We Want the Truth: Cramer's 'Mad Money' Recap (Wednesday 1/29/20)

Jim Cramer says a lot of CEOs pay lip service to transparency, but he explains why genuine honesty can drive a company's success.
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Investors just want to hear the truth, Jim Cramer told his Mad Money viewers Wednesday. That's why when you get the truth from a company, you should see it as a buying opportunity.

Case in point: Apple  (AAPL) - Get Report, a stock that a year ago decided to stop reporting iPhone unit sales. Investors cried foul, assuming the company was hiding something. But on Tuesday, the company reported that iPhone sales had grown to $55.96 billion, and thanks to new financing options, it turns out that unit sales are indeed an obsolete metric. 

Then there's General Electric  (GE) - Get Report a company long known for its confusing and almost completely opaque accounting. But shares rose 10.3% on its most recent quarterly report, as GE continues to turn the tide and be as transparent as possible with shareholders. 

But perhaps the best example of transparency on Wednesday was Boeing  (BA) - Get Report, which popped 1.7% after the company admitted that it has no idea when its 737 Max will return to air. Boeing did reaffirm its backlog, however, and gave its best estimates for how much the Max is likely to cost them. 

In all of these cases, investors have been too cynical, Cramer concluded. That's why when you hear the truth, you should consider it a gift.

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Don't Drop the Ball

High-flying tech stocks are a lot like wide receivers in football, Cramer told viewers. When everything goes right, things are explosive, but you definitely don't want to be there when they drop the ball. 

One example is Shopify  (SHOP) - Get Report, the best non-Amazon  (AMZN) - Get Report e-commerce play. Shopify helps small businesses set up shop online and the stock has been unstoppable, up over 20% so far in 2020. Shopify is a wider trader, however, selling off harder than the average stock on marketwise pullbacks.

Streaming media company Roku  (ROKU) - Get Report is another high-growth tech stock with volatile trading. The stock soared 201% last year, but also suffers from more than its fair share of highs and lows.

Cramer said it's tough to value companies with explosive revenue growth. He still likes both of these stocks, but only on weakness. 

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Executive Decision: Penn National Gaming

For his "Executive Decision" segment, Cramer sat down with Jay Snowden, president and CEO of Penn National Gaming  (PENN) - Get Report, along with Dave Portnoy and Erika Nardini, founder and CEO of Barstool Sports. Earlier Wednesday, Penn National announced it had taken a 36% stake in the privately held Barstool, news that sent shares soaring up 10.7% by the close. 

Nardini said that Penn National was the right partner for Barstool, as both companies shared in the vision of building a winning sports betting brand. Snowden added that Penn operates in 19 states but didn't have a sports betting brand of its own. Combined, they can now bring Barstool's brand and fan base to Penn National's nationwide infrastructure. 

Portnoy said that completing this deal was a surreal experience for him personally and is a big opportunity for both companies to do something really special in the gaming space. Barstool currently has over 66 million monthly users. 

Cramer said Penn National, combined with Barstool, is the gaming stock to own.

Executive Decision: Stryker

In his second "Executive Decision" segment, Cramer sat down with Kevin Lobo, chairman and CEO of medical device maker Stryker  (SYK) - Get Report. Shares of Stryker fell 1.6% Wednesday, despite the company posting strong earnings that included 8% organic revenue growth.

Lobo said that Stryker continues to see strong growth, thanks in part to the 50 acquisitions they've made during the past few years. One of those acquisitions was Mako Robotics in 2013, he said, and the Mako robotic arm has become a leader in its space, performing over 10,000 procedures every month. 

Lobo said while Intuitive Surgical's  (ISRG) - Get Report DaVinci robot is the leader in soft tissue procedures, Mako's robots are best for bone-related procedures such as knee replacements. He said using robot, patients can expect less pain and faster recovery times. 

Stryker continues to benefit from an aging population, but Lobo noted that only 6% of their sales comes from emerging markets, leaving room for future growth.

Value Stocks for the Future

In his "No-Huddle Offense" segment, Cramer said the markets make tons of mistakes around earnings season. And when they do, investors need to have the courage to take the other side of the trade. 

Shares of McDonald's  (MCD) - Get Report opened lower this morning, despite the company reporting stellar same-store sales up 5% globally and 6% domestically. By the close, shares closed up 1.9%. Cramer said these gains were easier had by those who could see how undervalued McDonald's was. 

Similar patterns were seen in Starbucks  (SBUX) - Get Report and Advanced Micro Devices  (AMD) - Get Report, Cramer added. In both cases, the stocks were being valued for today, instead of being valued for where they'll be in the future.

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 Wednesday evening: 

AT&T  (T) - Get Report: "I didn't think the quarter was bad. I'm a buyer." 

Silicon Laboratories  (SLAB) - Get Report: "No, they missed the quarter when everyone else is doing well." 

Amarin  (AMRN) - Get Report: "I'm a speculative buyer. They've got a lot going on." 

Twitter  (TWTR) - Get Report: "We have to wait on that one, with Facebook  (FB) - Get Report falling." 

Rite Aid  (RAD) - Get Report: "I like CVS Health  (CVS) - Get Report. That's the better buy." 

Sprouts Farmers Market  (SFM) - Get Report: "This is where you don't want to be. Stay away." 

LyondellBasell Industries  (LYB) - Get Report: "That's the way to go. I'd be a buyer."

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