Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday, Aug. 2.
The Dow hit a big milestone Wednesday, crossing the 22,000 mark for the first time in its history.
And who's not that all impressed? Mad Money's Jim Cramer.
Cramer told viewers of his show Wednesday that the recent strength of the Dow doesn't say all that much about the market in general. In fact, he said the S&P 500 and Nasdaq may be better indicators of what's really happening on Wall Street.
Nonetheless, the Dow milestone is something to pay attention to, for better or worse.
First, the Mad Money host said the Dow strength suggests someone (a large fund? selling programs?) is moving money out of tech and into industrial stocks and "boring S&P 500 names." Wall Street may now prefer "plain vanilla" stocks over tech.
The market also is receiving conflicting messages: Housing is strong (but not enough housing inventory is for sale), healthcare spending is positive (even if it's mostly government spending), tech spending is "magnificent," and fast food is up (even if the upscale restaurant business is down). However, auto sales are down, retail is weak (outside of Amazon (NASDAQ:AMZN)), and oil and gas "is horrendous."
"All of these add up to a mixed picture," Cramer said.
Also, investors shouldn't take their eyes off Apple (NASDAQ:AAPL). "We may be at the moment Apple becomes its own category of the economy," Cramer said.
While some of these messages may confuse, worry or even panic some investors, Cramer said it may be "the sound of opportunity knocking." And in some of these instances, investors should have some cash ready to deploy.
Groupon On The Rebound?
Cramer hosted Groupon (NASDAQ:GRPN) CEO Rich Williams during the show. The company reported an EPS beat for its second quarter, but missed on revenue. Nonetheless, Cramer said investors should pay attention to Groupon's story.
Williams pointed out Groupon is forming key partnerships, such as with GrubHub (HUB) for food delivery, a deal that gives Groupon access to 5,000 restaurant partners. And the company is pushing ahead with new initiatives, such as Groupon-Plus and BeautyNow.
Williams also highlighted the company's push to buy back shares (more than 150 million shares bought back so far). He said two thirds of Groupon's business is on mobile. For the second quarter, billings growth accreted, and the company added half a million active customers.
Cramer also hosted IDEXX (NASDAQ:IDXX) CEO Jonathan Ayers. The company this week reported second quarter beats on revenue and EPS.
Ayers talked about the strong organic growth at the company, at around 10%-11% for the current year. The company continues to build a strong business offering diagnostic and testing capabilities for its veterinarian customers. It also has a growing opportunity around its cloud-based applications.
A key component of IDEXX's success: Millennial spending on pets. "Millennials take it to a whole new level" when it comes to pet care, Ayers said.
A Seismic Shift
What's the latest trend investors should carefully watch?
Cramer talked about the move toward "documented, recordable experiences" consumers are looking for, especially millennial consumers. The rise of this economic shift could spell trouble for some companies, and opportunity for others.
The companies facing challenges? AMC Entertainment (NYSE:AMC) saw a drop in movie attendance, hurting recent box office business. General Motors (NYSE:GM) reported a 15% drop in sales in July. These companies could be victims of the new "recordable" experience.
Those seeing a boost in business? Royal Caribbean (NYSE:RCL) has seen a jump in sales. This suggests that consumers, especially millennials, are paying more for "memories" rather than hard goods, Cramer said.
Also, Netflix (NASDAQ:NFLX) sees consumers access 1.2 billion hours of programming each week. AT&T (NYSE:T) says more of its customers are watching video via mobile. And gaming companies like Take-Two (NASDAQ:TTWO) are witnessing brisk business for their titles.
Cramer's take: Investors should pay attention to the shift, especially among millennial consumers.
Viewer Calls Taken By Cramer
Sirius XM (NASDAQ:SIRI): Despite a fall in auto sales, this company "will be fine," Cramer said.
National Retail Properties (NYSE:NNN): Cramer said he will pass.
Activision (NASDAQ:ATVI): Cramer likes the stock.
Starbucks (NASDAQ:SBUX): This is a tough call, Cramer said. He told viewers the company cannot continue to guide down, but "I'm afraid they will have to."
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