The artificial forces that drove the market down last week appear to have gone this week, Jim Cramer told his Mad Money viewers on Monday. Traders have all but forgotten about inflation and the Fed, Cramer said, and that means tomorrow’s session is likely to continue today’s rally.
What has changed between Friday and today? Just the attitude of the buyer. Last week traders loathed the Fed’s comments on inflation, but today they have come to terms with the fact that even with low inflation, things are still looking pretty good for our economy.
That means there are still plenty of bargains to be found, especially on Friday when the Russell 2000 Index is rebalanced, which offers plenty of opportunity. This Friday, like last Friday, will be your chance to buy some great companies like UPS (UPS) – Get the report who just reported a strong result.
Investors can also return to American Express (AXP) – Get the reportwho also told us it was great last week. Cramer also supported companies like Honeywell (YOU) – Get the report and Lockheed Martin (LMT) – Get the report.
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Executive decision: Boxed
In his first “Executive Decision” segment, Cramer spoke to Chieh Huang, co-founder and CEO of Boxed, the e-commerce food platform that will soon go public through a reverse merger with Seven Oaks Acquisition SVOK. The SPAC deal is worth $ 900 million.
Huang admitted that there are some tradeoffs coming to the public through SPAC rather than a traditional IPO, but in the end he said that a SPAC was the best choice for Boxed. His company will use the proceeds from the transaction to drive marketing and awareness, and to fund his expansion efforts with new markets and product lines.
For those who may have never heard of Boxed, the company offers food in bulk to both consumers and businesses. Boxed has also opened its software platform to other corporate retailers, making it a SAAS software provider as well.
When asked about private label products, Huang stated that Boxed has about 100 items under its own private label, and those 100 items account for 15 to 20% of sales.
Huang remembered starting his business in a garage in New Jersey. He said he and his family could have lived the American dream and that he was very grateful.
Executive decision: Cerence
Dhawan stated that Cerence is just one of many departments within Nuance Communications, but as an independent company it is able to focus and grow significantly. Nuance has since agreed to be acquired by Microsoft (MSFT) – Get the report for $ 20 billion. Cerence was spun off from Nuance in 2019.
Cerence offers voice assistant technology that acts as a hands-free co-pilot for the drivers. Dhawan said her most common uses are navigation, phone interactions, and music search functions. They aim to create a seamless experience both inside and outside the car.
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Those pandemic gains still have strength
If your business committed murder during the pandemic, it has become toxic in this market even if sales are still skyrocketing. Case in point: Thor Industries (THO) – Get the reportwhich peaked at $ 146 per share in May and has since fallen back down. Stocks now trade for less than $ 100. The same goes for the boat manufacturer Brunswick Corp. (BC) – Get the report, which peaked at $ 115 in May and has also fallen below $ 100.
Investors seem to believe this is the final great quarter for these companies and that once the travel and entertainment industries are fully open again, demand will fade. But nothing could be further from the truth as both companies have multi-year arrears.
The same pattern can be seen in Campbell Soup companies (CPB) – Get the report to Take-Two Interactive (TWO) – Get the report, but Cramer said the most frustrating thing was Walt Disney Co. (DIS) – Get the report. Disney skyrocketed last year after the success of Disney +, but now the company can look forward to movies, theme parks, and cruises.
Has WallStreetBest lost its mojo?
In his “No Huddle Offense” segment, Cramer said the WallStreetBets crew may have finally lost their mojo. After the group’s big initial win in GameStop (GME) – Get the reportEvery subsequent recommendation has just lost people money.
Cramer said the WallStreetBets crew didn’t have enough firepower to support more than a stock or two at a time, which is why their attempts to recommend Wendy’s (WHOM) – Get the report, Corsair Gaming (CRSR) – Get the report, Clean energy fuels (CLNE) – Get the report and Petco (SHOT) – Get the report everything is very short-lived. If you made a purchase based on these recommendations, you have been destroyed.
Even GameStop continues to be called into question as the company has yet to come up with a plan to bail out beyond its troubled retail business.
Everyone loves a winner, Cramer concluded, but when you start losing money they stop paying attention pretty quickly.
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At the time of publication, Cramer’s Action Alerts PLUS held a position with UPS, HON, MSFT.