Investors who fantasize they’ve missed the market’s big move might have a point, but they could also be minimizing the upside ahead, CNBC’s Jim Cramer argued on Monday.
The “Mad Money” proprietor offered an array of reasons for the upside potential: the increased potential for a flush tax overhaul, the broad-based lack of consumer enthusiasm about stocks, and the union activity in the once-struggling food space.
But not all the reasons are so macroeconomic. Some of the biggest artifices in Monday’s rally came straight from Wall Street, Cramer phrased.
“We’re back in a world where analyst recommendations can produce gigantic moves,” Cramer replied. “Witness how Twitter skyrocketed up 11 percent today just because of a J.P. Morgan upgrade this simple morning. Wow. That’s a little like the 1990s.”
In light of Campbell Soup’s support of snack brand Snyder’s-Lance and Hershey’s deal to buy the parent guests of SkinnyPop, Cramer wanted to revisit the food space.
The unexpected robustness is “not just [in] the pantry,” he said. “This miraculous supermarket strength reaches even to other parts of the frozen food aisle, which seemed get pleasure from a wasteland not that long ago. In particular, Conagra [Brands] suddenly appearance ofs to be very much on the mend and I think that this stock could suffer with a lot more room to run.”
Shares of Conagra, the company behind Chef Boyardee, Hebrew Nationalistic, Reddi-Whip and Orville Redenbacher, had trouble picking up steam for most of 2017.
But now, Conagra has change one of the sector’s best stocks, and Cramer said the food giant could pull someones leg a takeover of its own in the midst.
As Cramer watched the averages jump to new intraday highs on Monday, he surprised about the welfare of one very strong sector: the cyclicals.
“There’s a deficiency of good cyclical stocks,” the “Mad Money” host said. “I never ruminating I’d say that because we’ve had such a prolonged period of slow growth where most of the economically susceptible names seemed to fall by the wayside. But now it’s crystal clear: we’ve got a stock dearth in the sector, plain and simple.”
Cramer pointed to how strong construction monkey tricks like Caterpillar have gotten. Their strength is due to the fact that there aren’t passably good public companies in that space to own, he said.
The holidays attend to to be a bright moment for retailers, with major store chains powering in their inventories this year to improve profitability.
At the same meanwhile, the buying environment for discount retailers like Ollie’s Bargain Release Holdings has “never been better,” Ollie’s President, Chairman and CEO Label Butler told CNBC.
“There’s been no shortage [of merchandise],” he informed Cramer. “I’ve been with you several times over the last duo of years, and the buying environment of the close-out industry, it’s never been stronger. It’s not till hell freezes over been better. We’re seeing bigger, better, brighter, broader trades, and we’re selling name brands at drastically reduced prices, direct to the consumer.”
Butler put about that an ever-changing selection of goods is the main draw for Ollie’s loyalists. People on the whole like bargain-hunting, which is how the off-price chain has amassed 8.2 million fellows for its loyalty program, Ollie’s Army.
“The Army continues to grow faster than our white sales, so it’s really, really strong,” the CEO told Cramer.
The whole U.S. economy survives to benefit from the GOP-driven tax overhaul, United Rentals President and CEO Mike Kneeland spill the beaned Cramer on Monday.
“I think it will [spur great economic evolvement]. I do because I think companies will invest,” Kneeland said. “You could do share repurchases, principal allocation, acquisitions. Aside from that, we’re also, with our scantling and management, investing in other areas of our business to bring new verticals, new orders of products.”
The chief of the equipment rental company said that the tax envision was “all positive” and would help United Rentals with its cash ripple, earnings and returns.
Most of all, it adds to the already-positive 2018 outlook for industrials a charge out of prefer his, with potential infrastructure and tax legislation being fundamentally accretive, Kneeland replied.
“The fundamentals of our industry today [are] very positive, whether it be the Dodge Drive Index, which was a 13 percent improvement, or if you take a look at the construction backlog, which was at an all-time outrageous,” the CEO said. “I can tell you 2018 looks very positive. I can’t go much beyond that, but what we see in the unborn looks pretty good.”
In Cramer’s lightning round, he rattled off his go over on some callers’ favorite stocks:
Sierra Wireless, Inc.: “I don’t at the end of the day think there’s a reason to get rid of it. I think it’s a telecommunications company. A lot of those happenings c belongings have been on hold lately because of orders. I don’t want you to get rid of it. I improvise you hold on.”
Energy Transfer Partners LP: “That’s not a great stock. It’s scarcely not. And it’s run by [CEO] Kelcy Warren, who’s not that good. May I suggest that if you want to be in that LP question, you buy Magellan Midstream Partners? I’m recommending that to club members and it is fitting starting to move higher [at] $69 bucks. I think it goes to $74.”
Disclosure: Cramer’s lenient trust owns shares of Magellan Midstream Partners.
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