Hurricane Harvey may be in the headlines, and then there's the late-breaking news about another missile launch by North Korea, Jim Cramer told his Mad Money viewers Monday, but what's really moving the markets are takeovers and the upcoming iPhone launch.
The stock market doesn't pay a lot of immediate attention to natural disasters, Cramer explained. That's because the rebuilding efforts, even if they're huge, take time to materialize and affect earnings.
Something else happening in the near future will be Apple's (AAPL) next iPhone launch, the rumors of which sent this Action Alerts PLUS holding up 1%, taking the likes of Micron Technology (MU) and LAM Research (LRCX) up 2.6% and 1.7% respectively.
On Real Money, Cramer says don't overthink the winner in this new iPhone iteration. It's Apple. Get Cramer's insights with a free trial subscription to Real Money.
Executive Decision: Six Flags
For his "Executive Decision" segment, Cramer welcomed back Jim Reid-Anderson, chairman, president and CEO of Six Flags Entertainment Corp. (SIX) , the amusement park chain with shares that are off 13% so far in 2017.
Reid-Anderson started off by saying that while Six Flags does operate three parks in hurricane-stricken Texas, it has 20 parks overall that operate year-round, so the financial impacts from any one event are minimal. He wished all those in Texas a speedy recovery.
Turning to the company's most recent quarter, Reid-Anderson said that while they did miss analysts expectations this quarter, they did post record revenues and earnings. He said they can, and will, do better, however. Reid-Anderson also noted that his return as CEO of the company was purely coincidental and did not have anything to do with this quarter's performance.
Looking ahead, Reid-Anderson said Six Flags has huge opportunities in a great industry and his company's 5.1% yield is the highest in the industry. He also noted this past last summer has historically been a great buying opportunity for their shares.
Hurricane Harvey's Impact
How do natural disasters like Hurricane Harvey affect your portfolio? History paints a mixed picture, Cramer said, but there may be some clear winners.
Cramer started off by saying that his thoughts and prayers go out to all those affected by the storm. No one truly wants to profit from the misery of others.
When it comes to the oil and gas industry, it will be the oil producers that will be hardest hit by any refinery closures. Keep a close eye on those in the Permian Basin, Cramer said, that those pipelines will have no place to go with Houston underwater.
As for the insurers, Cramer said they're likely to take a brief hit, as we saw today, but if Hurricane Katrina taught us anything, these stocks will rally hard over the next three months as damages are calculated and premiums begin to rise.
As for some ancillary plays, Cramer said investors should look into CBRE Group (CBE) , as many companies will require relocation, and United Rentals (URI) , which will have all of the equipment needed for the rebuilding efforts. As for the obvious -- such as Lowes (LOW) and Home Depot (HD) -- Cramer said there hasn't been any major bump for these stocks after past events.
Cramer and his team are focusing on how Hurricane Harvey is affecting the AAP portfolio, particularly energy holdings. Find out what they're telling their investment club member and get in on the conversation with a free trial subscription to Action Alerts PLUS.
Early-stage biotechs are inherently risky, Cramer reminded viewers, especially ones that have just completed big secondary offerings of stock. Case in point: Esperion Therapeutics (ESPR) .
Cramer explained that Esperion is the quintessential definition of a risky stock. The company is an early-stage biotech with no products currently on the market, meaning the stock can trade wildly on any news. Over the past few years, Esperion has traded from $20 a share to as high as $112, only to plunge back below $10, and more recently, spike above $48.
In 2015, Esperion used its momentum to complete a huge secondary offering of stock, a move which ultimately caused shares to lose that momentum. That's why the company's recent secondary raised the red flag for Cramer, who drew many similarities.
That's not to say Esperion isn't doing great work, Cramer said. It's treatment for lowering cholesterol is currently in four Phase III trials and would be a game changer for those who cannot tolerate the current standard of care.
But when a company that trades purely on its long-term potential and not on earnings, and it has a history of crushing investors when they least expect it, that makes the stock one he cannot recommend.
Executive Decision: Veeva Systems
In his second "Executive Decision" segment, Cramer spoke with Peter Gassner, founder and CEO of Veeva Systems (VEEV) , the cloud software provider to the life-sciences industry. Shares of Veeva lost 15% last week after the company posted a three-cents-a-share earnings beat with raised guidance.
Gassner said that Veeva had a great quarter and they continue to focus on top- and bottom-line growth. The company posted 31% operation margins with strong subscription growth.
When asked about competition, Gassner said that as Veeva broadens their product offerings, they're bumping up against new competition, which is normal. What's important, however, is that customers love Veeva's cloud offerings, especially as it expands into industries outside of life sciences, including manufacturing.
Cramer said there's a lot to like about Veeva and after shares ran up going into earnings, they're now at attractive levels.
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