Investors need to be in theme stocks, not meme stocks, Jim Cramer told Mad Money viewers Tuesday. Stick to well-run companies that operate regardless of the pandemic.
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Buy The Best Stocks: Cramer’s Mad Money Review (Tuesday, 02/02/21)
We are in a difficult moment in the stock market, explained Cramer. Vaccines are slowly picking up speed and the end of the pandemic may be in sight. But things could get a lot worse in the meantime. Because of this, investors are starting to sell the “nesting” stocks at home and buy the “reopening” stocks that will thrive when we return to normal.
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But instead of trying to thread that needle, Cramer said he’s looking for stocks that are excellent management and can thrive in any setting. Stocks like Walt Disney Co. surprised investors by doubling its streaming, but the company will also thrive once movies, theme parks, and sports get back up and running. Then there is Boeing, a company that is using the pandemic to improve its operations so that it can emerge even stronger from the shutdown.
Cramer said he is still a fan of Amazon even though founder Jeff Bezos plans to leave his position as CEO for the role of executive chairman. He also believed Alphabet was well positioned for a return to economic activity.
Cramer said he is not a fan of the AMC theater chain, although it is also a reopening. The company is poorly managed and has a poor balance sheet, which makes other reopening stocks far more attractive.
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Executive decision: Chipotle Mexican Grill
In his first “Executive Decision” segment, Cramer spoke to Brian Niccol, chairman and CEO of Chipotle Mexican Grill, the burrito chain with stocks that were making new highs as digital orders continued to surge.
Niccol said 2020 was a challenging year for Chipotle, but it was also one that demonstrated their resilience and the power of their digital operations. He said ordering online for in-store pickup is the most profitable way for customers to order from Chipotle, but they are still eager to reopen the dining rooms and give everyone a chance to enjoy a social experience as well.
Looking ahead in 2021, Niccol plans to open more than 200 new locations for the year, which will be a nice change of pace after a slowdown in 2020.
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Eventually, Niccol found that they continue to work with multiple delivery companies and models to find the right balance that everyone can benefit from in the new digital economy.
Chipotle will be advertising in the Super Bowl again this year. Niccol said the ad will highlight “Eating with Integrity” and everything that Chipotle stands for.
Executive decision: UPS
For his second “Executive Decision” segment, Cramer also spoke to Carol Tome, CEO of UPS, the shipping giant, which just posted a 52 cents per share profit jump after a strong vacation quarter.
According to Tome, UPS is continuing to transform its business and this quarter revenue has grown faster than volume, a merit for the entire team. She said UPS provided 97% service throughout the vacation quarter while increasing productivity.
Productivity is the name of the game, especially given that demand outperforms supply in the retail packaging business. For this reason, UPS works with all shipping partners to further increase productivity and meet growing demand.
When asked how our country is doing with vaccine shipments, Tome gave us a good testimonial. She said UPS has delivered over 225,000 vaccine shipments to date with 99.99% accuracy. UPS delivers vaccines from the manufacturer to dosing centers in less than 20 hours while maintaining the required very cold temperatures.
Executive decision: Norfolk Southern
For his final “Executive Decision” segment, Cramer checked in Jim Squires, the chairman and CEO of Norfolk Southern, the railroad, which saw earnings jump 16 cents a share last week.
Knappen said the Norfolk Southern has made a remarkable change over the years. When the railroad started, 30% of its volume was coal, but now the company transports the goods to support our consumer economy, including cars, consumer goods, and intermodal shipments. He reminded viewers that rail is the most economical way to move goods and is far better than trucks in terms of CO2 emissions.
When asked how they weathered the pandemic, after an initial hit, Squires said Norfolk Southern could move fast to cut costs and increase productivity. In fact, the company just finished its fifth straight year of productivity gains. The railroad continues to buy back its own shares with its excess cash flow.
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At the time of publication, Cramer’s Action Alerts PLUS held a position in DIS, AMZN, togetL.
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