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A New Rotation: Cramer's 'Mad Money' Recap (Monday 11/2/20)

Jim Cramer says the silver lining Monday was that investors had the opportunity  to sell the no-value stocks that have been weighing on their portfolios.
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When it comes to stocks, there's growth, there's value and then there's no value, Jim Cramer told his Mad Money viewers Monday. And with just hours to go until the election, all three categories were on display in the day's trading session.

Cramer explained that Monday's session was led by money managers responding to a research report out of JPMorgan Chase that suggested it's time to swap out of growth stocks and into some value names.

Cramer said the response to the JP Morgan piece was almost instantaneous. Stocks like Chevron  (CVX) - Get Chevron Corporation Report, Honeywell  (HON) - Get Honeywell International Inc. Report and Caterpillar  (CAT) - Get Caterpillar Inc. Report all sprang into action, closing up 3.8%, 5.2% and 3.9% respectively. Meanwhile, among the red-hot growth stocks, only Snowflake  (SNOW) - Get Snowflake, Inc. Class A Report and Tesla  (TSLA) - Get Tesla Inc Report managed to end the day higher.

But there's a problem -- several actually -- with the value over growth thesis. Cramer said, first, it's hard to hold the analysts who make these calls accountable over the long term. Second, the thesis ignores the performance of individual stocks, some of which have been phenomenal. Third, we have an election just a day away and no matter who wins, we're likely to see a COVID-19-induced economic slowdown going into the holidays.

And finally, Cramer said, there are still hopes for a post-election stimulus package, one which could spark some life back into the growth stocks.

But there is a silver lining to the day's value versus growth call, and that's the fact that investors were given a golden opportunity today to sell the "no-value" stocks that have been weighing down their portfolios.

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Executive Decision: Clorox

In his first "Executive Decision" segment, Cramer spoke with Linda Rendle, the new CEO of Clorox  (CLX) - Get Clorox Company Report, to discuss her company's strong earnings this quarter.

Rendle said Clorox remains committed to health and safety and is doing everything it can to increase capacity of wipes, disinfectants and cleaning products. The company continues to see robust sales as consumers stock up again ahead of another wave of coronavirus cases.

Rendle added that Clorox's brands are more relevant than ever to consumers. As they stay at home more, they cook more with Hidden Valley, they grill more with Kingsford charcoal and the drink more water filtered by Brita. Glad trash bags also remain popular, as Clorox has innovated with no-rip materials and clean scents.

Rendle said Clorox has increased ad spending by 30% and will continue to do so through year end to take market share and solidify their brands.

Executive Decision: Waste Management

For his second "Executive Decision" segment, Cramer also spoke with Jim Fish, president and CEO of Waste Management  (WM) - Get Waste Management, Inc. Report, which just posted a beat-and-raise quarter.

Fish explained that everyone expected revenues and volumes to be down, but fortunately, they were down less than many people expected. The other silver lining was that Waste Management discovered they can run their operation at lower costs than they expected.

When asked about the economy, Fish said Waste Management isn't beholden to any one sector of our economy. That means as retail and restaurant volumes declined along with stadiums and other venues, residential volumes picked up to offset. Housing continues to be a positive for the company, a trend Fish said he expects to continue well into 2021.

Finally, Fish commented on Waste Management's sustainability efforts. He reminded viewers that his company is America's largest recycler and they continue to make investments that turn papers and plastics into building materials. Fish said he's excited for their environmental efforts.

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Tech Opportunities, not Politics

"Forget politics and focus on opportunities," Cramer told viewers. The rally in technology isn't over, he said, and some of the biggest values are in recent tech IPOs like Corsair Gaming  (CRSR) - Get Corsair Gaming, Inc. Report, which came public on Sept. 23.

Shares of Corsair are already up 10% over the past month, but Cramer said this high-end gaming peripheral maker isn't done. The company has 18% market share in the gaming market and its high-end products are sought after by high-end gamers. While the company is spending a lot on research and development, as well as marketing, it also enjoys robust gross margins.

Cramer said there's a lot to like about Corsair, which has made the difficult transition from a commodity memory supplier into a gaming necessity. The stock currently trades at 25 times next year's earnings, which translates to just 1.4 times sales. That's a lot cheaper than rival Logitech  (LOGI) - Get Logitech International S.A. Report, which trades at 3.6 times sales, he said.

While private equity firm Eagle Tree still has a 78% stake in Corsair, Cramer said he's willing to recommend the company on the strength of the gaming market.

What's Bullish for Biden?

In his No-Huddle Offense segment, Cramer pondered what would likely happen if Joe Biden wins the White House.

One thing we know is the government would get more tough on COVID-19, Cramer said, and that means the possibility of another partial lockdown of restaurants and bars to get this pandemic under control. Under that scenario, Cramer said Amazon  (AMZN) - Get, Inc. Report will continue to be a winner, as the company has spent billions to ready itself for this pandemic. In the restaurant space, Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill, Inc. Report and Domino's Pizza  (DPZ) - Get Domino's Pizza, Inc. Report will be winners, as they also have a COVID-19 plan.

Both Target  (TGT) - Get Target Corporation Report and Walmart  (WMT) - Get Walmart Inc. Report will remain essential retailers, Cramer added, and companies like Clorox and Estee Lauder  (EL) - Get Estee Lauder Companies Inc. Class A Report will also continue to thrive. Finally, he said testing companies like Abbott Laboratories  (ABT) - Get Abbott Laboratories Report should be added to your portfolio.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:

Jumia Technologies  (JMIA) - Get Jumia Technologies AG Report: "This is speculative, but I think it's a good spec."

FibroGen  (FGEN) - Get FibroGen, Inc. Report: "I like this idea as long as you treat it as a speculative investment."

Nio  (NIO) - Get NIO Inc. (China) Report: "This one has taken off and I was late to the party. I think it goes higher."

Sabre Corp.  (SABR) - Get Sabre Corp. Report: "Saber is travel and travel isn't working right now."

CrowdStrike  (CRWD) - Get CrowdStrike Holdings, Inc. Class A Report: "I love CrowdStrike. I'd hold onto it for years."

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At the time of publication, Cramer's Action Alerts PLUS had a position in HON, ABT, AMZN.