The rest of Wall Street may have lost faith in Coca Cola’s struggling stock, but Jim Cramer is fearlessly standing behind the ubiquitous multinational.
“I’ve got to tell you, I have been watching this stock like a hawk,” the “Mad Money” host said. “I am telling you it’s bottomed. You’ve got a new CEO. KO is a buy, buy, buy. And I know that I am alone on that and I don’t care.”
With the market unexpectedly maintaining its strength in light of U.S. airstrikes in Syria, President Donald Trump’s tense meeting with Chinese President Xi Jinping, and a weak jobs report, Cramer nodded to the economic and corporate news he is keeping an eye on next week.
On Monday, the bulls will be itching to see oil break out of its $47 to $52 range into the $53 to $54 area, and would also do well to see the 10-year Treasury’s rates rise from 2.3 percent up to 2.4 or 2.5 percent.
Cramer also expects some takeover action in the biotechnology, consumer packaged goods, and oils sectors.
Tuesday’s Purchasing Managers’ indices from China and the United Kingdom concern Cramer, because if China’s is weak, leaders there could insist on stimulus via U.S. business involvement, and post-Brexit inflation in the United Kingdom could push the country’s central bank to raise rates.
Wednesday brings mortgage application data, which Cramer thinks “is going to be the most important number about what’s going on right now in the economy.”
Airline Delta also reports earnings ahead of Wednesday’s market open, and Cramer is worried about the effects of a slowdown in travel, though he does not expect any major bombshells.
An analyst meeting at fertilizer company Mosaic could bring a strong story and some upgrades for the lagging agriculture play. “I would actually like to own the stock ahead of that meeting,” Cramer said.
A flurry of earnings reports on Thursday includes JPMorgan, Citigroup, and Wells Fargo, and Cramer is paying attention to net interest margins, or the “free money” banks make from deposits, loan growth, which he hopes has not slowed from the first quarter, and expenses in the midst of regulatory rollbacks.
If chipmaker Taiwan Semiconductor’s Thursday earnings report shows that $171 billion company is spending, Cramer says investors should pick up shares of Lam Research or Applied Materials, as they will be the direct beneficiaries of Taiwan Semiconductor’s capital outflows.
Cramer compared two food-handling equipment companies to see if Welbilt, which has gained 40 percent since it was spun off by Manitowoc a year ago, held up against its competition.
Its biggest competitor is John Bean Technologies Corporation, or JBT Corp, a massive player that not only deals in food technology but also airport equipment.
While Welbilt’s revenue has declined in recent years and its net margins have withered, JBT’s revenue growth is accelerating year-to-year, despite slightly slacking margins.
“Could JBT’s strength be because its food equipment is better, is more the kind of stuff used by farmers and food processors, while Welbilt’s focused on restaurants? Yeah, that’s it,” Cramer said.
Restaurant chains are struggling, and Cramer said Welbilt is feeling the pressure as shuttering locations do not need new kitchen equipment. JBT, on the other hand, is tied to agriculture, which has seen a spending boost of late, and its other products like frozen food are consistently in demand.
“I think it deserves a bigger premium and I’d be a buyer of JBT right here,” Cramer said.
Schneider is a large-scale transporter and that ships items all over North America via truck and rail. The company, which raised $550 million in its IPO, has benefited from e-commerce and its logistics business, which includes freight brokerage, supply chain, and import-export services.
The company is growing its revenue and net income despite concerns about the effect of a order tax on imports on its business and heavy regulation at both the federal and state levels.
“That’s why Schneider National could end up being a major Trump stock,” Cramer said.
Cramer also interviewed Mike Tuchen, the CEO of software integration company Talend, to hear how the company is achieving its massive 100 percent growth.
“Well, right now, the entire industry is moving to cloud and big data, so that part of our business is just exploding. Those two product lines are just like a freight train right now. And it’s true for us, but it’s really true industry-wide,” Tuchen told Cramer on Friday.
When asked how competition like Microsoft and Oracle is unable to tackle Talend, Tuchen acknowledged that it was in part because the smaller operator offers its customers better deals.
“But if it were just that, then the competitors would just go and cut their price and be able to compete on a deal-for-deal basis. But it’s the combination of simply being better technically at these new scenarios as well as, of course, being a better deal. That’s why we’re growing at 100 percent there and that’s why our customers are coming to us,” Tuchen said.
A trifecta of bad news hit the market today, and one group of stocks — the semiconductor plays — rallied anyway, so Cramer tracked a signature pattern that boosts stocks even in troubled times.
Despite negative reports of Syrian airstrikes, allegedly tense U.S.-China talks, and weaker-than-expected employment numbers, chipmakers’ stocks, especially of those serving Apple devices, roared to new highs.
“We call it ‘the bid underneath,'” the “Mad Money” host said. “It’s a key part of the amazing sector resilience that explains this market’s ability to hang in there even on days like today with a lot of bad news. And frankly, I find the bid underneath in this market astonishing.”
In Cramer’s lightning round, he sped through his take on a few caller favorite stocks:
Valeant Pharmaceuticals International, Inc.: “No, no. Please don’t buy. I mean, on any lift I want you to sell because that’s just a call option. You’ve got to look at the debt side. The debt side’s really hideous. Even though they don’t have a lot of debt coming to you right now, I am concerned.”
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