We made it through what has historically been the worst month of the year, Jim Cramer proclaimed to his Mad Money viewers Friday. Despite Trump, Congress and a few other hurricanes, stocks are looking pretty good heading into October, Cramer said, as he laid out his game plan for next week's action.
Cramer said he'll be watching cable provider Altice USA Inc. (ATUS) - Get Altice USA, Inc. Class A Report on Monday, as the company is set to lose ESPN as it continues to fight with Walt Disney (DIS) - Get Walt Disney Company Report over fees. Cramer said he still likes Disney longer-term, but the deal with Altice could shape the future of cable.
On Tuesday, homebuilder Lennar (LEN) - Get Lennar Corporation Class A Report reports, along with Paychex (PAYX) - Get Paychex, Inc. Report . Cramer said he still finds Lennar and KB Home (KBH) - Get KB Home Report compelling, and he'd buy Paychex on any weakness.
Thursday has more to love, with Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report , Costco (COST) - Get Costco Wholesale Corporation Report and Yum China (YUMC) - Get Yum China Holdings, Inc. Report all reporting. Cramer said he likes all three and would buy more on any earnings-induced weakness.
Finally, on Friday, it's the latest non-farm payroll numbers, which will be impossible to read given the hurricane disruptions. Cramer said the banks may be the winners, as analysts will likely interpret any number as a good one and call for higher interest rates.
Cramer and the AAP team think it's a good idea to lock in some gains ahead of Pepsico's earnings next week. 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.
With AI, Think Big
When it comes to artificial intelligence, are we thinking too small? According to Cramer, way too small.
Cramer said Thursday night's interview with Applied Materials (AMAT) - Get Applied Materials, Inc. Report President and CEO Gary Dickerson really hit home. The more data we collect, the more AI we will need to make sense of it all and learn from it.
We're still in the very early innings of AI, Cramer said, and to date, only Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report , Amazon and perhaps the privately-held Spotify have harnessed its power. All three of these companies seem to know what's coming before it happens, and that means their competitors will have no choice but to also use AI to stay competitive.
That means that chips from Nvidia (NVDA) - Get NVIDIA Corporation Report and equipment from Applied Materials are no longer boom-and-bust names, they're secular growth companies with years of strong growth ahead of them.
Roku on Your Watchlist?
Shares of Roku (ROKU) - Get Roku, Inc. Class A Report have been on fire since their IPO earlier this week, rising 68% on Thursday and another 13% today. Is the company still a buy now that the much-anticipated unicorn has been released?
Not so fast, Cramer cautioned viewers. There's a lot to like at Roku, including strong sales, expanding gross margins and, after this week, a strong balance sheet. But there are also reasons for concern.
While none of Roku's competitors are focused solely on TV streaming like Roku is, the company does still have a growing number of sizable foes, including Apple (AAPL) - Get Apple Inc. (AAPL) Report , Alphabet (GOOGL) - Get Alphabet Inc. Class A Report and Amazon, along with a host of smaller streaming services.
But most concerning for Cramer was Roku's lack of a path to profits. The company isn't losing a ton of money, he said, but they also haven't made much progress since 2015. With the insider-selling lock-up release looming in just a few months, Cramer said he'd take a pass on Roku for the time being.
Executive Decision: PREIT
For his "Executive Decision" segment, Cramer sat down with Joseph Coradino, chairman and CEO of Pennsylvania Real Estate Investment Trust (PEI) - Get Pennsylvania Real Estate Investment Trust Report , a retail REIT with shares that are down 45% so far this year. Shares currently yield over 8%.
Coradino said the talk of the retail Armageddon is overdone. Retail is indeed changing and evolving, but there will still be winners as well as losers.
Coradino added that PREIT was early in seeing the shifting consumer patterns and sold 42% of their lesser performing malls. He said those that remain, are in great markets in Philadelphia and Washington, DC and are in locations that retailers need to be in if they want a national footprint.
As for the ailing department stores, Coradino noted that when a department store closes, PREIT is typically able to increase rents by as much as eight times. In Scranton, Penn., he said, one department store was replaced with a Dick's Sporting Goods (DKS) - Get Dick's Sporting Goods, Inc. Report and a HomeGoods, part of TJX Companies (TJX) - Get TJX Companies Inc Report , and foot traffic doubled -- a big win for every tenant at that mall.
When asked about winning trends, Coradino said that they continue to focus on dining and entertainment with companies like Dave & Busters (PLAY) - Get Dave & Buster's Entertainment, Inc. Report and also with discount and off-price retailers.
In the Lightning Round, Cramer was bullish on General Dynamics (GD) - Get General Dynamics Corporation (GD) Report , Raytheon (RTN) - Get Raytheon Company Report , MasTec (MTZ) - Get MasTec, Inc. Report , Commercial Metals (CMC) - Get Commercial Metals Company Report , Altria (MO) - Get Altria Group Inc Report and LAM Research (LRCX) - Get Lam Research Corporation (LRCX) Report .
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets. The first portfolio included Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report , 3M (MMM) - Get 3M Company Report , Lockheed Martin (LMT) - Get Lockheed Martin Corporation (LMT) Report , Take-Two Interactive (TTWO) - Get Take-Two Interactive Software, Inc. Report and Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report .
The second portfolio's top holdings included Apple, Amazon (AMZN) - Get Amazon.com, Inc. Report , Celgene (CELG) - Get Celgene Corporation Report , Chevron (CVX) - Get Chevron Corporation Report and West Pharmaceuticals (WST) - Get West Pharmaceutical Services, Inc. Report .
Cramer identified two-of-a-kind in this portfolio as well and suggested selling West and adding Dow DuPont undefined .
The third portfolio had Apple, TD Ameritrade (AMTD) - Get TD Ameritrade Holding Corporation Report , Bank of America (BAC) - Get Bank of America Corp Report , Micron Technology (MU) - Get Micron Technology, Inc. (MU) Report and Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report as its top five stocks.
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At the time of publication, Cramer's Action Alerts PLUS had a position in PEP, AAPL, GOOGL, NVDA, TJX, DWDP.