Without further stimulus, investors must stick to security stocks, Jim Cramer told Mad Money viewers Friday. Cramer’s game plan for next week’s trade all depends on Friday’s salary number outside the yard, which is why he also told viewers to leave room in his portfolios for some recession.
The schedule begins on Monday, with Cramer awaiting retaliation from China against President Trump’s harsh words on Friday. Cramer said he thinks this is a bad time to escalate the trade war and it could have bigger effects on the economy than previous rounds, struggled when the economy was solid and unemployment was low.
Next Tuesday we will receive revenue from Zoom Video (ZM) ̵
Most of the revenue comes on Thursday when we hear from JM Smucker (SJM) – Get report, Broadcom (crucial) – Get report, Gap Stores (GPS) – Get report, Slack (WORK) – Get report and DocuSign (DOCU) – Get report. Cramer was a fan of all those names, except for Gap Stores. He said investors just should not own second-class retailers.
But the big event is Friday when we get to know May’s salary number outside the yard. Cramer said there will be gigantic job losses that will cement in investors’ minds just how bad the upcoming recession will be.
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Executive decision: Zscaler
In his first Executive Decision segment, Cramer spoke with Jay Chaudhry, chairman and CEO of cybersecurity company Zscaler (ZS) – Get report with shares increasing by 29% today. Zscaler has increased by 111% for the year.
Chaudhry said that Zscaler’s mission from the beginning was to let employees work anywhere, which is why the pandemic hit was ready and could help companies quickly transfer their workforce to work remotely. Zscaler has also worked closely with the federal government, and has recently partnered with the Department of Defense for up to 500,000 users.
Chaudhry added that the cyber security market is big enough for all players, but those in the cloud will be the big winners. With the launch of 5G wireless, many people do not even need to use traditional networks anymore, and with that comes great new opportunities.
Executive decision: e.l.f.
For his second segment “Executive Decision”, Cramer also spoke with Tarang Amin, chairman and CEO of e.l.f. Beauty (FAIRY) – Get report, who was in a proxy battle with activist investor Marathon Partners.
Amin so et al. performs well. The reductions that the company saw in 2018 were a real wake-up call. Since then, they have focused on five new initiatives and have had five quarters as a result of year-on-year sales growth as they continue to gain market share.
Asked about the effects of the pandemic, Amin said they initially saw declines, but over the past four weeks, consumption has increased by 11%. He said that their partnership with Target (TGT) – Get report and Walmart (WMT) – Get report continue to perform well. Both Walmart and Ulta Beauty (Ulta) – Get report extends its e.l.f. footprints in their stores.
Amin also commented on her viral campaigns at TikTok. He said younger consumers love their products and the 4.5 billion views their campaigns have gathered prove the vitality of their brand loyalty.
Executive decision: fast
For its last segment “Executive Decision” for the week, Cramer checked in with Joshua Bixby, CEO of the content delivery provider (FSLY) – Get report. Fastly has increased by 115% for the year.
Bixby said the pandemic is compressing the digital transformation that has already taken place at companies. Quickly built to help content creators and developers bring their code and content to the world. He said no one could have predicted the pandemic, but many people are allowed to innovate in new ways.
Bixby said Fastly’s services are mission critical for businesses and they have been able to grow and adapt to their needs.
Buy when others sell
Everyone loves a story that makes sense, Cramer told viewers, but sometimes the confusing stories provide the greatest opportunities. Case in point, Salesforce.com (CRM) – Get report and Costco (COST) – Get report.
Salesforce faced a wave of sales after the company lowered its forecasts, but Cramer noted that a crisis is a terrible thing to waste, and Salesforce follows the same playlist as they used in the 2008 crisis, spending more to dominate the competition.
The same goes for Costco. The company chose to shut down some very profitable departments, such as glasses, hearing aids and their cafeteria, until they could figure out how to safely open these areas. The upside? This important retailer could stay open thanks to the built-in social distance of their extra-wide aisles.
That is why it pays to do the homework and buy when others sell.
Here’s what Jim Cramer had to say about some of the shares that callers offered during the Mad Money Lightning Round Friday night:
Hercules Capital (HTGC) – Get report: “We don’t know what they own.”
Caleres (CAL) – Get report: “I would take the money and run.”
Cognex (CGNX) – Get report: “I love these guys. They do things in the US and should be celebrated.”
Anheuser-Busch InBev (BUD) – Get report: “I like Constellation Brands (STZ) – Get report More.”
Nine (NINE) – Get report: “No, no, you deserve Tesla (TSLA) – Get report“.
Noble Energy (NBL) – Get report: “Noble is a good company but it is oil and I would prefer to see you in growth.”
Frontline (BACK) – Get report: “This is a trade. I’m looking for investment. If you want oil, go with Chevron (CVX) – Get report“.
Draft Kings (DKNG) – Get report: “This is a great game on sports coming back.”
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At the time of publication, Cramer’s Action Alerts PLUS held a position in CRM, COST.