Game Plan For The Week - Cramer's Mad Money (3/29/18)
- "Blockchain is here to stay," - Nvidia CEO Jensen Huang.
- Wait for the hot money to flush out of Micron Technology.
- Bank of America will benefit from the rate hike.
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday, March 29.
Though the market recovered on Thursday, it is still a battleground. "I think Amazon (AMZN) defines the modern-day stock market battlefield. Here's a stock that gave up 120 points in two days on rumors and stories about how President Trump hates Amazon. But the major point I need to make as we wrap up a largely dispiriting quarter is that if you can't handle the news flow, both fake and real, you need to use this rally to lighten up, maybe even on Monday, on the names that have caused you the most fright," said Cramer. With that, he discussed the game plan for the week.
Investors will be watching Facebook (FB) on Monday as it tries to recover from the recent scandal. Cramer thinks the company should hire outside counsel to mitigate damage. "It's the only way for Facebook to get past this debacle that really brought out the long knives from the legions of people who clearly despise CEO Mark Zuckerberg," he added.
Cloudera (CLDR) reports earnings on Tuesday. As cloud stocks have been moving down on the tech fallout, Cloudera's report might remind investors why they love cloud stocks.
CarMax Group (KMX), Lennar Corp. (LEN) and Ollie's Bargain Outlet Holdings (OLLI) will all report earnings.
CarMax and Lennar earnings will be interesting, as rising interest rates could affect autos and housing. Cramer will be watching for reference points to test if the theory is true. Ollie's, on the other hand, is expected to report strong earnings.
Monsanto (MON) reports earnings on Thursday. The company's report will give an indication on how the sector is reacting to tariff-related pressures on agriculture sector. "I don't really care as much about the quarter as I do about hearing which countries want to retaliate against the U.S. now that our government's showing some backbone when it comes to trade policy. We subsidize agriculture like nothing else in this country, so it tends to be the first thing our trading partners target when they go after American exports," Cramer noted.
The nonfarm payroll report will be out on Friday, and a good report will allow the Fed to raise rates while keeping growth steady. "This is the most important macro number we get. It does determine much of what was bad and good, like what was bad from the data in January and what was good about February," said Cramer.
He added if the selling in tech continues on Monday, it's okay for investors to trim their positions too. "And I have to tell you, my charitable trust will be joining you in trimming some of these positions next week, if only so I can stay sane enough to continue to do this darned show," he concluded.
CEO interview - Nvidia (NVDA)
The stock of Nvidia has moved up 1,700% in the last five years. Cramer interviewed founder, President and CEO Jensen Huang to know what leas ahead for the graphics and computing company.
Nvidia showed its latest graphic and gaming chips at the GPU Technology Conference in Silicon Valley. The chips are twice in performance compared to chips released six months ago and provide real-time cinematic renderings.
Huang spoke about the cryptocurrency craze impact demand for their GPUs. "Cryptocurrency will be here. The ability for the world to have a very low-friction, low-cost way of exchanging value is going to be here for a long time. Blockchain's going to be here for a long time, and it's going to be a fundamental new form of computing. I expect blockchain, I expect cryptocurrency to be an important driver for GPUs. The reason why cryptocurrency became such a popular thing on top of our GPUs is our GPUs are the world's largest installed base of distributed supercomputing," he said.
Despite this, the majority growth for the company comes from the video game business, professional graphics visualization, data centers and the self-driving cars business. "Cryptocurrency just gave it that extra bit of juice that caused all of our GPUs to be in such great demand. But I think over the long term, our fourth growth drivers is what's going to make Nvidia 10 times larger than it is today," Huang added.
The company's data centers business is a strong growth driver too. Its latest products can replace 300 servers costing millions with one desktop-sized box that costs just $399,000. This saves time, money, floor space and energy massively. The new computers can provide performance by using just 6,000 watts of power, compared to old servers at 160,000 watts of power.
Huang also commented on the recent Uber (UBER) self-driving vehicle crash. Although Uber used some of Nvidia's hardware in its vehicles, its sensing and processing systems are different from what Nvidia is developing. Nvidia is working on a virtual reality simulator that will train cars how to be safer in a faster way.
Micron Technology (MU)
The stock of Micron Technology has been volatile leading up to the earnings. Cramer said there was hot money in the stock. Hot money refers to the weak-handed, short-term investors that are in the stock for the short term.
The stock of Micron went up from $47 to $61 in 19 days going into earnings. The investors expected the stock to go higher after a blowout quarter, but the stock went down, causing the short-term investors to panic, and they hurried to exit the stock, pushing it down to $52. Cramer called it madness, as the stock had run up before earnings and yet short-term investors expected the stock to jump.
The long-term view of Micron is still intact, and it is the leader in the DRAM space. The hot money needs to get out of the stock before the stock can find a bottom again.
CEO interview - Constellation Brands (STZ)
Constellation Brands had a good quarter, and the stock rallied after earnings. Cramer interviewed CEO Rob Sands to learn more about the company's quarter.
Sands said the success of the company is a combination of great brands like Corona, Modello and Pacifico and a good management that bought $1 billion worth of stock in the last year and returned a total of $1.4 billion to shareholders, including dividends. The company's investment in Canadian-based Canopy Growth Company to explore the possibility of cannabis-based beverages in cannabis-legal states has also proved to be good.
Sands also adds that tariffs on aluminum and steel will have an immaterial impact on the company, as cans represent a small fraction of its business.
Viewer calls taken by Cramer
Square (SQ): The stock is in overbought territory, but it's a good long-term hold.
Bank of America (BAC): It's the largest beneficiary of the rate hike, and the stock will head higher.
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