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There's been so much news coverage about whether the United Kingdom will leave the European Union that it's making us numb, Jim Cramer told his Mad Money viewers Tuesday. But no matter what the outcome, it really won't matter to the U.S. stock market. In fact, the issue is far less important than had Greece or Portugal defaulted on their debts a few years ago, as many good and gloom pundits had also predicted.
What actually matters to the U.S. economy is what Federal Reserve chair Janet Yellen told us in her remarks today: that our economy isn't as strong as when the Fed raised rates in December. That can be seen in stocks such Carmax (KMX - Get Report) , which dropped 2.2% on slowing sales, and with homebuilder Lennar (LEN - Get Report) , which slipped 1.1% as the markets continue to pan housing stocks.
Meanwhile, Valeant Pharmaceuticals (VRX) continues to disintegrate to new 52-week lows, down another 3.9% today, and shares of Adobe Systems (ADBE - Get Report) lost 2.2% after a big run up going into its earnings.
In fact, perhaps the only stocks that are working, according to Cramer, are things you can "eat or wash with," including consumer packaged goods and food stocks such as J.M. Smucker (SJM - Get Report) , which rallied despite receiving an analyst downgrade.
So while the markets may continue to focus only on Europe, Cramer said he's sticking with what actually matters -- our economy.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over the breath-taking run in the price of natural gas, which has rallied hard since its February lows.
Garner noted that natural gas is often held hostage by the weather, suffering during warm winters and rallying big, as it is now, during hot summers. These seasonal patterns are remarkably predictable, she noted, with the price of natural gas falling from mid-June through the fall in 15 of the past 15 years.
Looking at a weekly chart of natural gas confirms this pattern, showing a bullish run since February that appears to be running out of steam as the William's oscillator and the relative strength index, or RSI, show overbought conditions. Garner also noted resistance at the $2.95 and $3.10 levels, just above current levels.
With the seasonal price patterns already baked into the price of natural gas, Cramer advises ringing the register to take profits in stocks including Range Resources (RRC - Get Report) and Southwest Energy (SWN - Get Report) before the summer peak turns into the fall doldrums.
Thor vs. Polaris
How is it that shares of Polaris Industries (PII - Get Report) are down 40% over the past 12 months, while rival Thor Industries (THO - Get Report) , makers of recreational vehicles, has returned 13.7% during the same time period? Cramer took a deep dive to find out why these two similar companies are moving in opposite directions.
While both companies make leisure vehicles, Cramer noted they're actually quite different, with Polaris making mainly all-terrain vehicles, snowmobiles and motorcycles, while Thor owns the RV market for both towable and drivable vehicles. Polaris is only 78% domestic as it expands aggressively overseas, while Thor remains all American.
Cramer said it's the latter metric that allowed Polaris to rack up a stunning 2,000% gain from 2009 through 2014, as the U.S. and the rest of the world was booming. But starting in 2015, shares fell 43% after the stock became overheated and faced multiple headwinds and missteps from recalls and a strong dollar to warm winters and too much inventory.
Thor, on the other hand, is part of an oligopoly in the RV space, where the top two players account for a full 70% of the market. Being all American, the company can also flourish when the rest of the world is sluggish. Finally, the low price of gasoline, coupled with lots of retiring Baby Boomers, all works in Thor's favor.
With both companies trading at 12 times earnings, Cramer said Thor is a much better investment as Polaris has too many moving parts and too many questions surrounding its business.
Cramer Loves Danaher
Shares of industrial giant Danaher (DHR - Get Report) are already up 30% since the company first announced it was breaking itself into two back in May 2014. Is there still more upside to be had? Cramer thinks there is.
As part of the deal, which will commence in July, Danaher will split itself into a slow-growing industrial to be called Fortive, while the remaining Danaher will become a higher-growth medical and industrial testing powerhouse. Shareholders will receive one share of Fortive for every two shares of Danaher they already own.
Cramer said he loves the new Danaher, which will focus on medical testing, dental products, water quality systems and product identification. Without its industrial sibling, the company will no longer be held hostage to the world economy and will be a faster growing and easier to value.
But how much is the new Danaher worth? Cramer said while the stock trades at 18.8 times earnings now, it could easily compare to Agilent (A - Get Report) , trading at 21 times earnings, or Illumina (ILMN - Get Report) at 34 times earnings. Ultimately, he said that 21 to 22 times earnings is not unreasonable for this terrific company.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer offered viewers a peek into the mind of the modern consumer. He said that in today's world, materialism is out and experiences are in. Value matters more than ever. And if it's not an app or on your smartphone, then it's probably not part of your life.
The Millennial generation has no problem paying up for Netflix (NFLX - Get Report) or spending the day at Six Flags (SIX - Get Report) , but they'll never pay retail for something at the mall. Owning a car is out, Uber is in. News comes from Facebook (FB - Get Report) , Action Alerts PLUS holding, and banking is done online.
That's how our economy can have low inflation and zero growth, Cramer explained, and that's why so many traditional jobs are going away and there's little anyone can do to stop it.
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