Jim Cramer loves when historical patterns pop up in the stock market, especially ones like the recent concerns about FANG stocks being overvalued and emblematic of the 2000 tech bubble.
“But you know that history doesn’t always repeat itself. In fact, there are times when it can lead you very much astray,” the” Mad Money” host said.
Take one of the market’s most topical technology stocks, Nvidia. Just two years ago, the chipmaker’s stock was trading at just six times earnings, a valuation far too low for how rapidly the stock climbed since then.
“Lots of people think NVIDIA’s the most outrageously valued stock in the market” today, Cramer said. “It turned out to be the maker of the semiconductors used in gaming, artificial intelligence, machine learning. It turned out to be one of the greatest bargains of all time.”
When Cramer was new to the stock business, he read legendary fund manager Peter Lynch’s 1989 book, “One Up On Wall Street: How to Use What You Already Know to Make Money in the Market.”
The book revolved around a key piece of advice: if investors kept their eyes open to products or experiences they liked, they would have an easier time finding profitable investments.
Lynch wrote that enjoying companies’ offerings should lead investors to research those companies and make informed decisions about whether to buy their stocks.
“But a funny thing happened since Lynch penned his seminal work,” Cramer said. “The homework has, in some cases, actually kept you out of stocks that you might otherwise have owned and made fortunes in.”
The “selfie generation” could be even more of a needle-mover than you thought, at least according to Allergan Chairman, President and CEO Brent Saunders.
Of the 30 million people in the United States who consider getting aesthetic treatments like Allergan’s Botox, only three million people actually follow through with getting the procedures.
But within that three million, “we see two new groups that are starting to emerge: millennials, which only account for maybe 10, 15 percent of the three million, and males, which also probably account for 10, 15 percent,” Saunders told Cramer on Monday.
Both millennials and males are relatively new to the aesthetic application space, but the groups are growing rapidly, the CEO said.
Then, Cramer spoke with Nick Pinchuk, the chairman and CEO of Snap-On Tools, about the slight weakness his multifaceted toolmaker saw in its latest fiscal quarter.
“Obviously, there are understandable questions about the tools group. The sales were down some,” Pinchuk told Cramer on Monday. “But I think … the good things about the performance, the strengths in the performance greatly outweigh the negatives.”
One such area of strength is Snap-On’s repair systems and information business, which was up 8.3 percent this quarter thanks to its connections to software applications, the CEO said.
“Every time we sell a diagnostic unit, it ignites a plume of updates in terms of software, so that’s a pretty good business,” Pinchuk said. “The good news is the vehicle repair market is pretty strong.”
Finally, despite the overall weakness in the autos market, Sierra Wireless President and CEO Jason Cohenour told Cramer that his internet of things company is getting a considerable boost from automotive deals.
“We already have quite a few automotive deals. It’s a key secular growth opportunity for the company,” Cohenour said. “The connected car is, we think, going to be very big. It’s a market that’s only 13 percent penetrated today. We think it’s going to 100 percent penetrated.”
Sierra’s main focus of late has been a partnership with Volkswagen to connect the automaker’s upcoming model to the internet.
“If you had a Volkswagen starting in 2018, you would take advantage of the Volkswagen concierge services that you access through your head unit, and we’re providing the connection behind those services so that you, the driver, get connected to the suite of Volkswagen services,” the CEO told Cramer.
In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks, including:
Puma Biotechnology: “Oh, boy. You know, you play with fire when you play with those stocks. We know that. We try to educate that these are very, very hard. You have just had a big run and I think that it’s time to ‘cha-ching’ on half the position.”
International Game Technology: “It’s an inexpensive stock. I don’t know. I mean, the quarter, it was fine. It just doesn’t have any pizzazz. There’s no catalyst.”
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Source: Investment Cnbc
Cramer Remix: This tech stock was one of the greatest bargains of all time