CNBC’s Jim Cramer would usually be happy about Netflix’s huge Monday earnings beat, but this time around, he was a little disappointed.
“Normally I love it when my favorite stocks surge higher, but today’s 10 percent run in Netflix kind of had me bummed me out,” the “Mad Money” host said. “What makes me upset is the fact that Netflix could’ve been acquired for less than half of its current price a few years ago, and whoever bought it would now be the king of content.”
Cramer lamented the fact that from the start, Netflix emerged as a streaming video powerhouse and could have been bought by any of the market’s top technology companies.
“At the end of the day, I am torn. On the one hand, I love that Netflix continues to make so much money for you, the shareholders. On the other, I can’t stop thinking about what a huge missed opportunity this would have been for the big boys – for the Apples, for the Amazons, for the Alphabets,” Cramer said. “A Netflix acquisition would’ve been a game-changer for these guys. Instead, they thought they made the mistake of thinking, ‘Duplicate Netflix,’ and now it’s too late for them to duplicate or buy.”
It used to be an unspoken rule for investors to sell stocks at the first sign of negative news, but sometimes, the rules have to change, Cramer said Tuesday.
“This time is indeed different, which means you can’t take your cue from the playbook that worked in more troubled times,” he said. “We’ve developed a vicious tendency to want to give up on stocks of companies that slip up, especially after big moves … but you know what? These days, that tendency will lead you astray.”
In a market that brushes off weak earnings reports and formerly market-rattling events, Cramer said that having long-standing biases about certain companies and stocks can hurt investors.
One example of this was the recent action in Facebook’s stock after the company’s CEO, Mark Zuckerberg, announced sweeping changes to the social media website’s News Feed.
Rising oil prices have breathed new life into the oil patch, but the sudden enthusiasm has made Cramer wonder if it can all be chalked up to irrational exuberance.
So the “Mad Money” host called on technician Carley Garner, the oil-savvy co-founder of DeCarley Trading and author of Higher Probability Commodity Trading, to help explain the positive action.
“Garner’s worried that the same animal spirits luring speculators into high-flying stocks and even cryptocurrencies may have migrated to the oil market,” Cramer said.
With that, he turned to Garner’s first chart: the weekly chart of West Texas Intermediate crude, complete with the critical Commodity Futures Trading Commission’s Commitments of Traders report.
Erika Nardini, a former AOL executive who landed the CEO job at Barstool Sports in 2016 as the only woman out of roughly 70 candidates, had been a fan of Barstool founder Dave Portnoy’s from the beginning, she told Cramer.
“Barstool, to me, is what guys say, it’s how they think, it’s how they talk, it’s what they love, and here was this guy who took a bet on himself and strived to build something and I wanted to be a part of it,” she said in a Monday interview with Cramer and Portnoy.
Asked whether she had any price constraints on her mind when it came to selling the privately-held company, she offer a flat “No.”
“We’re a big media company. We are a huge brand,” Nardini said. “Because we have a loyal audience that has been with Dave for 14 years, and all of our guys — Big Cat, KFC, our whole roster — we can do anything. We can become a commerce company. We can sell shoes. We can be an alcohol brand. We can create a boxing promoter. There is nothing that this company can’t do because we have an audience, we listen to them and we create only for them.”
Ahead of TE Connectivity’s Wednesday morning earnings report, Cramer wanted investors to be ready for the minor blip that would bring its stock back to buyable levels.
A spin-off of Tyco International, TE Connectivity makes electrical components that enable the flow of power and data for a number of lucrative end markets.
Better yet, its stock tends to sell off even after management reports strong quarterly earnings, giving investors a momentary entry point.
“When you find a high-quality company that’s making a killing thanks to the booming economy, you should be preparing yourself for the next pullback so you can buy it into weakness,” Cramer said. “TE Connectivity’s been on fire, reports tomorrow morning, and I want you to be ready, just in case it goes down despite delivering what I expect will be a generally strong quarter. If we don’t get a pullback, the stock is cheap enough that you can put on a small position, but ideally, I need you to wait for that next dip, even as they’re few and far between in this market.”
In Cramer’s lightning round, he shared his take on some callers’ favorite stocks:
C.H. Robinson Worldwide: “You know what? That’s one of the best stocks out there. It’s not just all FedEx, it’s not just all XPO and it’s not just all UPS. It’s them, too.”
Green Plains Inc.: “I don’t like ethanol plants. I think it’s only a matter of time before the president says, ‘Maybe this is a bad idea.'”
Disclosure: Cramer’s charitable trust owns shares of Apple, Alphabet and Facebook.
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Source: Tech CNBC
Cramer Remix: Netflix's recent run makes me upset