Where the Bulls Are: Cramer's 'Mad Money' Recap (Monday 10/26/20)

Jim Cramer sees buying opportunities in 5G, digitization, home renovation, cars and personal-care products. That's where the bulls are.
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Sit back and get comfortable, Jim Cramer told his Mad Money viewers Monday. This week is going to be a rocky one for the stock market. Instead of panicking, however, Cramer said it's time to start buying the bull markets that were just put on sale.

This market hinges on a stimulus deal out of Washington. That deal will come eventually, Cramer theorized, but in the meantime, investors need to stick with the five bull markets that are working right now.

Those bull markets include the transition to 5G wireless, digitization and the cloud, the bull market in hygiene, home improvement and renovations, and the continuing bull market in autos. All of these bull markets work with or without a stimulus plan, Cramer said, and they can keep going higher even with spiking COVID-19 cases.

Don't take your cues from the disappointing outlook at SAP  (SAP) - Get Report, Cramer cautioned. The digitization trend is alive and well, he said, and the cloud seems to be only passing over SAP, but not SAP's competition, where sales are booming. Cramer also said not to try and game Apple's  (AAPL) - Get Report earnings. "Buy Apple, don't trade it," continued to be his recommendation.

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Executive Decision: Plug Power

In his first "Executive Decision" segment, Cramer spoke with Andy Marsh, president and CEO of Plug Power  (PLUG) - Get Report, the fuel cell maker with shares up 69% over just the past three months, despite being down 4% Monday.

Marsh said the time has finally come for Plug Power and the time for hydrogen as a fuel source is now. Plug Power currently has over 35,000 of its fuel cell forklifts deployed to customers like Amazon  (AMZN) - Get Report, Walmart  (WMT) - Get Report and Home Depot  (HD) - Get Report, Marsh said and Plug Power is the largest user of liquid hydrogen in the country.

When asked about hydrogen's momentum, Marsh explained that companies and their sustainability goals are driving demand, not Washington. He said pro-renewable policies from Washington would only accelerate demand, but private enterprises are choosing green hydrogen over the alternatives.

Turning to the topic of long-haul trucking, Marsh noted that fuel cells are the only choice for longer distances. He said the technology and infrastructure are making hydrogen more of a reality every day.

Finally, when asked about competition from China, Marsh said he's not afraid of competition. He said it won't be easy for China to catch the lead Plug Power has obtained and fuel cells are a lot harder to produce than other technologies like solar panels.

Executive Decision: American Electric Power

For his second "Executive Decision" segment, Cramer also spoke with Nick Akins, chairman, president and CEO of American Electric Power  (AEP) - Get Report, the utility with a 3.1% yield and shares that rallied 1.8% on an otherwise down day.

Akins said that American Electric Power continues to invest to meet the changing needs of our economy. He said power generation has always been a capital-intensive business and with the pandemic, that trend only continues. Since COVID-19 began, Akins said power demand for residential has increased as people spend more time at home, while commercial and industrial demand has plunged. As we move into 2021, Akins said he expects both of those trends to moderate and overall demand for power to increase.

When asked about the upcoming election and how it affects their planning, Akins explained that their shareholders and customers expect a clean energy utility and they continue to focus on adding more renewables to their portfolio. He said changes in Washington may affect the aggressiveness at which they move, but their plan will always be to support a clean energy economy.

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Union Pacific on Track?

There's a bull market in transportation, Cramer told viewers, and that applies to the railroads. So why then are shares of Union Pacific  (UNP) - Get Report coming under pressure? Cramer took a closer look to find out.

When the railroads first began reporting earnings this quarter, things were looking great. Kansas City Southern  (KSU) - Get Report, the nation's smallest railroad, saw robust earnings. Those earnings were followed by an earnings beat at CSX  (CSX) - Get Report. But then Union Pacific reported weaker-than-expected results that crushed the stock last week, declines that continued another 1.8% Monday.

Cramer said Union Pacific has the best routes, the most scale and a precision railroading initiative that is second to none. And while expectations had gotten very high, there is a possibility that the railroad has gotten as efficient as it's going to get. Without a new catalyst, the stock may struggle to head higher.

Cramer posited that one potential catalyst would be to acquire Kansas City Southern, a deal he said would be beneficial for both railroads and is likely to pass through regulators. Without a catalyst, however, Cramer said shares of Union Pacific may have stalled.

Buying Opportunities in Business Casual

In his "No Huddle Offense" segment, Cramer reminded viewers that when the market sells off, stocks go on sale, allowing you to buy into bull markets at even better prices. Case in point: casual apparel stocks.

With so many people working from home, "business casual" has become less business and a lot more casual. That's great news for jeans maker Levi Strauss  (LEVI) - Get Report, the self-proclaimed "king of denim" and it's rival Kontoor Brands  (KTB) - Get Report, which owns Lee and Wrangler jeans. Cramer was also bullish on Gap Stores  (GPS) - Get Report, which is thriving from its Athleta brand, and Lululemon Athletica  (LULU) - Get Report, the brand on which Athleta is based.

All of these were great long-term stories last Friday, Cramer explained, they became even better ones today at lower prices.

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 Monday evening:

Focus Financial Partners  (FOCS) - Get Report: "I prefer Morgan Stanley  (MS) - Get Report. That's the one I would go with."

Landcadia Holdings  (LCA) - Get Report: "I'm willing to go with them and not against them."

Lordstown Motors  (RIDE) - Get Report: "This is a momentum stock. We will ask them to come on and tell their story."

American Airlines  (AAL) - Get Report: "This is an $11 stock but I'm partial to Southwest Airlines  (LUV) - Get Report which is a great long-term stock."

Raytheon Technologies  (RTX) - Get Report: "I think it's a good company and a good story long term."

Nordstrom  (JWN) - Get Report: "This is a tough stock to own. At $13, it's speculative."

Huya  (HUYA) - Get Report: "I like Alibaba  (BABA) - Get Report and JD.com  (JD) - Get Report from China. That's it."

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