Some companies are taking the bull by the horns and riding this pandemic to profits, Jim Cramer told his Mad Money viewers Tuesday. Cramer said that through a combination of ingenuity and a little luck, many of this quarter's standout stocks are poised to go higher again next quarter.
Many of this quarter's biggest winners are now household names. Stocks like Zoom Video (ZM) - Get Report, Netflix (NFLX) - Get Report, PayPal (PYPL) - Get Report, Tesla (TSLA) - Get Report and Apple (AAPL) - Get Report were among the biggest gainers in the second quarter, but they weren't the only ones. Cramer said he's betting on Regeneron Pharmaceuticals (REGN) - Get Report to be a leader in the race for a vaccine, while chips from Nvidia (NVDA) - Get Report will continue to power many of our hottest technology trends.
But beyond these names are a host of lesser-known companies that are helping small businesses transition online. Cramer liked Shopify (SHOP) - Get Report, Twilio TWLO, Fastly (FSLY) - Get Report, Etsy (ETSY) - Get Report, Wix (WIX) - Get Report and Adobe Systems (ADBE) - Get Report, all of which have surged as operating online became essential.
Executive Decision: ConAgra Brands
In his first "Executive Decision" segment, Cramer spoke with Sean Connolly, president and CEO of ConAgra Brands (CAG) - Get Report, the packaged foods maker that just posted a nine-cents-a-share earnings beat.
Connolly said consumers aren't just stocking their pantries, they're rediscovering the joys and values of eating at home with their families. We've all been conditioned to eat out at restaurants, he said, but now that we're all constrained financially, people are rediscovering the brands of ConAgra.
Among the standouts this quarter was a 62% increase in Chef Boyardee, a brand that Connolly said stands for both quality and value. Duncan Hines was also strong, as millennials and Gen-X consumers rediscovered baking at home.
Connolly said frozen foods are the perfect foods for this environment, as they are restaurant quality but still easy to prepare.
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Entire Industries, Small Business Face Extinction
In his "No-Huddle Offense" segment, Cramer said with government assistance programs winding down, we urgently need another round of stimulus to save our small business economy.
Restaurants are a precarious business even during the best of times, Cramer said, but in our new world, if you don't have a drive-thru, it's almost impossible to turn a profit. The same with retail. Only a handful of retailers will be able to pivot to an omnichannel world, while the rest will wither and die while not being able to pay their rent. The big box retailers will survive; they're deemed essential, Cramer said, but everyone else is not.
There are whole industries that could be wiped out. Health clubs will disappear, as only the biggest chains can afford the new cleanliness requirements. Then there are all of the countless businesses that support movie theaters and sporting events. All of these areas favor only the largest of operators, while the little guys will vanish without additional assistance.
Executive Decision: Crown Castle International
For his second "Executive Decision" segment, Cramer also spoke with Jay Brown, president and CEO of Crown Castle International (CCI) - Get Report, the cell tower operator that's gearing up for the 5G wireless revolution.
Brown explained that the shared infrastructure model allows carriers to deploy services quicker and save up to 50% from building their own towers. Once towers are constructed, they require little maintenance, he said, and multiple carriers and services can all share the same tower, adding to Crown Castle's profit margin.
When asked about the Sprint merger with T-Mobile (TMUS) - Get Report, Brown said that the combined company will still be spending big on the rollout of 5G, which will more than offset any revenue lost by combining the number three and four players. He was also bullish on Dish Network (DISH) - Get Report, which has also committed to a nationwide rollout of cellular services beginning in 2021.
Finally, Brown commented on the recent movements for social change. He said our way of life is built on equality for all and the inequalities we're seeing are bad for everyone.
Executive Decision: Dave Cote
Cote said he drew many lessons from his time at Honeywell. He said success is often about achieving two opposing things at the same time. You typically can't have both profit margins and market share, growth and control. But great CEOs know how to balance short-term profits with the long-term needs of the company.
Cote also said being a successful CEO requires intensity. Too many CEOs fall victim to their calendar, letting the urgent get in the way of the important. CEOs need to always take time to think and to plan and to see the big picture.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, NVDA, PEP.