The Bulls Are Listening - Cramer's Mad Money (6/6/18)

by: SA Editor Mohit Manghnani

Qualcomm CEO expects NXP Semiconductor deal to complete soon.

Book profits on Canada Goose.

DocuSign is a momentum stock.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday, June 6.

It seems that the bulls were listening to Cramer on Tuesday when he mentioned that the market needs more leadership groups, as on Wednesday, 10 out of 11 sectors went higher.

Cramer was happy to see JPMorgan (NYSE:JPM) go up 2% which lifted the financial stocks. In the healthcare group, UnitedHealth (NYSE:UNH) went up on the share buyback program along with Cigna (NYSE:CI) rising on analyst upgrade. Industrials is an important group which showed strength after a long time. Boeing (NYSE:BA) went up showing that fears of China were overblown. "Given that Boeing is a quintessential industrial and our biggest exporter, what can I say? This is a terrific sign. Let me say something: there are literally a dozen airline purchasers who would love to get in the queue if China drops out, and that's despite the recent declines in the airline stocks because of a 50% increase in the price of fuel," said Cramer.

Tesla (NASDAQ:TSLA) went up on positive comments from CEO Elon Musk. Retail showed strength after Five Below (NASDAQ:FIVE) went up on good earnings. All this is a good sign for Thursday's session.

CEO interview - Qualcomm (NASDAQ:QCOM)

Qualcomm has been in the news for its stalled deal with NXP Semiconductors (NASDAQ:NXPI) and its intellectual property dispute with Apple. Cramer interviewed CEO Steve Mollenkopf so he could shed light on the company's ongoing issues.

Mollenkopf commented on Broadcom's (NASDAQ:AVGO) bid to buy Qualcomm by saying, "I think it was a situation where there were some questions about deal certainty, which clearly became the case, but I think it's also a case where it's very difficult to buy a company using a hostile bid. You really have to engage with a company through the front door. If somebody had something like that, we would of course look for ways of driving value. But we have a pretty good plan and we're going to drive it.

Qualcomm ex-CEO Paul Jacobs is also starting a 5G tech company along with former executives.

Mollenkopf expects the NXP Semiconductors deal to complete soon. "When we extended the deal with NXP, we did it on purpose to get on the other side of some political milestones, one of them being the discussion on tariffs, because we thought that would provide an opportunity for a deal to get done. I don't think we've seen anything that was inconsistent with the strategy that we put in place to extend that agreement. So I'm hopeful, I'm optimistic and I'll tell you, we are very prepared to execute on it," he added.

Commenting on issues with Apple, Mollenkopf said, "Look, we have a contract. It's a very clear contract. It's consistent with what everybody else in the industry pays including Samsung. Our experience with this is that these things get resolved. It takes a while sometimes, but we're on the back end of that process."

The company continues to invest in 5G and other disruptive technologies.

Canada Goose (NYSE:GOOS)

Cramer was a fan of Canada Goose when it went public in March 2017. Since then, the stock is up 176%. The company had good earnings recently, after which the stock sold off as it had got too hot. However, as the company decided to expand in China, the stock went up again.

Cramer is still a fan of the company and its products, but he said that the company's expansion plans were already known and baked into the stock price. There was no reason for the stock to go up on company announcement.

The company also announced a secondary offering. This makes the stock vulnerable, according to Cramer. It is now trading at 66 times next year's earnings and 53 times 2020 earnings which is expensive even with its growth rate. Cramer thinks it's time to book profits on the stock.

CEO interview - Camping World (NYSE:CWH)

The stock of RV maker Camping World has been cut in half in 2018. Cramer interviewed CEO Marcus Lemonis to hear about their last quarter and their acquisition of Gander Mountain.

Lemonis said he has made some rookie mistakes as CEO of a public company. "There's a big transition from being private and I would say that I've really learned." The biggest learning curve was how to communicate his corporate strategy to the public market, he added.

Their recent acquisition of hunting, fishing and camping equipment retailer Gander Mountain was a clear case of the market misunderstanding. "I think what happened was people originally thought that we bought Gander Mountain to get into the big-box retail business. We disclosed today at the Baird Conference, in a public environment, our real strategy behind the acquisition of Gander. It was our backdoor entry into the market in Minnesota, Wisconsin, Indiana, Illinois, Pennsylvania and Texas, where we're going to be putting RVs in most of those locations," said Lemonis.

The company's primary business is still RVs. They have 130 dealerships today and they expect 20% growth by the end of 2019. The company's majority business comes from an online database called the Good Sam Club. "That's really how we make our money. We acquire new customers and we find new people through the sale of RVs and the other products. And I think that's different than people thought it was," he added.

They are also changing their auditors to resolve the 10K issue. He also said that RVs are not just for older people anymore.

Viewer calls taken by Cramer

DocuSign (NASDAQ:DOCU): This is a momentum stock and it will do well for some time.

51job (NASDAQ:JOBS): Why go down the food chain when good Chinese stocks like Alibaba (NYSE:BABA) are available?


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