The buyers may be young, but they've got the edge on Wall Street, Jim Cramer told his Mad Money viewers Tuesday, as he continued his focus on the younger investors that have been fueling the stock market's run to new highs.
Cramer said younger investors have been defying the conventional wisdom on Wall Street and taking a new approach to investing, one that's been working. "What's conventional wisdom done for you lately," he asked? Admittedly, not a lot. Younger investors are optimists, he said, and are willing to pay up for what they believe in.
Tesla (TSLA) - Get Tesla Inc Report has been the poster child of what younger investors want to invest in and shares are up 677% for the year. Today, Tesla announced a $5 billion share offering, but shares ended the day higher in an incredible show of strength. Tesla is now the sixth largest company in America.
But Tesla is not alone, Cramer added, younger investors have a host of stocks they love, including Roku (ROKU) - Get Roku, Inc. Class A Report, PayPal (PYPL) - Get PayPal Holdings, Inc. Report, Zoom Video (ZM) - Get Zoom Video Communications, Inc. Class A Report, Snowflake (SNOW) - Get Snowflake, Inc. Class A Report and their cybersecurity favorite, Okta (OKTA) - Get Okta, Inc. Class A Report. All of these stocks are about the future, Cramer explained, and younger investors keep buying them for the long term.
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Executive Decision: Chewy
In his first "Executive Decision" segment, Cramer spoke with Sumit Singh, CEO of pet supply retailer Chewy (CHWY) - Get Chewy, Inc. Class A Report, which just posted a strong quarter that included 45% sales growth.
Singh said the mission at Chewy is still the same, to surprise and delight their customers and turn them into evangelists for the brand. He said the pandemic has only taken what was already a strong secular trend and accelerated it by several quarters.
When asked about their growth, Singh said that they don't expect their value proposition to change once vaccines are readily available. He said Chewy operates in a very large market and their number of customers with new pets is up 40% for the year.
Chewy encourages their customers to give back to shelters and animals in need wherever they can, and the company is now expanding into healthcare services to help make veterinary care more accessible and affordable for the nearly one-third of pet owners who don't see their vet regularly.
Executive Decision: Hain Celestial Group
For his second "Executive Decision" segment, Cramer also spoke with Mark Schiller, CEO of the Hain Celestial Group (HAIN) - Get Hain Celestial Group, Inc. Report, the packaged foods maker with shares up 47% for the year.
Schiller explained that after acquiring 55 brands over 20 years, Hain Celestial had simply gotten too big and complex for both management and shareholders. His mission has been to simplify and focus the company, which began with shedding 16 lesser-performing brands so far.
The new Hain Celestial is focused on food as well as health and wellness, Schiller said. They have amazing brands that help people live healthier lives, with products from hand sanitizers and skincare products to energy drinks and tea.
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Know Your IPO
In his "Know Your IPO" segment, Cramer opined on the much-anticipated IPO of Airbnb, which will begin trading later this week under the ticker ABNB.
Airbnb has become a juggernaut in the lodging business, disrupting the industry with nearly four million hosts around the globe. Airbnb has a $3.4 trillion market opportunity ahead of it, but is still very disciplined with spending. The company sported 32% revenue growth in 2019, before the pandemic, but has seen sales decline over 20% since the pandemic.
Make no mistake, Airbnb will have an ugly fourth quarter and is likely to have a rough time going into the first half of 2021, Cramer said. But afterwards, Airbnb is in an excellent position. With shares expected to price around $60 a share, that would value the company at 10 times sales. Cramer said he'd be a buyer up to $85 a share.
Small Businesses Are Hurting
In his No-Huddle Offense segment, Cramer said when it comes to public health, there aren't two sides to the story. Some restaurants and retailers, like Costco (COST) - Get Costco Wholesale Corporation Report and Darden Restaurants (DRI) - Get Darden Restaurants, Inc. Report, are run by professionals and have what it takes to stay open during the pandemic. But most smaller restaurants and retailers don't have what it takes to remain open. Are these business run by amateurs? Cramer said he thinks not.
Running a smaller business is simply a riskier proposition than a big box store like Costco with 16-foot-wide aisles. Costco was built for social distancing, while Cramer's own shuttered Mexican restaurant in Brooklyn, with only 17 tables, simply is too small and too risky to stay open this winter.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:
Sea Ltd. SE: "I can't analyze this company and no one else can either."
Quest Diagnostics (DGX) - Get Quest Diagnostics Incorporated Report: "I think Quest is good but Laboratory Corp. of America (LH) - Get Laboratory Corporation of America Holdings Report is better."
Pacific Biosciences (PACB) - Get Pacific Biosciences of California, Inc. Report: "This is one of the most speculative stocks in the market. I can't tell you to buy it up here. It's moved too much."
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At the time of publication, Cramer's Action Alerts PLUS had a position in COST.