The markets will march to the beat of earnings again next week, Jim Cramer told his Mad Money viewers Friday, as he laid out his plans for action.
Cramer will start on Monday watching CNBC to see if Warren Buffett has any more surprises after announcing a big cut in his IBM (IBM) holdings. Newell Brands (NWL) and International Flavors & Fragrances (IFF) will be reporting earnings, and Cramer said he's been trimming his position in Newell for Action Alerts PLUS but remains a fan of IFF.
Next on Tuesday, it's earnings from Walt Disney (DIS) , Priceline (PCLN) , game maker Electronic Arts (EA) and chip maker Nvidia (NVDA) . Cramer was bullish on Disney, Priceline and Electronic Arts, but said that Nvidia is worrisome after Advanced Micro Devices (AMD) disappointed.
Wednesday brings more earnings, this time from Norwegian Cruise Lines (NCL) , Mazor Robotics (MZOR) , Twenty-First Century Fox (FOX) , Whole Foods Market (WFM) and Snap (SNAP) . Cramer predicted that Norwegian would have stellar results, and we bullish on Mazor, but advised listening to Fox and Snap. Whole Foods, he said, remains challenged by competition.
Finally on Friday, JC Penney (JCP) closes out the week, but Cramer said he'd stick with Kohl's.
Sometimes it's worth it to own the best of breed, Cramer told viewers. In the steel industry, that's not U.S. Steel (X) , which saw its shares plummet 23% this week after a miserable quarter.
The steel industry peaked in 2008, but was hit hard by the recession that followed. After a brief recovery, the group again got slammed in 2014 by both ailing overseas economies and illegal dumping of steel by China.
Things changed quickly 18 months ago however, when President Obama slapped tariffs on imported steel to curb the dumping and provide U.S. producers some much needed relief.
But Cramer noted that not all steel makers are created equal. U.S. Steel along with A.K. Steel (AKS) are traditional commodity makers of steel, while Nucor (NUE) and Steel Dynamics (STLD) are what's known as mini-mills, which make steel primarily from scrap metals.
The difference between this distinction is stark, Cramer said, with both of the mini-mills up for 2017, while the traditional players are still fighting low prices. U.S. Steel was expected to earn 32 cents a share, but instead delivered a loss of $1.03. Nucor on the other hand, had a bullish outlook for 2017.
Among the four, Cramer ranked Nucor the best, trading at 13 times earnings with a 2.5% yield and the possibility of a special dividend. Steel Dynamics came in second at 12 times earnings. He told viewers to steer clear of A.K. Steel and U.S. Steel.
Silicon Valley Wrap
Every time he spends a week on the west coast, he returns with a renewed sense of optimize, Cramer told viewers. This week's trip to Silicon Valley was no different. Cramer said he loves business and appreciates the world views and the work ethic that helps put money in the pockets of shareholders and life-changing products in the hands of consumers.
It's easy to be cynical about the big dreamers in Silicon Valley, but without them, we wouldn't have Apple (AAPL) creating a $1 billion fund to aid manufacturing job creation or Salesforce.com (CRM) pledging to create five million new technology apprenticeships.
"This is important stuff, " Cramer said, as he commended PayPal (PYPL) for democratizing money and Expedia (EXPE) for changing the way the world travels. The world may scoff at Intel (INTC) spending so much to acquire MobileEye, but isn't the company now positioned to be the leader in the next generation of processors? Even Clorox (CLX) is offering consumers true innovation, with dozens of new products.
That's why Cramer said it pays to be skeptical, but not cynical, and to always treat these big ideas with the upmost respect. You never know, sometimes crazy ideas actually work.
Off the Tape
In his "Off The Tape" segment, Cramer celebrated Cinco de Mayo by sitting down with Jenna Fagnan, president of the privately-held Tequila Avion, an ultra-premium tequila brand.
Fagnan said the premium tequila is now outselling vodka by a factor of five. No longer is tequila just a Cinco De Mayo and summer treat, it's something that's consumed year round. That's why Tequila Avion is having a hard time keeping some of its products in stock.
Fagnan said that millennials are also turning to tequila, but they're looking for more flavor, which is why they're adding new flavored tequilas to their lineup so they can be added to a host of different drinks.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer opined on the announcement today that billionaire Warren Buffett has sold a third of his position in IBM. Should investors follow suit? Cramer said any shareholder who owns IBM because Buffett does should be ashamed of themselves for not doing their homework.
But for those, like Cramer, who like the company for its turnaround efforts, nothing has really changed. In fact, with Buffett's partial exit, the company should feel liberated to do something bold, like perhaps buy Twitter (TWTR) . Cramer said some may snicker at the idea, but combining Twitter with IBM's Watson and other analytic tools might yield interesting results. It would also give the company a much needed foothold in the social, mobile and cloud space, something it desperately needs.
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