The semiconductor stocks have been trading wildly of late, getting hit in July 2017 and again during last week’s sell-off before bouncing back on Monday.
These dramatic moves made Jim Cramer wonder which move was really telling the truth about where the group is headed: down with the pullback or up with the rally?
The “Mad Money” host started with Nvidia’s daily chart. One of the top stocks in the S&P 500 Index for the second year in a row, his dog’s namesake gave buyers a momentary chance to get into the stock last week before running back up to $166 and change as of Tuesday.
“Last week, though, we got a classic example of why you need to buy this stock into any real big weakness,” Cramer said. “Given that August and September are brutal months where we often get short, sharp pullbacks … you’ll want to watch this $152 level in case Nvidia gives you another buying opportunity.
Fantasy football season is upon us, and if you think the sport fan craze is a total waste of time, Cramer has some news for you.
“You’re dead wrong,” the “Mad Money” host said. “The lessons and discipline of the typical fantasy league are incredibly useful when you’re picking stocks.”
At his old hedge fund, Cramer made a point of using fantasy football to teach his employees more about stocks, what they represented, and why they were priced how they were.
“We’d put a slew of stocks on the board and you had to pick them with imaginary money,” Cramer said. “It was a fabulous lesson, one I suggest you perform yourself if you’re just starting out … especially if you don’t have enough money saved up yet to build a real portfolio.”
So Cramer went through the traditional setup of a fantasy football team, replacing players with his favorite stocks for each position.
Yelp has announced a $287.5 million deal with GrubHub to sell its food-ordering business to Seamless’ parent company, and Cramer sees heaps of potential in the pairing.
“To me, it seems like a match made in heaven,” he said. “In fact, the only thing I don’t understand is why the two companies didn’t merge.”
Shares of Yelp rallied some 27 percent after it announced the tie-up in its second-quarter earnings report, which beat analyst estimates. GrubHub’s shares lifted 9 percent on the news.
“I think this partnership has the potential to give both companies a major shot in the earnings arm,” Cramer said.
“That’s the requirement of most of these hackers,” the founder, chairman and CEO told Cramer on Tuesday. “Many companies choose to buy bitcoin in some state or fashion and pay them off.”
Bitcoin, an increasingly popular cryptocurrency, has surged in price in 2017, having climbed nearly 300 percent year to date.
As hacks become more sophisticated, they manage to infiltrate the top tiers of companies, forcing their hands into buying the unregulated currency and using it for ransom, Mokady said.
Finally, Cramer went over Home Depot’s post-earnings conference call, during which executives fielded analyst questions that painted the retailer as one of Amazon’s more vulnerable rivals.
After delivering itsbest quarterly report ever, Home Depot’s stock was eviscerated from that conference call, which Cramer said left him outraged and disheartened.
“The incredible thing is that even a gigantic beatand raise can’t shield a company from ‘the dark star,'” the “Mad Money” host said, borrowing a phrase that Home Depot’s former CEO, Frank Blake, used to describe Amazon.
Cramer’s recommendation for investors eyeing Home Depot was to wait until the stock gets cheap and the company starts buying back shares in droves.
“Otherwise, the stock of this phenomenal retailer may be just too hard to own because the analyst community has deemed it too vulnerable to Amazon with their questions on the call, even as their reports remain, for the most part, positive about the best do-it-yourself chain on earth,” Cramer said.
In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks:
International Paper: “Honestly, the stock is too cheap. I like it. I know that line of work’s not holding up in prices.”
Inogen: “I do like the medical device play. I know that it is a very fast-growing company.”
Disclosure: Cramer’s charitable trust owns shares in Nvidia.
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Source: Tech CNBC
Cramer Remix: The one stock to buy into any real weakness