“I like stock more when they’re coming down than when they’re flying high,” Jim Cramer told his Mad Money viewers Monday. When the market is declining, investors should be running toward the sale, not fleeing from it. Fortunately, stocks were still on sale today, which should have everyone smiling.
Why did the market start declining in the first place? Cramer said investors were taking profits in Nvidia (NVDA) , which had run too far, too fast. But now that shares have fallen from $168 to $150 a share, Cramer said not might be the time to start buying in.
The markets were also digesting a downgrade of Apple (AAPL) , an Action Alerts PLUS holding. Cramer said the downgrade was well-intentioned, but he’s still sticking with the company he called the strongest consumer brand in the world.
Then there are the other growth stocks, like FANG. Cramer said he’s a buyer of Facebook (FB) and Alphabet (GOOGL) , two of the four FANG stocks, along with Adobe Systems (ADBE) and LAM Research (LRCX) .
As for the banks, Cramer said their fate is not in their hands, as all eyes are counting on the Federal Reserve to raise interest rates multiple times this year. Without a strong statement from the Fed, these stocks could be in jeopardy.
On Real Money, Cramer says the sale’s still on and that’s not something to freak out about. It’s something to embrace. Get more of his insights with a free trial subscription to Real Money.
Executive Changes at General Electric
What should investors make of the news that long-time General Electric (GE) CEO Jeff Immelt is out and will be replaced by John Flannery? Cramer said he’s holding onto the stock for Action Alerts PLUS and you probably should too.
In the sports world, the saying goes that you’re only as your record says you are. In the case of Immelt, who’s been at the helm of GE for the past 16 years, that record isn’t a good one, with shares down 31% during a time that most other industrials were at least able to post double-digit gains.
Cramer said he still has a lot of respect for Immelt, who he called a smart man that did as well as it could given that GE was invested heavily in aerospace just after 9/11, and heavily in oil and gas just as the markets peaked in 2014. That said, Flannery, known for being tough as nails, could bring real change to GE, something that activist investor Nelson Peltz has been advocating for.
Cramer said expectations will have to come down for GE in the short term, but he sees no reason to sell here given that any change is a good change and after the stock’s rally today, the market seems to agree.
C’mon In, The Water’s Fine
Summer is getting into full swing and the weather is getting hot. Fortunately, there’s one company that thrives when the mercury rises and that’s Pool Corp (POOL) .
Let’s face it, when the weather gets really cold, we use more natural gas and buy more winter coats from Columbia Sportswear (COLM) , Cramer said, and when it gets really hot, we build more pools.
Pool Corp not only benefits from the building of new pools, which is on the rise as home prices rebound, but also from the maintenance and upkeep of those pools, helped along by a longer pool season. Making matters even better, the drought in California has finally ended, which means both more pool construction and more pools back in operation.
Cramer said Pool Corp is also very shareholder friendly, with this $5 billion company having bought back nearly $1.5 billion of its own shares and increasing its dividend to 1.2%. When the company last reported, it posted a 12-cents-a-share earnings beat and has delivered a 26% compound growth rate since first coming public in 1995.
Coming up on this episode of Mad Money: Cramer interviews Mark Butler, CEO of Ollie’s Bargain Outlet Holdings Inc. (OLLI) . Plus, don’t miss the Lightning Round. Which stocks is Cramer bullish on?
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