Next week, you need to stay focused on strong earnings, Jim Cramer told his Mad Money viewers Friday, as he laid out his weekly game plan. Cramer said to pay particular attention to those earnings that still make sense because of continuing COVID fears.
Monday starts light with just earnings from Kimberly-Clark (KMB) – Get Report. Cramer said Kimberly could confirm a rotation into the consumer packaged goods makers.
The earnings begin in earnest on Tuesday, with Johnson & Johnson (JNJ) – Get Report, General Electric (GE) – Get Report and American Express (AXP) – Get Report reporting. Cramer was bullish on all three. We’ll also hear from 3M (MMM) – Get Report, a stock Cramer says should be much higher, as well as three other favs, Advanced Micro Devices (AMD) – Get Report, Microsoft (MSFT) – Get Report and Starbucks (SBUX) – Get Report. All three are holdings in the Action Alerts portfolio. He suggested waiting to buy Starbucks until after it reports.
Next, on Wednesday, we’ll hear from the Federal Reserve, but Cramer wasn’t expecting any changes. The earnings continue with Boeing (BA) – Get Report and Abbott Labs (ABT) – Get Report, two stocks that are still early in their rallies. After the close, it’s a trifecta of tech darlings, Facebook (FB) – Get Report, Apple (AAPL) – Get Report and Tesla (TSLA) – Get Report.
Closing out the week, we’ll hear from McDonald’s (MCD) – Get Report, Mastercard (MA) – Get Report, Visa (V) – Get Report and Skyworks Solutions (SWKS) – Get Report on Thursday and Honeywell (HON) – Get Report, Chevron (CVX) – Get Report, Caterpillar (CAT) – Get Report and Eli Lilly (LLY) – Get Report on Friday. Cramer felt investors were too negative on McDonald’s and Skyworks. He said that all four of Friday’s earnings should also be strong.
Executive Decision: Ranpak
In his first “Executive Decision” segment, Cramer spoke for the first time with Omar Asali, chairman and CEO of Ranpak Holdings (PACK) – Get Report, the packaging supplier Cramer called a stealth way to play the ecommerce revolution. Shares of Ranpak were up 12.4% in today’s session.
Asali explained that Ranpak is a leader in eco-friendly packaging. They focus 100% on paper and fiber-based packaging with zero plastics of any kind and support sustainable forestry.
Ranpak currently derives 50% of its sales from the U.S. with the remainder stemming from overseas operations. In addition to packaging supplies, Ranpak also provide automation systems for ecommerce operations to help them ship more boxes, more efficiently. The company has several big ecommerce clients, including Walmart WMT.
Asali added that Ranpak is also focused on innovation. He said nobody likes to see small items packed inside of big, wasteful boxes, which is why they’ve created customizable packaging that ensures items arrive in perfect condition with the minimal packaging required. Ranpak also invests in materials science, hoping to one day replace styrofoam, plastics and other non-sustainable materials.
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When you’re hot, you’re hot. That’s certainly been the case with Cathie Wood, CEO and Chief Investment Officer of ARK Invest. Wood’s investments into disruptive companies has delivered spectacular returns over the past few years, Cramer said, but it has also created some problems.
Cramer said Wood should be celebrated for her disruptive-focused investment approach. She was bullish on Tesla (TSLA) – Get Report when no one else was, and scored a 1,100% gain as a result. Other disruptive investments included Roku (ROKU) – Get Report, Teladoc (TDOC) – Get Report and Spotify (SPOT) – Get Report.
But ARK’s success has also created some problems. First, with billions of dollars pouring into Wood’s funds, it makes it harder to invest in smaller companies. Second, ARK now has a legion of followers and copycats who follow their every move, driving prices higher than they otherwise would be.
Cramer said becoming a victim of your own success is not a new phenomenon on Wall Street, but it should make investors cautious. Right now, the markets favor disruption and innovation, but without a diversified portfolio, this group could fall as quickly as they rose.
Executive Decision II: First Horizon
For his second “Executive Decision” segment, Cramer spoke with Bryan Jordan, president and CEO of First Horizon National (FHN) – Get Report, the Tennessee-based regional bank that just posted another strong quarter. Shares of First Horizon are up 57% in just the past six months.
Jordan said the rollout of the COVID vaccine is the limiting factor in our economic recovery. He said it’s imperative to get vaccines to people as quickly as possible so the economy can get back to health as well. He was bullish on the prospects of private businesses partnering with the government wherever possible to help get this monumental task done.
Turning to their business, Jordan was bullish on their exposure to the oil and gas industry. He said this group will be a significant factor in the economy for the foreseeable future and the recovery is only just now beginning.
First Horizon is also investing heavily in technology. Jordan noted that some of the tools being used by Iberia Bank, one of their recent acquisitions, will now be rolled out to all 500 locations in 12 states. He said it’s a “huge lift” to move antiquated mainframe systems to the cloud, but that’s what customers expect from a modern bank.
Cramer proclaimed First Horizon his favorite regional bank.
No Huddle Offense
In his “No Huddle Offense” segment, Cramer proclaimed that the the fundamentals of individual companies are finally back in the drivers seat and we are once again in a stock picker’s market.
Cramer said for years, stocks felt like commodities, trading in lock-step based solely on what the market was doing or whether that sector was in favor that day. But last year, something changed.
Whether it was the rise of commission-free trading or younger investors putting their stimulus checks to work, stock prices began to reflect whether individual companies were winning or losing. Stocks like Johnson & Johnson (JNJ) – Get Report, PayPal (PYPL) – Get Report and even General Motors (GM) – Get Report are all trading based on earnings and not because they’re popular on the Wall Street fashion show.
Cramer said we are once again in a wonderful stock picker’s market.
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In the Lightning Round, Cramer was bullish on NVIDIA (NVDA) – Get Report and Lemonade (LMND) .
Cramer was bearish on Cardiff Oncology (CRDF) , Atomera (ATOM) – Get Report and Root ROOT.
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