In a stock market with possible winners everywhere, Jim Cramer likes to highlight its unsung heroes. On Monday, he chose Baxter International, Becton Dickinson and Boston Scientific, crowning them “the killer B’s.”
“Why call them ‘the killer B’s,’ aside from the obvious? Because these guys simply refuse to stop going higher. Their stocks almost never seem to go down. In short, they deserve a nickname,” the “Mad Money” host said.
While all three are medical device plays, they all deal in slightly different products. Baxter makes medical equipment like dialysis machines and infusion systems; Becton Dickinson makes supplies like needles, syringes and catheters; and Boston Scientific makes pacemakers and defibrillators, among other cardiovascular and endoscopic devices.
Each of their stocks has rallied into the double-digits just since the start of 2017, with Baxter up 36 percent, Becton Dickinson up 22 percent, and Boston Scientific up 23 percent. When Cramer is challenged by the bears, he turns to these names for both proof of and solace in the bull.
“What a great place to be when you hear about all of the turmoil. None of it’s going to affect their businesses. It has nothing to do with them,” Cramer said. “The three ‘killer B’s’ of the medical device space are some of the market’s strongest unsung heroes. Baxter, Becton Dickinson [and] Boston Scientific, they just keep roaring, and you know what? I don’t think they’re done. I think all three have more room to run.”
With Washington lawmakers still at odds over health care and tax reform and unpredictable agents like North Korea seemingly gaining power, it can be tough for Cramer to stay bullish.
“It’s really hard to stay positive about this market in the face of conventional wisdom that is so darned negative,” the “Mad Money” host said.
But while Cramer has written off Congress’ gridlock and saved some cash in case the hermit kingdom somehow prevails, Wall Street’s increasingly skeptical outlook on stocks escapes him.
“Bizarrely enough, when you look at The New York Times as a company and as a stock, it’s not failing. It’s thriving,” Cramer said.
Cramer called upon the Times’ second-quarter results as proof. Besides the newspaper’s stock being up some 70 percent since Trump’s election, its earnings beat included a nearly 50 percent rise in net digital-only subscribers year over year.
While investors found the second-quarter earnings results for Domino’s Pizza less than tasty, President and CEO Patrick Doyle said Wall Street had nothing serious to fear.
“We’ll work through it. We’ll see just how quickly we can get it moving again,” Doyle told Cramer on Monday. “You know, these are fixable problems. There is nothing going on in the economies, anything external. This is about us executing, getting this right and we know how to get this done.”
While the delivery giant’s report topped analyst estimates, the Street reared up when international same-store sales, a key metric for retailers, came in lower than the company expected.
Doyle said that while management was not happy with Domino’s 2.6 percent in overseas same-store sales, which did not meet the company’s expectations of 3 to 6 percent, they were equipped to tackle the issues at hand.
Finally, Cramer looked into the transportation stocks to see if the struggling group could drag the bull market lower.
“Close observers of this show know I’m a huge believer that you do need the stocks that are involved with transportation, because that’s commerce, to go higher in order to verify the true bonafides of any rally,” Cramer said. “If you’ve got a rally that’s led by the financials and backed by the transports — as opposed to the health care stocks or the techs or just a handful of stocks — then you’ve got a move with genuine staying power.”
But the transports have endured a 560-point decline just since the start of earnings season, suggesting that there may be trouble ahead for the group, which is represented by the Dow Jones Transportation average.
Still, Cramer thinks the weakness is not as dire as it appears. He argued that it revolves mainly around the overall weakness in the auto industry, as autos are a major piece of most of the transports’ cargoes.
“Taken in total, while many of the transports have been awful, I believe in most cases the expectations simply got too high going into earnings season. So my conclusion remains a positive one: the transports all have their reasons for being weak. But the only real concern is the decline in autos. They are, indeed, important for the U.S. economy,” Cramer said.
In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks, including:
Radian Group: “It’s a very, very good company. Philadelphia company I know. But you know what? I looked at Ellie Mae over the weekend and it made me feel a little nervous about the housing contracts. I mean, it’s just not enough volume. So I wouldn’t mind if you what I call ‘schnitzel,’ you took a little bit off the table.”
AllianceBernstein Holdings: “AllianceBernstein is an inexpensive stock even though it’s had a very big run. I can’t speak for the dividend because these things are so variable, but that’s a very good company.”
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Source: Tech CNBC
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