The markets received some good news about a possible coronavirus vaccine, Jim Cramer told his Mad Money viewers Monday. But if we see another outbreak, all of the stocks that rallied could come right back down. That's why Cramer advocated a barbell strategy of owning the biggest winners, both with and without COVID-19.
Today's positive clinical trial news from Moderna (MRNA) was indeed encouraging, but it's just one step in the long road toward a vaccine, Cramer cautioned viewers. Investors traded the news like a vaccine is a sure thing, but that's anything but the case.
Moderna is a terrific company, Cramer said, and if anyone can speed through the drug discovery process, it will likely be Moderna, he said, but seeing crowded beaches and long lines outside reopening restaurants is too much, too soon.
It may be years before everyone is able to be vaccinated, Cramer said, yet investors were snapping up the stocks of airlines, cruise lines and hotels like travel will magically resume tomorrow. That's how stocks like Nucor (NUE) were able to rally 7.3%, as investors anticipate a resurgence of economic activity that is still a long way off.
For now, Cramer said investors should continue to own stocks of companies that do well in a pandemic, like his COVID-19 index.
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Executive Decision: Avaya
For his "Executive Decision" segment, Cramer spoke with Jim Chirico, president and CEO of Avaya Holdings (AVYA) , the communications provider that reported strong earnings last week. Shares of Avaya are up 58% over the past month.
Chirico had positive things to say about his company's recent partnership with RingCentral (RNG) . He said they're only 40 days into the agreement, but they've already signed their first 7-figure deal for the new offerings. He said Avaya is very excited about the opportunities the new partnership will provide for both companies.
Avaya continues to support COVID-19 response efforts with communications systems for various states that provide patients with their test results. Chirico said that by using automation and SMS messaging, results are being disseminated faster than ever. Avaya is also a leader in work-from-home communication systems, helping hundreds of thousands of employees transition to home in just days.
Chirico said Avaya is a lot more than just video conferencing like Zoom Video (ZM) . He said they provide an entire suite of services for businesses and large enterprises, complete with the security and management tools businesses require.
Executive Decision: Denny's
In his "Executive Decision" segment, Cramer spoke with John Miller, CEO of Denny's (DENN) , the restaurant chain with 1,700 locations and shares that plunged from $22 to just $5 amidst the pandemic.
Miller said Denny's is open, clean and ready for business. The chain has partial inside dining available at 521 of its locations, with takeout and delivery available at the remainder. They are taking all safety precautions, including masks and temperature checks for all employees and proper social distancing inside their restaurants.
When asked how franchisees have been coping with the pandemic, Miller noted that 70% of their franchisees own fewer than five locations, so they've been focused on raising liquidity and taking advantage of government programs. At the corporate level, Denny's has also been focused on increasing liquidity and shoring up their balance sheet so they're best able to provide for their franchisees.
Miller said 96% of Denny's locations are franchised and just about all of them now have delivery service available via third-party providers.
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Executive Decision: Mass General Brigham
For his final "Executive Decision" segment, Cramer checked in Scott Sperling, chairman of Mass General Brigham, one of our nation's largest health systems, for an update on how the healthcare system is faring.
Sperling said Mass General increased their ICU bed capacity to 900 ahead of the pandemic, and is currently at 33% of that peak capacity. He said they continue to learn about COVID-19, and with new treatments like Gilead Sciences (GILD) Remdesivir, the average hospital stay has fallen from six days to four days and the average ICU stay from 14 days to just 10 days.
But while they are making progress, Sperling said many community hospitals on verge of not making payroll and many non-COVID patients still need care. Mass General has seen 30% fewer cancer diagnoses in recent weeks, not because cancer rates have fallen but because patients are scared to visit a hospital. There are many patients who need care and many hospitals that need non-COVID patients and procedures in order to survive.
Never Sell into the Panic
Remember the old adage, "sell in May and go away?" Cramer told viewers those old trading philosophies haven't held up in years, but this year, the narrative is evolving quickly. Just a few weeks ago, companies were suspending their guidance, and dividends, as we entered the most downbeat portion of the pandemic so far.
But now, just a few short weeks later, the lockdowns are slowly lifting, the Federal Reserve continues to prop up companies by any means necessary and we're about to hear from our biggest retailers, Walmart (WMT) , Target (TGT) and Costco (COST) , all of which should have some positive things to say.
Famed investor Peter Lynch once said that more money has been lost preparing for corrections than in the corrections themselves. Cramer said that's why he never advocates selling into the panic. For those who sold just a few weeks ago, it may already be too late to buy back in.
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Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Monday evening:
Seattle Genetics (SGEN) : "I like these guys very much. They have an amazing pipeline."
Qorvo (QRVO) : "These are all levered to 5G wireless. They're not my favorite but they're good."
Penske Automotive Group (PAG) : "This stock is way too cheap."
Virtu Financial (VIRT) : "This is a smart company. They deserve a higher multiple."
Energy Transfer (ET) : "I'd dump that tomorrow."
Mastercard (MA) : "This is levered to world commerce and that's hurt the stock."
RingCentral: "I think RingCentral is terrific."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, COST, MA.