It’s tough for a company to succeed in this environment, Jim Cramer admitted his Mad Money viewers Monday. But, there is one company that proved with a seasoned management team, you can overcome any challenge. That company was not named Twitter (TWTR) – Get Twitter, Inc. Report.
Twitter is a case study in how not to run a company, Cramer explained. For years, Twitter has been neglected and mismanaged. Now, it needs someone like Elon Musk taking it private to fix its many problems. While Twitter is a worst-of-breed company, there was another company in the news today that showed us what a best-of-breed company looks like.
That company was Coca-Cola (KO) – Get Coca-Cola Company Report, under the leadership of chairman and CEO James Quincy. Coke delivered strong earnings, citing continued sales momentum, despite Covid, despite inflation and despite the war in Ukraine. Coke gave investors a master class in how to pivot and adapt to changing conditions, how to innovate with new products like hard seltzer, and the power of strong brands during tough times.
Coke deserves a spot in your portfolio, Cramer concluded, and they once again showed the world why.
Executive Decision: Whirlpool
In his first “Executive Decision” segment, Cramer spoke with Marc Bitzer, chairman and CEO of Whirlpool (WHR) – Get Whirlpool Corporation Report, the appliance maker that saw its shares rise 1.5% after reporting a 57-cent-a-share earnings beat. Shares of Whirlpool trade for just seven times earnings with a 3.9% dividend yield.
Bitzer said both sales and gross margins at Whirlpool are now better than they were pre-pandemic, and Whirlpool is a very different company than it was just 10 years ago.
Whirlpool is about more than just doing your laundry, Bitzer explained. The company is now a dominant player in the kitchen, making everything from major appliances down to Kitchen-Aid stand mixers which, he said, are one of its best-selling products of all time.
Despite being hit with multiple rounds of cost inflation, Bitzer said Whirlpool is committed to returning money to shareholders and has raised their dividend for the past nine years in a row. The company is open to additional stock buybacks, he added.
Whirlpool is also making several strategic moves, including selling its European operations and increasing manufacturing capacity in the U.S. to better meet demand.
Airlines Gaining Altitude
There’s always a bull market somewhere, and right now it’s flying at 30,000 feet, as the airlines are making a huge post-pandemic recovery that few people saw coming.
All of the major airlines have reported a huge surge in demand, including Delta Air Lines (DAL) – Get Delta Air Lines, Inc. Report, United Airlines (UAL) – Get United Airlines Holdings, Inc. Report, American Airline (AAL) – Get American Airlines Group, Inc. Report and Alaska Air (ALK) – Get Alaska Air Group, Inc. Report.
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Much of this stems from pent-up demand for travel as people are anxious to take vacations and there is a backlog of weddings.
Cramer said any of these major airlines would be a good buy, but investors should avoid former darlings, like Southwest Airlines LUV, which has seen operational issues, and the trio of Frontier (ULCC) – Get Frontier Group Holdings, Inc. Report, Jet Blue (JBLU) – Get JetBlue Airways Corporation Report and Spirit Airlines (SAVE) – Get Spirit Airlines, Inc. Report, all of which are distracted by takeovers that the government isn’t likely to allow.
Executive Decision II: Otis
For his second “Executive Decision” segment, Cramer also spoke with Judy Marks, president and CEO of Otis Worldwide (OTIS) – Get Otis Worldwide Corporation Report, the elevator maker that continues to see strong sales, and earnings, in our new post-pandemic world.
Marks confirmed that consultation in the U.S. and throughout all of North America remains strong. Otis saw revenues surge 8.8% this quarter and the company’s backlog of business rose by 6%. Otis also saw order growth in China, which has now risen for eight consecutive quarters.
Service remains a bright spot for Otis, Marks noted. Service revenues rose by 3%.
Despite many headwinds, including rising input costs and freight, Marks felt confident that Otis will continue to offset those pressures by increased productivity, especially in installations.
In the Lightning Round, Cramer was bullish on Informatica (INFA) , Capri Holdings (CPRI) – Get Capri Holdings Limited Report, Ralph Lauren (RL) – Get Ralph Lauren Corporation Class A Report, FTI Consulting (FCN) – Get FTI Consulting, Inc. Report, Enbridge (ENB) – Get Enbridge Inc. Report, Kinder Morgan (KMI) – Get Kinder Morgan Inc Class P Report, EnLink Midstream (ENLC) – Get EnLink Midstream LLC Report, Enterprise Products Partners (EPD) – Get Enterprise Products Partners L.P. Report, Applied Materials (AMAT) – Get Applied Materials, Inc. Report and Energy Transfer (ET) – Get Energy Transfer, L.P. Report.
Cramer was bearish on Lithium Americas (LAC) – Get Lithium Americas Corp. Report and Canopy Growth (CGC) – Get Canopy Growth Corporation Report.
In his “No-Huddle Offense” segment, Cramer reminded viewers that the stocks of good companies get cheaper as they go lower, which makes them a lot more attractive to people like you and me.
We just heard how well things are going at Whirlpool, for example, and that momentum is not currently captured by its share price. The same is true for Otis. That’s why Elon Musk bought Twitter and how investors like Warren Buffett have been delivering for shareholders for decades.
The market doesn’t always get it right, Cramer concluded, and when stock prices are less than the intrinsic value of the company, that’s when real value is created.
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