Veterans And The Wall Street – Cramer's Mad Money (11/9/17)

Cramer wants the AT&T and Time Warner deal to go through.

Cramer lists out good cybersecurity companies.

Tesla is a cult stock.

Stocks discussed on the in-depth session of Jim Cramer’s Mad Money TV Program, Thursday, November 9.

Cramer dedicated the show to Veterans held at the U.S. Military Academy at West Point. He said that veterans can relate to business easily. “I think there is some commonality, because leading an enterprise these days is all about the same processes that cadets learn here. No wonder veterans do so well in business. A winning strategy is a winning strategy. It doesn’t matter whether you’re talking about the military or the private sector,” said Cramer.

There are some key traits taught to the military that have helped executives in tough times at their companies.

  1. Leadership: “It’s the person at the top who defines how an institution works,” said Cramer. It can be seen in stocks like Pepsi (NYSE:PEP) with CEO Indra Nooyi, Apple (NASDAQ:AAPL) with CEO Tim Cook or West Point graduate Alex Gorsky, who is the CEO of Johnson & Johnson (NYSE:JNJ).
  2. First movers advantage: This works both for the military and in the private sector. Companies like Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOG) have the first-mover advantage.
  3. Loyalty: “Big bank CEOs like JPMorgan’s (NYSE:JPM) Jamie Dimon and Goldman Sachs’ (NYSE:GS) Lloyd Blankfein have succeeded thanks to the loyalty they have to their institutions,” said Cramer.

Lastly, attention to detail and thriving under pressure are key aspects both for the cadets and the executives. “They are by nature optimistic, but they’re skeptical. They trust the process and they know the institution must be preserved,” added Cramer. It takes more than just EPS for a CEO to get their company at the top. “There are many different kinds of service, but the best companies can all foster environments that produce people who say, ‘Bring on the pressure, we’ll handle it as a team,'” concluded Cramer.

CEO interview – Johnson & Johnson (JNJ)

The stock of JNJ is up 21% for the year and they had a good last quarter. Cramer interviewed CEO Alex Gorsky who is also a graduate of West Point.

Gorsky said that he has learned a lot of valuable lessons from here. “It takes all of us working together. If we’re going to solve issues like health care, if we’re going to take on issues about how do we grow our economy, how do we create more high-paying jobs, that requires industry and the government working together,” he added.

He spoke about the tax reform on which the administration says filing taxes easier on the layman on making US companies competitive. “It starts with smart tax policy. How do we make sure that we have competitive tax policy so that companies, frankly, aren’t making bad decisions about moving their things around based on tax alone? It should be based on the strategy,” he said.

The successful strategy is a combination of innovation and execution. “You’ve got to have a very clear plan, make sure you’re delivering on that, that you’re crossing the T’s, dotting the I’s,” said Gorsky.

Cramer said JNJ is a good company.

Veteran as executives

Cramer said that there are examples from the Wall Street that veterans make excellent executives.

CEO Ivan Seidenberg of Verizon (NYSE:VZ) is a prime example of this who turned this regional telco into a nation colossus. Be it CEO Donald Knauss of Clorox (NYSE:CLX) or CEO Scott Wine of Polaris (NYSE:PII), they are veterans.

Even Twitter (NYSE:TWTR) COO Anthony Nodo and Palo Alto’s (NYSE:PANW) Mark McLaughlin, who are great executives, started in the military. This is the reason companies should hire more veterans.

Cybersecurity

The threat of cybersecurity is not going soon and hence a cybersecurity company will make a good investment. While Palo Alto remains Cramer’s favorite in the group, there are many smaller players that need to be looked at.

Mimecast (NASDAQ:MIME) is a cloud-based data security company, the stock of which is up 72% for the year. Cramer thinks it has more room to run.

Cyberark Software (NASDAQ:CYBR) is a major player in cybersecurity as it protects privileged accounts and network. Though its stock has been under pressure, Cramer thinks it has a bright future.

Cramer liked ProofPoint (NASDAQ:PFPT), L3 Communications (NYSE:LLL) and Science Application and International Corp. (NYSE:SAIC) as well.

Cadet questions taken by Cramer

Tesla (NASDAQ:TSLA): Tesla is a cult stock but their balance sheet is terrible. “Buy it if you like the car.”

AT&T (NYSE:T) – Time Warner (NYSE:TWX) merger: Despite the Justice department talks on AT&T and Time Warner deal, Cramer is bullish about the merger. “The combined companies actually have better cash flow than if you break them up. AT&T has got a 5% yield. I think it can go higher,” said Cramer. “I want the deal to go through because I think the combined companies would be terrific, but I’m not against it, particularly for income,” he added.

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