The stock market is not infallible, Jim Cramer reminded his Mad Money viewers Wednesday. In fact, Cramer said, he sees stupid things happening every day.
Back in January 2016, oil traded for just $26 a barrel and shares of oil service giant Schlumberger (SLB) traded at $61. Today, oil trades at near twice that level and shares of Schlumberger are trading at $61 a share with a 3.2% yield. Should these shares be higher? Cramer said: absolutely, given that 2018 will be a pivotal year for the oil patch.
Then there's the curious case of Home Depot (HD) , which delivered a 7.9% rise in same-store sales when the analysts were only looking for 5.8%. The market's response? Shares fell on the open.
Target (TGT) is a serial offender of UPOD, or "under-promise and over-deliver." Yet when the company once again forecast weak sales, shares immediately plunged 9.8%.
Need still more examples? Cramer cited the slow decline in IBM (IBM) , the pop in Procter & Gamble (PG) , the strength in Cisco Systems (CSCO) and the dive and subsequent rally in Walt Disney Co. (DIS) as four more examples of the market just getting things dead wrong.
Never trade on the headlines, Cramer reminded viewers. Do your own homework. Wait for the price you want, and pull the trigger when that price arrives.
Executive Decision: Square
For his "Executive Decision" segment, Cramer sat down for the first time with Sarah Friar, CFO of payment processor Square (SQ) , a stock that has tripled in 2017 thanks to 45% revenue growth.
Friar said that Square is all about empowering commerce and her company provides even the smallest of companies the tools they need to never miss a sale, and bigger companies the ability to be innovative and creative in the way they accept payments. Friar sees a $26 billion market opportunity in the U.S. and eight times that internationally.
Square is about more than just payments, however, as the company is also in the small business lending space, with loan losses under 4% thanks to their strong relationships with their merchants.
Square is also making news as the company plans to experiment with bitcoin. Friar explained that you never know where innovation is going, but they need to be where their customers are and right now bitcoin is what customers are asking for.
Cramer said that even at current levels, Square is a powerful story.
Executive Decision: Welbilt
In his second "Executive Decision" segment, Cramer also sat down with Hubertus Muehlhaeuser, president and CEO of Welbilt (WBT) , the restaurant equipment spinoff from Manitowoc (MTW) . Shares of Welbilt are up 10% so far this year.
Muehlhaeuser said that Welbilt is executing on the plan they laid out last year and his company is outperforming the industry. The restaurant business, which accounts for 60% of sales, continues to grow in the U.S. but is growing more slowly than it has in the past.
One of Welbilt's biggest advantages is that they can provide all of the components for a modern kitchen. By building these components, Welbilt can provide everything from grills and fryers to coolers and refrigerators and do it in a way that makes kitchens more efficient with less labor and less waste.
Every restaurant needs to invest and reinvest in order to keep costs in check, Muehlhaeuser said, and that's where Welbilt continues to shine.
Know What the Kids Want
Knowing what the millennial generation desires is key to a successful portfolio, Cramer told viewers, as he opined on the growing influence of younger consumers. He said that everyone knows millennials are willing to pay up for Uber, iPhones and makeup to look their selfie best. Just look at the run in Estee Lauder (EL) . But the millennial influence extends far beyond these obvious winners.
ConAgra Foods (CAG) has been hard at work reinventing its brands for the younger generation, as has Tyson Foods (TSN) , when they bought Hillshire Farms. Both these tired food stocks have been reinvigorated with new products, new branding and most importantly, new packaging that swaps paper for plastic and includes clean labels with all-natural ingredients.
The older generation doesn't matter to these companies, or their stocks, nearly as much as they did in decades past, Cramer concluded. The winners are the ones who have figured out what makes the millennials tick.
Off the Tape
In his "Off The Tape" segment, Cramer sat down with Sarah Robb O'Hagan, CEO of the privately-held Flywheel Sports, the fitness company with 42 studios across the country and a new high-tech, connected stationary bike that brings the studio experience right into your home.
O'Hagan explained that their new bike, which retails for $1,699, lets riders connect their own smart device to their TV at home for an immersive, big screen experience. The new offering will expand the Flywheel brand to those who don't live close to a studio and to those who aren't able to make it to a studio class as often as they'd like.
Flywheel is quickly becoming a lifestyle, O'Hagan said, and their riders are increasingly involved in their community.
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