In the great debate on inflation, the jury still absent, Jim Cramer warned his Mad Money viewers on Tuesday. Some companies have succeeded in using innovation and ingenuity to fight rising costs, while others have lost the battle. By the end of this week, however, we should know the final score.
The problem with the inflation debate is that the two extremes are, well, too extreme. Can productivity really triumph over inflation? It depends on who you ask.
Safer Real moneyEd Ponsi writes that if Twitter CEO Jack Dorsey is right about inflation, then investors might want to be in a REIT. Learn more about Ponsi’s investment strategies and see what he says about the iShares US Real Estate Exchange Traded Fund.
To 3M (MMM) – Get the 3M Company Report, rising costs have tarnished the company’s track record of formative innovation. But at General Electric (GE) – Get the General Electric Company (GE) report, the company has been successful in beating inflation, at least for now, by pushing up stocks at the close. Otis Actions (OTIS) – Get the OTIS WORLDWIDE CORPORATION report fell 1.9%, despite strong sales in the United States, but UPS (UPS) – Get the Class B report from United Parcel Service, Inc. managed to surprise on the upside, keeping costs low and pushing its share up to 6.9% at the close.
Cramer was bullish on a few serial innovators, including steelmaker Nucor (NAKED) – Get the report from Nucor Corporation, drug maker Eli Lilly (THERE IS) – Get the Eli Lilly and Company (LLY) report and Microsoft (MSFT) – Get the report from Microsoft Corporation (MSFT). The only disappointment of the day, he said, was Alphabet (GOOGL) – Get the Class A report from Alphabet Inc..
Alphabet shares fell in after-hours trading, although the company said its third-quarter earnings exceeded analysts’ estimates.
Executive decision: Logitech
In his first segment “Executive Decision”, Cramer spoke with Bracken Darrell, President and CEO of Logitech (LOGI) – Get the Logitech International SA report, the computer peripherals maker which saw its shares drop from nearly $ 150 to less than $ 85 on Tuesday. The shares are currently trading for 19 times earnings.
Darrell said that despite the loss of enthusiasm from Wall Street, Logitech’s business remains strong and all of its product categories continue to grow. Logitech provides equipment for video conferencing, home and mobile workspaces, gaming, and content creation and delivery, all of which are in high demand.
Digging into quarterly results, Darrell noted that video sales fell this quarter, but only after doubling last year at the height of the pandemic. He also admitted that Logitech is not immune to supply chain pressures.
The company is adding inventory to the channel in an effort to combat the logistics slowdown ahead of the holiday shopping season. He expected slight impacts on the company’s gross margins.
Off the charts
In the “Off The Charts” segment, Cramer sat down with his colleague Larry Williams to see where crude oil could go next.
Williams first looked at a weekly crude oil futures chart from 2012 to 2014 as a frame of reference. He noted that during this period there were four times speculators bought while traders sold. Each of these periods marked a peak in crude oil prices.
Fast forward to today and Williams saw the same pattern in the 2021 futures charts. Trade traders are offloading their positions, while hedge funds and home players are buying aggressively, signaling that a high rough should be close.
Williams’ thesis was confirmed by his own COTSI indicator, as well as historical crude seasonal trends. Typically, oil would have peaked in July, making this year an anomaly, but these seasonal pressures are still present and will eventually bring prices back to Earth.
Cramer noted that the trend for oil is always higher, meaning that a peak in the crude market could still be in a few days. Nonetheless, he urged investors to be cautious in the coming weeks as crude is about to turn a corner soon.
Executive decision: Centene
For his second “Executive Decision” segment, Cramer also spoke with Michael Neidorff, CEO of health plan operator Centene (CNC) – Get the report from Centene Corporation. Centene shares have risen 15% in the past two weeks alone, including a 4.4% gain on Tuesday after the company reported another strong quarter.
Neidorff said you need scalability in healthcare, and now Centene has the scale it needs to deliver on all of its promises. The company has had a clean quarter, he said, and is entering the phase of recognizing the value of all of its past investments.
One of those investments has been the addition of artificial intelligence to support monotonous tasks like pre-authorizations. Neidorff noted that it takes an average of 18 minutes for a nurse to review a patient’s chart and authorize a procedure. Their new AI system performs the same task in a single second. However, Centene doesn’t rely exclusively on AI. Any procedure that is not pre-authorized is still subject to human scrutiny, said Neidorff, but the new system is a huge saving in time and money.
Asked about his stance on vaccination mandates, Neidorff said his mission is to keep everyone healthy. Everyone who can get vaccinated should get vaccinated, he said, to protect themselves and anyone who cannot be vaccinated. It is a public health problem, he continued. The unvaccinated are a host for the next variant, and with each new variant we run the risk of the variant being resistant to our vaccines and starting this process all over again.
Another look at Facebook
In his No-Huddle Offense segment, Cramer took another look at Facebook (FB) – Get the Class A report from Facebook, Inc., whose shares fell a further 3.9% on Tuesday. He admitted that the social media giant has a lot of work to do to fix its platform and reassure the world that its network will not be used to promote hate, violence and a host of crimes, including human trafficking. humans and even genocide.
But outside of the company’s current issues, Cramer said he looks forward to Thursday, when Facebook launches plans for the Metaverse, an interactive virtual reality platform that Cramer says will be the driving force behind the technology for the next decade.
No one knows exactly how Facebook envisions the metaverse, only that the company has invested millions in its creation. Think of the metaverse as a place where you can interact with friends or celebrities in virtual reality. The platform could be used for everything from games and entertainment to learning and training, arts, concerts and culture.
The metaverse will be built by millions of creators, Cramer concluded, and Facebook is likely the platform that will enable those creators. This is what makes Thursday’s announcements so exciting.
Here’s what Cramer had to say about some of the actions that callers offered during the “Mad Money Lightning Round” on Tuesday night:
soft (CHWY) – Get the Class A report from Chewy, Inc.: “The stock is down 24% for the year. I think you should buy it. They are in good shape.”
Berkshire Hathaway (BRK.B) – Get the Berkshire Hathaway Inc. Class B (BARK.B) report: “You will never go wrong buying Berkshire.”
The Metals Co. TMC: “It’s a Canadian battery company and there isn’t enough room for all of these companies. I don’t want to be in this one. “
The Lion Electric Company LEV: “Be careful with these names. Everyone wants to be Tesla (TSLA) – Get the Tesla Inc report but we already have a Tesla. “
Microvast (MVST) – Get the report from MICROVAST HOLDINGS, INC.: “No. There are too many battery companies.”
Pharmaceutical Jazz (JAZZ) – Get the report from Jazz Pharmaceuticals Plc: “I like Jazz. It was a good acquisition they made.”
Ncino (NCNO) – Get the report from NCINO, INC.: “This one did not take off as I hoped. I would be a buyer.”
To sign up for TheStreet’s free Daily Booyah! newsletter with all the latest articles and videos please click here.