The stock market may be out of the doghouse, but FAANG shares are still hated by investors, Jim Cramer warned his Mad Money viewers Wednesday. Does that make them a purchase? Cramer pushed in to find out.
Cramer said he is still a supporter of Apple (AAPL – Get Report), now that the latest iPhones, iPad and Apple Watches have been announced. Shares of Apple trade at just 17.5 times earnings. He was also still a fan of Facebook (FB – Get Report), which may be under fire from regulators and politicians, but it is still loved by users.
Alphabet (GOOGL – Get Report) is under control for antitrust violations, but with 22 times earnings, Cramer said the fears are probably excessive. However, when it comes to Netflix (NFLX ̵
Finally, it is Amazon (AMZN – Get Report), which may be despised by the White House, but which has been a huge deflationary force in our economy. Cramer also remained bullish on Amazon as well. Cramer said you don't become a company like FAANG without doing something right, and so they still buy everyone except Netflix.
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Stocks that should be on your team
What do fantasy football and stocks have in common? Sometimes you can get a great player who is in a slump for a real bargain. This was Cramer's take on Starbucks (SBUX – Get Report), after hearing the company's recent comments. He said Starbucks & # 39; s operating growth remains intact and the stock is a steal at today's levels.
Cramer was also good at VMware (VMW – Get Report) after talking to the company earlier this week. Shares of VMware increase by 6% over the past week. Also on Cramer's hotlist, cloud analytics provider Splunk (SPLK – Get Report), trading platform Shopify (SHOP – Get Report) and Chipotle Mexican Grill (CMG – Get Report), all of which trade for far less than they are worth.
Interest on Pinterest
The market rotation has created many good buying opportunities, Cramer told viewers, opportunities like Pinterest (PINS), which reported fantastic earnings, but have since seen their shares erase all postal revenue. gains.
Pinterest bills itself as a visual discovery engine, and spends money to grow its place in the social media world as a friendly, personal space to share and discover. But at the same time, sales per user increase, and the company last spent 88 øre per user, far ahead of analysts' estimates of only 80 øre per user.
Cramer said Pinterest has a lot to like. The company has no hype around it, as Snap (SNAP – Get Report) did when it went public. Pinterest is very non-advertising. It also increases the user base at a time that many other platforms have folded. Pinterest also offers advertisers great value, as Pinterest users are already looking for new ideas and products. In the end, Cramer said, Pinterest is just a nice place to be, without the scruples and controversies of all other social platforms.
For all of these reasons, Cramer said Pinterest is a purchase, and he will be a buyer of any weakness and would buy even more when the inside lockup period expires next month.
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Retail Remains Risky
Many down-and-out retailers have been able to stage a comeback lately, but Cramer urged viewers not to be misled. When it comes to retail, it is still a very dangerous place to be.
Just this year we have seen a number of retail bankruptcies, including Gymboree, Diesel, Payless Shoes and Barneys New York. Still others, like J. Crew and Neiman Marcus, are in the balance. What is the common thread? Cramer said they all have recently listed listed listed publicly listed stock exchanges that have saddled them for too much debt. It is difficult to revitalize your online business and be competitive when you are saddled with debt.
However, not all private equity deals are bad, as Cramer noted that both Dollar General (DG – Get Report) and Burlington Stores (BURL – Get Report) have been recent success stories.
Cramer warned against two other confusing dealers, Michaels (MIK – Get Report), the Arts and Crafts dealer and Party City (PRTY – Get Report). In particular, he advised using the recent strength of Micheals to sell, as the rejection is probably just a short squeeze.
A Broken Stock, or a Broken Company?
It's important to know the difference between a broken stock and a destroyed company, Cramer told viewers. A broken stock can be fixed, but a broken company can be dangerous to your portfolio. Back on August 1, shares in Payment Processor Square (SQ – Get Report) traded for $ 83. Just a few days later, they crashed to $ 59 a share. Is the plunge an opportunity or a warning sign?
Cramer said Square is in a good business. Payment processing is only gaining in popularity as every merchant goes digital, and Square has the added benefit of Square Capital, using what it knows about sellers to make loans that no other lender can do.
So what drives the stock's recent fall from grace with investors? Cramer said Wall Street seems tired of the company's weak comment and guidance after each revenue report, no matter how good that report may be. It's also a problem with CEO Jack Dorsey's apparent part-time status when running both Square and Twitter (TWTR – Get Report).
comes to Square. The company has a 46% long-term growth, which justifies the share price of 8.3 times the sale. The company has a lot of growth going forward, and when it comes to payments, size and execution are important, and Square continues to deliver.
The Lightning Round
In the Lightning Round, Cramer relied on the Pilgrims Pride (PPC – Get Report) and Rio Tinto (RIO).
Cramer was bearish on Sarepta Therapeutics (SRPT – Get Report), MGP Ingredients (MGPI – Get Report) and Occidental Petroleum (OXY – Get Report).
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