10 Stocks That Moved The Dow – Cramer's Mad Money (10/5/17)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Thursday, October 5.

The Dow continues to hit all-time highs. It rose 4.9% in Q3, as September turned out to be a good month despite historical poor performance. Cramer listed the 10 stocks that moved the Dow, and their contribution.

  1. Boeing (NYSE:BA) accounted for a 37.5% gain in the Dow; its strong order book and deliveries led to the rise.
  2. Caterpillar (NYSE:CAT) accounted for an 11.6% gain; “The company had a true blowout quarter, thanks to a pickup in orders, very lean inventories and a very low table of employment,” Cramer noted.
  3. Goldman Sachs (NYSE:GS) accounted for 10.8% gain; its last quarter was not great, but the stock got a boost from investor optimism.
  4. Chevron (NYSE:CVX) accounted for a 9% gain in the Dow; the company’s performance showed the strength of its balance sheet and the ability to maintain dividends.
  5. Visa (NYSE:V) accounted for a 7.8% gain; “I think what shocked people here is that the modern-day Visa was built by Charlie Scharf, who recently left that job, but his successor, Al Kelly, seems to be handling things perfectly well. I admit, I was worried when Scharf left. I was wrong. Kelly is amazing. Visa’s business is humming,” said Cramer.
  6. UnitedHealth (NYSE:UNH) accounted for a 7.5% gain; the company pulled money out of losing exchanges after the Trump administration failed to repeal and replace Obamacare.
  7. Home Depot (NYSE:HD) accounted for a 7.2% gain in the Dow; the company rallied as rebuilding will be required after the recent hurricanes.
  8. Apple (NASDAQ:AAPL) accounted for a 7.1% gain; there was renewed optimism after the latest iPhone launch.
  9. American Express (NYSE:AXP) accounted for a 4.4% gain; the stock bounced back after a rise in the company’s profitability.
  10. Microsoft (NASDAQ:MSFT) accounted for a 4.4% gain in the Dow; “It’s become a must-own tech name for big-time portfolio managers who like growth but also want to sleep at night,” said Cramer.

Cramer said when interest rates are low, solid dividends can push stocks, and most of these stocks got a push by way of passive investments made in index funds. “Put simply, these names went higher largely because they were the only game in town, cash-heavy stocks of companies that are doing better than we thought that could grow in an era of slow growth,” he concluded.

CEO interview – Clorox (NYSE:CLX)

Clorox held its analyst day, and Cramer interviewed CEO Benno Dorer to find out more about the company’s road map and strategy for the future.

Dorer told Cramer that Clorox products are essential during relief efforts. Bleach is still an effective way of decontaminating water. “The American Red Cross says that we’re one of the very first calls they make after a natural disaster. We have shipped thousands of cases of Clorox bleach, but also Glad trash bags and Kingsford charcoal, and even Fresh Step cat litter to help with pet shelters. We love to make a difference, we’re proud to do so, and this is unfortunately a time when we take that call with pleasure,” he added.

Clorox believes in good growth that is profitable and sustainable. Apart from making the right products, the company invests in brand awareness and connect with the consumers.

The hurricane can impact chemical prices, which means costs of Clorox can go up. “We’re still learning about the impact of storms on costs. It’s certainly fair to assume that in the short term there could be an increase in cost. Polyethylene is about 15-20% of our cost. But you know, in the long run, if these hurricanes and natural disasters behave like previous hurricanes and natural disasters, it evens out,” said Dorer.

CEO interview – Constellation Brands (NYSE:STZ)

The stock of Constellation Brands rallied after it reported a strong quarter. Cramer interviewed CEO Rob Sands to learn more about the company’s earnings.

Sands said consumers are not one-trick ponies any more. “The consumer has changed. “If you think back historically, it was very common that a person only drank one thing. You only drank scotch, or you only drank a single wine or a single brand of beer,” he added.

The CEO mentioned that 55% of the consumers drink all 3 – beer, wine and liquor. This is good for Constellation, as the company is in a strong position in all three categories. Brands like Corona beer and Svedka vodka have gained momentum, but there is more to be done as per Sands. “We’re making distribution gains, we’ve got tremendous growth in sales and volume, but we still don’t have the distribution and the shelf space that we ought to have given our growth and given our profitability to the retailer,” he added.

The company’s acquisition strategy allows it to buy great and growing smaller brands, thereby enhancing its portfolio. Sands mentioned that Constellation’s new brands are growing in double digits and contributing 60% gross margins to the bottom line.

Chairman interview – Patterson-UTI Energy (NASDAQ:PTEN)

The stock was up 25% in the last month. Cramer interviewed Chairman Mark Seigel to know his views on the energy sector and Patterson’s performance.

As oil exports from the US have reached record highs, Siegel said the trend shouldn’t worry commodity watchers. “I think everybody starts to think that there’s an abundance whenever somebody’s starting to do well. The United States has become the marginal producer in the world, and so we’re very excited about our prospects,” he added.

Oil has been trading in the $50 range for some time now, and some worry about oversupply while others anticipate production cuts by OPEC. A high number of oil rigs does add to worries for commodity watchers, but Seigel said his company is doing more with less. “Quite frankly, we think that’s a very positive trend, because it allows for very great efficiency on the part of our customers, and that efficiency allows them to be productive. Our rig count has stayed very, very flat, and that’s all about the fact that people can make money now with these kinds of energy prices,” he added.

The chairman also mentioned about the industry’s shift towards natural gas. “It’s interesting, a lot of the natural gas is being used for manufacturing and for particular uses where it’s already set in motion or for electrical generation. And so, there’s quite a market for us,” he said. Natural gas has displaced coal in 2017, and Seigel thinks this is a long-term trend which is good for the environment, and cheaper too.

Viewer calls taken by Cramer

Dave & Buster’s Entertainment (NASDAQ:PLAY): It’s a terrific new entrant into malls. Cramer still recommended a buy.

OSI Systems (NASDAQ:OSIS): Cramer thinks L3 Technologies (NYSE:LLL) is a better play.


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