Are the big money managers betting on a return to normal? Jim Cramer told his Mad Money viewers Wednesday that he's compiled a "go" list of stocks, and when these "headlight" stocks are all heading higher, you'll know the markets are heading higher.
Cramer has repeatedly told viewers never to bet against American science. He's always known a vaccine or cure for COVID-19 was coming. The only question was when. That's why his list of touchstone stocks hold the key, as they all signal a recovery is at hand.
There are several industrial stocks on Cramer's "go" list, all of which need strong global markets. They included DuPont (DD) - Get Report, which rallied 3% today, along with 3M Co. (MMM) - Get Report, Emerson Electric (EMR) - Get Report, PPG Industries (PPG) - Get Report and Nucor Corp. (NUE) - Get Report. Among the group, 3M was Cramer's favorite.
Retail also made Cramer's list, with PVH (PVH) - Get Report, Ralph Lauren (RL) - Get Report and Nike (NKE) - Get Report representing the group. Cramer said these stocks will only head higher when investors are betting on a strong holiday season.
Rounding out the list was railroad Union Pacific (UNP) - Get Report, which will only rally when global commerce is returning to normal, and Mastercard (MA) - Get Report, which needs global travel to return. Mastercard closed up 4.3%.
When all of these stocks go green, Cramer said we'll know the return to normal has begun and money managers are betting on the recovery. Tuesday saw many of these stocks end higher, which means we may be getting close.
Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. 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: Beyond Meat
In his first "Executive Decision" segment, Cramer spoke with Ethan Brown, president and CEO of Beyond Meat (BYND) - Get Report, the plant-based meat alternative that saw its shares fall after reporting inline earnings for the quarter.
Brown said he's very excited about Beyond Meat's partnership with KFC. He said they've been working on chicken alternatives for years and the combination of their products with KFC's seasoning and presentation is exceptional. Their initial trial was scheduled to last a month, but sold out in less than two weeks.
Beyond Meat is using the pandemic to expand their reach and market share, Brown said. The company was equally split between retail and food service sales at the beginning of the year, but now has 88% retail as consumers have been cooking more at home. Their retail revenues are up 192% for the year.
Brown said the question is no longer are consumers willing to pay more for a better alternative. He said Beyond Meat will ultimately produce their products for less than the cost of animal protein. They just need to continue to add scale.
Executive Decision: Xilinx
For his second "Executive Decision" segment, Cramer spoke with Victor Peng, president and CEO of Xilinx (XLNX) - Get Report, the semiconductor maker that just posted a nine-cents-a-share earnings beat.
Peng said Xilinx saw a strong first half of the year, even with the pandemic, thanks to a resilient business and their strong and diverse end markets. While some investors chose to focus on short-term impacts of trade restrictions with China, Peng noted that China should not be the narrative for Xilinx.
Xilinx continues to innovate in key end markets, including streaming video. The company just introduced two new video streaming appliances that offer the lowest cost per channel for diode providers. Peng added that video meetings and movies aren't going away anytime soon.
No talk about semiconductors would be complete without discussing 5G wireless. Peng said 5G is still in the early innings and Xilinx is planning on at least three generations of 5G chips as the technology continues to be refined.
Cramer said Xilinx is now one of the cheapest semiconductor stocks out there.
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.
Executive Decision: Sempra Energy
For his final "Executive Decision" segment, Cramer checked in Jeff Martin, CEO of Sempra Energy (SRE) - Get Report, the utility making big moves, thanks in part to activist investors. Shares on Sempra trade for 17 times earnings and yield 3.3%.
Martin said after transforming and simplifying their business, Sempra is now a top-tier growth and income story. The company has sold off all of their non-core assets and is now concentrating on its core businesses in core markets.
Martin noted that they just completed construction on their LNG export terminal, which has a tolling model that provides income no matter where the gas is going. By owning the infrastructure, Martin said Sempra collects rent whether the gas shows up or not.
Sempra is also bullish on green hydrogen, Martin explained. He admitted that it's still early for hydrogen, but being early allows them to carve out a leadership position for when hydrogen becomes a more prevalent fuel source.
When Sellers Get it Wrong
There's a big difference between making a mistake and having an appalling lapse of judgment, Cramer told viewers, as he questioned the action in four terrific stocks that headed lower Wednesday.
Investors took shares of Wendy's (WEN) - Get Report down almost 6% after the company reported earnings, just as they did last quarter. The only problem? Wendy's is a terrific company and shares will rally again, just as they did last quarter.
Then there were the sellers of Regeneron (REGN) - Get Report, which dipped 3.6% by the close. Regeneron reported excellent earnings, including its treatment to help severe cases of COVID-19. Cramer says it's a big mistake to be selling Regeneron.
Finally, there was the announcement of a merger between Teladoc (TDOC) - Get Report and Livongo Health (LVGO) - Get Report. Cramer called the combination "brilliant" and said anyone selling on this news needs to have their head examined.
"If you sold any of these stocks today, you will regret it," Cramer concluded.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:
Royalty Pharma RPRX: "This is one you want to hold onto. I like it."
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
At the time of publication, Cramer's Action Alerts PLUS had a position in DIS, MA.