Headlines Don't Determine Stock Prices – Cramer's Mad Money (6/12/18)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Tuesday, June 12.

The news coverage on Monday was about the North Korea summit. Cramer said there is lot more to the market than North Korea, a country of 25 million, people and the market has already moved on. At most, the defense stocks went down, but that is a buying opportunity. The only implication that the summit will have is at most negotiations with China will be looked as a positive.

In other news that can impact the market as a whole is the outcome of the AT&T (NYSE:T)-Time Warner (NYSE:TWX) deal. The federal judge ruled that the purchase is legal and it will pass without any conditions. The justice department sued to block the merger, calling it illegal and harmful to consumers. This deal will have bigger outcomes for the market.

“Not only will this ruling mean this huge deal will close and you’ll see Time Warner up big Wednesday, it also means that many similar deals in a host of industries, like Cigna (NYSE:CI) trying to buy Express Scripts (NASDAQ:ESRX), will also probably be greenlighted if Justice tries to stop them. It also meant that Comcast’s widely anticipated bid for some of Twenty-First Century Fox’s (NASDAQ:FOXA) assets just got one step closer to being formally announced,” Cramer noted.

“This decision is important enough and so pro-merger, frankly, that I think it’ll help a whole host of industries that are thinking of consolidating. It’s a huge positive for tomorrow’s market,” he concluded.

CEO interview – Cisco (NASDAQ:CSCO)

The stock of Cisco is up 40% in the last 12 months, but has been trading sideways after an in-line quarter. Cramer interviewed CEO Chuck Robbins to know what lies ahead and the company’s new partnership with Alphabet (NASDAQ:GOOG).

Robbins said customers need help both with private and public cloud infrastructure, and hence, Cisco is providing multi-cloud environment that will have AI and machine learning that will help with automation and analytics. This will make things less complex and remove costs for customers.

He also spoke about the partnership with Google. “They’re looking for the public cloud economics and the ability to actually have applications and write applications one time and then deploy them to any cloud. We’re actually integrating that software into our technology, allowing our customers to run that on premise but then also building the capabilities for those applications to seamlessly move into Google Cloud if that’s what our customer would like to do,” the CEO said.

Cisco’s focus on security is an ongoing theme. “The network plays a tremendous role with security, with policy and actually allowing our customers to make that happen and that’s what we talked about this week. You have to be able to ingest thread information from endpoints, from the network, from email, from the cloud and actually correlate that very dynamically and then defend automatically to actually solve the problem we’re trying to solve in the future. Cisco is the only company to have that architecture.

Commenting on the recent acquisition of AI company Accompany, Robbins said it will boost Cisco’s data-driven products and fuel more partnerships like the one with Google.

Cisco’s revenues are growing consistently, and the company’s deferred revenue has been growing for the past 10 quarters.

Off the charts

Cramer went to the charts with the help of technician Rob Moreno to look at the stocks that have been left behind in a heating-up market.

The stock of medical equipment maker Edwards Lifesciences (NYSE:EW) hit a 52-week high after several months of volatility and the last quarter that missed on earnings. The stock’s daily chart shows consolidation and has made an inverse head-and-shoulders pattern, which is a bullish indicator. The MACD also made a bullish crossover in May. The stock could be headed to $166 before it runs out of steam.

The stock of US Steel (NYSE:X) has not been doing much since the tariffs on Chinese steel have been announced. After making a triple top in March, the stock went below its 200-day moving average. Once the stock breaches its ceiling of resistance, it will have more room to run.

Tapestry, Inc. (NYSE:TPR) stock went down after earnings. The chart now shows a positive accumulation distribution line and improving momentum. Investors are buying TPR aggressively, and if the stock rises by $2, it will start to gaining momentum to rally.

FedEx (NYSE:FDX) has been holding up above its 200-day moving average, which is a result of transports holding up. The company also boosted its dividend by 30%. It’s a good sign.

CEO interview – Teladoc (NYSE:TDOC)

The stock of Teladoc is up 60% in 2018 after the company’s turnaround since the IPO. Cramer interviewed CEO Jason Gorevic to find out what lies ahead for the company.

Gorevic said that Teladoc offers healthcare on patients’ own terms. It uses technology to match patients with providers in their area with any specialty they need. Consumers and providers are still getting used to the concept, and the government is beginning to take notice. “I think we’re past the point of inevitability for virtual care. The administration’s very supportive of virtual care,” he added.

The company serves 2 million members of UnitedHealth Group (NYSE:UNH) and has a partnership with CVS Health Corp. (NYSE:CVS). Commenting on the competition, Gorevic said Teladoc is the leader in the category, and it is difficult to replicate its offerings due to scale. The company acquired the best doctors in 2017, and its recent acquisition of Advance Medical for $352 million just adds to scale.

Viewer calls taken by Cramer

T-Mobile (NASDAQ:TMUS): Its merger with Sprint (NYSE:S) will be scrutinized in a different way. It’s a good stock to buy on earnings as well.

Worldpay, Inc. (NYSE:WP): Cramer likes the stock and said buying more is okay. He likes the payment space.

Is Russell re-balancing an investible event? Cramer said there is no research that proves this. Keep buying high-quality stocks.


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