Jim Cramer shares his views every day on RealMoney. Click here for a real-time look at his insights and musings.
Cramer: Corporate Tax Cut Among Victims of 'Craziness'Originally published June 1 at 1:24 p.m. EST
Something's got to change. Something. I met with a terrific CEO Thursday of a company that pays a 31% federal tax rate. There was a time when I would be thinking about how much more money this company could make once President Trump and the Republican-controlled Congress ram through a corporate income tax cut.
If we got a dream 15% rate, then the company's stock would be radically undervalued on a new earnings estimate and I could see it trading dramatically higher. It might have been ideal to recommend.
Instead, I have to hold back. I barely mentioned the possibility of a lower tax rate to management. It seemed almost atavistic, as there would be a time when fed tax cuts would have been a genuine catalyst. When I mentioned it, we immediately defaulted to all the "craziness" that killed the hoped-for opportunity.
Wednesday, I got plenty of snippets about what Ruth Porat, the fantastic CFO of Alphabet (GOOGL) , was talking about at the Code conference. I like this company so much, my charitable trust has owned shares in it for ages. I think its self-driving car initiative, Waymo, is dramatically undervalued within the company's worth and that perhaps all auto companies have to turn to it for the company's technology. There was another time, though, where I also thought about the possibility of the $47 billion that Alphabet could bring home if companies got a federal tax break on cash they repatriate or bring home to the U.S. I know Alphabet's got a buyback, so this idle cash could really soup things up. But these days, it's simply no more of a factor than the $60 billion that Cisco (CSCO) has overseas that I thought could be earmarked for both buyback and dividend. (Alphabet and Cisco are part of TheStreet's Action Alerts PLUS portfolio.)
Now it seems almost fanciful to bank on that cash coming back, again because of the craziness, the errant tweeting, the Russian thing, the health care issues and now the Paris accords.
There was a time when I would have pounded the table on the bank stocks after Wednesday's drubbing because I would have thought by now that some of the most onerous regulations that have hamstrung banks from controlling their own destiny would have been repealed. I also figured a Trump administration would have somehow allowed the grown-ups who run their banks to be more expansive with dividends or buybacks now that the stocks have come down instead of waiting for stingy regulators to give them the high sign.
Now I think you can't possibly own the big banks for what could occur with a Trump presidency when you are staring at their lack of trading gains to augment their regular book of business.
In fact, the only executive orders that I see are helping business may be backfiring. Trump's pushing fossil fuels all over the place, but coal isn't economic versus natural gas in most parts of the country. Trump favors aggressive drilling but all that will do is cause more of a glut and lower prices. It's a self-fulfilling prophecy.
Oh, and Lord help the CEOs who spend time with Trump. Did anyone put in more hours than Mark Fields, the former CEO of Ford, who canceled plans to make smaller cars much cheaper in Mexico?
He's out now. He couldn't get costs down among other "transgressions."
No, it isn't like we have a Trump slump versus a Trump bump. What we have is nothing. We had nothing for eight years from Obama and, thankfully, the stock market moved up nicely albeit from very depressed levels. What we have now is a business president who is rendering himself irrelevant while tweeting about that crook Hillary Clinton and replaying his only big win to date, the election. That's not exactly businesslike, and it's not what's needed to live up to these promises that seemed so bankable just six months ago.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long GOOGL and CSCO.
Cramer: What Are These Stocks, Chopped Liver?
There's plenty of debate these days about how there aren't a lot of winners besides FANG and a couple of fellow travelers.
But perhaps they don't know where to look. We all think retail's dead except for Amazon (AMZN) . Then how do we explain the strength in Ulta (ULTA) or Costco (COST) or Walmart (WMT) ? I think these are legit moves by major companies in the sector.
We all think the industrials have had it. But what does that say about Honeywell (HON) or United Technologies (UTX) or 3M (MMM) ? I think all three have great momentum and can be bought. Cummins (CMI) and Caterpillar (CAT) aren't far behind.
Sure, we hate the banks. But how about MasterCard (MA) , Visa (V) , PayPal (PYPL) and Square (SQ) ? Have you seen those moves? Those are the non-credit-risk financials or fin tech, or whatever you want to call them.
They are red hot.
All I am saying is that, sure, we can say here comes Nvidia (NVDA) and Analog (ADI) and Texas Instruments (TXN) to go with FANG and Adobe (ADBE) and Workday (WDAY) . (Starbucks, PepsiCo, Comcast and Adobe are part of TheStreet's Action Alerts PLUS portfolio.)
But how about all these others?
Just remember that they count, too.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long ADBE, PEP, SBUX and CMCSA.