Don't make any snap judgements during next week's trading, Jim Cramer cautioned his Mad Money viewers Friday. Earnings will still be coming fast and furious, Cramer said, which means you must always listen to the commentary, and not trade on the headlines.
Cramer said Monday could be the most treacherous day of the week as rumors are swirling that Qualcomm (QCOM) - Get Qualcomm Inc Report may be interested in buying Broadcom (AVGO) - Get Broadcom Inc. Report . If a deal happens, it'll be another leg higher for the semis, but if not, this group could turn cold.
Also on Monday, earnings from CVS Health (CVS) - Get CVS Health Corporation Report and Michael Kors (KORS) , two stocks Cramer was not a fan of, along with Skyworks Solutions (SWKS) - Get Skyworks Solutions, Inc. Report and International Flavors & Fragrances (IFF) - Get International Flavors & Fragrances Inc. Report , two stocks he does like.
Tuesday brings earnings from Emerson (EMR) - Get Emerson Electric Co. Report , Valeant Pharmaceuticals (VRX) , Marriott (MAR) - Get Marriott International, Inc. Class A Report and Take-Two Interactive (TTWO) - Get Take-Two Interactive Software, Inc. Report . Cramer was a buyer of Marriott and Take-Two, adding that Emerson and Valeant should also be good. He urged investors to stay away from Snap (SNAP) - Get Snap, Inc. Class A Report , which will also be reporting.
Thursday has earnings from a slew of retailers, including Kohl's (KSS) - Get Kohl's Corporation Report , Macy's (M) - Get Macy's Inc Report and Nordstrom (JWN) - Get Nordstrom, Inc. Report . Cramer was bearish on all three. He was more excited for Walt Disney (DIS) - Get Walt Disney Company Report and Nvidia (NVDA) - Get NVIDIA Corporation Report , but said both companies have to deliver for shares to see any lift.
Over on Real Money, Cramer explains why many of the oil stocks are too cheap to ignore. Get more on his insights with a free trial subscription to Real Money.
The Difference Is in the Expectations
Sometimes, the market seems like it loses its mind, Cramer told viewers, and that's the time you need to pounce on the opportunities presented. Case in point: the perplexing action in gaming giant Activision-Blizzard (ATVI) - Get Activision Blizzard, Inc. Report and Starbucks (SBUX) - Get Starbucks Corporation Report .
Activision posted a solid, beat-and-raise quarter, but while shares initially spiked, they collapsed after the market opened. Starbucks missed both top- and bottom-line estimates and lowered their long-term guidance, but after an initial selloff, shares rallied.
The difference between these two stocks is all in the expectations. When Starbucks disappointed last quarter, Wall Street was expecting a guide down, thus when it came today, shares were able to rally. The expectations at Activision however, are always high, making it nearly impossible for the company to impress.
Cramer said he'd be an aggressive buyer of Activision on this weakness as the company continually delivers on all of its promises. Not so with Starbucks, which still hasn't proven that even these lowered numbers are attainable.
Cramer and the AAP team view the selling in Activision Blizzard as completely overdone, making today's pullback an excellent opportunity to buy shares. 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.
Breakups and Spinoffs
If corporate breakups are a sure-fire way to make money in the market, spinoffs come a close second, Cramer told viewers. That's because not only do the smaller, more focused companies typically do better on their own, they also make terrific takeover targets.
Cramer said there are many examples of spinoffs done right.
In March of 2016, Ingersoll-Rand (IR) - Get Ingersoll Rand Inc. Report spun off Allegion (ALLE) - Get Allegion PLC Report , which is now up 29%, while Ingersoll itself is up 47%. The July 2015 spinoff of Chemours (CC) - Get Chemours Co. Report is up an astounding 647%, while the Danaher (DHR) - Get Danaher Corporation Report spinoff of Fortive (FTV) - Get Fortive Corp. Report in July 2016 has soared 43%.
There are plenty of other examples, Cramer noted, including AdvanSix (ASIX) - Get Advansix, Inc. Report , Adient (ADNT) - Get Adient plc Report and recently, Axalta Coatings (AXTA) - Get Axalta Coating Systems Ltd. Report .
Where should investors be looking for the next spinoffs? Cramer said Honeywell (HON) - Get Honeywell International Inc. Report , DowDuPont undefined and FMC Corp (FMC) - Get FMC Corporation Report are where he'd put his money.
Executive Decision: Integrated Device Technology
For his "Executive Decision" segment, Cramer spoke with Greg Waters, president and CEO of Integrated Device Technology (IDTI) - Get Integrated Device Technology, Inc. Report , the chip maker that just posted a penny-a-share earnings beat with an 11% rise in revenues.
Waters said his company's 2016 investments and acquisitions into the automotive space were slow to get started but are now on fire, growing sales by 30%. He said systems like optical radar, or LIDAR, for self-driving cars currently cost $10,000, but will eventually become just a few hundred dollars. That means they can be added to cars, tractors, farm equipment and a host of other vehicles in the future.
Waters was also bullish on wireless charging products, where Integrated Devices is a leader. He said that market is also expanding and in a few years, wireless charging will be in our cars, homes and in all of our devices.
Cramer Does His Homework
In his "Homework" segment, Cramer followed up on a few stocks that stumped him during earlier shows. He said that Mannkind (MNKD) - Get MannKind Corporation Report has been disappointing, as doctors appear to be sticking with tried and true diabetes treatments, instead of Mannkind's offerings.
Cramer said that another biotech, Fibrogen (FGEN) - Get FibroGen, Inc. Report , has interesting treatments in the pipeline for anemia, pancreatic cancer and a synthetic cornea to treat blindness. But after the stock's 161% run so far this year, Cramer would wait for a pullback and not chase it higher.
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At the time of publication, Cramer's Action Alerts PLUS had a position in ATVI, AVGO, NVDA, SBUX, DHR, DWDP.