Why are investors always so negative? That was the question Jim Cramer offered his Mad Money viewers Tuesday, after another wave of selling on Wall Street spurred by the development in the Russia-Ukraine crisis.
Make no mistake, Russian President Vladimir Putin is a bad guy, Cramer told viewers, but wars don't happen overnight, and this conflict could drag on for months. That's why investors need to treat every selloff as a learning experience and not simply use them as an excuse to panic.
Over on Action Alerts PLUS, Bob Lang and Chris Versace are focusing on the fundamentals amid geopolitical tensions and global markets volatility. They say they'll learn what's positive for existing positions and look for new ones, putting to work the cash that they've built up. Get in on the conversation and get more trading strategies from the Action Alerts PLUS investing club.
Selloffs are when the market puts your favorite stocks on sale, Cramer said. That means investors need to have their shopping lists ready with the prices they're willing to pay. If your stocks reach those prices, don't panic, just buy. If they don't reach your targets, no problem. Just be patient.
Cramer recommended stocks of companies that just reported earnings, as they're the least likely to surprise you. Both Cisco Systems (CSCO) and Walmart (WMT) reported last week and both are now well off their highs. Cisco trades for just 16 times earnings with a 2.7% yield, while Walmart gave investors a spectacular outlook for the rest of 2022. Neither of these companies is affected by Russia, Cramer noted, which is why they're safe bets.
Executive Decision: Carrier Global
In his first "Executive Decision" segment, Cramer spoke with David Gitlin, chairman and CEO of Carrier Global (CARR), the heating and air conditioning giant that just gave a bullish outlook during their analyst event. Shares of Carrier bucked the trend Tuesday, rallying 2.7% by the close.
Gitlin said there are many long-term, secular growth trends that are driving Carrier. The pandemic has opened all new possibilities when it comes to creating safe indoor environments, he said. Carrier is also a leader in cold storage solutions, which are needed for vaccines and other mission critical medical supplies. That's why Carrier forecasts sales up more than 6% to 8% for the year.
When asked about inflation, Gitlin said costs are rising, but Carrier is working hard to reduce costs so when prices retreat, their gross margins will expand even more.
Carrier is also a cash story, Gitlin noted. When the company was spun off, they had $10 billion in debt. Today, they have under $4 billion. That's why Carrier is making acquisitions and returning cash to shareholders by boosting their dividend 25% and authorizing a $1.6 billion share buyback. "Our strong cash positions now lets us play offense," Gitlin added.
Executive Decision: Mattel
For his second "Executive Decision" segment, Cramer spoke with Ynon Kreiz, chairman and CEO of toymaker Mattel (MAT), which reported blowout earnings two weeks ago that included a top- and bottom-line earnings beat with double-digit sales growth and expanding gross margins.
Kreiz proclaimed the turnaround at Mattel is now complete and the company is returning to growth mode. He said his company's balance sheet has been fixed, their brands have been reinvigorated and Mattel is focused on monetizing intellectual property with digital entertainment.
Kreiz noted that the company is very excited for its upcoming movie featuring Barbie, an event he said is "worth the wait." Barbie may be 63 years old, but she's more modern and relevant than ever, he said.
Mattel has also proven that card games were not just for the pandemic. It turns out that Uno is "number one" in more ways than one.
Turning to their supply chain, Kreiz said Mattel's supply chain is a competitive advantage, one they actively manage to keep toys on store shelves and in the hands of their customers. Shares of Mattel are up 19% over the past month.
Executive Decision: Palo Alto Networks
For his final "Executive Decision" segment, Cramer checked in Nikesh Arora, chairman and CEO of Palo Alto Networks (PANW), the cybersecurity giant with shares down 12% over the past three months.
Arora said that Palo Alto has spent the past three-and-a-half years rebuilding its platform from scratch and now has the ability to detect and stop attacks as they happen, rather than weeks or months after they've occurred.
Cybersecurity is more relevant than ever, Arora added, as nations, companies and hacker groups are all probing for weaknesses they can exploit. Companies have to keep their stuff safe, he said, and that means making security a priority, especially as the complexity of our technology grows.
Lightning Round
In the Lightning Round, Cramer was bullish on AbbVie (ABBV) and Sirius XM Holdings (SIRI).
Cramer was bearish on CRISPR Therapeutics (CRSP), American Airlines (AAL) and Uber Technologies (UBER).
The Cost of Innovation
In his "No Huddle Offense" segment, Cramer sounded off against chasing innovation at all costs, a strategy made popular by Cathie Wood and her ARK Innovation ETF (ARKK).
You can't just innovate for the sake of innovation, you need to also make money, Cramer said. If your company doesn't have a path to profitability, then it's simply not worth owning.
Investors need to always remember that the market can be wrong about a company a lot longer than you can remain solvent.
So while Wood refuses to admit she's been wrong about stocks like Palantir (PLTR), which has fallen more than 62% over the past year, regular investors can't afford to follow in her footsteps.
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