Next week marks the beginning of the real earnings season, Jim Cramer told his Mad Money viewers Friday. That’s when we’ll start to see the true impacts of inflation and the economic reopening. Inflation is surely a negative, Cramer said, but the reopening is so strong, it will likely carry us through.
Cramer’s game plan starts on Monday when we’ll get earnings from Coca-Cola (KO) – Get Report, United Airlines (UAL) – Get Report and IBM (IBM) – Get Report. Coke has no snack business, but should still do well as restaurants reopen. United will win as travel resumes. As for IBM, it’s still too early to tell if business is turning around.
Next, on Tuesday, Cramer was bullish on Abbott Laboratories (ABT) – Get Report and Johnson & Johnson (JNJ) – Get Report, which he said has been unfairly punished. Procter & Gamble (PG) – Get Report is facing tough comparisons with rising inflation. But Netflix (NFLX) – Get Report should candidly beat expectations on what Cramer called the funnest conference call of the season.
Wednesday brings earnings from Verizon (VZ) – Get Report, but Cramer preferred T-Mobile (TMUS) – Get Report. He has positive things to say about Chipotle Mexican Grill (CMG) – Get Report and Lam Research (LRCX) – Get Report.
Then on Thursday, we will hear from Cramer favorites Union Pacific (UNP) – Get Report, Dow Chemical (DOW) – Get Report, Danaher (DHR) – Get Report, Nucor (NUE) – Get Report and Boston Beer (SAM) – Get Report. The only negative on the day, Intel (INTC) – Get Report, which Cramer said should only be bought on weakness.
Finally, on Friday, the week ends with more bullish news from Honeywell (HON) – Get Report and American Express (AXP) – Get Report, along with an analyst day from Bristol-Myers Squibb (BMY) – Get Report, all of which should be fantastic.
Cramer and the AAP team are looking at everything from earnings and politics to the Federal Reserve. Find out what they’re telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Metromile
In his first “Executive Decision” segment, Cramer spoke with Dan Preston, CEO of Metromile MILE, the digital insurance provider whose customers pay for their auto insurance by the mile instead of a standard flat rate.
Preston said at Metromile, insurance is tailored to the individual, and low-mileage customers can up to 47% off of traditional fixed rates.
Traditional insurance is a commodity, Preston added, which is why insurance companies spend billions to keep their name top of mind. At Metromile, most of their business comes from referrals, which dramatically lowers their cost. The product experience speaks for itself.
Executive Decision: QuantumScape
For his second “Executive Decision” segment, Cramer also spoke with Jagdeep Singh, chairman and CEO of QuantumScape (QS) – Get Report, the solid-state battery maker that’s come under fire from a research firm, Scorpion Capital, that characterized the company as a “pump-and-dump” scam. QuantumScape immediately responded to Scorpion’s allegations, answering all their concerns at length.
Singh said that QuantumScape has always been very transparent about what they have and the work that still remains to be done. He said while they have solved some of the primary issues that have held solid state batteries thus far, they’ve only been able to produce single layer and four-layer cells. They must continue to work to produce cells with dozens of layers.
Singh cited Volkswagen’s (VLKAY) recent $100 million investment as proof that his company is for real. He said the investment with VW required their cells to pass certain milestones and they recently sent cells to Germany that passed those milestones.
When asked his thoughts on Scorpion Capital, Singh politely noted that short-sellers invest in high-value stocks and try to knock them lower, so he’s not surprised they became a target. He noted that nothing in their 188-page report was original research and most of it “was simply absurd.”
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Off the Tape: The Zebra
In the “Off The Charts” segment, Cramer checked in with colleague Keith Melnick over the chart of The Zebra, an insurance comparison service.
Melnick, who hailed from the travel comparison service Kayak, said there are a lot of similarities between the two industries. He said both were fragmented, complicated and opaque in how they price their services.
Before The Zebra, people were forced to waste time shopping multiple carrier websites, or shop on lead generation websites that offer comparisons from only a handful of vendors. Melnick said it took The Zebra a lot of time to solve the problem and his company now has relationships with hundreds of carriers across the country.
In his “No Huddle Offense” segment, Cramer opined on the deteriorating relations between the U.S. and China. He said when President Biden took office, everyone, including him, expected relations to cool and diplomacy to prevail. But so far, Biden has not rolled back any of Trump’s tough stance on China.
The sticking point remains Taiwan, which has enjoyed autonomy but not outright independence from China. In the past few months, tensions over Taiwan have been ratcheting higher as two superpowers fight for relevancy and dominance.
This is a worrisome trend, Cramer concluded, one with no end in sight.
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Friday evening:
Lithia Motors (LAD) – Get Report: “This is a smoking good stock. I’d buy it right here.”
World Wrestling Entertainment (WWE) – Get Report: “This is a very well run company. I think you’re in good hands.”
Innovative Industrial Properties (IIPR) – Get Report: “I’m a big believer in this one.”
Fiverr International (FVRR) – Get Report: “I’m a giant believer in the company but the stock is pretty expensive. I’ll bless it, along with Wix.com (WIX) – Get Report.”
Upstart (UPST) – Get Report: “This is hugely shorted. People try to knock it down all the time. I think it’s a good situation.”
United Natural Foods (UNFI) – Get Report: “This stock is on a monster move. I’d wait for it to cool off.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position in HON, ABT.