Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- How FANG stocks can go higher
- How Amazon is moving in on Home Depot
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's--and reader comments--in real time.
The answer here, in this particular case, is no. In fact an emphatic NO. It seems that every day these companies are innovating and giving you another reason to buy them.
Just consider Thursday. We just learned this morning that Facebook is working with news organizations to figure out a way to get their wares out and become more friendly with these outlets. I can tell you that's been a huge issue and the fact that they are addressing it shows you exactly how customer friendly they really are. Plus, we know they just started figuring out ways to put video on some of their functions that will take away the worry that there is too much ad load, something they brought up on the last conference call. And we just got a reiteration from an analyst who says Instagram is crushing SNAP SNAP with its new copycat offerings. These are all new and earnings per share additive reasons to buy the darned stock.
Amazon? What can I say? We wake up and find out that they are now in the appliance game, something we thought couldn't be Amazoned. Sears, its pathetic partner, doesn't have much left to itself, of course, but it does have the best brand name in appliances: Kenmore. You put Kenmore together with Amazon, you throw in Alexa to be able to scream at your washing machine to turn on, and voila, you are off to the races. Impactful? My washing machine just broke down. I know which one I want. I don't want to go to the store. I am actually debating doing this. I am sure others are, too. Kenmore's an untarnished brand despite the endless tarnishing of Sears. Another reason to buy Amazon.
Many people are still digesting what Netflix did in that amazing quarter that caused this gigantic explosion in the common stock, especially the surge of international subscriptions. I follow a columnist named Buster Coen at TheStreet who knows more about the movies than anyone I have ever met. He took the ball from the conference call, the ball named Okja, which is the Korean movie the company used to describe how they took that country by storm, and if you read the piece you will know why Netflix can go much higher. First, it's a compelling story that could never be made in Hollywood. Okja, to quote from the article, is a superpig who has been genetically engineered by an agro-chemical corporation to taste good. A caring young girl in the countryside of South Korea stands in the way of the corporation's carnivorous plans, resulting in an adventure film that spans Seoul to New York City."
The movie's got big stars, Tilda Swinton as a gonzo CEO and Jake Gyllenhaal as a loopy TV personality and a flawless computer aided design pig and its made by the most popular director in South Korea, Bong Joon-ho. The film made a big splash at the Cannes film festival, even as the French tried to interfere with it because they are notoriously anti-streaming. It was also boycotted by three major cinema chains in South Korea. Talk about buzz!! This was Netflix's final release of the second quarter and I think it put international sign-ups over the top of domestic. Right story, right publicity, fabulous knowledge of South Korean culture, all things that the conventional studios reject or just don't know how to do.
Do you know that today Google came out with a function that allows you to see news that is tailored to your interests? I have always disliked the newsfeed that comes from Google, the one where you go into Google news, enter a topic and then it sends you to some news entity that's really not on point. But Google has now been able to algorithmically mine what you have asked them to see about the news and send you a personal feed that matches what you are really interested in. They have a ton of data on you so they will personalize it for you. How fabulous is that? I have wanted this for ages. Today they produced it.
Now I am not saying these stocks can't go down. Alphabet's off right now. I am saying they just keep making news, generating actual events and products that are additive to earnings. As long as that continues to happen, though, these stocks can continue to go higher, and you shouldn't feel foolish if you pull the trigger because they seem to introduce needle movers every single day of the week.At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long FB and GOOGL .
Thursday morning, Home Depot (HD) got hit by a one-two punch: Sherwin Williams (SHW) had a confusing story about paint, a big, big product for Home Depot, and Sears (SHLD) joined with Amazon (AMZN) to sell Kenmore products linked with Alexa. Both are jarring given that Home Depot is not able to defend itself right now and if paint is challenged and appliances could be under pressure, you can't pay 20 times earnings for the stock.
Of course, this isn't limited to Home Depot. You are getting a similar reaction from Lowe's (LOW) .
I am saying this the kind of overreaction because nobody is saying Home Depot or Lowe's has to lower numbers. Instead, it is all about what has happened every time you have heard that Amazon is involved against a retailer, and this would be a direct involvement with a very good brand name.
The issue with these kinds of falling knives in this market is that you can't come in the first day without something, anything that refutes at least one of these stories.
The former, paint, can be refuted if we can find out from the companies what's going on.
The latter, the Amazon threat? It is just a killer as we know from what happened to Costco (COST) when Amazon bought Whole Foods (WFM) . It didn't matter that Costco crushed the numbers. The threat is just too great to allow a stock to be valued as highly as it once was.
Emotions are riding so high in retail that there is no assuaging the sellers.
It's remarkable to see this behavior for such an amazing company like Home Depot. It's almost as if sellers are saying it just doesn't matter. I can't handle any retail.
It's almost a permanent re-rating.
Oddly, there is a way to play the Kenmore trade -- not Sears, that's just a short squeeze. You go buy the stock of XPO Logistics (XPO) , which just priced a monster secondary.
XPO is the last-mile delivery for huge merchandise that tends not to be handled by UPS (UPS) or FedEx (FDX) . That means Kenmore. I like the stock anyway. But now you have one more reason at a discounted price.
Long term, I think Home Depot is levered to household formation and the continuing increase in the price of homes.
It's levered to Amazon.
Eat, Drink and Talk Money With Jim Cramer
Meet Jim Cramer at an exclusive reception at his Bar San Miguel in Brooklyn, N.Y., on Tuesday, July 25, from 6:30 to 9 p.m. ET.
The evening will start with a screening of Jim's CNBC show Mad Money. Afterward, Jim will join the party fresh off of the CNBC set to mingle, take photos and answer your investing questions.
Tickets include dinner, drinks and an autographed copy of Jim's book Get Rich Carefully.
Click here for more information or to buy tickets.
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
When: Tuesday, July 25, 6:30 to 9 p.m. ET
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.