Individual stock picking is about to make a comeback, Jim Cramer told his Mad Money viewers Thursday, thanks in part to a slew of hot new IPOs and individual companies doing extraordinary things.
Beginning Friday with Lyft, Cramer said there are nearly $1 trillion worth of IPOs coming to the market, and many of them are household names that will spark the interest in individual investors. That will be significant given that 50% of all new money entering the markets simply goes to index funds, rather than to individual stocks.
The second thing helping to encourage stock picking, the stocks themselves. TodOn Thursday, PVH (PVH) - Get PVH Corp. Report shares rallied 14.8%, a gain Cramer said was totally attainable by anyone paying attention to the company. Five Below (FIVE) - Get Five Below Inc. Report jumped 8.1% on the day thanks to its stellar earnings performance. Cramer said this Action Alerts PLUS holding remains a buy. Finally, he recommended Lululemon Athletica (LULU) - Get lululemon athletica inc. Report , the athletic apparel maker that shot up 14.1% on another solid quarter.
Even the beleaguered Wells Fargo (WFC) - Get Wells Fargo & Company Report managed a 2.6% gain on the news it's CEO, Tim Sloan, will be stepping down. Cramer said he wouldn't chase this stock, but noted it's another example of individual companies doing right by its shareholders.
When it comes to stocks, no expectations are the best expectations, Cramer told viewers. Case in point, Apple's (AAPL) - Get Apple Inc. Report new credit card, which received little love from analysts after the company's event earlier this week.
Cramer said while the analysts have paid little attention to the Apple Card, consumers are intrigued. That could make the new service a big win for Apple and its partner Goldman Sachs (GS) - Get Goldman Sachs Group Inc. (The) Report . Goldman remains the cheapest of the banks, trading at just five times earnings, while Apple trades for less than 15 times earnings. If the Apple Card sparks any interest from consumers, the upside for both companies could be sizable.
Cramer said he's betting with both companies.
Picks Require Homework
The key to picking individual stocks is being able to tell a great company from a bad one. All it takes is a little homework.
In the packaged foods space, both Mondelez (MDLZ) - Get Mondelez International Inc. Report and Kraft Heinz (KHC) - Get The Kraft Heinz Company Report were similarly valued this time last year. Mondelez had a marketcap of $58 billion while Kraft was valued at $52 billion. Since then however, Mondelez has gained 21%, while Kraft has plunged 46%.
On the surface, both of these companies appear identical. They sell similar products into the same markets and have similar costs. Both companies also make acquisitions to grow and then cut costs to improve their bottom lines. The difference however, is in the execution.
Cramer said Kraft uses a mallet when it cuts costs, but Mondelez cuts with a scalpel and uses surgical precision. So while Mondelez has seen its sales stay essentially flat as it divests businesses to move into more lucrative ones, Kraft has been forced to take write downs and slash its dividend.
Cramer was still a fan of Mondelez, but told investors to steer clear of Kraft Heinz.
Executive Decision: Broadridge Financial
For his "Executive Decision" segment, Cramer sat down with Rich Daly, chairman of Broadridge Financial Solutions (BR) - Get Broadridge Financial Solutions Inc. Report , as Financial Literacy Month is about to kick off and investors gear up proxy season, when many companies allow shareholders to vote on a host of issues.
Daly explained to viewers that with every share of stock comes the right to vote and let your voice be heard. And while many investors may not think their vote matters, many important decisions have been decided by retail investors just like you. Daly was happy to report that 70% of shareholders Broadridge services have registered to vote electronically, which means they can vote from their mobile device in just a few minutes.
Even if their aren't contentious issues at stake, like Bristol-Myers Squibb's (BMY) - Get Bristol-Myers Squibb Company Report planned acquisition of Celgene (CELG) - Get Celgene Corporation Report or fights with activist investors, Daly said it's important for shareholder to voice their support or non-support for a company's current management.
Also important to note for mutual fund shareholders, paper reports and materials will be phased out over the next two years. If you'd like to still receive paper annual reports, shareholders will need to register with Broadridge.
In the Lightning Round, Cramer was bullish on Eli Lilly (LLY) - Get Eli Lilly and Company Report , Nucor (NUE) - Get Nucor Corporation Report , HCP (HCP) - Get HashiCorp Inc. Report , Ventas (VTR) - Get Ventas Inc. Report , Splunk (SPLK) - Get Splunk Inc. Report , Spotify (SPOT) - Get Spotify Technology S.A. Report , Shopify (SHOP) - Get Shopify Inc. Class A Subordinate Report and Canopy Growth (CGC) - Get Canopy Growth Corporation Report .
Cramer was bearish on Pure Storage (PSTG) - Get Pure Storage Inc. Class A Report , Texas Capital BancShares (TCBI) - Get Texas Capital Bancshares Inc. Report , Snap (SNAP) - Get Snap Inc. Class A Report , Canada Goose (GOOS) - Get Canada Goose Holdings Inc. Subordinate Report and DowDuPont undefined .
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets. The first portfolio included Amazon (AMZN) - Get Amazon.com Inc. Report , Walt Disney (DIS) - Get The Walt Disney Company Report , Microsoft (MSFT) - Get Microsoft Corporation Report , McDonald's (MCD) - Get McDonald's Corporation Report and American Water (AWK) - Get American Water Works Company Inc. Report .
Cramer said this was a perfect portfolio.
The second portfolio's top holdings included Tesla (TSLA) - Get Tesla Inc. Report , Estee Lauder (EL) - Get Estee Lauder Companies Inc. (The) Report , Fifth Third Bank (FITB) - Get Fifth Third Bancorp Report , Waste Management (WM) - Get Waste Management Inc. Report and Intuitive Surgical (ISRG) - Get Intuitive Surgical Inc. Report .
Cramer reviewed this portfolio and determined it too was properly diversified.
The third portfolio had Enterprise Product Partners (EPD) - Get Enterprise Products Partners L.P. Report , Cyrus One (CONE) - Get CyrusOne Inc Report , ConEd (ED) - Get Consolidated Edison Inc. Report , Apple (AAPL) - Get Apple Inc. Report and Crown Castle (CCI) - Get Crown Castle International Corp. (REIT) Report . as its top five stocks.
Cramer also blessed this portfolio as properly diversified.
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At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long FIVE, AAPL and GS.