Today’s amazing labor report was no match for the nightmare unfolding in Ukraine, Jim Cramer told his Mad Money viewers Friday. The news that Russian forces shelled an active nuclear power plant sent shockwaves through the market, and even robust job growth here at home couldn’t stem the decline.
Next week’s action will also be held hostage by events unfolding in Ukraine, Cramer admitted, which is why his game plan for Monday only included the analyst meeting at Kohl’s (KSS) – Get Kohl’s Corporation Report, an event he said could be positive for the company.
Over on Action Alerts PLUS, co-portfolio managers Bob Lang and Chris Versace are telling their investment club members that the longer the Ukraine crisis goes on, the greater the impact on the cost side of the equation given the sharp increases we’ve seen thus far in a variety of commodities from wheat and other ag ones to steel and oil to natural gas and others. Get in on the conversation and hear more of their investment ideas and trading strategies.
Next, on Tuesday we’ll hear from Dick’s Sporting Goods (DKS) – Get Dick’s Sporting Goods, Inc. Report, a stock Cramer said is “worth owning.” We’ll also hear from three stocks not worth owning, MongoDB (MDB) – Get MongoDB, Inc. Class A Report, Bumble (BMBL) – Get Bumble, Inc. Class A Report and Stitch Fix (SFIX) – Get Stitch Fix, Inc. Class A Report, all of which are high-growth with no earnings.
Wednesday brings earnings from Campbell Soup (CPB) – Get Campbell Soup Company Report, a good defensive stock, and CrowdStrike (CRWD) – Get CrowdStrike Holdings, Inc. Class A Report, a cybersecurity stock that’s in high demand as cyber attacks ramp up.
Then on Thursday, Wheels Up (UP) will be reporting their earnings and Cramer felt the stock was worth a listen. Ulta Beauty (ULTA) – Get Ulta Beauty Inc Report, DocuSign (DOCU) – Get DocuSign, Inc. Report, and Rivian (RIVN) – Get Rivian Automotive, Inc. Class A Report will also report, while eBay (EBAY) – Get eBay Inc. Report will hold an analyst day. Cramer was bullish on Ulta, a company he said “has it all.”
Finally, on Friday, AT&T (T) – Get AT&T Inc. Report will hold an investor meeting, but Cramer said he’s not touching the stock.
Executive Decision: Splunk
In his first “Executive Decision” segment, Cramer spoke with Gary Steele, incoming CEO at Splunk (SPLK) – Get Splunk Inc. Report, the cybersecurity company that just posted monster earnings of 61 cents a share when analysts were expecting a loss. Shares of Splunk rallied 5.9% Friday but are still off 27% from their November highs.
Steele explained that he took the position at Splunk because cybersecurity is more critical than ever to all organizations and now’s the right time to be stepping into such an amazing opportunity. He added that Splunk serves 95% of the Fortune 100 companies and has a high retention rate, with customers always wanting more from the company.
Splunk is the platform of choice for many companies, Steele continued. That’s why Splunk is happy to partner with everyone to help integrate services with the other technologies that companies are depending on. In today’s world, everyone needs to be vigilant and stay on high alert, Steele said, and that’s what Splunk helps them do.
These IPOs Couldn’t Be Revived
At times like these, it pays to look amongst the wreckage, not only for stocks to buy, but also to learn what stocks to avoid. Case in point: three high-profile IPOs from last year that have since cratered.
Cramer warned investors all year in 2021 that the pace and quality of many of the IPOs hitting the market were horrendous, and that was before the Federal Reserve indicated higher interest rates, tanking any company that was unprofitable.
First up was Allbirds (BIRD) – Get Allbirds, Inc. Class A Report, the eco-friendly footwear brand that debuted at $15, rallied to $32, and now trades just above $6. Too many naive investors liked the shoes and bought the stock, oblivious to the fact shares were trading at 13 times sales, which is totally ridiculous for an unprofitable company.
Next was On Holding (ONON) , the footwear brand that is actually profitable, but also manufactures all of its shoes in Vietnam, ground zero for COVID-induced supply chain issues. On Holding is off 60% from its highs.
Finally, there’s Rent The Runway (RENT) , the subscription apparel company that’s just been horrendous. The company is deeply unprofitable and shares reflect it, down more than 75% from their highs.
If you want a good apparel stock, go buy Macy’s (M) – Get Macy’s Inc Report, Cramer urged. At least with Macy’s, you know what you’re getting.
Executive Decision: Hostess Brands
For his second “Executive Decision” segment, Cramer also spoke with Andy Callahan, president and CEO of Hostess Brands (TWNK) – Get Hostess Brands, Inc. Class A Report, purveyors of Twinkies and Ding Dongs and the No. 1 cupcake brand in the U.S.
Callahan said Hostess has the brands consumers love and grew by 12% in the most recent quarter. It also continues to innovate with new products like caffeinated Donettes.
When asked about inflation, Callahan said both inflation and supply chain issues are real at Hostess, but fortunately the company has pricing power and has been proactive to stay ahead of it. A new business model allows it to have the cash to invest back into the company and ensure growth for years to come.
In the Lightning Round, Cramer was bullish on Freeport-McMoRan (FCX) – Get Freeport-McMoRan, Inc. Report.
Cramer was bearish on Progress Software (PRGS) – Get Progress Software Corporation Report, Virgin Galactic (SPCE) – Get Virgin Galactic Holdings Inc Report and Trex (TREX) – Get Trex Company, Inc. Report.
In his “No Huddle Offense” segment, Cramer offered up the takeaways from his recent interview with Devon Energy (DVN) – Get Devon Energy Corporation Report CEO, Rick Muncrief.
Cramer explained that everyone assumed now that oil prices are soaring that drillers like Devon would be scrambling to increase production. But the new disciplined oil producers aren’t taking the bait. As Muncrief explained, new wells take up to a year to enter production, and by then oil prices could be back down to current levels, or worse, if everyone adds more production at the same time.
So while Wall Street sees prices as irresistible, the oil producers have been able to resist.
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