Wall Street is like a fashion show. What's hot today probably won't be tomorrow, Jim Cramer told his Mad Money viewers Wednesday. Market rotations aren't over in just a day, however, which is why investors need to be patient and wait for stocks to come to them.
Wednesday's market rotation was again caused by positive trade chatter, Cramer explained, which gave a boost to everything from Deere & Company (DE) - Get Report to FedEx (FDX) - Get Report to all of the major banks, like JPMorgan Chase (JPM) - Get Report, Bank of America (BAC) - Get Report and even Goldman Sachs (GS) - Get Report. But that also meant many of the market's former high fliers, like Salesforce.com (CRM) - Get Report and Adobe Systems (ADBE) - Get Report needed to sell off. Railroad Union Pacific (UNP) - Get Report was an unlikely winner, posting disappointing results bur still managing to end the day up 2% as investors were hopeful for post-trade war pickup in demand.
Cramer told viewers that the long-term secular trends are still intact for technology and the cloud, which is why he remains bullish on the semiconductors like Advanced Micro Devices (AMD) - Get Report and Broadcom (AVGO) - Get Report, which remain cheap on just about every metric.
It's not time to buy quite yet, Cramer cautioned, as the rotation has not yet run its course.
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Executive Decision: Mattel
For his "Executive Decision" segment, Cramer sat down with Ynon Kreiz, chairman and CEO of toymaker Mattel (MAT) - Get Report, which has been hard at work turning itself around after its accounting was called into question.
Kreiz said Mattel's accounting issues are now behind it and the company is focused on profitability and capturing value from their existing intellectual property. Regarding profitability, Kreiz said that Mattel has reduced its manufacturing footprint and is restructuring its operations to be flexible and able to respond to market conditions. He noted that Mattel was able to respond quickly to the Baby Yoda phenomenon and will have toys on shelves as early as April.
Some of Mattel's traditional brands, like Barbie, saw a 12% increase this past quarter after being redesigned. Barbie is one of many mature Mattel brands seeing lots of innovation, he said. The company is expanding beyond just toys and into movies, games, music and more with many strong content partnerships.
Finally, when asked about China, Kreiz noted that Mattel manufactures about 66% of their toys in China, below the industry average, but it is working to reduce their exposure as part of their flexibility initiatives.
Off the Tape: Robinhood Markets
In his "Off The Tape" segment, Cramer sat down with Vlad Tenev and Baiju Bhatt, co-CEOs of the privately-held Robinhood Markets, the commission-free trading platform that's disrupting traditional brokerages. The company boasts over 10 million accounts.
Tenev started off by saying that Robinhood's mission is to empower individual investors and more than half of their new accounts are first-time investors. It's not only about commission-free trading, however. Younger investors appreciate the easy-to-use website, their mobile-centric focus and how Robinhood puts their needs first, Tenev said.
When asked about how the company makes money, the pair explained there are many avenues to make money, especially now that the company is expanding into debit cards and other financial services. Additionally, Robinhood is primarily a tech company, they said, which means they are more efficient at everything they do.
Robinhood also places emphasis on content and education, and is helping to revitalize individual investing, which had been waning in recent years.
Executive Decision: Avita Medical
Perry explained that severe burns are typically treated by taking large areas of skin from other areas of the body and using them to help spur the healing process. This process is very painful and doesn't yield aesthetically pleasing results. Avita's treatment uses significantly less donor skin to create a spray that can be applied to wide areas of the body. Their treatments have been approved for second- and third-degree burns and are available in 50% of burn centers across the country.
Not only is Avita's treatment less less painful, Perry said, it's also less costly and provides a better outcome aesthetically. Cramer said Avita's stock is speculative, but very promising.
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To Be or Not to Be - Truthful
Which is the better business model: Being a single source of truth, or the largest source of untruths? That was the question Cramer pondered as he opined on Facebook (FB) - Get Report and Salesforce.com (CRM) - Get Report.
There's a battle brewing in Washington, D.C. and around the nation about the harmful effects of advertising that isn't true. Facebook takes a hands-off, common-carrier approach, while Salesforce's Mark Benioff, advocates for truth in advertising.
Cramer said in our current political and social environment, Facebook's approach is becoming riskier and the company may have no choice but to self-censor its ads -- or the government is likely to do it for them. That's why if he had to choose one company to invest it, that company would be Salesforce.
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At the time of publication, Cramer's Action Alerts PLUS had a position in JPM, GS, CRM, FB.