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Tale of Two Recoveries: Cramer's 'Mad Money' Recap (Tuesday 8/18/20)

Jim Cramer says the stock market may be making new highs, but that doesn't mean we're in a V-shaped economic recovery.
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Don't confuse what's happening in the S&P 500 with what's happening in our nation's economy, Jim Cramer cautioned his Mad Money viewers Tuesday. The stock market may be making new highs, but that doesn't mean we're in a V-shaped recovery.

If our economy was indeed recovering, it would be the Dow Jones Industrial Average rallying, Cramer explained, and not the S&P. In fact, the stocks behind the the market's move are the opposite of recovery stocks, they're the stocks with long-term secular trends behind them.

Topping the list of the S&P 500's biggest winners is PayPal  (PYPL) , a company looking to upend the banks and move our world to contactless and digital payments. Coming in just behind PayPal are a host of semiconductor makers that are also ushering in our digital transformation, including Nvidia  (NVDA)  and Advanced Micro Devices  (AMD) , as well as Qrovo  (QRVO) , Qualcomm  (QCOM)  and a host of semiconductor supporting players like KLA Tencor  (KLAC) , Candence  (CDNS)  and Synopsis  (SNPS) .

Also making the list was Apple  (AAPL) , another perennial secular grower, and ServiceNow  (NOW) , one of Cramer's Cloud Kings helping companies big and small digitize their operations in the cloud.

None of these names are companies that show a recovering economy, Cramer said, and that's because the stock market doesn't reflect the broader economy, only a select few of our biggest companies.

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Greener Shoots

What's the best story in retail that you've probably never heard of? Well, if you were watching last night's Mad Money, you know it's GrowGeneration  (GRWG) , the hydroponics retailer that caters to cannabis growers.

Cramer said he was so struck by last night's interview that he felt GrowGeneration deserved a second look. He said it's very rare that a specialty retailer owns their category, but that's exactly what GrowGeneration has done. The company is profitable, saw 48% same-store sales growth and has plans to double its store count next year.

Every hobby has specialty retailers, Cramer explained, with the products, service and expertise needed to be successful. With cannabis legalization on another seven state ballots this year, Cramer said the growth potential for GrowGeneration could be even greater. He recommended buying the stock on any weakness.

Executive Decision: Columbia Sportswear

In his first "Executive Decision" segment, Cramer once again spoke with Tim Boyle, chairman and CEO of Columbia Sportswear  (COLM) , the outdoor apparel maker that reported sales off 40% year-over-year.

Boyle said being in the great outdoors is one of the few activities people can still do with their families while social distancing. That's why Columbia's products are still in demand and beloved by their customers.

When asked about their corporate responsibility efforts, Boyle said Columbia doesn't make the topic part of their marketing, but they do take it very seriously. Last quarter the company performed 390 surprise audits of their vendors and partner facilities to ensure Columbia's products are being made in the way they expect them to be made.

Columbia also continues to innovate with new technologies and fabrics that are guaranteed to keep you warm this winter.

Regarding the company's e-commerce efforts, Boyle explained that Columbia not only has their own website for direct-to-consumer sales, but they also work with many retail partners to ensure that everyone can buy Columbia products online from the comfort of their homes.

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Executive Decision: eHealth

For his final "Executive Decision" segment, Cramer checked back in with Scott Flanders, CEO of eHealth  (EHTH) , the online insurance marketplace with shares down 29% in the past month after the company's earnings have come under scrutiny.

Flanders said eHealth remains in a great business. He said with over 11,000 seniors turning 65 every day, the demand for affordable insurance under Medicare Advantage is booming and eHealth has a lot of momentum.

When pressed about the company's 42% churn rate, Flanders explained that it is critical to retain their customers and while they were focused on growth, retention got out of control. However, after auditing the situation, it was determined that 90% of their churn was of their own doing, and eHealth has made significant changes to address it.

Flanders said they're hired more internal agents to assist customers, have incentivized their agents to focus on retention and have a dedicated retention team that is continually improving their model to keep customers happy.

Cramer said it was important for Flanders to admit the problems and outline their plans to fix them. More importantly, Flanders also just purchased 50,000 shares of eHealth as a sign of conviction that they have the situation under control.

Off the Charts: U.S. Dollar

In his "Off The Charts" segment, Cramer checked in with colleague Larry Williams over the trajectory of the weakening U.S. , which Williams predicts could now be poised for a rally. 

Williams first looked at a monthly chart of the dollar index, overlaying it with the Commitment of Traders (COT) Report, noting that with so many bearish speculators, the dollar is likely to rally. This theory was confirmed by overlaying the dollar against crude oil prices, which also signal the dollar's next move is higher.

For still more corroboration, Williams looked at the seasonal patterns for the dollar, which typically bottoms in early September. Even when comparing the dollar to gold prices, which trade inversely, the trend for the dollar appears to be higher.

Cramer said he could easily discount any of these trends given the state of global affairs. However, when they all signal that the dollar is ready to rally, and no one is expecting it to, that means a powerful move, and lots of opportunity, could be in the cards for the coming weeks.

Lightning Round

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

Livongo Health  (LVGO) : "This one is coming back. This is the telemedicine powerhouse and is a must-buy."

Amarin  (AMRN) : "This one is doing nothing and I'm not going to bless it right now. "

Celsius Holdings  (CELH) : "This one has been on fire. I'm going to do a segment on this company."

EQT Corp.  (EQT) : "I think you need to sell EQT. Natural gas is a terrible place to be. "

D.R. Horton  (DHI) : "All of the home builders have been on fire as people are fleeing the cities."

CBRL Group  (CBRL) : "If you think travel is coming back, then this is a good idea but I'm not recommending anything other than Darden Restaurants  (DRI)  and Brinker International  (EAT) ."

WestRock  (WRK) : "No, there's still too much cardboard."

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