We don’t need everything to go right for the stock market to rally, Jim Cramer told his Mad Money viewers Wednesday. If just one or two things turn in our favor, stocks could react like a coiled spring.
There is no shortage of events that could make investors turn positive and send stocks higher. The Federal Reserve could engineer the perfect economic soft landing, curbing inflation without spurring a recession. Or there could be a peaceful resolution in Ukraine. Or, earnings could surprise to the upside, like they did at Nordstrom (JWN) – Get Nordstrom, Inc. Report, sending shares skyrocketing 37% by the close.
We don’t need all of these things to go right, just a few. A decline in oil prices might do the trick. So too could any number of data points showing inflation is receding.
A market that rallies on no news, like we saw Wednesday, is often a harbinger of good things on the horizon, Cramer concluded. That’s why he’s among only a select few who are actually positive on the stock market despite the many bad things happening around the globe.
Executive Decision: Okta
In his first “Executive Decision” segment, Cramer spoke with Todd McKinnon, chairman and CEO of Okta (OKTA) – Get Okta, Inc. Class A Report, the cybersecurity company which just posted solid quarterly results. Shares of Okta are up 15% over the past week.
McKinnon explained that Okta is taking advantage of the trends towards the cloud, working from home and providing better customer experiences and helping its customers be more successful with all three. Okta now has over 15,000 customers and is playing in an $80 billion addressable market.
When asked about the criticisms that Okta makes no money, McKinnon said their strategy hasn’t changed over the past six years. With such a huge market opportunity in front of them, the best use of their cash is to invest into their business and not to focus on earnings.
When asked about their identity solutions, McKinnon said the entire industry is moving to a “zero-trust” model, where every user is verified every time, ensuring that only the right people have access to the resources they should have access to. As cyber attacks ramp up, zero-trust is a must-have technology.
‘Accidental’ high yielders
Wall Street craves certainty, Cramer told viewers. So when times get bumpy, it’s time to look for high-quality stocks that trade at ridiculously low levels. You can always fall back on stocks with great dividends, which is why Cramer offered up his top 10 favorite “accidental” high yielders.
Topping the list was long-time fav Simon Property Group (SPG) – Get Simon Property Group, Inc. Report, the shopping center REIT with a 4.8% yield. This is the perfect stock now that COVID is fading.
Simon was followed by Dow Chemical (DOW) – Get Dow, Inc. Report, International Paper (IP) – Get International Paper Company Report, Walgreen Boots Alliance (WBA) – Get Walgreens Boots Alliance Inc Report and Contour Brands (KTB) – Get Kontoor Brands, Inc. Report, all of which have yields over 4%.
Cramer also recommended Newell Brands (NWL) – Get Newell Brands Inc Report, which is turning itself around and sports a 3.9% yield, along with American Eagle Outfitters (AEO) – Get American Eagle Outfitters, Inc. Report, which trades at just seven times earnings with a 3.7% yield. Pfizer (PFE) – Get Pfizer Inc. Report also made the list, as did Innovative Industrial Industrial Properties (IIPR) – Get Innovative Industrial Properties Inc Report, with its 3.1% yield.
The last name in Cramer’s top 10 was also a long-time favorite, Morgan Stanley (MS) – Get Morgan Stanley Report.
Executive Decision: Snowflake
For his second “Executive Decision” segment, Cramer also spoke with Frank Slootman, chairman and CEO of Snowflake (SNOW) – Get Snowflake, Inc. Class A Report, the cloud-based data and analytics company that plunged 22.8% Wednesday after reporting slowing revenue growth.
Slootman explained that investors are still apparently getting used to Snowflake’s consumption revenue model. He said unlike a typical SaaS model, which is contractual and easier to follow, Snowflake is consumption-based and varies depending on usage.
That means when Snowflake has a surge of new customers with no history, they have less visibility into how those customers will grow, which leads to more conservative forecasts. Given past history, the growth for these new customers should snowball into great earnings down the road, he said.
Slootman touted customers like Instacart as proof of the value it offers. Using Snowflake, Instacart was able to scale up to meet the demand of the pandemic without a hitch. Snowflake has proven it can scale, even in extreme scenarios.
Lightning Round
In the Lightning Round, Cramer was bullish on Norwegian Cruise Line (NCLH) – Get Norwegian Cruise Line Holdings Ltd. Report, Cemig (CEMIG) , and Masimo (MASI) – Get Masimo Corporation Report.
Cramer was bearish on Foot Locker (FL) – Get Foot Locker, Inc. Report and DigitalBridge (DBRG) .
Downshifting Tesla
In his “No Huddle Offense” segment, Cramer said for as much as he loves Elon Musk and Tesla (TSLA) – Get Tesla Inc Report, the momentum in the stock market has now shifted in favor of legacy automakers like Ford (F) – Get Ford Motor Company Report and upstarts like Rivian (RIVN) – Get Rivian Automotive, Inc. Class A Report.
Wednesday, Ford announced that it is effectively splitting the company into two, with an internal combustion division and an EV division. This will allow Ford to build the best teams possible for each side, while still sharing financial resources. Ford now aims to build two million electric vehicles by 2026. Today’s 8.38% surge in Ford stock shows that investors think it’s possible.
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Source: https://www.thestreet.com/jim-cramer/cramers-mad-money-recap-march-2-2022?puc=yahoo&cm_ven=YAHOO&yptr=yahoo