Next week, health-care stocks and bank stocks will take center stage, Jim Cramer told his Mad Money viewers Friday, but only one of the two groups will be investible.
That's why Cramer said he'll be listening for news coming from Celgene (CEL) - Get Cellcom Israel Ltd. Report , Amgen (AMGN) - Get Amgen Inc. Report , Allergan (AGN) - Get Allergan plc Report , an Action Alerts PLUS holding, and Regenron (REGN) - Get Regeneron Pharmaceuticals, Inc. Report , all of which are set to present. Of the four, Cramer said he's sticking with Allergan and Amgen.
The conference continues on Tuesday with presentations from Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report , Pfizer (PFE) - Get Pfizer Inc. Report , Alkermes (ALKS) - Get Alkermes Plc Report and Valeant Pharmaceuticals (VRX) . Cramer said he'll be watching for news from all four companies.
Then on Thursday, it's earnings from Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report , used car king Carmax (KMX) - Get CarMax, Inc. Report and cloud software company Splunk (SPLK) - Get Splunk Inc. Report . Cramer was bullish on Delta, but wanted to hear more from Carmax and Splunk.
Finally on Friday, the banks begin to report. This is a group that benefits both from President-elect Donald Trump's proposed deregulation and from rising interest rates. Cramer was bullish on JPMorgan and Bank of America (BAC) - Get Bank of America Corp Report , but held Wells Fargo (WFC) - Get Wells Fargo & Company Report , another Action Alerts PLUS name, as his favorite in the group.
Eyes on the Skies
Stocks get less attractive as they go higher, Cramer reminded viewers, and that's certainly been the case with the airlines, which have only seen a cold dose of reality since we rang in the new year.
The airlines had been on a tear since the election, Cramer noted, as Trump's pro-business agenda was thought to be a huge tailwind for the group.
But already in January, the airlines have seen not one, but two analyst downgrades. According to the analysts, it was multiple expansion, not earnings growth, that has taken these stocks higher. And with rising fuel and labor costs, gross margins will come under increasing pressure.
Cramer said he agrees that the airline stocks have run too far, too fast, which means the easy money has already been made and investors need to be more selective. Among the group, Cramer remained a fan of United Continental (UAL) - Get United Airlines Holdings, Inc. Report and of everyone's favorite low-cost carrier, Southwest Airlines (LUV) - Get Southwest Airlines Co. Report .
Is it time to crown a new king of beers? After speaking with Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report CEO on Thursday night's show, Cramer said it was time to take a fresh look at the beer sector to see if a reshuffling is in order.
In the past, Cramer has been a fan of both Constellation as well as Molson Coors (TAP) - Get Molson Coors Brewing Company Class B (TAP) Report , which was able to snap up all the Miller and Coors brands last year for $12 billion. That deal is expected to boost Molson's earnings by 25% this year.
But in the company's most recent quarter, which does not include the recent additions, Molson's beer volumes shrank by 7%. The company also continues to struggle with currency headwinds.
Constellation, however, expects beer sales to increase 16% to 17% next year, and has growth in high-end wines, tequila and whiskey to further bolster earnings.
While some investors worried that Constellation may come under fire from Donald Trump for importing beer from Mexico, Cramer said he feels those fears are overblown and are already baked into the share price. You can't brew a Mexican beer outside of Mexico, after all.
Even though Constellation shares trade at 22 times earnings, as compared to Molson's 17 times earnings, Cramer said he'd still go with Constellation, which deserves its premium price tag.
In his "Homework" segment, Cramer followed up on a few stocks that had stumped him during earlier shows. He said that he's taking a pass on Toro (TTC) - Get Toro Company Report , a stock that's just off its highs and trades at a premium to rival Deere & Company (DE) - Get Deere & Company Report .
Finally, Cramer said Hudson Technologies (HDSN) - Get Hudson Technologies, Inc. Report was a great stock to own in 2016, when shares soared 170%, but this year, he cannot recommend this high-flying refrigeration company.
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In the Lightning Round, Cramer was bullish on Western Digital (WDC) - Get Western Digital Corporation Report , Twilio (TWLO) - Get Twilio, Inc. Class A Report , Adient (ADNT) - Get Adient plc Report , Salesforce.com (CRM) - Get salesforce.com, inc. Report , AT&T (T) - Get AT&T Inc. Report and Verizon (VZ) - Get Verizon Communications Inc. Report .
Cramer was bearish on Ferrellgas Partners (FGP) - Get Ferrellgas Partners, L.P. Report , Realty Income (O) - Get Realty Income Corporation Report , Synergy Pharmaceuticals (SGYP) - Get Synergy Pharmaceuticals Incorporated Report , Avis Budget Group (CAR) - Get Avis Budget Group, Inc. Report and HubSpot (HUBS) - Get HubSpot, Inc. Report .
Take a closer look at what Cramer said about these stocks in Friday's Lightning Round.
In his "No Huddle Offense" segment, Cramer said the market's radical rally since the election is all about companies like farm equipment maker AGCO (AGCO) - Get AGCO Corporation Report . Most investors have never even heard of AGCO, but over the past few years, the company's been quietly acquiring distressed brands and revitalizing them.
AGCO has also been doing something else, Cramer noted: buying back its own stock, reducing its share count from 99 million shares in 2013 to just 80 million shares today.
What does that mean for investors? It means that as growth forecasts are now rising, there simply aren't enough shares to go around, which sends prices higher.
AGCO is not alone, Cramer said. There are countless companies that have also been reducing debt, making smart acquisitions and buying back stock -- and all of them are now poised to see their shares trade markedly higher as the global economy improves.
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At the time of publication, Cramer's Action Alerts PLUS had positions in AGN and WFC.