Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday, July 30.
The stock market is in panic mode, and Cramer reminded investors that no one made a dime panicking. Tech weighed down on the averages, and it can be traced to Facebook's (NASDAQ:FB) earnings, which led to the stock going down by 20%. "If you wait until tomorrow and pick among the rubble of stocks that were only down as collateral damage, then I think those are going to be bargains," said Cramer.
High-profile names like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet (GOOG, GOOGL) went down on pin action even though they reported good earnings. These stocks have become bargains. These businesses are being driven by the Cloud and have nothing to do with social media.
"The same trends that were so important before Facebook - cybersecurity, video games, Internet of Things, cloud onboarding - they're still important, but the related stocks have been reset in price. That's what many would-be buyers have been waiting for," added Cramer. He believes that Facebook was being overly negative on the call so they could under-promise and overdeliver later.
There is money to be made from tech-induced weakness in financials, industrials and the domestic retailers. Buy high-quality stocks at lower levels. "Remember, after the panic, it doesn't storm, it gets calm, and you have to take advantage of these prices before everyone else realizes that the panics are temporary and the opportunity to buy is now over," concluded Cramer.
CEO interview - Lam Research (NASDAQ:LRCX)
Lam Research reported good earnings, but the stock went down on lower guidance. Cramer interviewed CEO Martin Anstice to know what lies ahead.
Anstice told Cramer that the company has completed the strongest fiscal in terms of revenue and profits. They see a growing value proposition for the chips it helps to produce. "The investments, the discipline from our customers today means they invest in capacity when they have demand for chips, and I think that's a commentary on health and sustainability in our industry," he added. The memory-chip revenue growth at an all-time high, and Anstice expects the semiconductor ecosystem to expand to various industries.
"Let's not forget that the semiconductor revenues in the last four or five years have increased by about $120B, and that's 0.2% of global GDP. And that reflects the increased value proposition of the industry in the broader data economy," he added.
Anstice also believed that the weakness for the year is largely behind them. The company plans to invest the excess capital for growth and return the remaining to shareholders in the form of dividends and buybacks.
Keep the shopping list ready
While the market is being ruled by Facebook, there are many winners of the earnings season. Advanced Micro Devices (NASDAQ:AMD) reported a monster quarter with double-digit revenue growth for the fourth quarter in a row. Cramer applauded AMD's CEO Lisa Su for engineering a turnaround. "First, she fixed the company's tattered balance sheet, then she began bringing in new talent, engineers who shot not for the moon, but for the stars," he said. The stock hit a 52-week high and has surpassed its rival, Intel (NASDAQ:INTC).
Microsoft was a clear winner after the huge earnings spurred by growth in its cloud business. Its cloud is becoming more competitive against leading players. Amazon and Alphabet also reported good earnings.
In the industrial sector, Cramer noted he likes earnings from Honeywell (NYSE:HON), which is splitting to unlock value. United Technologies (NYSE:UTX) and Ingersoll-Rand (NYSE:IR) reported good earnings as well. "There are lots of other winners that I'm really slighting here, but the ones I just mentioned have been the stars of the show so far. They're the best places to go as the market tumbles in confusion over who's guilty and who's innocent in this rapidly eroding earnings season," he concluded.
NXP Semiconductors (NASDAQ:NXPI)
"I think last week, the big washout in NXP Semis has given you a buying opportunity. At these levels, I think this semiconductor company is pretty attractive even without a takeover," said Cramer. The company's capital return program plans to return $5 billion to shareholders in the form of buybacks, which could boost the earnings by $8 per share, making it trade at 12 times earnings.
"While the organization has experienced a level of deal fatigue, the core basics of the business have actually strengthened - autos and the internet of things," said Cramer. As automakers put more tech into each car, the company's chips become more relevant both in autos and IoT. Their NFC chips are doing well too.
Cramer predicts NXPI can reach 5-7% CAGR in the next three years, which is 50% faster than the growth in its addressable market. "In short, this deal falling apart could actually be a positive, a major positive, for a big part of their business. I think you can buy some here and then add to your position if you like what the company has to say at their Analyst Day in September. It's a washed-out, de-risked tech story in a market filled with very risky dynamics," he concluded.
Viewer calls taken by Cramer
CVS Health Corp. (NYSE:CVS): The worst is over, and the company has a good acquisition going.
Hi-Crush Partners (NYSE:HCLP): The stock is acting fine but the yield is a red-flag. "The dividend is not safe," Cramer opined.
United Rentals (NYSE:URI): Cramer couldn't figure out what's wrong with the stock and why it is down. He said does not recommend it till he finds out.
MercadoLibre (NASDAQ:MELI): It is doing well but it's hard to predict.
Cerner Corp. (NASDAQ:CERN): Get ready to buy when it drops on earnings. It's a successful company that reduces healthcare costs for people.
Universal Display Corp. (NASDAQ:OLED): It's a supplier to cellphones, and Cramer is staying away from pure suppliers.
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