Friday’s market proved that when something goes right, the market can rally, Jim Cramer told his Mad Money viewers. That’s especially true now that China has indicated there might be a thaw in the chilly trade dispute with the U.S. — allowing U.S. tech stocks to display some leadership.
Cramer says there are many more good opportunities coming in next week’s game plan.
Cramer said he’ll be listening to Tyson Foods (TSN) on Monday, but with rising input costs, the bears are likely to keep winning in the short-term. On a positive note, Service Now (NOW) will be holding an analyst day, which will be sure to ignite the cloud stocks.
Next, on Tuesday, earnings from Walt Disney Co. (DIS) , Electronic Arts (EA) and Monster Beverage (MNST) . Monster has been disappointing of late, but the same cannot be said for Disney and Electronic Arts, both of which Cramer recommended.
Wednesday will see earnings from Anheuser-Busch InBev (BUD) and 21st Century Fox (FOXA) . Cramer said he’s betting on a good quarter from Anheuser-Busch and Fox should provide the latest on the Disney deal.
Then on Thursday, good things are expected from Magna International (MGA) when they report, and Nvidia (NVDA) should be able to rally once the company gets beyond the cryptocurrency headwinds. The real story behind Nvidia is not bitcoin, Cramer added.
Finally, on Friday, we’ll get some comments from the St. Louis Federal Reserve Chairman and Cramer said he expects those comments to reassure investors and maybe even spur another Friday rally.
Cramer and the AAP team are bringing WestRock Co. (WRK) , the No. 2 North American container board producer, out of the bullpen. Find out what they’re telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.
Executive Decision: Axon Enterprise
For his “Executive Decision” segment, Cramer sat down with Rick Smith, CEO of Axon Enterprise (AAXN) , the body camera and evidence capture company formerly known as Taser. Shares of Axon are up 80% over the past 12 months.
Smith said that Axon is still the smallest competitor in their space, but their products speak for themselves and they’re winning more deals than anyone.
When it comes to body cameras, Smith explained that the software is key. Police officers no longer need to spend hours writing up reports when there is video footage of the entire incident.
Smith says evidence has shown that using body cameras decreases fatalities by 50%, while complaints against police have fallen 93%. Cameras simply keep all parties on their best behavior, Smith said.
With Axon expanding overseas, Cramer said there are a lot of things going right with this company.
Over on Real Money, Cramer says keep an eye on Skyworks Solutions (SWKS) CEO Liam Griffin because he knows how to play the game. Get more of his insights with a free trial subscription to Real Money.
The Yum Conundrum
Nearly 10 months ago, Cramer told viewers to buy shares of Yum Brands (YUM) and sell its counterpart, Yum China (YUMC) . Since that recommendation, shares of Yum are up 11%, while Yum China has fallen over 5%. What should investors do now? Cramer took a fresh look to find out.
The difference in these two stocks’ performance comes down to expectations and execution, Cramer said. Yum China was supposed to be the faster growing of the two, forecasting 15% annual growth and a tripling of its store count. But in reality, the company hasn’t been living up to its potential.
Meanwhile, Yum Brands was also supposed to deliver 15% earnings growth and the company delivered 20% instead. KFC saw sales rise by 13% and Taco Bell by 4%, leaving only the beleaguered Pizza Hut seeing a 7% decline. While that’s not perfect, Cramer said it’s better than anyone had hoped.
Since talk of trade wars began in March, shares of Yum China have only gotten worse, as its U.S. counterpart continues to rise. That’s why Cramer said he’s sticking with his original recommendation.
Executive Decision: FireEye
In his second “Executive Decision” segment, Cramer spoke with Kevin Mandia, CEO of FireEye (FEYE) , the cybersecurity company that saw its shares fall 10% after it reported strong results with lighter-than-expected guidance.
Mandia started off by saying that FireEye exceeded all of their forecasts and he was very pleased with the quarter. He manages the company for the long term, he said, and is not paying a lot of attention to today’s stock decline.
When asked about their business, Mandia explained that FireEye is a second line of defense and catches what the firewalls and email gateways miss. Even as a second layer, his company detects millions of attacks every week, emphasizing the importance of having a unified system looking at network, email and endpoints.
Turning to the topic of cryptocurrency, Mandia said that these currencies are a real problem, because they’re anonymous and an attacker can easily empty your wallet from thousands of miles away.
Despite the weakness today, Cramer said he still likes FireEye.
In his “No-Huddle Offense” segment, Cramer celebrated the annual Berkshire Hathaway (BRK.A) (BRK.B) shareholder weekend by taking a quick peek at Warren Buffett’s five largest holdings.
Buffett just bought another 75 million shares of Apple (AAPL) , a stock which Cramer also owns for Action Alerts PLUS. Cramer said this company’s service revenue is still underappreciated and is likely why Buffett keeps buying more.
Wells Fargo (WFC) likely won’t get a lot of attention this weekend, but Cramer said the worst is likely behind this company. Buffett’s other bank, Bank of America (BAC) , is a big winner though, especially with rising interest rates.
Rounding out Buffett’s top five are Kraft Heinz (KHC) and Coca-Cola (KO) , two stocks which Buffett has shown a lot of patience with.
In the Lightning Round, Cramer was bullish on PayPal (PYPL) , Wyndham Worldwide (WYN) , Churchill Downs (CHDN) , Devon Energy (DVN) , Discovery Communications (DISCA) and Cypress Semiconductor (CY) .
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