Earnings season is here again, Jim Cramer told his Mad Money viewers on Thursday evening. And while fears about weak results are weighing on the markets, investors should keep their eyes open for stocks that report not better-than-expected earnings, but rather, results that are not-as-bad-as-feared.
PepsiCo (PEP) - Get Report reported on Thursday before the open and shares rallied to new all-time highs on the report. While the results were solid, they mostly helped ease investors' concerns, as shares sold off in the prior session.
In other words, the quarter was not as bad as feared, Cramer reasoned.
So what other companies should investors be looking for, that could also report not-as-bad-as-feared results?
Look no further than JPMorgan Chase (JPM) - Get Report and Abbott Labs (ABT) - Get Report . Both companies have great management and have come off the highs, Cramer said. Don't forget about Facebook (FB) - Get Report and CVS Health (CVS) - Get Report , as well.
Then there's American Express (AXP) - Get Report and Starbucks (SBUX) - Get Report , two stocks investors have gotten too negative on recently. Additionally, Merck (MRK) - Get Report is one of the few drug stocks that investors can bank on right now.
Several of these stocks are holdings in Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Save 57% during our fall sale: Join Cramer's AAP investment club to become a smarter investor. Click here to sign up and save.
Executive Decision: Constellation Brands
"We had a really strong quarter," Newlands said, despite the stock's 6% selloff on Thursday. The core business was solid -- with strong growth from Modelo -- while Constellation reported its best quarterly margins ever.
So what went wrong? Investors were likely tripped up on a few accounting details. Because of new accounting rules, Constellation had to show a $484 million equity loss on its Canopy Growth (CGC) - Get Report holdings.
However, keep in mind the company is still up more than $750 million on its stake, he said.
Canopy Growth is the best capitalized and current leader in cannabis sales, he added. Plus, they have the regulatory and scientific knowledge to excel in the industry. When cannabis becomes legal in the U.S., Canopy is already well positioned to dominate that market, too.
Newlands said he is confident on the company's coming Corona seltzer product, launching in March 2020, and said tariffs are having very little impact on business.
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.
Reflecting on Ulta
When Ulta reported earnings in late August, not many investors were prepared for the 30% one-day decline that it suffered. Shares were sold in the days and weeks after the results as investors rid their portfolios of the stock.
The company missed on earnings, revenue and same-store sales. Worse, management cut its outlook for each of the three metrics as well. The insider selling from April suddenly made a bit more sense.
But we've seen an interesting development after this brutal decline.
First, some of those insiders have started buying again, and unlike selling, there's only one reason to buy: Because they think the stock will go back up.
Further, the stock has begun to rebound recently, but slipped 2% on Thursday. Cramer said he believes the rebound is real and that investors who like the name should consider buying a portion of their desired allocation now and more on a deeper decline.
It's true the stock has a slower growth rate than before, but Ulta is still doing well as a retailer in this environment. However, its valuation now looks a lot more attractive than it did earlier this year, he reasoned.
Am I Diversified?
On the show's "Am I Diversified" segment, Cramer looked at viewers' portfolios to see if they were properly diversified.
The first viewer's top five holdings included Microsoft (MSFT) - Get Report , Nvidia (NVDA) - Get Report , Cerner (CERN) - Get Report , Exelon (EXC) - Get Report and Aerojet Rocketdyne (AJRD) - Get Report .
These are all great companies. However, because Nvidia and Microsoft tend to trade together, he suggested selling Microsoft in favor of a solid retailer, such as Costco Wholesale (COST) - Get Report .
This portfolio is very well diversified, Cramer said.
The third caller's portfolio included Roku (ROKU) - Get Report , Advanced Micro Devices (AMD) - Get Report , CVS Health (CVS) - Get Report , Qualcomm (QCOM) - Get Report and Etsy (ETSY) - Get Report .
Cramer blessed the portfolio as diversified, saying even though PepsiCo and Diageo are beverage companies, they don't trade together and sell different types of products.
On the show's "No-Huddle Offense," Cramer was talking trade. The WTO ruling out of Europe was favorable for the U.S., with many investors expecting the White House to use the ruling as a bargaining chip to get better long-term trade deals put in place.
Instead, the president forged ahead with several new tariffs on European goods. While that didn't make Wall Street happy, money managers know it could have been much worse, Cramer said. But this isn't the development we need.
While Cramer is all for cracking down on China, fighting a two-front trade war isn't going to work out well. Thankfully, our economy is humming along right now. But as more tariffs continue to roll out, the harder the hurdles will become. Large entities are already struggling with decision paralysis, because they don't know what the next escalation will be. The solution? Start making some progress on the trade deals, Cramer reasoned.
In the Lightning Round, Cramer was bullish on Yeti (YETI) - Get Report , Raytheon (RTN) - Get Report , Bristol-Myers Squibb (BMY) - Get Report , Ventas (VTR) - Get Report , BP Inc. (BP) - Get Report and Waste Management (WM) - Get Report .
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At the time of publication, Cramer's Action Alerts PLUS had a position in PEP, JPM, ABT, FB, CVS, MSFT, NVDA, DIS, HON, BP.