Investors once loved its cost-cutting strategies on top of Warren Buffett’s 27 percent stake in the company, but the “Mad Money” host said Wall Street’s “reverence” turned to “revulsion” after it announced a $15 billion write down and lost 27 percent of value last Friday.
After Kraft and Heinz merged in 2015, the stock was nearly $73—now its about $34, a 52 percent decline at a time that most food stock are down about 1 percent, Cramer said.
“Great bloodlines only get you so far. We’re picking stocks here, we’re not picking ponies,” he said. “Eight different firms downgraded the stock from buy to hold as they finally recognized that management’s strategy—making big acquisitions then cutting costs—just isn’t working.”
Cramer said there’s a chance for Kraft Heinz to find new life, but it would be expensive especially for a company that is cutting costs. Additionally, many of its products like Jell-O, Miracle Whip, and Kool-Aid are outdated, he said. Millennials, the host said, prefer buying fresh and organic food and that’s a big reason that Kraft Heinz and frozen food companies are losing pricing power.
“So the company’s up against an unholy trinity here: they need to spend to support their brands, their raw costs are going up—something mentioned repeatedly on the call—and the consumer is turning against them,” Cramer said.
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There are signs showing that investors can make more money on this market rebound even with a trade deal still pending between the two world’s largest economies, Cramer said.
In fact, there’s a chance that stocks can continue this rally even without an agreement between the United States and China, the host said.
“If we can advance without a trade ceasefire, just imagine how high we could go if the White House and the Chinese Communist Party can reach some kind of accommodation?” he said. “Today, we got some solid evidence that there’s enough good happening away from China to justify sticking with this market in order to enjoy what Warren Buffett called the ‘tailwind of American greatness’ in his annual Berkshire-Hathaway letter that came out this weekend.”
Stocks are expected to spike whether or not a prospective trade deal drops tariffs currently in place. President Donald Trump said over the weekend that he will delay increasing tariffs on billions of dollars worth of Chinese imports originally scheduled to begin on March 1, citing progress in trade talks with Beijing.
Read more on his analysis here.
Investors thought it was time to get out of semiconductors, but the sector is up 20 percent this year and there are no signs of it slowing down, Cramer said.
The rally in chipmaker stocks, he said, is in part because Wall Street watchers turned too negative on the space. Additionally, semiconductors were hit by the trade war with China.
Now investors have been waiting for a pullback in the space to buy some stocks, but Cramer said if there is any weakness in the sector it will be over in a blink of an eye.
“I think the semiconductor stocks still have legs, especially if there’s any sort of China deal,” he said. “More important, it’s the group to buy every time you hear that trade talks might falter, simply because the chipmakers have a lot more going for them than just China or cellphones these days.”
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LivePerson, a provider of mobile and online business messaging, is helping companies like Lowe’s, T-Mobile, and HSBC communicate with their customers. The stock price is up nearly nearly 50 percent this year, handily outperforming the S&P 500, and nearly double its price a year ago.
CEO Robert Locascio talked with Cramer Monday about how his company is using conversational commerce to change how consumers interact with businesses.
“My kids are not going to be calling, they’re going to be messaging,” he told Cramer in an interview. “They’re going to messaging, like they message their friends, to a brand and that’s the stuff we’re bringing to these large brands today.”
Watch the full interview here.
Zendesk is one company that Cramer said he wish he would have known about a lot sooner. The cloud-based customer relations software company has seen its stock spike more than 35 percent year-to-date and more than 85 percent year-over-year.
Cramer said he can’t recommend the stock at nearly $80 because it ran up too far and too quickly. Investors looking to buy shares now would be chasing it, which the host hates to do.
“The bottom line? I wish I’d spotted Zendesk sooner, but after the stock’s monster run of late, I think we need to just admit that we missed it and we gotta move on,” he said. “That said, Zendesk is a great company and if we get a major pullback in its stock, you have my blessing to pounce.”
Hear Cramer’s thoughts here.
In Cramer’s lightning round, he ran through responses to callers’ stock questions:
Deutsche Bank: “You need a recovery in Europe. I was over in Europe last week, I’ve gotta tell you you’re not going to see that as long as China is not doing that well either. I’m going to have to take a pass on Deutsche Bank. I don’t want you to buy it here.”
Sarepta Therapeutics Inc.: “This is one where it’s such a wild trader. I suggest you just sit on your hands on this one because I do think no matter what happens, this is the kind of company that’s getting bought up by people. I mean Sarepta’s a good company. So let’s just keep—sit on your hands.”
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