There are two ways to make money on Wall Street. There’s the easy way and there’s the hard way. But Jim Cramer told his Mad Money viewers Tuesday that the easy money is always the best kind of gain. And in a market that’s prevailed against interest rates, Bitcoin, the meme stocks, and shortages of just about everything, don’t we all deserve a little easy money?
The easiest way to make money is to buy what you know, stocks you don’t have to think about, or worse, stay up at night worrying about. Cramer offered up a list of five “buy what you know” stocks.
First up was Ford Motor (F) – Get Report, the automaker with a great lineup of new vehicles. As the semiconductor shortage subsides and Ford’s Lightning electric F-150 pickup starts rolling off the lot, it’ll be hard not to make money with Ford.
Next was Costco (COST) – Get Report, the big box retailer where you’ll always buy more than you need, pandemic or no pandemic.
Another stock to consider is American Eagle Outfitters, now known as just AEO (AEO) – Get Report. Here’s a retailer with 26 consecutive quarters of growth.
Rounding out the list were two perennial favorites, Apple (AAPL) – Get Report and Amazon (AMZN) – Get Report. Cramer called each of these companies truly special and more than worthy of your investment dollars.
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Executive Decision: GlaxoSmithKline
This week’s investor meeting at GlaxoSmithKline (GSK) – Get Report is turning out to be a high-stakes event for shareholders, as the company will unveil its widely criticized plans for its breakup and dividend.
Back in 2018, Glaxo acquired Tesaro for $5.1 billion and announced plans to spin off and merge its consumer health business with Pfizer’s (PFE) – Get Report, leaving its pharma and vaccine business behind. Since then, progress has been painfully slow going, with shares falling 4.4% over the past three years. The underperformance caught the eye of activist investor Elliott Management, which now has a significant stake in the company.
Adding to the importance of this week’s meeting are rumors that Glaxo plans to slash its dividend to help with the split and spur additional growth. Cramer said this would be a death blow for the stock, at AT&T (T) – Get Report learned the hard way when income investors fled that stock en masse.
What will we learn Wednesday? Cramer said, hopefully, we’ll hear their forecast for the remaining Glaxo, along with an update on the company’s drug pipeline. We also need to hear, good or bad, whether the dividend is in jeopardy. If shares plunge, it could be a buying opportunity, but only after we hear the company’s plans.
Executive Decision: CNH Industrial
In his “Executive Decision” segment, Cramer spoke with Scott Wine, CEO of CNH Industrial (CNHI) – Get Report, the machinery maker that just announced the acquisition of Raven Industries (RAVN) – Get Report for $2.1 billion.
Wine said that in today’s market, farmers need productivity, and precision farming with high-tech equipment is how to get that done. That’s why CNH, along with Raven, will be able to offer farmers a full assortment of precision equipment, including autonomous vehicles.
Wine also commented on CNH’s partnership with the troubled Nikola (NKLA) – Get Report. He said while there’s no denying the company’s past troubles, the CNH partnership is a good one and Nikola is helping to advance their technology.
CNH is also in the process of separating their on-highway and off-highway products, Wine said, to better allow each business to follow its own trajectory.
Off the Tape: Nextdoor
In his Off the Tape segment, Cramer spoke with Sarah Friar, CEO of Nextdoor, the neighborhood-centric social media application.
Friar announced that Nextdoor has teamed up with Albertsons (ACI) – Get Report and Moderna (MRNA) – Get Report to help address vaccine hesitancy. She said 47% of the U.S. population still hasn’t received even one dose of the COVID vaccine, but 37% said they could be encouraged to do so.
The key to addressing vaccine hesitancy is to make it local, Friar explained. Most people don’t follow celebrities, but if you can provide them with the right information and use local influencers in their neighborhood, your chance of success increases greatly.
Nextdoor is currently serving 260,000 neighborhoods across the nation and, as people are spending more and more time locally, the Nextdoor platform has experienced a 50% year-over-year increase in user engagement.
When asked if the company has any plans to come public, Friar said they will certainly raise money when they need it, but she’s happy with their current rate of growth and progress. They continue to focus on new products and features that support local communities and especially small businesses.
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Where Did the Workers Go?
In his “No Huddle Offense” segment, Cramer tried to answer the question, “Where did all of the workers go?” According to the latest labor reports, there are still millions of people looking for work, but also millions of jobs waiting to be filled.
Cramer said there are a number of factors that could be keeping workers at home. Thanks to government stimulus and high savings rates, workers can afford to be picky and wait for the perfect job to come along. Workers are also benefiting from expanded unemployment benefits.
Third, Cramer noted that many people have fled cities for the country, causing shortages in metropolitan areas. People are also a lot less likely to want customer-facing jobs amid surges in bad behavior.
Finally, let’s not forget that COVID has killed more than 600,000 people, with countless more having long-term complications and millions more still not vaccinated.
All of these factors are adding up to the labor shortage we’re seeing, Cramer concluded. Hopefully, some will resolve themselves by the fall, but if not, the Federal Reserve might be forced to raise interest rates to curb demand.
Lightning Round
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Tuesday evening:
XPO Logistics (XPO) – Get Report: “I think XPO is a great company and will be worth even more after the spinoff.”
Magna International (MGA) – Get Report: “I love this company so much. This one is a winner. Every automaker should be using them.”
LoanDepot LDI: “It’s OK, but this is a very commodity-oriented business. “
Torchlight Energy Resources (TRCH) – Get Report: “This was a meme stock, so it’s hard to comment on it other than saying it raised a lot of money.”
Qualcomm (QCOM) – Get Report: “I like Qualcomm a lot and I would buy it here.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position in AAPL, AMZN, COST.