CNBC’s Jim Cramer actually gets worried when Wall Street analysts “throw in the towel” on given stocks for one reason or another.
“Why do these towel-throwers scare me? You might think it’s always a good thing when the bears surrender or the bulls lose patience, but if the stock market does take a downturn — by the way, there will always be a downturn eventually — there will be no upgrade cushions to stabilize things. The upgrades will have already happened,” the “Mad Money” host said.
Cramer was particularly frustrated with two recent analyst reports on the stocks of Sherwin-Williams and Microsoft that seemed half-hearted after large gains in both stocks.
“If anything, these analysts who lack the intestinal fortitude are more likely to downgrade once we get slammed with that sell-off.”
As the Dow Jones industrial average continues to reach intraday all-time highs, Cramer decided to look back at the stocks that drove the index’s gains in the third quarter.
The Dow increased by 4.9 percent in the third quarter as the stock market avoided a historically typical September downturn, so Cramer examined the top 10 stocks responsible for the move.
All in all, Cramer learned three key things from looking at the group in its entirety:
- It’s possible to turn skeptics into believers.
- When interest rates are low, solid dividends can help push stocks considerably higher.
- Most of these stocks were boosted by passive investments made through index funds.
As oil exports from the United States reach record highs, Mark Siegel, the executive chairman of Patterson-UTI Energy, told CNBC that the trend shouldn’t worry commodity-watchers.
“I think everybody starts to think that there’s an abundance whenever somebody’s starting to do well,” Siegel told Cramer in an exclusive interview on Thursday. “The United States has become the marginal producer in the world and so we’re very excited about our prospects.”
The oil patch has been a highly contested area of the market as crude prices hover in the $50 range. Some experts worry about oversupply while others hold their breath ahead of anticipated production cuts by OPEC in November.
As parts of the United States recover after a series of devastating hurricanes, Clorox CEO Benno Dorer told CNBC that his company’s products are essential for relief efforts.
“The American Red Cross says that we’re one of the very first calls they make after a natural disaster,” Dorer told Cramer in an exclusive Thursday interview. “We have shipped thousands of cases of Clorox bleach, but also Glad trash bags and Kingsford charcoal and even Fresh Step cat litter to help with pet shelters. We love to make a difference, we’re proud to do so and this is unfortunately a time when we take that call with pleasure.”
As most of Clorox’s other business segments improve, Dorer said the company is keeping a close eye on chemical prices, which may have been negatively affected by the hurricanes.
“We’re still learning about the impact of storms on costs,” Dorer told Cramer. “It’s certainly fair to assume that in the short term, there could be an increase in cost. Polyethylene is about 15 to 20 percent of our cost. But, you know, in the long run, if these hurricanes and natural disasters behave like previous hurricanes and natural disasters, it evens out.”
According to Constellation Brands President and CEO Rob Sands, consumers aren’t just one-trick ponies anymore.
“The consumer has changed,” Sands told CNBC in an exclusive interview with Cramer on Thursday. “If you think back historically, it was very common that a person only drank one thing. You only drank scotch or you only drank a single wine or a single brand of beer.”
Sands said that now, 55 percent of consumers drink alcohol across all three categories — beer, wine and liquor.
“So, being an all-three-category player, that puts us in a great position relative to the consumer,” he said.
Constellation Brands, the parent company of brands like Corona beer and Svedka vodka, is indeed gaining momentum after delivering higher profits in its Thursday earnings report. But Sands insisted there is still more to be done.
“We’re making distribution gains, we’ve got tremendous growth in sales and volume, but we still don’t have the distribution and the shelf space that we ought to have given our growth and given our profitability to the retailer,” the CEO told Cramer. “That’s a good news story because given that there’s a lot of room to grow distribution and shelf space, that means that our growth is going to be sustainable well into the future.”
In Cramer’s lightning round, he flew through his take on some callers’ favorite stocks:
Taiwan Semiconductor: “Taiwan Semiconductor’s very good. This whole group is a little too hot for me. I say you buy some and then let it come in.”
Whiting Petroleum Corp.: “No, no. Actually, its costs are not low enough. I am not going to recommend that stock.”
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Source: Investment Cnbc
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