The artificial forces that drove the market down last week appear to have gone this week, Jim Cramer told his Mad Money viewers on Monday. Traders have all but forgotten about inflation and the Fed, Cramer said, and that means tomorrow’s session is likely to continue today’s rally.
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Cramers Mad Money Recap: American Express, UPS, Honeywell
What has changed between Friday and today? Just the attitude of the buyer. Last week traders loathed the Fed’s comments on inflation, but today they have come to terms with the fact that even with low inflation, things are still looking pretty good for our economy.
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That means there are still plenty of bargains to be found, especially on Friday when the Russell 2000 Index is rebalanced, which offers plenty of opportunity. This Friday, as well as last Friday, is your chance to buy some great companies like UPS that have just reported strong profits.
Investors can also go back to American Express, which also told us last week that things were great. Cramer also supported companies like Honeywell and Lockheed Martin.
Cramer and the AAP team are reviewing everything from revenue to politics to the Federal Reserve. Find out what they are saying to their investment club members and join the fun with a free trial subscription to Action Alerts Plus.
Executive decision: Boxed
In his first “Executive Decision” segment, Cramer spoke to Chieh Huang, co-founder and CEO of Boxed, the e-commerce food platform that will soon go public through a reverse merger with Seven Oaks Acquisition SVOK. The SPAC deal is worth $ 900 million.
Huang admitted that there are some tradeoffs coming to the public through SPAC rather than a traditional IPO, but in the end he said that a SPAC was the best choice for Boxed. His company will use the proceeds from the transaction to drive marketing and awareness, and to fund his expansion efforts with new markets and product lines.
For those who may have never heard of Boxed, the company offers food in bulk to both consumers and businesses. Boxed has also opened its software platform to other corporate retailers, making it a SAAS software provider as well.
When asked about private label products, Huang stated that Boxed has about 100 items under its own private label, and those 100 items account for 15 to 20% of sales.
Huang remembered starting his business in a garage in New Jersey. He said he and his family could have lived the American dream and that he was very grateful.
Executive decision: Cerence
For his second “Executive Decision” segment, Cramer also spoke to Sanjay Dhawan, CEO of Cerence, the automotive AI technology company that powers over 320 million vehicles.
Dhawan stated that Cerence is just one of many departments within Nuance Communications, but as an independent company it is able to focus and grow significantly. Nuance has since agreed to be acquired by Microsoft for $ 20 billion. Cerence was spun off from Nuance in 2019.
Cerence offers voice assistant technology that acts as a hands-free co-pilot for the drivers. Dhawan said her most common uses are navigation, phone interactions, and music search functions. They aim to create a seamless experience both inside and outside the car.
Video: Cramer on American Airline’s trim flights amid labor shortage (CNBC)
Cramer on American Airline trim flights amid labor shortages
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Those pandemic gains still have strength
If your business committed murder during the pandemic, it has become toxic in this market even if sales are still skyrocketing. Case in point: Thor Industries, which peaked at $ 146 per share in May, only to have fallen since then. Stocks now trade for less than $ 100. The same goes for boat maker Brunswick Corp., which peaked at $ 115 in May and has also fallen below $ 100.
Investors seem to believe this is the final great quarter for these companies and that once the travel and entertainment industries are fully open again, demand will fade. But nothing could be further from the truth as both companies have multi-year arrears.
The same pattern can be seen in companies from Campbell Soup to Take-Two Interactive, but Cramer said the most frustrating thing was Walt Disney Co. Disney skyrocketed last year after the success of Disney +, but now the company can look forward to movies, theme parks, and cruises.
Cramer said he’s still a fan of all of these stocks, along with Southwest Airlines, Delta Air Lines, and Airbnb.
Has WallStreetBets lost their mojo?
In his “No Huddle Offense” segment, Cramer said the WallStreetBets crew may have finally lost their mojo. After the group’s big initial win in GameStop, every further recommendation just lost people money.
Cramer said the WallStreetBets crew didn’t have enough firepower to prop up more than a stock or two at a time, which is why their attempts to recommend Wendy’s, Corsair Gaming, Clean Energy Fuels, and Petco have all been very short-lived. If you made a purchase based on these recommendations, you have been destroyed.
Even GameStop continues to be called into question as the company has yet to come up with a plan to bail out beyond its troubled retail business.
Everyone loves a winner, Cramer concluded, but when you start losing money they stop paying attention pretty quickly.
Lightning round
Here’s what Cramer had to say about some of the stocks callers offered during Monday night’s Mad Money Lightning Round:
Sesen Bio: “Take some winnings off the table.”
Louisiana-Pacific Corp .: “I want to stay with Louisiana Pacific.”
Gevo: “People have to make room for this stock in their portfolio.”
Nikola: “No thanks. Life is too short.”
Marathon Oil: “I think it’s fine. I prefer chevron, but you’ll be fine on that too.”
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At the time of publication, Cramer’s Action Alerts PLUS held a position with UPS, HON, MSFT.
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