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Optimism Rises: Cramer's 'Mad Money' Recap (Tuesday 4/28/20)

Jim Cramer says the bulls are back, and investor confidence is bolstered by support from the Fed and the U.S. Treasury.
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Why is Wall Street so confident the economy can reopen without significant health consequences? That was the question Jim Cramer posed to his Mad Money viewers Tuesday. There is a lot of optimism in the stock market, he said, and the bulls are gaining steam.

There's a growing feeling that it's time for America to get back to work, Cramer said. Too many people are out of work and our country can't expect them to use up all their savings while we wait. There's also a sense that COVID-19 is about to run its course and we'll see declines in new cases. 

Investors have also been buoyed by the unprecedented level of support from the Federal Reserve and the Treasury. These programs are far from perfect, Cramer said, but they've ensured that at least our largest companies can survive. 

Investors are also bullish on stocks with stable dividend income, especially those that have recently raised their payouts. There are also hopes for a quick vaccine, even though testing will take months. 

As Americans become more restless, the need to reopen the economy only grows, Cramer concluded. That's why it makes sense that some stocks will be doing better a few months from now than they are right now. But some industries, like sports venues and cruise lines, will be struggling for longer.

Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. 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.

Executive Decision: Nucor

For his "Executive Decision" segment, Cramer spoke with Leon Topalian, the new president and CEO of steelmaker Nucor  (NUE) - Get Nucor Corporation Report

Topalian said at the end of the day, low cost wins. That's why Nucor has been the lowest-cost steel provider and will continue to be so. The company is not over-leveraging itself and is making smart investments and decisions to secure its future. Nucor also remains committed to its shareholders through its dividend. 

Topalian was bullish on the most recent round of steel tariffs. He said there will be plenty of steel looking for a home as economies reopen, making it vital that we have comprehensive fair trade reforms. He also said that we need to take a second look at our global supply chain. America needs to become a nation that builds and makes things again, especially when it comes to steel, pharmaceuticals, protective equipment and medical supplies. 

Cramer said when it comes time to own a cyclical stock, Nucor will be the one to own. 

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Executive Decision: Centene

In his second "Executive Decision" segment, Cramer checked in with Michael Neidorff, chairman and CEO of Centene  (CNC) - Get Centene Corporation Report, the health plan provider that now covers one out of every 15 Americans after its recent acquisition of Wellcare. 

Neidorff said that Centene is now roughly five times bigger than it was just five years ago and he is very proud of its position, liquidity, strong balance sheet and the fact it's serving some of the most vulnerable people who need affordable healthcare. 

When asked about our current economic outlook, Neidorff said you can't measure COVID-19 quarter-by-quarter. He said we are experiencing depression-level unemployment and that demands you take a long-term approach. It's very likely we will see a second or even third peak in COVID-19 cases, he said. No company was prepared to send their workforce home. Centene transitioned 66,000 people to working from home in just three days.

Some Stocks Deserve Better

Stop saying stocks have rallied too far, Cramer told viewers. When the market crashed in late February and early March, investors panicked, selling the good along with the bad. But that doesn't mean that everything deserved to trade markedly lower. 

Case in point: Wendy's  (WEN) - Get Wendy's Company (The) Report, the fast-food chain with a stock that plunged from $24 a share to just $7 on March 18. That's a 71% decline and the definition of what a crash looks like, Cramer said. 

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But Wendy's is a well-run company and an iconic brand. The company is deemed essential almost everywhere, which is why only 3.5% of their locations are currently closed. They also excel at drive-through and delivery. When Wendy's last reported, the company updated investors on the precautions they're taking to keep employees safe and noted they're seeing no disruptions in their supply chain. 

While Wendy's did suspend their stock buyback and took down additional revolving credit lines, Cramer said management is just being cautious. Shares have already recovered to $20 a share and trade at just 24 times 2022 earnings, when COVID-19 will hopefully be a distant memory. 

Cramer said he would not be a buyer at current levels, but Wendy's is a perfect example of a stock that didn't deserve to trade at just $7 a share.

Refining Oil Opportunities

In his "No-Huddle Offense" segment, Cramer clarified his recommendation of a few oil stocks on last night's show. He said while he remains bearish on the entire oil industry long-term, there are moments when certain sectors, including oil, are right for a trade. Last night, Carley Garner noted that while oil futures for June trade for just $13 a barrel, in the out years, they trade for significantly higher. That creates an opportunity, Cramer said, and that's the opportunity he called out last night.

The same applies to the home builders. No one is going to buy a home with double-digit unemployment, Cramer said, but in the short term, stocks like DR Horton  (DHI) - Get D.R. Horton Inc. Report could make for a terrific trade.

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 Tuesday evening: 

Prudential Financial  (PRU) - Get Prudential Financial Inc. Report: "I think that payout is too high and it concerns me. Don't reach for yield."

Spirit AeroSystems  (SPR) - Get Spirit Aerosystems Holdings Inc. Report: "I don't want to be in anything aerospace."

General Motors  (GM) - Get General Motors Company Report: "I have no long case for GM. There's no earnings momentum here." 

American Airlines  (AAL) - Get American Airlines Group Inc. Report: "I'd sell half your position. We're worried how the earnings are doing." 

Dynatrace  (DT) - Get Dynatrace Inc. Report: "I'm going to say yes to that one."

Health Catalyst  (HCAT) - Get Health Catalyst Inc Report: "Go with Veeva Systems  (VEEV) - Get Veeva Systems Inc. Class A Report, that's the one to own." 

Helmerich & Payne  (HP) - Get Helmerich & Payne Inc. Report: "That is the best house in a bad neighborhood. I'm not going there."

Chemed  (CHE) - Get Chemed Corp Report: "No, that's too hard."

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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.