Jim Cramer's 'Mad Money' Recap: Unsafe at Any Price

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


NEW YORK (TheStreet) -- What happens when safety is no longer safe? That was the question Jim Cramer posited to his Mad Money viewers Thursday. Cramer said the averages may not show it but the markets were again in turmoil because big money managers are once again shifting direction.

Throughout much of 2013, the momentum stocks were all the rage, Cramer reminded viewers, but all that changed in February when the momentum slowed and money managers fled en masse, leading to huge declines of 30% or more for any fast-growing company.

Those managers fled to safety stocks, stocks that offered decent growth along with dividends and sometimes even slight upticks in their share prices.

For the momentum stocks, the pattern was clear: report your earnings, see a brief pop in your share price, followed by a vicious decline. That was until today when Yelp (YELP) reported and saw actually strength in its shares.

Why the sudden change? Cramer said it's because Yelp shares have already fallen from $101 to $55 a share, making them a good value. With the flood of new IPOs finally subsiding, money managers are once again willing to roll the dice on the likes of Netflix (NFLX) and Workday (WDAY). At the same time, they're now fleeing Clorox (CLX) and Hershey (HSY).

Executive Decision: Patrick Doyle

For his "Executive Decision" segment, Cramer sat down with Patrick Doyle, president and CEO of Domino's Pizza (DPZ), a stock that trades at 22 times earnings with a 15% growth rate.

Doyle admitted that Domino's did see a rise in some commodity prices this quarter, which took a bite out of earnings. He said the harsh winter was great for ordering pizza but it also stressed the cows, which led to a sharp spike in the price of dairy products. Pork, he said, also saw higher prices that were not expected.

But even with a ding to earnings, Doyle painted a positive picture of Domino's. He said the company's new iPad application has been received very well by customers and allows them to build their pizzas with high def, 3D graphics that are amazing.

When asked about the part technology plays in the company's growth, Doyle said Domino's is betting big on digital media and some weeks 50% of its orders come in from online and mobile sources. He said the company has over nine million fans on Facebook.

Finally, when asked about the controversy surrounding executive compensation, Doyle said that at Domino's executive pay is aligned with performance. If the shareholders are making money, so, too, is the management team. If they're not, there will be no bonuses.

Cramer said the Domino's story is as good as ever.

Sell Block

In his Thursday "Sell Block" segment, Cramer placed the entire 3-D printing industry, and in particular 3D Systems (DDD), under house arrest. These stocks have already been cut in half, he said, but they still have a lot further to go.

Shares of 3D Systems roared from $50 to $97 last year, Cramer said, but have since giving back all those gains. Why? Cramer said the rally was based largely on hype, on the promise that everyone would soon have a 3-D printer on their desks creating magnificent objects. The only problem: The machines that make the really magnificent objects still cost hundreds of thousands of dollars. The affordable ones remain very limited.

Then there's the issue of competition. Not only are dozens of 3-D players ramping up in China, but even Hewlett-Packard (HPQ) has announced it is getting into the 3-D space in June.

Yet, shares of 3D Systems, even after its 50% haircut, still trade at 61 times earnings, or 7.4 times sales, and that's using estimates that are likely still too high. Putting it another way, Cramer said the entire 3-D printing industry is expected to generate $6.5 billion in 2018, yet 3D Systems is currently valued at $5.2 billion.

With inventories rising and insiders selling, Cramer said this industry needs to be avoided at all costs. 3-D printing is proving to be a flash in the pan.

Executive Decision: Dinesh Paliwal

In his second "Executive Decision" segment, Cramer sat down with Dinesh Paliwal, chairman, president and CEO of Harman Industries (HAR), makers of high-end speakers and electronics, which today delivered a 12-cents-a-share earnings beat on dramatically higher revenue that rose 32%. Shares of Harman trade at just 22 times earning with a 22% growth rate.

Paliwal said Harman acts as the bridge between Silicon Valley and the auto makers. With all of the new devices and technology coming, such as Apple's (AAPL) new CarPlay technology, car makers are forced to integrate those systems into their larger systems but do so in a way that differentiates them from the competition.

Paliwal continued that the barriers to enter this space are very high, which is why when a company like BMW decides to put Harman in all its vehicles, the company sticks with that investment. Harman is now in four generations of BMWs, Paliwal noted.

When asked whether too many product launches may put a damper on gross margins, Paliwal explained that profitability is very important to Harman, which is why it is predicting margin expansion and not a reduction.

Cramer said that shares of Harman may trade wildly, but history has shown that any weakness is a buying opportunity.

Lightning Round

In the Lightning Round, Cramer was bullish on Boeing (BA), FireEye (FEYE), Cheniere Energy Partners (CQP) and Gilead Sciences (GILD).

Cramer was bearish on Ensco International (ESV), Quidel (QDEL), Gogo (GOGO), Bed Bath & Beyond (BBBY), The Blackstone Group (BX) and Cheniere Energy (LNG).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off on the coordinated moves in the Internet and software-as-a-service stocks after Yelp reported earnings Wednesday.

Cramer said just seconds after Yelp reported its shares plummeted, only to reverse hard minutes later, taking many of its peers with it. This pattern broke the spell of the momentum stocks, which for the last few months have been trading the exact opposite -- reporting, then popping, only to see long-lasting declines.

This pattern can only be accomplished through programmatic trading, Cramer explained, where the machines all trade in unison, linking stocks together that have no business being linked together. Gone are the days when investors could digest earnings and choose with stocks to buy. Now, the market moves decisively and instantly to a drummer that only the machines can hear.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in BA.

More from Jim Cramer

Regions Financial, Edwards Lifesciences: 'Mad Money' Lightning Round

Regions Financial, Edwards Lifesciences: 'Mad Money' Lightning Round

First Horizon National: Cramer's Top Takeaways

First Horizon National: Cramer's Top Takeaways

Waste Management: Cramer's Top Takeaways

Waste Management: Cramer's Top Takeaways

Jim Cramer: Will Apple or Amazon Become the World's First Trillion Dollar Stock?

Jim Cramer: Will Apple or Amazon Become the World's First Trillion Dollar Stock?

Not Thankful for Fridays: Cramer's 'Mad Money' Recap (Friday 4/20/18)

Not Thankful for Fridays: Cramer's 'Mad Money' Recap (Friday 4/20/18)