Knowing what a read-through means is a great way to spot winners that others may miss, Jim Cramer told his Mad Money viewers Thursday, but only if the company you're taking your cues from is credible.
Cramer said investors can learn a lot from Micron Technology's (MU) - Get Micron Technology, Inc. (MU) Report conference call this quarter, as the company laid out for investors just how strong their business is becoming. Even with shares already up 58% for the year, Micron told investors that this quarter was the bottom and it will only get better from here.
What's the read-through? Cramer said if flash memory is strong, that means Western Digital (WDC) - Get Western Digital Corporation Report can be bought. And if the data center is strong, that mean you should buy Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report and Nvidia (NVDA) - Get NVIDIA Corporation Report. Cramer remains bullish on 5G wireless, recommending stocks like American Tower (AMT) - Get American Tower Corporation Report. He was also bullish on Facebook (FB) - Get Facebook, Inc. Class A Report and Alphabet (GOOGL) - Get Alphabet Inc. Class A Report.
Not all companies are credible, however. Cramer again called out FedEx (FDX) - Get FedEx Corporation Report as a serial disappointer. There is no read-through from the FedEx conference call, he said, as FedEx's problems are all their own. Darden Restaurants (DRI) - Get Darden Restaurants, Inc. Report also disappointed in a self- inflicted way, Cramer said, with poor promotions and sloppy executions. The read-though from Darden is to buy Chipotle Mexican Grill (CMG) - Get Chipotle Mexican Grill, Inc. Report.
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The Market Isn't Always Right
Stocks are supposed to represent the future earnings potential of a company, and our stock market is designed to put a value on those those earnings using all of the information available at the time. It's a system that works perfectly, Cramer told viewers, except when it doesn't.
"The markets are a mess," Cramer quipped, and stocks are mis-priced all the time. Just look at ConAgra Foods (CAG) - Get Conagra Brands, Inc. Report, which shot up 19% over the past two weeks, he said. Back when the company announced the acquisition of Pinnacle Foods, investors panned the stock, calling the acquired brands like Bird's Eye vegetables and Duncan Hines tired and worthless. Yet in less than two years, ConAgra turned them into winners.
Then there's Rite Aid (RAD) - Get Rite Aid Corporation Report, the pharmacy chain that even Cramer panned just Wednesday night. Thursday, the stock surged 42% after the company reported a stellar quarter.
Finally, Cramer called out ViacomCBS (VIA) - Get Viacom Inc. Class A Report, a stock that is now among the cheapest in the S&P 500. Even with increased streaming competition, Cramer said the markets are valuing Viacom all wrong.
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IPOs of 2019
As 2019 winds to a close, is it time to take a second look at some of this year's hottest IPOs? Cramer said while most have been beaten down since their debut, there are a few diamonds in the rough.
Levi Strauss (LEVI) - Get Levi Strauss & Co. Class A Report is one of those gems. Shares ran from $17 to $22 a share before sliding to just over $16. But with solid revenue growth and a ton of innovation, Cramer said Levi is more than just a clothing company. He felt the stock was a buy.
Also making the grade, Kontoor Brands (KTB) - Get Kontoor Brands Inc. Report, the spinoff of VF Corp. (VFC) - Get V.F. Corporation Report, which trades at just 10.7 times earnings and has a 5.6% dividend.
In the ridesharing space, Cramer said Lyft (LYFT) - Get Lyft Inc Class A Report is getting its act together, and Uber Technologies (UBER) - Get Uber Technologies, Inc. Report is holding up remarkably well given the wave of insider selling. Cramer still thinks Uber should sell it non-core businesses, like UberEats, to make itself more attractive.
Many IPOs are still too pricey to own. That was Cramer's take on Zoom Video (ZM) - Get Zoom Video Communications (ZM) Report, which trades at 22 times sales, and CrowdStrike (CRWD) - Get CrowdStrike Holdings, Inc. Class A Report, which is off 22% from its IPO price but still sells for 12x sales.
Finally, Cramer said that Pinterest (PINS) - Get Pinterest, Inc. Class A Report needs to get its act together before he can recommend it, but Revolve (RVLV) - Get Revolve Group, Inc Class A Report has great growth and can be bought right now.
Executive Decision: Emergent BioSolutions
For his "Executive Decision" segment, Cramer spoke with Robert Kramer, CEO of Emergent BioSolutions (EBS) - Get Emergent BioSolutions Inc. Report, the vaccine maker that landed a $2 billion government contract to provide smallpox vaccines.
Kramer said our government remains vigilant about protecting its people and military from biologic threats and continues to stockpile items like vaccines to ensure they're prepared. The benefits of immunizing against known diseases far outweigh the risks, he said.
Our country also continues to fight the opioid epidemic, Kramer said, and 97% of insurance plans now cover Narcan, their treatment for opioid overdose. The U.S. government spent $1.8 billion last year on items like Narcan, but also invested heavily in education and awareness for the 21 million patients who are prescribed opioids every year.
Off the Tape: ThoughtSpot
In his "Off The Tape" segment, Cramer sat down with Sudheesh Nair, CEO of the privately-held data analytics company, ThoughtSpot.
Nair explained there have been two big trends over the past five years. Companies are collecting more data than ever before, especially from things and mobile devices, and they are moving all of that data to the cloud. That means new tools are needed to provide insights so companies can make better decisions.
Data is all about discovery. Every answer you get from your data often spawns 10 more questions. Companies need tools that let users explore and have machine learning to find answers even before they're asked.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in NVDA, FB, GOOGL, ABBV.