This is an unhealthy moment for the stock market, Jim Cramer admitted to his Mad Money viewers Thursday. The sentiment is extremely negative, Cramer said, and there simply aren't many reasons left to buy. In fact, after a scan of 300 different companies, Cramer said he found only a few he could recommend.
Before you can buy any stock, Cramer said, you must first see if it passes fours tests. First, is the company reliant on a trade deal? If so, you need to take a pass. Too many companies, including Emerson Electric (EMR - Get Report) , Nvidia (NVDA - Get Report) and Cisco Systems (CSCO - Get Report) have all fallen hostage to the trade wars, whether they deserve it or not.
The second question investors must ask is whether the company is immune to competition. We learned that Domino's Pizza (DPZ - Get Report) is still fighting against money-losing delivery services, but they're not alone. Everything from apparel, to department stores, to advertising and cable TV is seeing disruption and ruthless competition.
The third question investors must answer is whether their stock is part of a troubled market. The saga at Boeing (BA - Get Report) is controlling the aerospace market, while the labor strikes at General Motors (GM - Get Report) are crushing the auto sector and its suppliers. Troubled sectors must also be avoided.
Finally, stocks must pass the Elizabeth Warren test, Cramer said. Even though the U.S. Senator from Massachusetts is still a long way from the White House, her rhetoric is affecting a host of businesses and sectors who fear increased regulation and scrutiny.
If your stock can pass all four of these tests, then it's worthy of a spot in your portfolio, Cramer concluded.
Executive Decision: Hormel Foods
Snee said that innovation continues to be the lifeblood of the company, which is why new products like pumpkin-spice Spam sold out in less than seven hours. The food business is constantly evolving, he said, and food companies need to evolve with it or be left behind. That's why Hormel is expanding some of its brands from retail and into the food service sector, where they can reach younger consumers at schools and universities.
Looking in the short term, Snee explained that a spike in avocado prices will compress margins for their Wholly Guacamole brand and a recent outbreak of swine flu will disrupt pork supplies, but over the longer term, he said, the company's businesses and brands remain strong.
When asked about international expansion, Snee noted that business in China continues to grow and they're still learning from early investments and experiments made in Brazil.
Hormel is also a big believer in supporting the communities they serve, Snee concluded. He said they focus on their people, their partners and giving back to all of their communities.
Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.
Is BBBY a Buy, Buy, Buy?
Bed Bath & Beyond has been in the doghouse for years, as the company faced increased competition from the likes of Walmart (WMT - Get Report) , Target (TGT - Get Report) , Amazon (AMZN - Get Report) and countless others, while management seemingly had no definitive turnaround plan. Over the past five years, shares have fallen from $80 to under $9, as the company wandered aimlessly.
But that trend finally began to change last week, when the company reported 34 cents a share in earnings, beating expectations. That was followed by today's news that Mark Tritton, chief merchandising officer at Target, will be taking over as the company's CEO in November. Cramer noted that Tritton, a seasoned executive credited with many of Target's biggest recent successes, will be taking most of his compensation in stock, a signal that he believes in Bed Bath & Beyond's outlook.
Trading at just 6.4 times earnings, Cramer said Bed Bath & Beyond is now too cheap to ignore.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Off the Tape: Drexler Ventures
In his "Off The Tape" segment, Cramer sat down with Millard "Mickey" Drexler, chairman and founder of Drexler Ventures, the privately-held holding company for the new clothing brand, Alex Mill.
Drexler said that clothing is in his DNA and he loves the creativity that goes into making clothes that people love. Style, taste, value and quality have been at the core of everything he's done over the past 40 years, he said.
When asked where traditional mall stores are going wrong, Drexler said that any time products are marked up twice, the perceived value is diminished and that's only reinforced by the ability to find the same items for less on your smartphone. Adding to that, Drexler said many retailers have lost their passion for creating excitement and they simply don't offer compelling products.
Drexler also commented on his relationship with Apple's (AAPL - Get Report) Steve Jobs. Drexler was one of Steve's mentors in the original Apple Store design, and he said those designs have evolved into the greatest retail empire of all time.
What Should the Fed do?
In his "No Huddle Offense" segment, Cramer sounded off against those who think the Federal Reserve shouldn't cut interest rates. He said our economy, and the bond market, is screaming for a rate cut.
Those who oppose lower interest rates are either terrified of inflation or feel that a recession will help boot President Trump out of office. But Cramer noted that inflation is non-existent right now and our economy should never be used for political gain.
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