Superstars don’t win every game, but over the long-term, they win a lot more than they lose, Jim Cramer told his Mad Money viewers Thursday.
This also rings true for superstar stocks with superstar management teams. Far too often, stocks go down because investors didn’t do their homework. That means far too often, stock declines aren’t justified.
We’ve seen many examples of this phenomenon recently. The headlines of Alphabet’s (GOOGL) – Get Alphabet Inc. Class A Report earnings made the quarter sound horrendous. But the underlying trends of Google’s business didn’t warrant such a panic. Cramer said he trusts Alphabet’s management, and you should too.
Then there’s Meta (FB) – Get Meta Platforms Inc. Class A Report, which investors have written off countless times. First, they feared the company missed mobile, then it was competition from Snap (SNAP) – Get Snap, Inc. Class A Report, then TikTok and most recently, Apple’s (AAPL) – Get Apple Inc. Report new privacy rules. But in every case, Meta eventually overcame their challenges.
Speaking of Apple, Cramer said of course the Covid lockdowns in China will have an impact on Apple. But that doesn’t mean CEO Tim Cook can’t be trusted to deliver for shareholders.
Cramer was also bullish on Ford Motor (F) – Get Ford Motor Company Report, which has also delivered for shareholders by shedding money-losing businesses and doubling down on electric vehicles. As for Microsoft (MSFT) – Get Microsoft Corporation Report, Cramer called the stock’s dip after earnings simply “foolish.“
These great companies don’t get it right every time, Cramer concluded, but those who have done their homework know you simply can’t beat them over the long term.
Executive Decision: Hertz Global
In his first “Executive Decision” segment, Cramer spoke with Steve Scherr, CEO of Hertz Global (HTZ) – Get Hertz Global Holdings Inc Report, the rental car giant that saw its shares dip 6.8% after reporting an upbeat quarter.
Scherr said Hertz is an iconic brand that’s now 103 years old. The mobility market is changing, he said, and Hertz remains at the center of it, having cleaned up its balance sheet after the company’s recent bankruptcy.
Hertz is about a lot more than just travelers at the airport, Scherr added, as the company now rents vehicles to everyone from corporate fleets to Uber (UBER) – Get Uber Technologies, Inc. Report drivers. Both leisure travel and business travel are coming back, he said, and Hertz is near pre-pandemic level.
At the end of the day, Hertz is all about asset management, managing their intakes and outtakes carefully. The company is finding electric cars, for example, garner higher rental rates with lower maintenance costs, making them more profitable, he said.
Too Much Negativity
How was Meta able to surge 17% when the company only delivered mixed results? Simple. The negativity has simply gotten overdone.
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Meta’s problems first started last summer, when Apple introduced new privacy rules that were at odds with Facebook’s targeted advertising. With growth rates declining, Meta reported its first revenue miss by the fall and its first earnings miss in February, sending investors heading for the hills. The bulls had simply lost all confidence in Meta.
But this quarter, Meta put those worries to rest. The company has a plan to mitigate Apple’s new rules, they have a response to the popularity of TikTok, and they even told investors they’ll curb their capital expenditures to boost earnings.
That’s how you under-promise and over-deliver, Cramer said.
Executive Decision: Brunswick
For his second “Executive Decision” segment, Cramer also spoke with David Foulkes, CEO of boat maker Brunswick (BC) – Get Brunswick Corporation Report, which just delivered a 20-cents-a-share earnings beat. Shares of Brunswick are down 28% over the past year and trade at just 7.6 times earnings.
Foulkes said Brunswick continues to see strong sales in all of its segments, including propulsion and service. Now is the time for Brunswick to shine, he said, as the company was built to flourish in any environment.
Supply chain constraints continue to challenge the company, however. Inventories are down, with just 5,000 units among the company’s 900 dealers.
When asked about rising interest rates, Foulkes said rates are not yet at levels where they would affect demand. But, he noted, only about 50% of boats purchased are financed.
Lightning Round
In the Lightning Round, Cramer was all-bulls, recommending Weber (WEBR) – Get Weber, Inc. Class A Report, Traeger (COOK) , Magnolia Oil & Gas (MGY) – Get Magnolia Oil & Gas Corp. Class A Report and Affirm (AFRM) – Get Affirm Holdings, Inc. Class A Report.
Can’t Blame the Fed for Everything
In his “No Huddle Offense” segment, Cramer said he’s tired of hearing that Federal Reserve chair Jay Powell is “behind the curve.”
Powell is certainly not perfect. He didn’t want to derail the Covid recovery by tightening too soon, a move that led some measures of inflation to move from transitory to worrisome.
But Cramer argued that the real measures of inflation are outside of Powell’s control and nothing he can do would influence them. The cost of oil, for example, is controlled by geopolitical worries, while rising food prices stem from supply chain disruptions and labor worries.
Nobody even knows why some prices are rising, Cramer concluded, that’s why it’s not fair to blame Jay Powell for everything.
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Source: https://www.thestreet.com/jim-cramer/cramers-mad-money-recap-april-28-2022?puc=yahoo&cm_ven=YAHOO&yptr=yahoo