There's still a bull market going on underneath all of this nonsense, Jim Cramer told his Mad Money viewers Thursday. The great pivot out of momentum stocks and into growth at a reasonable price will continue, Cramer said, as he laid out his game plan for next week's action.
On Monday, we'll of course be watching for the latest news out of Ukraine. Good news for Ukraine is good news for stocks. We'll also hear from Bank of America (BAC), the technology-driven powerhouse that Cramer said is a screaming buy.
Next, on Tuesday, we'll get a slew of earnings including Halliburton (HAL), Johnson & Johnson (JNJ), Travelers (TRV), Prologis (PLD), IBM (IBM) and Netflix (NFLX). Cramer was bullish on all of these names, except for Netflix, when consumers continue to struggle with streaming overload.
Wednesday brings earnings from the perfect company for an inflationary environment, Procter & Gamble (PG). Cramer was also upbeat on Tesla (TSLA) and United Airlines UAL after Delta's (DAL) strong comments earlier this week.
Then on Thursday, both AT&T (T) and Freeport-McMoRan (FCX) report results. Cramer said investors should look to T-Mobile (TMUS) for growth and Verizon (VZ) for yield instead of AT&T. He was bullish on Freeport as commodity prices remain high.
Finally, on Friday, We'll hear from American Express (AXP) and Schlumberger (SLB), both of which should post strong results.
Cars as a Leading Indicator
The most important economic data to hit Wall Street this week wasn't the consumer price index, Cramer told viewers, it was the earnings from CarMax (KMX). That's because used cars are an excellent leading indicator for the rest of the economy.
CarMax reported a big miss this quarter, coming in with earnings 27-cents-a-share less than analysts were expecting. The reason? Used car prices have been rising since the summer of 2020 and may have finally hit levels that are destroying demand. CarMax may be the first company to signal that inflation is peaking.
Investors should avoid buying CarMax, and especially used car rivals like Carvana (CVNA), which are unprofitable and have seen their shares crater. New car sellers however, like Lithia Motors (LAD), may be your best bet in the auto sector, as shares are cheap and new car supplies are starting to return to normal levels.
Growth at a Reasonable Price
In his final installment of stocks that have GARP, or growth at a reasonable price, Cramer dove into the industrial sector. After screening the S&P 500 and removing inflationary areas, like housing and trucking, he came up with just five names that passed the GARP criteria.
First was General Electric (GE), which has admittedly struggled for years, but is now poised for a comeback, as all of its end markets, from aerospace to power plants to healthcare, are all in demand. Shares of GE trade for just 17 times earnings.
Next was United Rentals (URI), Howmet Aerospace (HWM) and Textron (TXT). United Rentals is perfect for rebuilding infrastructure and trades at 12 times earnings. Howmet has 35% growth but trades at just 25 times earnings. Textron, makers of business jets and military helicopters, is growing earnings at 20% and trades for just 17 times earnings.
Last on the list was a familiar name, Johnson Controls (JCI), the heating and air conditioning supplier with 23% growth that trades at 17 times earnings. All of these names, Cramer concluded, should be on investors' shopping lists.
Executive Decision: Zoom Video Communications
In his "Executive Decision" segment, Cramer spoke with Kelly Steckelberg, CFO of Zoom Video Communications (ZM), the virtual meetings giant that was the ultimate Covid winner, only to see its shares fall from a peak of $588 to just $110 a share. Zoom currently trades for 30 times earnings.
Steckelberg said Zoom has transformed itself from just a meetings app to an entire communications platform, which offers products for conference rooms, phone systems and hybrid events that will include both in-person and virtual components. They're also introducing new products for sales organizations, which uses conversational intelligence features to help sales people up their game.
When asked about the company's lower earnings projections for next year, Steckelberg explained that after stellar revenue growth during the pandemic, Zoom is getting back to its roots, doubling down on research and development as well as building its sales and service organizations to meet the growing demand.
Lightning Round
In the Lightning Round, Cramer was bullish on Innovative Industrial Properties (IIPR), 1-800-Flowers (FLWS) and Clearfield (CLFD).
Cramer was bearish on Green Brick Partners (GRBK) and Virgin Galactic (SPCE).
Musk and Twitter
In his "No Huddle Offense" segment, Cramer opined on Elon Musk's offer to buy Twitter (TWTR). He says the only way Twitter can make meaningful changes is as a privately-held company, and that's exactly what Musk hopes to do. For years, Twitter has been underperforming, and the company has longed for an engaged, risk-taking, full-time CEO.
Musk, an active Twitter user and public figure, likely knows exactly what Twitter needs. We'll need to see now whether Twitter's board agrees.
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