Politics and money do mix, Jim Cramer assured his Mad Money viewers Monday. They just don't mix that easily for the stock market.
Cramer reminded viewers that stocks trade on earnings per share, not on emotions per share. So no matter what your opinions of Donald Trump's executive orders, there will always be opportunities if you know where to look.
Today's selloff in the market made perfect sense, Cramer said, and ultimately wasn't as bad as some had feared.
The Trump rally is based on his promises for lower taxes, deregulation and the repatriation of funds. Anything that gets in the way of that, such as talk of immigration and border walls, creates uncertainty and investors loath uncertainty.
So what should investors make of CEOs that publicly denounce Trump's policies? Ultimately, these comments should have no impact on stock prices, Cramer said, but then again, we do have a president who likes to retaliate against his most vocal critics.
In the end, Cramer said he still sees opportunities in some sectors, such as aerospace, the banks, semiconductors and the home builders. Even some retailers managed to rally today.
Wondering how to play a Trump backlash? Cramer says that as the border tax issue gets shaky, retailers are showing signs of revival. Check out Cramer's strategies with a free subscription to Real Money.
Still Weighing the Trump Effect
President Trump impacts the stock market like no other, Cramer old viewers, so prepare your investment plans and don't get rattled.
Take today's simple meeting with small business leaders. In the span of just minutes, Trump announced that he negotiated a deal with Lockheed Martin (LMT) to reduce the price of the F-35 fighter jet by $600 million. That may not seem like a lot for a multi-billion dollar project, but it's a win for the government and it shouldn't be too detrimental to Lockheed.
Trump then said he wants oil pipelines and drilling companies to only use U.S.-made steel. This is big news for U.S. steelmakers since imports from Mexico have been considerably cheaper for years.
Finally, Trump spoke of dismantling the banking reforms known as Dodd-Frank, which would certainly be a win for banks. All of this news came from just one meeting, Cramer said, which is why Trump is becoming so important to your portfolio.
Know Your IPO
In his "Know Your IPO" segment, Cramer highlighted the stock of REV Group (REVG) , the maker of specialty vehicles that went public this past Friday.
When you think REV Group, think school buses, fire trucks, ambulances, street sweepers and mobility vans. The company is the No. 1 or No. 2 player in 72% of the categories in which it sells. REV Group is also run by "Mad Money" Wall of Fame CEO Tim Sullivan, former CEO of Bucyrus.
Cramer said there's a lot to like about REV Group, including strong demographic trends in its favor and solid performance in 2016, including 11% sales growth and a 32% rise in net income.
On the downside however, Cramer was not thrilled with the company's balance sheet, nor its private equity sponsor, which still has shares to sell.
Since its IPO, shares of REV Group are up 2.6%, putting them at 40 times earnings, far more than a company like RV maker Thor Industries (THO) , which trades at 16.
Cramer said he'd be a buyer of Thor today, but would wait for weakness, or perhaps a secondary offering, before pulling the trigger on REV Group.
Executive Decision: United Rentals
For his "Executive Decision" segment, Cramer sat down with Michael Kneeland, president and CEO of United Rentals (URI) , the equipment rental company that posted blowout earnings last week, including a 43-cents-a-share earnings beat, positive commentary for 2017 and an acquisition.
Kneeland said that rising employment has been the biggest driver for his business. While last year saw a lot of uncertainty and an overhang from low oil prices, this year he's seeing more confidence from consumers and CEOs alike.
United Rentals is also enjoying positive cashflows, which affords it the flexibility to grow via acquisition, something the company was able to do this quarter.
As for the Trump agenda, Kneeland confirmed that a pickup in infrastructure spending, oil pipelines and a border wall would all be accretive events to United Rentals' bottom line.
Cramer said the United Rentals is indeed a Trump stock, but it's also one that does well when the economy does well.
Cramer was bearish on United States Steel (X) .
Executive Decision: Ethan Allen
In his second "Executive Decision" segment, Cramer spoke with Farooq Kathwari, chairman, president and CEO of Ethan Allen (ETH) , the furniture retailer that just posted a penny-a-share earnings beat off of previously lowered expectations. Shares declined 12% after the report.
Kathwari admitted that Ethan Allen was up against some tough comparisons this quarter, but noted that the company will be increasing marketing spending by 20% because after years of restructuring, its products, manufacturing, designers and retail network is now ready to handle the growth.
Kathwari continued by noting that beginning next month, Ethan Allen will begin a national TV campaign, along with digital and print advertising that will help lure customers back to stores. He was also optimistic on a new partnership with Walt Disney (DIS) to bring 500 new Disney-themed items to stores.
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At the time of publication, Cramer's Action Alerts PLUS had a position in CSCO.