In a market that has plenty to worry about, whether it be the Senate health care bill, retail’s demise, or impending deflation, Jim Cramer says it is preoccupied by one thing only: Amazon.
“I think the undercurrent, or I should say the undertow, of Amazon, is such a dominant threat to so many consumer-related sectors in a consumer-driven economy that it’s sinking whole swaths of stock once again,” the “Mad Money” host said.
But Cramer found one hidden winner of Amazon’s domination, a discount retailer that stands to gain when the e-commerce giant leads to more store closures in malls.
“The biggest winner in Amazon’s destruction of the mall is, by far, TJX. It has the cash to come in and buy all this excess inventory that pops up when you close a store, which they then mark up for a lower price than Amazon can charge, and they still make a boatload of money,” Cramer said.
Then, Cramer sat down with Mondelez CEO Irene Rosenfeld, who said her company’s top brass were not worried at the announcement of the Amazon-Whole Foods deal.
“I think, if anything, it’s a clear validation of the notion that the consumer is shopping everywhere, and all of us better pay attention to that,” Rosenfeld told Cramer on Thursday.
And as snacking patterns change around the globe and more people embrace healthy living Rosenfeld said she sees a promising path for her massive snack distributor.
“We have the most robust health and well-being pipeline in our U.S. franchise that we’ve ever had,” Rosenfeld told Cramer. “We’re doing lots of work in terms of renovating our core portfolio.”
When alcohol giant Diageo decided to buy Hollywood actor George Clooney’s tequila brand, Casamigos, for up to $1 billion, Cramer instantly took notice.
“It’s not very often that I get to talk about one of my favorite subjects on air: tequila,” the “Mad Money” host said.
At first glance, what intrigued Cramer most was the deal’s price tag: $700 million up front, with $300 million still on the table depending on future performance.
To Cramer, this seemed like a fortune, even though tequila is one of the fastest-growing categories in liquor, with average tequila volumes doubling from 2002 to 2015. So he compared it with Constellation Brands’ recent tequila brand purchase to see which name came out on top.
Cramer also sat down with Howard Lerman, the CEO of the newly public Yext.com, to find out how his company is carving a space for itself in an increasingly digital world.
“Every intelligence service, whether it’s Google or Apple or Facebook, they all have three layers. They have their [user interface], they have their algorithms and they have their knowledge base. Their knowledge base is where Yext comes in,” Lerman told Cramer on Thursday.
Yext’s job is to take its clients’ information and disseminate it across 100 platforms, providing companies with a one-stop shop to ensure their information is accurate when, for example, a prospective customer Googles it on her phone.
“It’s not enough for a business to sit back and hope that the right information is found. We proactively push the truth into the world,” Lerman said.
And while Yext is still a new company, Lerman assured Cramer that its potential is massive.
“This is a huge market. There are more than 100 million locations in Google Maps alone. We have a million, so we’re only 1 percent penetrated into what we could do,” the CEO said. “We have more than a $10 billion addressable market where we can go out and win. We believe, by the way, that this is a winner-take-all market.”
Once in a while, Cramer appreciates hubris, so the “Mad Money” turned to Oracle to go over its post-earnings conference call, in which the software company’s management applauded its own progress.
“I, for one, am not throwing any flags because I think occasionally it’s right to crow when you do something very right,” Cramer said. “And make no mistake, Oracle’s nailing the transition from on-premises computing to the cloud.”
Cramer has listened to thousands of conference calls in his career, and he uses his own measure to test the success of a conference call: the “congratulations-to-question ratio.”
“Nine analysts asked questions about the quarter on that call, eight of them gave some form of congratulations. Only Goldman Sachs’ Heather Bellini, one of my absolute favorite analysts, resisted the siren call, or it would’ve been a perfect game,” Cramer said. “Normally I’d like that impartial, diffident kind of question, but not this time. Come on Heather, join in on the fun and embrace Oracle like everyone else! Why? ‘Cause that stock is going higher.”
In Cramer’s lightning round, he sped through his take on some guests’ favorite stocks, including:
Citigroup: “They just reported. The stress test – flying colors. Next week I think [CEO] Mike Corbat is going to ask for a bigger dividend. I think he gets it. I want to hold on. My charitable trust owns it. I like it.”
US Steel: “No, no, no, no, no. We’re Nucor people. Within the next five days, I expect the president to be able to announce that he’s going to shut down all Chinese steel [imports]. US Steel’s going to go up $4 bucks, then you have to sell, but Nucor could go up $15. They already pre-announced. All the expectations are lower. I say buy Nucor.”
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Source: Tech CNBC
Cramer Remix: The biggest winner of Amazon’s destruction of the mall