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CNBC’s Jim Cramer on Monday noted that shares of 3M, the company that makes Scotch tape and Post-it notes, have been soaring since the Federal Reserve ended plans to raise interest rates in 2019.
After falling from $193 to about $178 in December, Cramer said the equity has rebounded from apparent weaknesses, which the notable J. P. Morgan analyst Steve Tusa highlighted last year. He gave two sell calls on the stock, including one that cut his price target.
Shares of 3M closed Monday north of $215, even after the company gave a disappointing guidance in its most recent earnings report, Cramer pointed out.
“3M could get hit again when it reports on [April] 25th,” the “Mad Money” host said. “They have auto exposure and a lot of Chinese business, so the tariffs hurt. But if we get a trade deal with China, then people will overlook the current weakness and buy the stock hand over fist.”
On top of 3M, Cramer also gave his thoughts on Walgreens and FedEx in response to a Wall Street Journal article that claims the bull market would face volatility as corporations begin to deliver earnings reports of the first three months of 2019.
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Investors should take note of the downgrades analysts made on a collection of stocks, Cramer said.
Analysts made their calls on General Electric, Boeing, and Clorox, among others, which could signal what’s to come, he said. The Dow Jones Industrial Average shed nearly 84 points on the day, while the S&P 500 rose 0.1% to extend a seven-day winning streak and the Nasdaq moved up 0.2%.
Because the market has had an “incredible” run, many of these downgrades seem to be warranted and action oriented, Cramer said.
“You know my mantra: bulls make money, bears make money, but hogs … they get slaughtered,” the host said. “I don’t want to be too greedy and that rule has never gotten me in trouble, so we need to take these calls seriously. We always should focus on downgrades. They can be very meaningful.”
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Cramer said that stockholders of household names should not be too quick to pull the trigger when they hit a rough patch because the market tends to be forgiving.
“When a company with a terrific long-term track record suffers a setback and the stock implodes, the pain can make you want to dump the stock and forget about it,” he said. “But as we’ve seen from Apple, Nvidia, and McCormick, these moments of extreme weakness and desperation, they tend to be terrific buying opportunities.”
Those three companies looked like “roadkill” at the beginning of the year, but Cramer said the stocks have since recovered their losses.
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2U, the online education platform for colleges and universities, announced Monday that it inked a $750 million deal for Trilogy Education Services. Trilogy is a technology company that offers skill-based technology courses.
The acquisition nearly doubles 2U’s reach to 68 institutions.
“So that’s part of where the story gets super interesting is you’re bringing the market leader, working with universities with boot camps, into our company as the market leader in online for great schools,” CEO Christopher Paucek told Cramer.
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Dirty Lemon
The global non-alcoholic beverage industry, which is dominated by Coca Cola and Pepsi, could grow to about $2 trillion over the next six years, according to Iris Nova founder and CEO Zak Normandin.
Iris Nova, which owns the Dirty Lemon beverage start-up that sells lemon-based drinks via text message, is looking to carve its own lane and take share in the sector with health-focused products.
“Coca cola and Pepsi are making sugary, high-calorie options for the majority of their products,” Normandin told Cramer. “So what we were looking to do with Dirty Lemon, which is the first brand underneath Iris Nova, is actually create low-calorie, no-sugar offerings with functional benefits that are appealing to the modern consumer.”
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In Cramer’s lighting round, the “Mad Money” host zips through his responses to callers’ stock picks of the day.
Cabot Corp.: “You know, that is one of the few industrials that is not starting to roar. … I think we oughta look into why it hasn’t, because I think you may have a winner there. I like the company Cabot.”
Helmerich and Payne Inc.: Well Helmerich & Payne, HP, no. I mean I’ve been in a house of pain with anything related to oil. Now, we had a couple good days, but this group is too hard to own.
Amarin Corp. PLC: “I don’t know. There’s a lot of takeover chatter in that one, so if you don’t get a takeover it’s gonna come back down, so that means for me it’s a little too dicey because I don’t like to recommend stocks on a takeover basis.”
Disclosure: Cramer’s charitable trust owns shares of Apple and Nvidia.
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