Investors who waited until this month's preview of the much-anticipated service, waited too long.
Then there's Chipotle Mexican Grill (CMG - Get Report) , which is only now recovering after the problems it had 18 months ago with customers getting ill. Cramer said it typically takes restaurants 18 months to recover from such events, which is why the time to buy Chipotle was months ago, not today.
Finally, Cramer said that smart investors snapped up shares of Facebook (FB - Get Report) long before today's announcement the company has set aside $3 billion to settle charges of privacy violations.
In each of these cases, the best time to buy was when all others had given up, long before the all-clear finally sounded.
Cramer and the AAP team are focusing on earnings this week. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Domino's Pizza
For his "Executive Decision" segment, Cramer spoke with Ritch Allison, CEO of Domino's Pizza (DPZ - Get Report) , a stock that popped 4.8% in Wednesday's session, after the company reported mixed results -- with an 11-cents-a-share earnings beat and weaker-than-expected same-store sales.
Allison said he remained excited about the company's business and the momentum it has. The company just celebrated the opening of their 16,000th store, but Allison noted that by 2025, they anticipate a footprint of 25,000 locations worldwide. That number includes another 8,000 locations in the U.S.
These additional locations are part of Domino's fortress strategy, Allison explained, which aims to provide great, consistent service while being the low-cost leader. This is accomplished by shrinking the delivery areas for their stores, so drivers can make shorter trips and customers can get their orders even faster.
Smaller delivery areas improve the economics of a Domino's location, Allison said, allowing both the drivers and the franchisees to profit.
When asked about labor, Allison mentioned that Domino's is one of the few companies with a path to becoming a business owner. Nearly 90% of all franchisees began their careers with the company as a driver or answering phones, and even many of the largest franchisees got their start in this manner.
Cramer said Domino's continues to deliver for customers and shareholders.
On Real Money, Cramer says that when we see earnings results, we're seeing the fruits of fear. Get more of his insights with a free trial subscription to Real Money.
What the Analysts Got Wrong
Many analysts were predicting doom and gloom for the first quarter of 2019. But instead, the markets have seen phenomenal earnings. Cramer listed the five things the analysts got wrong.
First, companies have seen strong free cash flow, which has allowed them to buy back tons of stock and boost their earnings per share. Next, the ongoing trade war hasn't affected many companies as expected. Companies like Nike (NKE - Get Report) and United Technologies (UTX - Get Report) have yet to see many ill effects.
Third, Cramer said employment continues to be strong, which has helped consumer spending, but it's also not so strong that we need to worry about wage inflation.
The fourth thing the analysts got wrong was the peak in commodity and freight costs, two key metrics that appeared to be on the rise in January, but have since leveled off.
Finally, there are those three additional interest rate hikes that the Federal Reserve has promised in October, but which are now off the table.
Executive Decision: Zuora
For his second "Executive Decision" segment, Cramer once again sat down with Tien Tzuo, founder and CEO of Zuora (ZUO) , the cloud subscription management company with shares that are off 4% over the past month.
Tzuo said we're beginning to see the end of the ownership economy. Take cars, he said. Unit sales continue to decline, even though the number of miles driven continues to increase. That's because many consumers under the age of 35 would rather use ride sharing than own a car themselves.
The subscription economy isn't just for software and media companies, Tzuo explained. As more companies make connected devices, the opportunities for new services is growing. That's why Zuora counts companies like Caterpillar (CAT - Get Report) among their customers, as even heavy equipment can utilize subscription-based services.
Zuora is also helping to redefine collections. In the past, a company would sell an item and if the customer didn't pay, they'd use any tactic possible to collect. But now, it's all about long-term relationships, Tzuo said, and that demands a different approach to dealing with customers.
Cramer said he doesn't understand how a great company like Zuora has shares that are so inexpensive.
Executive Decision: ServiceNow
In his third and final "Executive Decision" segment, Cramer also sat down with John Donahoe, president and CEO of ServiceNow (NOW - Get Report) , the cloud software company that saw a 13-cents-a-share earnings beat this quarter. Shares of ServiceNow are up 36% for 2019.
Donahoe explained that the power of ServiceNow is in its platform, which enables companies to digitize and automate their workflows to provide great experiences for both employees and customers. For years, the Internet and technology have been helping us at home, he said, and now those technologies, like the cloud and mobile, are coming to the workplace.
For example, ServiceNow will be introducing an employee on-boarding application that will provide a seamless experience for new employees, while simultaneously connecting to back-end systems for HR, IT, facilities, security and more.
Donahoe added that most companies now rely on four to six strategic software platforms to run their business and ServiceNow provides the platform that keeps all of those systems connected and running smoothly.
Cramer was bearish on Textron (TXT - Get Report) , Halliburton (HAL - Get Report) , Eagle Pharmaceuticals (EGRX - Get Report) , Six Flags (SIX - Get Report) , Cars.com (CARS - Get Report) , Micron Technology (MU - Get Report) and Church & Dwight (CHD - Get Report) .
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