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Reflation and Rotations: Cramer's 'Mad Money' Recap (Tuesday 2/23/21)

Jim Cramer says it's not too late to buy the cyclical stocks that will benefit as our economy reopens.
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Sometimes the jargon on Wall Street can be confusing, Jim Cramer told his Mad Money viewers Tuesday. That's why Cramer has dedicated himself to decoding and demystifying the investing gibberish to put things into plain English for everyday investors.

You may have heard the term "reflation," for instance. Cramer said this is simply having inflation after a long period without. During inflation, it's wise to sell growth stocks in favor of cyclical stocks. Apple  (AAPL) - Get Apple Inc. Report can't charge more for iPhones in a growth environment, for example, but airlines, hotels and theme parks can.

But what does "inflation" really mean? Cramer explained it's an erosion in value of money. Money is worth less in the future. That means those future earnings from the high-flying electric vehicle SPACs are now worth a lot less.

"Inflation scare" was the next term in Cramer's investing dictionary. He said this is when investors assume the Federal Reserve will raise interest rates to fight inflation. But Cramer noted that with so much unemployment, it's unlikely the Fed would move rates higher.

Finally, Cramer explained the term "risk off," which is a confusing way to say investors are looking to take on less risk when interest rates are likely to rise.

What do all of these new terms mean for individual investors? Cramer said it's not too late to sell the speculative growth stocks that have been getting hammered as of late. It's also not too late to buy the cyclical stocks that will benefit as our economy reopens.

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.

Don’t miss Cramer’s best, every day, with fast, actionable strategies: StreetLightning.

Executive Decision: Brink's Co.

In his first "Executive Decision" segment, Cramer spoke with Doug Pertz, president and CEO of Brink's Co.  (BCO) - Get Brinks Company (The) Report, shares of which surged 6.3% Tuesday after the company reported a strong 63-cents-a-share earnings beat.

Pertz said that cash isn't going away anytime soon. In fact, the total amount of cash in circulation is up 16% since the pandemic began, which is in line with other recent periods of uncertainty.

But even though Brink's is best known for its cash processing services, Pertz noted that the company's future lies in digital cash management solutions which will allow retailers to manage their cash in new ways.

When asked about their environmental efforts, Pertz noted that reducing emissions is a priority for the company. They work hard to plan the most efficient routes possible to reduce the total number of miles traveled. The company is also working on dual-fuel vehicles that can travel on diesel and cleaner natural gas.

Executive Decision: Conagra Brands

For his second "Executive Decision" segment, Cramer also spoke with Sean Connelly, president and CEO of Conagra Brands  (CAG) - Get ConAgra Brands Inc. Report, the packaged foods giant with shares down 2% over the past three months.

Connelly said Conagra is always changing with the times. Consumers are now online and on their devices, and that's why 80% of their advertising budget is now digital. Consumers also don't want brands preaching at them, which is why Conagra leans heavily on social media influencers and endorsements to tell the world about their many brands.

When asked whether the trend of eating more at home was here to stay, Connelly said he thinks it is. There's no doubt that people will be working more from home going forward, which means more breakfasts and lunches in your kitchen. There will also be more entertainment at home now that some movies will be released direct to streaming. That means more snacking.

Turning to the topic of brands and packaging, Connelly noted that every generation wants modern products and packaging, which is why Conagra puts a lot of effort into keeping all of their brands current. Consumers are willing to pay more, he said, but only if you embrace design thinking.

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Executive Decision: Charles River Labs

For his final "Executive Decision" segment, Cramer checked in Jim Foster, chairman, president and CEO of Charles River Labs  (CRL) - Get Charles River Laboratories International Inc. Report, the contract research company helping the biotech and pharma industries bring better, safer products to market faster.

Foster started off by saying that Charles River worked on 80% of all the drugs that have been approved over the past three years, as well as many that weren't. They provide critical services to help companies discover, test and ultimately get their drugs to market faster than ever before.

Cell and gene therapy is a hot area, Foster noted, and now accounts for 10% of Charles River's revenues. There are over 2,000 new drugs being developed in this space, with two-thirds of them still in pre-clinical development.

Biotechs are clearly the engines of growth in the pharmaceutical industry, Foster added. That's how we were able to develop COVID vaccines in record time using messenger RNA technologies. There are countless companies with cutting-edge technologies that all need testing, development and clinical trial services from Charles River.

Lessons From GameStop

In his No Huddle Offense segment, Cramer opined on the lessons learned from the great GameStop  (GME) - Get GameStop Corporation Report debacle.

The consensus seems to be that the Reddit revolution had the hedge funds on the ropes until Robinhood and others halted trading. But Cramer said in reality, this massive short-squeeze, while brilliantly executed, was never going to last forever. The huge surge in trading uncovered a number of flaws in our regulatory system, but there was no conspiracy.

Cramer said some of who he calls the "rebels without a cause" are more concerned with being right, even if they lose money. But if you're not investing to make money, then you have no business investing.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:

Vertex Pharmaceuticals  (VRTX) - Get Vertex Pharmaceuticals Incorporated Report: "I don't know why this one is as low as it is."

QuantumScape  (QS) - Get QuantumScape Corporation Class A Report: "They've got the better battery. I don't want you to bail on this one."

Canopy Growth  (CGC) - Get Canopy Growth Corporation Report: "Canopy is still heading higher. I want to buy Canopy."

eXp World  (EXPI) - Get eXp World Holdings Inc. Report: "This is a real deal company and they're doing fantastic things."

Fuelcell Energy  (FCEL) - Get FuelCell Energy Inc. Report: "I'd take some profits and let the rest ride."

Dish Network  (DISH) - Get DISH Network Corporation Report: "No, no. Too risky for me."

Luminar Technologies  (LAZR) - Get Luminar Technologies Inc. Report: "This whole group is cooling off."

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL.