Our economy isn't in as bad shape as the naysayers would have you believe, Jim Cramer told his Mad Money viewers Monday, but in the short term, the markets will continue to favor the slow-down stocks.
Cramer said investors have a host of things they're worried about. They worry the trade war will lower economic growth. They also fear falling U.S. Treasury yields, despite the fact that low rates are great for our economy. But even with such prevalent doom and gloom, Cramer said there are stocks that can transcend all of these worries.
First, Cramer recommended owning gold, either with the SPDR Gold Shares ETF (GLD - Get Report) , or with Barrick Gold (GOLD - Get Report) or Agnico-Eagle Mines (AEM - Get Report) . Next, he said, stocks with big dividend yields are also safe bets, as are consumer staple stocks like Bristol-Myers Squibb (BMY - Get Report) .
Finally, Cramer recommended WATCH, his acronym for retailers with enough scale to overcome and absorb most of the tariff pressures. WATCH includes Walmart (WMT - Get Report) , Amazon (AMZN - Get Report) , Target (TGT - Get Report) , Costco (COST) and Home Depot (HD - Get Report) .
After locking in some gains Monday morning, Cramer and the AAP team added to their position in Burlington Stores (BURL - Get Report) . 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.
Even Good Stocks Can Fall
Sometimes, even good stocks can be bad, Cramer warned viewers. Case in point: Dollar Tree (DLTR - Get Report) and Darden Restaurants (DRI - Get Report) , two stocks that have been faring well as of late, but still have one fatal flaw.
While investors worry that Dollar Tree, and its rival Dollar General (DG - Get Report) , will be hit hard by tariffs, Cramer said both of these chains are savvy operators that know how to navigate rising costs. As for Darden, Cramer said in a strong economy, this company's restaurants become go-to destinations. Both stocks are also cheap, trading at 19 times earnings for Darden and 18 times earnings for Dollar Tree.
So what is the fatal flaw investors need to be worried about? Both companies are part of the the S&P 500, and when protests occur in Hong Kong or Treasury yields plunge, investors don't ask questions, they sell the entire S&P. Cramer said he could see Darden falling to as low as 17 times earnings and Dollar Tree as long as 15 times earnings before the selling subsides, which is why investors need to remain cautious.
On Real Money, Cramer says these are buying opportunities, but the timing isn't quite right. He thinks most investors need to to wait until things play out to commit new money. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: Take-Two Interactive
For his "Executive Decision" segment, Cramer again sat down with Strauss Zelnick, chairman and CEO of Take-Two Interactive (TTWO - Get Report) , the video game maker that just posted a monster 22-cents-a-share earnings beat that included a 46% rise in sales year-over-year.
Zelnick said Take-Two continues to focus on creating the best digital entertainment in the world and keeps delivering innovative new titles that their customers love. He said they've been very happy with NBA 2K, which saw sales rise 140% after a slow start. In countries like China, Zelnick said NBA 2K is now a nine-to-10-month experience for most players and they're working to make it a full-year experience.
Another hot title for Take-Two is Red Dead Redemption 2, the western-themed game that has already sold more than 25 million units. Zelnick said the world was ready for a western and Red Dead gives them an experience they won't find anywhere else.
When asked about those who link video game violence to real violence, Zelnick said it's disrespectful to the victims of real violence to link it to entertainment. He said Take-Two's titles are sold around the globe, but gun violence in America is a problem different from those of other countries.
Executive Decision: Keurig Dr. Pepper
In his second "Executive Decision" segment, Cramer sat down with Bob Gamgort, chairman and CEO of Keurig Dr. Pepper (KDP) , the beverage company with shares that are up 11.6% for the year and up more than 20% since company's merger a little over a year ago.
Gamgort said his company is the perfect mix of renovation and innovation, reviving old brands and creating new ones. He said Dr. Pepper is growing thanks to new, limited-edition flavors, while Canada Dry ginger ale now commands 70% market share and is also growing thanks to new flavors and innovations.
As for the company's other namesake, Keurig, Gamgort said over 28 million homes now have a Keurig brewer and that brand also keeps innovating with new brewers like the forthcoming "Duo" brewers which will allow the brewing of both single-serve as well as pots of coffee. Keurig is also working hard to reduce its environmental footprint with recyclable K-Cups that have already debuted in Canada.
When asked about other hot topics like alcoholic beverages and tariffs, Gamgort said Keurig's distribution network is for non-alcoholic beverages, which is why they've partnered with Anheuser-Busch Inbev (BUD) . As for tariffs, Gamgort said in the short term the company estimates an impact of $10 to $15 million, but that will be mitigated by 2020.
Executive Decision: Evolus
In his final "Executive Decision" segment, Cramer welcomed back David Moatazedi, president and CEO of Evolus (EOLS) , the Botox competitor with shares that are up 48% so far in 2019.
Moatazedi said Evolus launched Jeuveau, their anti-wrinkle Botox rival, on May 15 and easily surpassed their first 90-day sales goals. After receiving over 20,000 patient surveys, the company has learned that for nearly a quarter of patients, this was their first aesthetic procedure and many others are already switching from Botox due to the compelling value.
Moatazedi added that this is an exciting time to be in the aesthetics space, as Jeuveau is the first new product in over a decade. Based on current trends, his product will be the No. 2 player in the space within its first 24 months.
In the Lightning Round, Cramer was bullish on AMAG Pharmaceuticals (AMAG - Get Report) , Okta (OKTA - Get Report) , Survey Monkey (SVMK) , Interpublic Group of Companies (IPG - Get Report) , Revolve Group (RVLV) , Ventas (VTR - Get Report) and Planet Fitness (PLNT - Get Report) .
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