Pockets of Strength: Cramer's 'Mad Money' Recap (Wed. 5/6/20)

Jim Cramer wonders if strength in tech and healthcare can counteract more very bad unemployment news.
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Friday's jobs report is going to be bad, Jim Cramer warned his Mad Money viewers Wednesday, but that doesn't mean there aren't pockets of strength.

Technology and healthcare continue to lead the markets higher, Cramer said, that's why stocks like Shopify  (SHOP) - Get Report, Amazon  (AMZN) - Get Report and PayPal  (PYPL) - Get Report continue to rally. Also heading higher, companies that are levered to China's reopening economy.

One company at the intersection of technology, health and retail is CVS Health  (CVS) - Get Report, which is why Cramer spoke with Larry Merlo, CEO of CVS, for an update on the company's outlook. 

Merlo said the pandemic has been a validation of their omnichannel strategy. The company has been working hard to serve their communities with retail, pharmacy, HealthHubs, digital products and now COVID-19 testing.

When asked about their testing efforts, Merlo said CVS has administered 100,000 tests at select locations and is working to bring "swab-and-send" testing to 1,000 locations nationwide. They continue to work with the CDC and the medical supply chain to get testing into the hands of everyone who needs to be tested. CVS is also working with businesses to help craft their return-to-work testing needs.

As the economy slowly reopens, Merlo said customers can expect CVS to return to normal hours of operation. The company also continues to offer telemedicine for COVID-19 and non-COVID-19 issues for their Aetna members.

Merlo concluded by saying that CVS remains committed to its dividend and is also paying down debt to strengthen its balance sheet.

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Digital Advertising

Back in the old days, if you wanted to advertise nationally, you had three choices, Cramer told viewers. There was ABC, NBC and CBS. Fast forward to today and we once again only have three choices, but now they're Alphabet  (GOOGL) - Get Report, Facebook  (FB) - Get Report and Amazon.  

Digital advertising on the web is now controlled by just these three players, Cramer explained. That was made clear by the stunning drop in ad spending practically everywhere else. Snap  (SNAP) - Get Report, Twitter  (TWTR) - Get Report and Pinterest  (PINS) - Get Report all saw sharp declines, while the New York Times  (NYT) - Get Report was only buoyed by strong digital subscription sales. 

Perhaps the only area of the advertising world that isn't controlled by these new big three is live sports, Cramer added, but in a COVID-19 world with no live sports, it became crystal clear just how important Google, Facebook and Amazon have become. 

Executive Decision: Beyond Meat

For his second "Executive Decision" segment, Cramer spoke with Ethan Brown, president and CEO of Beyond Meat  (BYND) - Get Report, the plant-based meat alternative that saw a 140% surge in sales this quarter that sent shares up 26% by the close. 

Brown explained that there are patterns emerging that prove our global food chain is under pressure. Whether it's swine flu in Asia, avian flu in Ireland or meat processing plant closures here in the U.S., the world cannot sustain the current ratio of animals to human. "We've reached a tipping point," Brown noted, and it's clear the world needs better alternatives.

With meat prices surging, Beyond Meat is becoming more price competitive every day, Brown said, and people are learning about the many benefits of their products, like less fat, less sodium and no genetically modified or artificial ingredients.

Beyond Meat has partnered with McDonald's  (MCD) - Get Report and Starbucks  (SBUX) - Get Report to help get the word out and Brown said there will be additional trials and partnerships coming this summer.

Executive Decision: Mattel

For his third "Executive Decision" segment, Cramer checked in Ynon Kreiz, chairman and CEO of toymaker Mattel  (MAT) - Get Report, which Wednesday announced a wider-than-expected 56-cents-a-share earnings miss. The company has been plagued by supply disruptions, retail closures and now delays in movie releases. 

Kreiz explained that Mattel started the year with strong sales, but saw sharp declines beginning in March as retailers focused on essential items to deal with the COVID-19 crisis. The company saw some improvements in April. 

Kreiz added that online sales continue to grow strongly, but they're not yet able to offset the decline at traditional retail.

Mattel still has strong brands, Kreiz added, and his company has been able to gain market share in gaming, while Barbie remains the No. 1 fashion doll in the world. It's still too early to tell what the retail environment will look like for the holiday season.

As for Mattel's finances, Kreiz said the company refinanced its short-term debt with nothing coming due until 2023. They entered the year with $600 million in cash, and credit facilities of $1.6 billion if needed. He said Mattel has the liquidity they need to weather this crisis.

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Executive Decision: Waste Management

In his final "Executive Decision" segment, Cramer checked in Jim Fish, CEO of Waste Management  (WM) - Get Report, which has seen its shares fall from $126 to $97 in this economic shutdown. 

Fish said Waste Management has responded well to the pandemic. Nearly 20,000 of the company's employees transitioned to work-from-home in just five days, he said, while the rest remain on the front lines collecting trash, using precautions.

When asked about their volumes, Fish explained that residential collections are seeing 25% more trash per can, but large swaths of their commercial business has declined to zero with retail, restaurants, sporting events and schools being shuttered. Fish expected many businesses to bounce back once the economy reopens, but was unclear how new social distancing requirements would affect the economy over the long term.

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 Wednesday evening: 

Crowdstrike  (CRWD) - Get Report: "This is the best cybersecurity stock for our work at home economy. I also like Okta  (OKTA) - Get Report."

Camping World  (CWH) - Get Report: "I think that camping will make a comeback. Winnebago Industries  (WGO) - Get Report reported a good number." 

Apache  (APA) - Get Report: "Let's take the money and go. "

Lam Research  (LRCX) - Get Report: "This is the finest semiconductor equipment company in the world but trade tensions are high." 

General Dynamics  (GD) - Get Report: "You need to take a long view. The whole group is under pressure."

United Natural Foods  (UNFI) - Get Report: "This one is good, then it's bad. It's too hard for me."

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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN, CVS, GOOGL, FB, SBUX.