The Era Of Good Feelings – Cramer's Mad Money (11/21/17)

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Tuesday, November 21.

Cramer called Thanksgiving week the “era of good feelings.” “I’m talking about this week of Thanksgiving, where the buyers pay up and the sellers walk away. It’s almost as if there’s a selling ban,” said Cramer. Tuesday was such a day where stocks went up despite negative news.

The stock of Apple (NASDAQ:AAPL) went up despite news on the delay of Home-Pod, Facebook (NASDAQ:FB) went up despite antitrust concerns and Tencent (TECHY) surpassing Facebook, and Micron (NASDAQ:MU) and Western Digital (NYSE:WDC) went up even on news of an upcoming oversupply of DRAM and flash chips. “It’s almost as if these longtime worries have up and vanished. But nothing’s changed. The sellers are just letting the stocks lift and the buyers are reaching like mad,” added Cramer.

The revenue miss and fall in Campbell Soup (NYSE:CPB) did not lead to pin action in General Mills (NYSE:GIS) or Kraft-Heinz (NASDAQ:KHC) which earlier would have been the case. Even Cracker Barrel (NASDAQ:CBRL) missing revenues did not affect McDonald’s (NYSE:MCD) or Wendy’s (NYSE:WEN), that both went up.

“Maybe investors have simply decided they should pay more for the same earnings numbers, giving us the gift of multiple expansions. Feel free to use the era of good feelings to lighten up. Nobody ever got hurt selling into strength,” concluded Cramer.

CEO interview – Marvell Technology Group (NASDAQ:MRVL)

Cramer interviewed Marvell CEO Matt Murphy who acquired Cavium (NASDAQ:CAVM) for $6B, which has led to an 11% rise in Cavium and 13% rise in Marvel since the announcement.

“The reaction we’ve gotten over the last few days as I’ve met with investors is they love the fact that you’re getting a pure play infrastructure, cloud-levered, internet-of-things-levered company that really takes care of all the interconnections within the cloud and to the edge,” said Murphy.

After he took over as CEO in 2016, this acquisition was a part of the bigger restructuring plan. “We re-focused fundamentally on storage, networking, cloud and infrastructure as the key drivers for our company’s future, and that’s now set us up over the last year to grow our top line, make a ton of progress with customers, and then enable us, with the balance sheet we’ve got, to actually go off and combine with Cavium,” he added.

The combination will diversify Marvell’s portfolio, reducing hard drive business to 25% of total revenue from 40% earlier. “All the drives that go into the data center or enterprise, the big-capacity drives, the near-line drives, that’s a growing segment of the hard drive market,” he added.

The combination will create a leading player in “silicon, software and solutions for the cloud,” and will be the industrial internet-of-things. “Once the data gets onto the internet, that goes all through Marvell and Cavium technology,” concluded Murphy.

Know Your IPO

Cramer said he’s seeing a troubling pattern with IPOs these days as the stock rises on its debut only to fall when the lockup period on insider selling expires. This was the case with flooring retailer Floor & Decor (NYSE:FND) which went public 7 months ago and has fallen on private equity backers exiting the stock.

He said that there is a lot to like about the company. Firstly, it cannot be ‘Amazon’ed’. Secondly, it has been growing at a rapid pace with a 13.5% rise in same-stores sales in the last quarter. The company is growing at a strong rate of 27%. Though the stock looks pricey at 47 times earnings, it will become a lot cheaper given its growth rate.

Cramer suggested waiting for the next private equity exit or a big pullback to buy the stock.

CEO interview – Brunswick (NYSE:BC)

The stock of Brunswick fell after the last quarter’s earnings miss. The boat and fitness equipment maker lowered its estimates after disruptions from the hurricanes. Cramer interviewed CEO Mark Schwabero to find out what lies ahead.

Schwabero said that the hurricanes did cause disruptions to the business but they are seeing developments in the vast majority of the business which is elsewhere. The weakness in fitness equipment in the U.S. and Europe is temporary as the company is about to debut new cardio products.

He also spoke about new innovations in boating. “I think the whole idea of boat clubs is good, good because it gets people on the water. It may change to ownership over time. The other part is the fact that as you get them on the water, those boats that are in the clubs are going to get more usage, which’ll translate into other new boats,” he said.

The technology in the boating industry is growing with joystick driving and autonomous docking. “The joystick is really there today as well as what we call SkyHook, holding a boat in position. Autonomous docking’s still something we’re working on, but the capabilities are really there to keep exploiting technology for marine applications,” he concluded.

Is the market overvalued?

Stocks do not exist in a vacuum and in the supermarket of investments, stocks is the only aisle that is working. Cramer finds it crazy when people say, “We haven’t had a recession yet, but we’re about to, and if that’s the case, stocks are way too expensive.'” The reasoning is moronic, according to Cramer, as there are many bubbles out there and the stock market is not one of them.

For instance, Bitcoin is overvalued as it is being used for ransomware or by wealthy citizens in Venezuela, Zimbabwe and Brazil to get their money out of falling regimes. “So you have this currency that’s been bid up to $8,000 by people anxious to move their money without government scrutiny for whatever reason. A year ago, one bitcoin was worth $750. You mean to tell me that’s not a bubble? You think that’s a safe place, a reasonable approximation of value versus the stock market?” said Cramer. The junk bonds are overvalued as they have low-yield and high risk.

“As long as everything else is totally crazy and bubblicious, stocks are looking good. I don’t care where we are in the cycle,” said Cramer.

Viewer calls taken by Cramer

KNOT Offshore Partners (NYSE:KNOP): The entire group is awful.

Viacom (NYSE:VIA): Cramer prefers Discovery Communications (NASDAQ:DISCA).

Yext (NYSE:YEXT): Cramer is a fan.

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Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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