Seeking Alpha

Technology Is Pushing Up Stocks - Cramer's Mad Money (4/18/18)

by: SA Editor Mohit Manghnani

Chinese trade war tensions will not affect CyrusOne - CEO Gary Wojtaszek.

Don't bet against banks.

Intuitive Surgical will overcome all challenges.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday, April 18.

Cramer told viewers on Wednesday that technology is not just restricted to FANG stocks, but it's also helping companies push forward. One doesn't need to be a tech company to use technology for competing and staying ahead of the game. Home Depot (NYSE:HD) is doing that, and it plans to hire 1,000 additional tech professionals to stay ahead of the competition.

Cramer cited more stealth tech companies. Railroad CSX Corp. (NASDAQ:CSX) had lower volumes but higher earnings due to efficiencies by using technology. Players like Schlumberger (NYSE:SLB) and Core Labs (NYSE:CLB) are using technology to make old wells produce more. Nucor (NYSE:NUE) is in a similar position, and it will also benefit from Trump's tariffs.

Lastly, IBM Corp. (NYSE:IBM) is all about tech, but unfortunately, a lot of it is old and wrong. Only 50% of the company's technology is fast-growing, while that of Amazon (NASDAQ:AMZN) is in demand everywhere.

CEO interview - CyrusOne (NASDAQ:CONE)

Have data center REITs fallen out of favor? The stock of CyrusOne yields 3.75%, but it has fallen 14% in 2018. Cramer interviewed president and CEO Gary Wojtaszek to find out what lies ahead.

Wojtaszek said what's in his control is the execution of the company and not how the stock trades. CyrusOne had one of its best quarters, and it continues to lead the industry. "Over time, people are going to recognize that that'll eventually pay off," he added.

The company follows its customers, and that led to the acquisition of one of the largest data center REIT operators in London and Frankfurt - Zenium - for $442 million. It has also purchased land in Atlanta to put data centers where customers need them.

Wojtaszek is not worried about trade tensions with China. "A lot of the stuff that they're talking about are not really that data-focused, and so I don't really think it's going to hit us," the CEO said. "Chinese data center operator GDS is a company we bought. They're up dramatically. We've more than doubled our return on that investment in a couple months," he concluded.

Betting against banks?

Cramer told viewers that bears are putting forward a case that bank earnings have stalled and a recession is looming. However, he doesn't agree with this theory and said that while bank earnings were not fantastic, they were still good.

The banking industry is doing well, and it is lending in tandem with GDP growth without taking unnecessary risks. Banks have the best balance sheet they have had in decades.

Banks are just being responsible and not showing reckless behavior. If that would be the case, bears would still scream recession. Don't listen to the bears, as banks are exactly doing what people expect them to do since the financial crisis.

CEO interview - Revance Therapeutics (NASDAQ:RVNC)

Revance Therapeutics is a small biotech that is developing injectable therapies that compete with Allergan's (NYSE:AGN) flagship product, Botox. Cramer interviewed co-founder and CEO Dan Browne to know what lies ahead.

Browne said the treatment is slated for a 2020 release, and it could reach the heights that Botox has reached under Allergan's control. "This has been a passion for Revance for 15 years. We think with scale, we'll have the same margins as the existing commercial leader, the market leader in the Botox brand," he added. The company is on track to file for FDA approval for "RT002" next year.

The CEO also added that he is confident of keeping the company afloat till the product's launch in 2020. "Look, I don't think you're ever as funded in biotech as much as you want to be, but I think at this point, we're very well capitalized, we see a number of catalysts as we go forward. Whether we partner, whether we don't partner, we feel that we'll be able to raise the capital we need to launch this product," he concluded.

Viewer calls taken by Cramer

Etsy (NASDAQ:ETSY): It's an online proprietary shopping center, and people will pay up whatever the cost to buy the products.

iQIYI (NASDAQ:IQ): Cramer recommends only a few Chinese stocks like Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU).

Lam Research (NASDAQ:LRCX): The company is concerned about its second half, and hence, Cramer is not going aggressive on the stock.

Intuitive Surgical (NASDAQ:ISRG): The company keeps defeating all challenges. Cramer said he still likes it.


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